Exhibit 10.1

 

 

 

$250,000,000

CREDIT AGREEMENT

dated as of June 28, 2011,

among

DUCOMMUN INCORPORATED,

as Borrower,

THE GUARANTORS PARTY HERETO,

as Guarantors,

THE LENDERS PARTY HERETO

and

UBS SECURITIES LLC and CREDIT SUISSE SECURITIES (USA) LLC,

as Joint Lead Arrangers and Joint Bookrunners

and

UBS AG, STAMFORD BRANCH,

as an Issuing Bank, Administrative Agent and Collateral Agent,

and

UBS LOAN FINANCE LLC,

as Swingline Lender

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Documentation Agent

and

CREDIT SUISSE SECURITIES (USA) LLC,

as Syndication Agent

and

BANK OF AMERICA, N.A.

as an Issuing Bank

 

 

 

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TABLE OF CONTENTS

 

Section

        Page   ARTICLE I    DEFINITIONS   

SECTION 1.01

   Defined Terms      2   

SECTION 1.02

   Classification of Loans and Borrowings      44   

SECTION 1.03

   Terms Generally      44   

SECTION 1.04

   Accounting Terms; GAAP      45   

SECTION 1.05

   Resolution of Drafting Ambiguities      46    ARTICLE II    THE CREDITS   

SECTION 2.01

   Commitments      46   

SECTION 2.02

   Loans      46   

SECTION 2.03

   Borrowing Procedure      48   

SECTION 2.04

   Evidence of Debt; Repayment of Loans      48   

SECTION 2.05

   Fees      49   

SECTION 2.06

   Interest on Loans      50   

SECTION 2.07

   Termination and Reduction of Commitments      51   

SECTION 2.08

   Interest Elections      52   

SECTION 2.09

   Amortization of Term Borrowings      53   

SECTION 2.10

   Optional and Mandatory Prepayments of Loans      53   

SECTION 2.11

   Alternate Rate of Interest      58   

SECTION 2.12

   Yield Protection      58   

SECTION 2.13

   Breakage Payments      60   

SECTION 2.14

   Payments Generally; Pro Rata Treatment; Sharing of Setoffs      60   

SECTION 2.15

   Taxes      62   

SECTION 2.16

   Mitigation Obligations; Replacement of Lenders      66   

SECTION 2.17

   Swingline Loans      67   

SECTION 2.18

   Letters of Credit      68   

SECTION 2.19

   Defaulting Lenders      75   

SECTION 2.20

   Increase in Commitments      77   

SECTION 2.21

   Discounted Voluntary Prepayments      80    ARTICLE III    REPRESENTATIONS
AND WARRANTIES   

SECTION 3.01

   Organization; Powers      82   

SECTION 3.02

   Authorization; Enforceability      82   

 

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SECTION 3.03

  No Conflicts      83   

SECTION 3.04

  Financial Statements; Projections      83   

SECTION 3.05

  Properties      84   

SECTION 3.06

  Intellectual Property      85   

SECTION 3.07

  Equity Interests and Subsidiaries      86   

SECTION 3.08

  Litigation; Compliance with Laws      86   

SECTION 3.09

  Reserved      87   

SECTION 3.10

  Federal Reserve Regulations      87   

SECTION 3.11

  Investment Company Act      87   

SECTION 3.12

  Use of Proceeds      87   

SECTION 3.13

  Taxes      87   

SECTION 3.14

  No Material Misstatements      87   

SECTION 3.15

  Labor Matters      88   

SECTION 3.16

  Solvency      88   

SECTION 3.17

  Employee Benefit Plans      89   

SECTION 3.18

  Environmental Matters      89   

SECTION 3.19

  Insurance      90   

SECTION 3.20

  Security Documents      90   

SECTION 3.21

  Acquisition Documents      91   

SECTION 3.22

  Anti-Terrorism and Anti-Money Laundering Laws      92   

SECTION 3.23

  Foreign Corrupt Practices      92    ARTICLE IV    CONDITIONS TO CREDIT
EXTENSIONS   

SECTION 4.01

  Conditions to Initial Credit Extension      93   

SECTION 4.02

  Conditions to All Credit Extensions      99    ARTICLE V    AFFIRMATIVE
COVENANTS   

SECTION 5.01

  Financial Statements, Reports, etc.      100   

SECTION 5.02

  Litigation and Other Notices      103   

SECTION 5.03

  Existence; Businesses and Properties      103   

SECTION 5.04

  Insurance      104   

SECTION 5.05

  Obligations and Taxes      105   

SECTION 5.06

  Employee Benefits      106   

SECTION 5.07

  Maintaining Records; Access to Properties and Inspections; Annual Meetings   
  106   

SECTION 5.08

  Use of Proceeds      107   

SECTION 5.09

  Compliance with Environmental Laws; Environmental Reports      107   

SECTION 5.10

  Reserved      107   

SECTION 5.11

  Additional Collateral; Additional Guarantors      107   

SECTION 5.12

  Security Interests; Further Assurances      109   

SECTION 5.13

  Information Regarding Collateral      110   

 

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SECTION 5.14

  Post-Closing Collateral Matters      110   

SECTION 5.15

  Maintenance of Ratings      110    ARTICLE VI    NEGATIVE COVENANTS   

SECTION 6.01

  Indebtedness      110   

SECTION 6.02

  Liens      112   

SECTION 6.03

  Sale and Leaseback Transactions      115   

SECTION 6.04

  Investment, Loan, Advances and Acquisition      115   

SECTION 6.05

  Mergers and Consolidations      117   

SECTION 6.06

  Asset Sales      118   

SECTION 6.07

  Dividends      119   

SECTION 6.08

  Transactions with Affiliates      120   

SECTION 6.09

  Financial Covenants      120   

SECTION 6.10

  Prepayments of Other Indebtedness; Modifications of Organizational Documents
and Other Documents, etc.      122   

SECTION 6.11

  Limitation on Certain Restrictions on Subsidiaries      123   

SECTION 6.12

  Limitation on Issuance of Capital Stock      124   

SECTION 6.13

  Limitation on Creation of Subsidiaries      124   

SECTION 6.14

  Business      124   

SECTION 6.15

  Reserved      124   

SECTION 6.16

  Fiscal Year      124   

SECTION 6.17

  No Further Negative Pledge      124   

SECTION 6.18

  Compliance with Anti-Terrorism and Anti-Money Laundering Laws      125   
ARTICLE VII    GUARANTEE   

SECTION 7.01

  The Guarantee      126   

SECTION 7.02

  Obligations Unconditional      126   

SECTION 7.03

  Reinstatement      128   

SECTION 7.04

  Subrogation; Subordination      128   

SECTION 7.05

  Remedies      128   

SECTION 7.06

  Instrument for the Payment of Money      128   

SECTION 7.07

  Continuing Guarantee      129   

SECTION 7.08

  General Limitation on Guarantee Obligations      129   

SECTION 7.09

  Release of Guarantors      130   

SECTION 7.10

  Right of Contribution      130   

 

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ARTICLE VIII    EVENTS OF DEFAULT   

SECTION 8.01

  Events of Default      131   

SECTION 8.02

  Application of Proceeds      134    ARTICLE IX    THE ADMINISTRATIVE AGENT AND
THE COLLATERAL AGENT   

SECTION 9.01

  Appointment and Authority      135   

SECTION 9.02

  Rights as a Lender      135   

SECTION 9.03

  Exculpatory Provisions      135   

SECTION 9.04

  Reliance by Agent      137   

SECTION 9.05

  Delegation of Duties      137   

SECTION 9.06

  Resignation of Agent      137   

SECTION 9.07

  Non-Reliance on Agent and Other Lenders      138   

SECTION 9.08

  Withholding Tax      139   

SECTION 9.09

  No Other Duties, etc.      139   

SECTION 9.10

  Enforcement      139   

SECTION 9.11

  Administrative Agent May File Proofs of Claim      140   

SECTION 9.12

  Collateral and Guaranty Matters      140    ARTICLE X    MISCELLANEOUS   

SECTION 10.01

  Notices      141   

SECTION 10.02

  Waivers; Amendment      144   

SECTION 10.03

  Expenses; Indemnity; Damage Waiver      148   

SECTION 10.04

  Successors and Assigns      150   

SECTION 10.05

  Survival of Agreement      154   

SECTION 10.06

  Counterparts; Integration; Effectiveness      154   

SECTION 10.07

  Severability      154   

SECTION 10.08

  Right of Setoff      154   

SECTION 10.09

  Governing Law; Jurisdiction; Consent to Service of Process      155   

SECTION 10.10

  Waiver of Jury Trial      156   

SECTION 10.11

  Headings      156   

SECTION 10.12

  Treatment of Certain Information; Confidentiality      156   

SECTION 10.13

  USA PATRIOT Act Notice and Customer Identification Information and
Verification      157   

SECTION 10.14

  Interest Rate Limitation      157   

SECTION 10.15

  Lender Addendum      158   

SECTION 10.16

  Obligations Absolute      158   

 

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ANNEXES

Annex I

   Amortization Table

Annex II

   Existing Letters of Credit SCHEDULES

Schedule 1.01(a)

   Refinancing Indebtedness to Be Repaid

Schedule 1.01(b)

   Subsidiary Guarantors

Schedule 3.03

   Governmental Approvals; Compliance with Laws

Schedule 3.06(c)

   Violations or Proceedings

Schedule 3.17

   Employee Benefit Plans

Schedule 3.18

   Environmental Matters

Schedule 3.19

   Insurance

Schedule 3.21

   Acquisition Documents

Schedule 4.01(g)

   Local Counsel

Schedule 4.01(n)(vi)

   Landlord Access Agreements

Schedule 4.01(o)(iii)

   Title Insurance Amounts

Schedule 5.14

   Post-Closing Matters

Schedule 6.01(b)

   Existing Indebtedness

Schedule 6.02(c)

   Existing Liens

Schedule 6.04(b)

   Existing Investments

Schedule 6.08

   Transactions with Affiliates EXHIBITS

Exhibit A

   Form of Administrative Questionnaire

Exhibit B

   Form of Assignment and Assumption

Exhibit C

   Form of Borrowing Request

Exhibit D

   Form of Compliance Certificate

Exhibit E

   Form of Interest Election Request

Exhibit F

   Form of Joinder Agreement

Exhibit G

   Form of Landlord Access Agreement

Exhibit H

   Form of LC Request

Exhibit I

   Form of Lender Addendum

Exhibit J

   Form of Mortgage

Exhibit K-1

   Form of Term Note

Exhibit K-2

   Form of Revolving Note

Exhibit K-3

   Form of Swingline Note

Exhibit L-1

   Form of Perfection Certificate

Exhibit L-2

   Form of Perfection Certificate Supplement

Exhibit M

   Reserved

Exhibit N

   Reserved

Exhibit O

   Form of Solvency Certificate

Exhibit P

   Form of Intercompany Note

Exhibit Q

   Form of Non-Bank Certificate

Exhibit R

   Form of Discounted Prepayment Option Notice

Exhibit S

   Form of Lender Participation Notice

Exhibit T

   Form of Discounted Voluntary Prepayment Notice

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”) dated as of June 28, 2011, among
DUCOMMUN INCORPORATED, a Delaware corporation (“Borrower”), the Subsidiary
Guarantors (such term and each other capitalized term used but not defined
herein having the meaning given to it in Article I), the Lenders, UBS SECURITIES
LLC and CREDIT SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such
capacity, “Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such
capacity, “Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A. as an Issuing Bank in respect of the Existing
Letters of Credit.

WITNESSETH:

WHEREAS, Borrower and DLMBS, Inc., a Delaware corporation and a direct Wholly
Owned Subsidiary of Borrower (“Merger Subsidiary”), have entered into an
Agreement and Plan of Merger, dated as of April 3, 2011 (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof and thereof, and including the disclosure schedules attached
thereto, the “Acquisition Agreement”), with LaBarge, Inc., a Delaware
corporation (the “Acquired Business”), to effectuate the merger of the Acquired
Business into Merger Subsidiary (the “Merger”), with the Acquired Business
surviving the Merger and becoming a Wholly Owned Subsidiary of Borrower.

WHEREAS, Borrower has requested the Lenders to extend credit in the form of
(a) Term Loans on the Closing Date, in an aggregate principal amount not in
excess of $190.0 million, and (b) Revolving Loans at any time and from time to
time prior to the Revolving Maturity Date, in an aggregate principal amount at
any time outstanding not in excess of $60.0 million, of which no more than $10.0
million may be drawn on the Closing Date.

WHEREAS, Borrower has requested the Swingline Lender to make Swingline Loans, at
any time and from time to time prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $10.0
million.

WHEREAS, Borrower has requested the Issuing Bank to issue letters of credit, in
an aggregate face amount at any time outstanding not in excess of $10.0 million.

WHEREAS, the proceeds of the Loans are to be used in accordance with
Section 3.12.

 

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NOW, THEREFORE, the Lenders are willing to extend such credit to Borrower and
the Issuing Bank is willing to issue letters of credit for the account of
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings specified
below:

“ABR”, when used in reference to any Loan or Borrowing, is used when such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

“ABR Loan” shall mean any ABR Term Loan or ABR Revolving Loan.

“ABR Revolving Loan” shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

“ABR Term Loan” shall mean any Term Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.

“Acceptable Price” shall have the meaning assigned to such term in
Section 2.21(c).

“Acceptance Date” shall have the meaning assigned to such term in
Section 2.21(b).

“Accounting Changes” shall have the meaning assigned to such term in
Section 1.04(d).

“Accounts Receivable Program” means (i) the accounts receivable discount sales
program solely with respect to the accounts receivable of “the Buyer” (as
identified therein as of the date hereof) established pursuant to the Supplier
Agreement between LaBarge, Inc. and Citibank, N.A. dated as of June 9, 2005, as
amended on February 1, 2010, and as further amended, supplemented or otherwise
modified from time to time to the extent permitted hereunder, (ii) the accounts
receivable discount sales program solely with respect to the accounts receivable
of “the Buyer” (as identified therein as of the date hereof) established
pursuant to the Supplier Agreement between Ducommun Aerostructures New York,
Inc. and Citibank, N.A. dated as of November 20, 2009, and as amended,
supplemented or otherwise modified from time to time to the extent permitted
hereunder, (iii) the accounts receivable discount sales program solely with
respect to the accounts receivable of “the Buyer” (as identified therein as of
the date hereof) established pursuant to the Supplier Agreement between CMP
Display Systems, Inc. and Citibank, N.A. dated as of December 21, 2010, and as
further amended, supplemented or otherwise modified from time to time to the
extent permitted hereunder, (iv) the accounts receivable discount sales program
solely with respect to the accounts receivable of “the Buyer” (as identified
therein as of the date hereof) established pursuant to the Supplier Agreement
between Ducommun AeroStructures, Inc. and Citibank, N.A. dated as of March 11,
2005, as amended on August 31, 2010, and as further amended, supplemented or
otherwise modified from time to time to the extent permitted hereunder and
(v) any accounts receivable discount sales

 

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program (a) that contains terms and is pursuant to an agreement in form and
substance substantially similar to those set forth in clauses (i), (ii),
(iii) and (iv) established in the good faith business judgment of the Company or
(b) that is reasonably satisfactory to the Administrative Agent, in each case as
such agreements may be amended, supplemented or otherwise modified from time to
time to the extent permitted hereunder.

“Acquired Business” shall have the meaning assigned to such term in the first
recital hereto.

“Acquisition Agreement” shall have the meaning assigned to such term in the
first recital hereto.

“Acquisition Agreement Representations” shall have the meaning assigned to such
term in Section 4.01(s).

“Acquisition Consideration” shall mean the purchase consideration for any
Permitted Acquisition and all other payments by Borrower or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
(other than Qualified Capital Stock of the Borrower to the extent not
constituting a Change in Control hereunder) or of properties or otherwise and
whether payable at or prior to the consummation of such Permitted Acquisition or
deferred for payment at any future time, whether or not any such future payment
is subject to the occurrence of any contingency, and includes any and all
payments representing the purchase price and any assumptions of Indebtedness,
“earn-outs” and other agreements to make any payment the amount of which is, or
the terms of payment of which are, in any respect subject to or contingent upon
the revenues, income, cash flow or profits (or the like) of any person or
business; provided that any such future payment that is subject to a contingency
shall be considered Acquisition Consideration only to the extent either (i) the
obligation to make such payment is required to be reflected on the face of the
balance sheet of Borrower or any of its Subsidiaries or (ii) a reserve is
required to be established in respect thereof by Borrower or any of its
Subsidiaries, in each case under GAAP at the time of such sale.

“Acquisition Documents” shall mean the collective reference to the Acquisition
Agreement and the other documents listed on Schedule 3.21.

“Additional Senior Unsecured Indebtedness” means senior unsecured Indebtedness
(a) the sole obligor of which is the Borrower, (b) that will not mature prior to
the 91st day following the Final Maturity Date, (c) that has no scheduled
amortization of principal or required or mandatory redemptions, or repurchases,
sinking fund obligation or payments of principal prior to the 91st day following
the Final Maturity Date (other than customary offers to repurchase upon a change
of control, asset sale or condemnation event on market terms at the time of
issuance), (d) bears interest that is a market rate of interest on the date of
issuance of such Indebtedness as determined by the Borrower’s Board of Directors
in good faith. and (e) the covenants, events of default and other material terms
of which (other than fees, discounts, interest rate and redemption premiums) are
not, taken as a whole, more restrictive to the Borrower and the Subsidiaries in
any material respect than those in this Agreement; provided, that the terms of
any such Indebtedness shall not include any financial maintenance covenant;
provided, further, for the avoidance of doubt that any such Indebtedness may be
guaranteed by any Guarantor hereunder to the extent permitted by Section 6.01.

 

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“Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) determined by the Administrative Agent
to be equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period; provided that the Adjusted LIBOR
Rate shall be deemed to be not less than 1.25% per annum.

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto and includes each other person appointed as the successor
pursuant to Article X.

“Administrative Agent Fee” shall have the meaning assigned to such term in
Section 2.05(b).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in
substantially the form of Exhibit A.

“Affiliate” shall mean, when used 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;
provided, however, that, for purposes of Section 6.08, the term “Affiliate”
shall also include any person that directly or indirectly owns more than 10% of
any class of Equity Interests of the person specified.

“Agents” shall mean the Administrative Agent and the Collateral Agent; and
“Agent” shall mean any of them.

“Agreement” shall have the meaning assigned to such term in the preamble hereto.

“Alternate Base Rate” shall mean, for any day, a fluctuating rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
greatest of (a) the Base Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 0.50% and (c) the Adjusted LIBOR Rate
for an Interest Period of one-month beginning on such day (or if such day is not
a Business Day, on the immediately preceding Business Day) plus 1.00%; provided
that the Alternate Base Rate shall be deemed to be not less than 2.25% per
annum. If the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Base Rate, the Federal Funds Effective Rate or the
Adjusted LIBOR Rate shall be effective on the effective date of such change in
the Base Rate, the Federal Funds Effective Rate or the Adjusted LIBOR Rate, as
the case may be.

 

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“Anti-Money Laundering Laws” shall mean any Requirements of Law related to money
laundering, including 18 U.S.C. §§ 1956 and 1957 and the Bank Secrecy Act, 31
U.S.C. §§ 5311 et seq., as amended by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(“USA PATRIOT Act”) of 2001 (Title III of Pub. L. 107-56), and its implementing
regulations (collectively, the “Bank Secrecy Act”).

“Anti-Terrorism Laws” shall mean any Requirements of Law related to terrorism
financing and economic sanctions, including the Trading With the Enemy Act (50
U.S.C. § 1 et seq., as amended), the International Emergency Economic Powers Act
(50 U.S.C. §1701 et seq., as amended) and Executive Order 13224 (effective
September 24, 2001), and their implementing regulations.

“Applicable Discount” shall have the meaning assigned to such term in
Section 2.21(c).

“Applicable ECF Percentage” shall mean, for any fiscal year, (a) 50% if the
Total Leverage Ratio as of the last day of such fiscal year is greater than or
equal to 3.50 to 1.00, (b) 25% if the Total Leverage Ratio as of the last day of
such fiscal year is less than 3.50 to 1.00 but greater than or equal to 2.50 to
1.00 and (c) 0% if the Total Leverage Ratio as of the last day of such fiscal
year is less than 2.50 to 1.00.

“Applicable Margin” shall mean, for any day, (a) with respect to ABR Loans,
3.25% and (b) with respect to Eurodollar Loans, 4.25%.

“Approved Fund” shall mean 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.

“Arrangers” shall have the meaning assigned to such term in the preamble hereto.

“Asset Sale” shall mean (a) any conveyance, sale, lease, sublease, assignment,
transfer or other disposition (including by way of merger or consolidation and
including any Sale and Leaseback Transaction) of any property excluding
(i) sales of inventory and dispositions of cash and Cash Equivalents, in each
case, in the ordinary course of business, by Borrower or any of its
Subsidiaries, (ii) dispositions of used, worn out, obsolete or surplus property
by any Company in the ordinary course of business and the abandonment or other
disposition of Intellectual Property that is, in the reasonable judgment of
Borrower, no longer economically practicable to maintain or useful in the
conduct of the business of the Companies taken as a whole, (iii) any sales,
assignments, transfers, leases, licenses or other dispositions of property,
including, dispositions of cash and Cash Equivalents, in each case, in the
ordinary course of business, by any Company to Borrower or to any Subsidiary
Guarantor, (iv) the creation of a Lien (but not the sale or other disposition of
the property subject to such Lien) permitted by Section 6.02, (v) non-recourse
sales of accounts receivable of the Borrower or any Subsidiary pursuant to and
in accordance with the terms of an Accounts Receivable Program, (vi) the
disposition of any property or other assets of the Borrower or any of its
Subsidiaries by reason of theft, loss, physical destruction or damage, taking or
similar event and (vii) any surrender or waiver of contract rights or the
settlement, release, recovery on or surrender of contract claims, tort claims or
other claims of any kind and (b) any issuance or sale of any Equity Interests of
any Subsidiary of Borrower, in each case, to any person other than (i) Borrower,
(ii) any Subsidiary Guarantor or (iii) other than for purposes of Section 6.06,
any other Subsidiary.

 

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“Assignment and Assumption” shall mean 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 10.04(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit B, or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” shall mean, when used with respect to any Sale and
Leaseback Transaction, as at the time of determination, the present value
(discounted at a rate equivalent to Borrower’s then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such Sale and Leaseback
Transaction.

“Auto-Renewal Letter of Credit” shall have the meaning assigned to such term in
Section 2.18(c)(ii).

“Available Net Assets” shall have the meaning assigned to such term in
Section 7.10.

“Bailee Letter” shall have the meaning assigned thereto in the Security
Agreement.

“Bankruptcy Code” shall mean Title 11 of the United State Code, as amended, or
any similar federal or state law for the relief of debtors.

“Base Rate” shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate shall be effective on the date such
change is effective. The corporate base rate is not necessarily the lowest rate
charged by the Administrative Agent to its customers.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

“Board of Directors” shall mean, with respect to any person, (i) in the case of
any corporation, the board of directors of such person, (ii) in the case of any
limited liability company, the manager, board of managers, or sole member of
such person authorized to act on behalf of such person, (iii) in the case of any
partnership, the general partner or managing general partner of such person and
(iv) in any other case, the functional equivalent of the foregoing.

“Borrower” shall have the meaning assigned to such term in the preamble hereto.

“Borrowing” shall mean (a) Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

 

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“Borrowing Request” shall mean a request by Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such other
form as shall be approved by the Administrative Agent.

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

“Capital Assets” shall mean, with respect to any person, all equipment, fixed
assets and Real Property or improvements of such person, or replacements or
substitutions therefor or additions thereto, that, in accordance with GAAP, have
been or should be reflected as additions to property, plant or equipment on the
balance sheet of such person.

“Capital Expenditures” shall mean, for any period, without duplication, all
expenditures made directly or indirectly by Borrower and its Subsidiaries during
such period for Capital Assets (whether paid in cash or other consideration,
financed by the incurrence of Indebtedness or accrued as a liability), but
excluding (i) expenditures made in connection with the reinvestment of Asset
Sale proceeds pursuant to Section 2.10(c) or in connection with the replacement,
substitution or restoration of property pursuant to Section 2.10(f), (ii) any
portion of such expenditures attributable solely to acquisitions of property,
plant and equipment in Permitted Acquisitions and (iii) leasehold improvement
expenditures that are actually paid for by unaffiliated third party landlords in
the ordinary course of business and which no Company has provided or is required
to provide or incur any consideration or obligation to such third party
landlord. For purposes of this definition, the purchase price of equipment or
other fixed assets that are purchased simultaneously with the trade-in of
existing assets or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount by which such purchase price
exceeds the credit granted by the seller of such assets for the assets being
traded in at such time or the amount of such insurance proceeds, as the case may
be.

“Capital Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

“Captive Insurance Entity” means any Person (other than an individual) created
solely for the purpose of purchasing or providing, or facilitating the provision
of, insurance for products liability, workers compensation, property damage,
professional indemnity, employee benefits, employer’s liability and motor and
medical expenses, in each case, to the extent that such insurance may be so
purchased, provided, or facilitated in accordance with applicable Requirements
of Law.

 

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“Cash Equivalents” shall mean, as to any person, (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in

support thereof) having maturities of not more than one year from the date of
acquisition by such person; (b) time deposits and certificates of deposit of any
Lender or any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any state thereof or the District of Columbia having, capital and
surplus aggregating in excess of $200.0 million and a rating of “A” (or such
other similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) with maturities of not more than one year from the date of acquisition by
such person; (c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (b) above, which
repurchase obligations are secured by a valid perfected security interest in the
underlying securities; (d) commercial paper issued by any person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard &
Poor’s Ratings Group or at least P-1 or the equivalent thereof by Moody’s
Investors Service Inc., and in each case maturing not more than one year after
the date of acquisition by such person; (e) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (a) through (d) above; and (f) demand deposit accounts
maintained in the ordinary course of business.

“Casualty Event” shall mean any involuntary loss of title, any involuntary loss
of, damage to or any destruction of, or any condemnation or other taking
(including by any Governmental Authority) of, any property of Borrower or any of
its Subsidiaries. “Casualty Event” shall include but not be limited to any
taking of all or any part of any Real Property of any person or any part
thereof, in or by condemnation or other eminent domain proceedings pursuant to
any Requirements of Law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any Real Property of any person or any part
thereof by any Governmental Authority, civil or military, or any settlement in
lieu thereof.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. and all implementing
regulations.

A “Change in Control” shall be deemed to have occurred if:

(a) at any time a change of control occurs under the Senior Notes or any other
Material Indebtedness;

(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause
such 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), directly or
indirectly, of Voting Stock of Borrower representing more than 35% of the voting
power of the total outstanding Voting Stock of Borrower; or

(c) individuals who on the Closing Date constituted the Board of Directors
(together with any new directors whose election or appointment by such Board of
Directors or whose nomination for election by the shareholders of the Borrower
was approved by a vote of a majority of the directors of the Borrower then still
in office who were either directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.

 

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For purposes of this definition, a person shall not be deemed to have beneficial
ownership of Equity Interests subject to a stock purchase agreement, merger
agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.

“Change in Law” shall mean the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking into effect of any law, treaty,
order, policy, rule or regulation, (b) any change in any law, treaty, order,
policy, rule or regulation or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or issuance
of any request, 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 or directives thereunder or issued in
connection therewith and (y) all requests, rules, guidelines or 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 be
deemed to be a “Change in Law”, regardless of the date enacted, adopted or
issued.

“Charges” shall have the meaning assigned to such term in Section 10.14.

“Class,” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans,
Incremental Term Loans the terms of which are not identical to Term Loans or
Swingline Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment, Term Loan Commitment, Incremental
Term Loan Commitment or Swingline Commitment, in each case, under this Agreement
as originally in effect or pursuant to Section 2.20, of which such Loan,
Borrowing or Commitment shall be a part.

“Closing Date” shall mean the date of the initial Credit Extension hereunder.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collateral” shall mean, collectively, all of the Security Agreement Collateral,
the Mortgaged Property and all other property of whatever kind and nature
subject or purported to be subject from time to time to a Lien under any
Security Document.

“Collateral Agent” shall have the meaning assigned to such term in the preamble
hereto.

“Commercial Letter of Credit” shall mean any letter of credit or similar
instrument issued for the purpose of providing credit support in connection with
the purchase of materials, goods or services by Borrower or any of its
Subsidiaries in the ordinary course of their businesses.

 

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“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving
Commitment, Term Loan Commitment or Swingline Commitment, and any Commitment to
make Term Loans of a new Class extended by such Lender as provided in
Section 2.20.

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

“Commitment Letter” shall mean the commitment letter dated April 3, 2011 by and
among Ducommun Incorporated, UBS Loan Finance LLC, UBS Securities LLC, Credit
Suisse AG and Credit Suisse Securities (USA) LLC.

“Companies” shall mean Borrower and its Subsidiaries; and “Company” shall mean
any one of them.

“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit D.

“Confidential Information Memorandum” shall mean that certain confidential
information memorandum dated as of May 2011.

“Consolidated Amortization Expense” shall mean, for any period, the amortization
expense of Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

“Consolidated Current Assets” shall mean, as at any date of determination, the
total assets of Borrower and its Subsidiaries which may properly be classified
as current assets on a consolidated balance sheet of Borrower and its
Subsidiaries in accordance with GAAP, excluding the following: cash and Cash
Equivalents and the effects of adjustments pursuant to GAAP resulting from the
application of recapitalization accounting or purchase accounting, as the case
may be, in relation to any consummated acquisition.

“Consolidated Current Liabilities” shall mean, as at any date of determination,
the total liabilities of Borrower and its Subsidiaries which may properly be
classified as current liabilities (other than the current portion of (i) any
Loans or (ii) any Indebtedness with a scheduled final maturity greater than one
year at the time of incurrence) on a consolidated balance sheet of Borrower and
its Subsidiaries in accordance with GAAP, excluding the effects of adjustments
pursuant to GAAP resulting from the application of recapitalization accounting
or purchase accounting, as the case may be, in relation to any consummated
acquisition.

“Consolidated Depreciation Expense” shall mean, for any period, the depreciation
expense of Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, adjusted by (x) adding thereto, in each case only to the extent
deducted in determining such Consolidated Net Income and without duplication:

(a) Consolidated Interest Expense for such period,

 

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(b) Consolidated Amortization Expense for such period,

(c) Consolidated Depreciation Expense for such period,

(d) Consolidated Tax Expense for such period,

(e) (i) costs and expenses directly incurred in connection with the
Transactions, and (ii) costs and expenses in respect of any employment agreement
(including severance costs), change in control (including with respect to the
long term incentive program of the Acquired Business), stock based compensation
or employee incentive agreement in respect of the Transactions (not to exceed
with respect to clause (ii) $10.0 million in the aggregate),

(f) the aggregate amount of all other non-cash charges, expenses or losses
reducing Consolidated Net Income (excluding any non-cash charge, expense or loss
that results in an accrual of a reserve for cash charges in any future period
and any non-cash charge, expense or loss relating to write-offs, write-downs or
reserves with respect to accounts or inventory) for such period,

(g) (i) fees, expenses, financing costs, severance costs and management bonuses
incurred or paid in connection with any Permitted Acquisition after the Closing
Date, including attorneys’ fees and (ii) costs and expenses in respect of any
employment agreement, change in control, stock based compensation or employee
incentive agreement or plan or other employee benefit agreement or plan arising
in connection with a Permitted Acquisition after the Closing Date or the
occurrence of a change in control as defined under such compensation agreement
or plan; provided that amounts under this clause (g) shall not exceed $5.0
million per fiscal year,

(h) reasonable and customary fees, expenses, premiums and other charges in
connection with the issuance or repayment of Indebtedness, the issuance of
Equity Interests, any refinancing transaction, amendment or other modification
of any debt instrument, the making of any Investment, any Asset Sale or
disposition not constituting an Asset Sale, in each case to the extent permitted
by the terms of this Agreement (in each case whether or not consummated and in
each case including reasonable and customary investment banking and attorneys’
fees),

(i) any losses attributable to the extinguishment of any Hedging Obligations or
other derivative instruments,

(j) any extraordinary or non-recurring loss, expense or charge recorded or
recognized by Borrower or any of its Subsidiaries during such period; provided
that the amount of any non-recurring loss, expense or charge during any period
shall not exceed $5.0 million,

(k) any net loss from discontinued operations and any net loss on disposal of
discontinued operations; and

(y) subtracting therefrom the aggregate amount of the following to the extent
increasing Consolidated Net Income: (a) all non-cash items increasing
Consolidated Net Income (other than (1) the accrual of revenue or recording of
receivables in the ordinary course of business and (2) any non-cash items to be
received in cash in any future period or any non-cash income or gain that
results from a reversal of write-offs, write-downs and reserves with respect to
accounts or

 

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inventory) for such period, (b) any gains attributable to the extinguishment of
any Hedging Obligations or other derivative instruments, (c) any extraordinary
or non-recurring gain recorded or recognized by Borrower or any of its
Subsidiaries during such period and (d) any net gain from discontinued
operations or any net gain on disposal of discontinued operations.

Notwithstanding the foregoing, Consolidated EBITDA (1) for the fiscal quarter
ended on July 3, 2010 shall be deemed to be $23.676 million, (2) for the fiscal
quarter ended on October 2, 2010 shall be deemed to be $21.313 million, (3) for
the fiscal quarter ended on December 31, 2010 shall be deemed to be $19.770
million and (4) for the fiscal quarter ended on April 2, 2011 shall be deemed to
be $21.288 million.

Other than for purposes of calculating Excess Cash Flow, Consolidated EBITDA
shall be calculated on a Pro Forma Basis (including Pro Forma Cost Savings if
applicable) to give effect to the Merger, any Permitted Acquisition and Asset
Sales (other than any dispositions in the ordinary course of business)
consummated at any time on or after the first day of the Test Period and prior
to the date of determination as if the Merger and each such Permitted
Acquisition had been effected on the first day of such period and as if each
such Asset Sale had been consummated on the day prior to the first day of such
period. Furthermore, Consolidated EBITDA shall be calculated without regard to
(1) the cumulative effect of a change in accounting principles during such
period and (2) effects of adjustments pursuant to GAAP resulting from the
application of purchase accounting in relation to the Merger or any Permitted
Acquisition.

“Consolidated Indebtedness” shall mean, as at any date of determination, the
aggregate amount of all Indebtedness set forth on the consolidated balance sheet
of Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP (provided that notwithstanding any provision herein to the
contrary, Consolidated Indebtedness shall be determined without giving effect to
any OID or upfront fees (which shall be deemed to constitute like amounts of
OID)).

“Consolidated Interest Expense” shall mean, for any period, the total
consolidated interest expense of Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP plus, without
duplication:

(a) imputed interest on Capital Lease Obligations and Attributable Indebtedness
of Borrower and its Subsidiaries for such period;

(b) commissions, discounts and other fees and charges owed by Borrower or any of
its Subsidiaries with respect to letters of credit securing financial
obligations, bankers’ acceptance financing and receivables financings for such
period;

(c) amortization of debt issuance costs, debt discount or premium and other
financing fees and expenses incurred by Borrower or any of its Subsidiaries for
such period;

(d) cash contributions to any employee stock ownership plan or similar trust
made by Borrower or any of its Subsidiaries to the extent such contributions are
used by such plan or trust to pay interest or fees to any person (other than
Borrower or a Wholly Owned Subsidiary) in connection with Indebtedness incurred
by such plan or trust for such period;

 

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(e) all interest paid or payable with respect to discontinued operations of
Borrower or any of its Subsidiaries for such period;

(f) the interest portion of any deferred payment obligations of Borrower or any
of its Subsidiaries for such period; and

(g) net costs under Hedging Agreements related to interest rates.

Consolidated Interest Expense shall be calculated on a Pro Forma Basis to give
effect to any Indebtedness (other than Indebtedness incurred for ordinary course
working capital needs under ordinary course revolving credit facilities)
incurred, assumed or permanently repaid or extinguished at any time on or after
the first day of the Test Period and prior to the date of determination in
connection with the Merger, any Permitted Acquisitions and Asset Sales (other
than any dispositions in the ordinary course of business) as if such incurrence,
assumption, repayment or extinguishing had been effected on the first day of
such period.

“Consolidated Net Income” shall mean, for any period, the consolidated net
income (or loss) of Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from such
net income (to the extent otherwise included therein), without duplication:

(a) the net income (or loss) of any person (other than a Subsidiary of Borrower)
in which any person other than Borrower and its Subsidiaries has an ownership
interest, except to the extent that cash in an amount equal to any such income
has actually been received by Borrower or (subject to clause (b) below) any of
its Subsidiaries during such period;

(b) the net income of any Subsidiary of Borrower during such period to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary of that income is not permitted by operation of the terms of its
Organizational Documents or any agreement, instrument or Requirements of Law
applicable to that Subsidiary during such period, except that Borrower’s equity
in net loss of any such Subsidiary for such period shall be included in
determining Consolidated Net Income;

(c) any gain (or loss), together with any related provisions for taxes on any
such gain (or the tax effect of any such loss), realized during such period by
Borrower or any of its Subsidiaries upon any Asset Sale (other than any
dispositions in the ordinary course of business) by Borrower or any of its
Subsidiaries;

(d) gains and losses due solely to fluctuations in currency values and the
related tax effects determined in accordance with GAAP for such period;

(e) earnings resulting from any reappraisal, revaluation or write-up of assets;
and

(f) unrealized gains and losses with respect to Hedging Obligations for such
period.

“Consolidated Tax Expense” shall mean, for any period, the tax expense of
Borrower and its Subsidiaries, for such period, determined on a consolidated
basis in accordance with GAAP.

 

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“Consolidated Working Capital Adjustment” shall mean, for any period on a
consolidated basis, the amount (which may be a negative number) by which Net
Working Capital as of the beginning of such period exceeds (or is less than) Net
Working Capital as of the end of such period. For purposes of calculating the
Consolidated Working Capital Adjustment, (i) for any period in which a Permitted
Acquisition occurs, the “consolidated current assets” and “consolidated current
liabilities” acquired as of the date such Permitted Acquisition is consummated
shall be added to Consolidated Current Assets or Consolidated Current
Liabilities, as the case may be, as of the first day of the applicable Excess
Cash Flow Period, (ii) for any period in which an Asset Sale occurs, the
“consolidated current assets” and “consolidated current liabilities” transferred
in such Asset Sale, as of the date such Asset Sale is consummated shall be
deducted from Consolidated Current Assets or Consolidated Current Liabilities,
as the case may be, as of the first day of the applicable Excess Cash Flow
Period and (iii) any reclassification of Consolidated Current Assets and
Consolidated Current Liabilities to, respectively, consolidated long-term assets
or long-term liabilities on the Borrower’s consolidated balance sheet in
accordance with GAAP, and vice versa, shall be disregarded.

“Contingent Obligation” shall mean, as to any person, any obligation, agreement,
understanding or arrangement of such person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of such person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation; (d) with respect to bankers’ acceptances,
letters of credit and similar credit arrangements, until a reimbursement
obligation arises (which reimbursement obligation shall constitute
Indebtedness); or (e) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or any product
warranties. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such person may be liable, whether
singly or jointly, pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such person is required to
perform thereunder) as determined by such person in good faith.

“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Control Agreement” shall have the meaning assigned to such term in the Security
Agreement.

 

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“Cost Savings Certificate” shall have the meaning assigned to such term in the
definition of “Pro Forma Cost Savings”.

“Credit Extension” shall mean, as the context may require, (i) the making of a
Loan by a Lender or (ii) the issuance of any Letter of Credit, or the amendment,
extension or renewal of any existing Letter of Credit, by the Issuing Bank.

“Debt Issuance” shall mean the incurrence by Borrower or any of its Subsidiaries
of any Indebtedness after the Closing Date (other than as permitted by
Section 6.01).

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

“Default Rate” shall have the meaning assigned to such term in Section 2.06(c).

“Defaulting Lender” shall mean any Lender, as reasonably determined by the
Administrative Agent, that (a) has failed to fund any portion of its Loans or
participations in Letters of Credit or Swingline Loans required to be funded by
it hereunder within one Business Day of the date required to be funded by it
hereunder (unless such failure is a result of a good faith dispute), (b) has
notified the Administrative Agent, the Issuing Bank, the Swingline Lender, any
Lender and/or Borrower in writing that it does not intend to comply with any of
its funding obligations under this Agreement or has made a public statement to
the effect that it does not intend to comply with its funding obligations under
this Agreement or under other agreements in which it commits to extend credit,
(c) has failed, within three Business Days after request by the Administrative
Agent or the Borrower, acting in good faith, to confirm in writing that it will
(and is financially able to) comply with the terms of this Agreement relating to
its obligations to fund prospective Loans and participations in then outstanding
Letters of Credit and Swingline Loans (provided that such Lender shall cease to
be a Defaulting Lender upon receipt of such written confirmation by
Administrative Agent and/or the Borrower), (d) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within three Business Days of the date when due, unless the
subject of a good faith dispute, or (e) in the case of a Lender that has a
Commitment, LC Exposure or Swingline Exposure outstanding at such time, shall
take, or is the Subsidiary of any person that has taken, any action or be (or
is) the subject of any action or proceeding of a type described in
Section 8.01(g) or (h) (or any comparable proceeding initiated by a regulatory
authority having jurisdiction over such Lender or such person); 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 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 or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such person.

 

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“Discount Range” shall have the meaning assigned to such term in
Section 2.21(b).

“Discounted Prepayment Option Notice” shall have the meaning assigned to such
term in Section 2.21(b).

“Discounted Voluntary Prepayment” shall have the meaning assigned to such term
in Section 2.21(a).

“Discounted Voluntary Prepayment Notice” shall have the meaning assigned to such
term in Section 2.21(e).

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the 180th day after the Final Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Equity Interests referred to in (a) above, in each case
at any time on or prior to the 180th day after the Final Maturity Date, or
(c) contains any repurchase obligation which may come into effect prior to
payment in full of all Obligations; provided, however, that any Equity Interests
that would not constitute Disqualified Capital Stock but for provisions thereof
giving holders thereof (or the holders of any security into or for which such
Equity Interests is convertible, exchangeable or exercisable) the right to
require the issuer thereof to redeem or repurchase such Equity Interests upon
the occurrence of a change in control or an asset sale occurring prior to the
180th day after the Final Maturity Date shall not constitute Disqualified
Capital Stock if such Equity Interests provide that the issuer thereof will not
redeem or repurchase any such Equity Interests pursuant to such provisions prior
to the repayment in full of the Obligations.

“Dividend” with respect to any person shall mean that such person has declared
or paid a dividend or returned any equity capital to the holders of its Equity
Interests or authorized or made any other distribution, payment or delivery of
property (other than Qualified Capital Stock of such person) or cash to the
holders of its or any of its parent companies’ Equity Interests as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
consideration any of its Equity Interests outstanding (or any options or
warrants issued by such person or any of its parent companies with respect to
its Equity Interests), or set aside any funds for any of the foregoing purposes,
or shall have permitted any of its Subsidiaries to purchase or otherwise acquire
for consideration any of the Equity Interests of such person or any of its
parent companies outstanding (or any options or warrants issued by such person
or any of its parent companies with respect to its Equity Interests). Without
limiting the foregoing, “Dividends” with respect to any person shall also
include all payments made or required to be made by such person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.

 

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“Documentation Agent” shall have the meaning assigned to such term in the
preamble hereto.

“dollars” or “$” shall mean lawful money of the United States.

“Domestic Subsidiary” shall mean any Subsidiary that is organized or existing
under the laws of the United States, any state thereof or the District of
Columbia.

“Eligible Assignee” shall mean any person to whom Loans and Commitments are
permitted to be assigned pursuant to Section 10.04(b)(i); provided that
“Eligible Assignee” shall not include Borrower or any of its Affiliates or
Subsidiaries or any natural person.

“Embargoed Person” shall mean any party that (i) is publicly identified on the
most current list of “Specially Designated Nationals and Blocked Persons”
published by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”), is a “designated national” pursuant to OFAC’s Cuban Assets Control
Regulations (31 C.F.R. 515.305); or (ii) is publicly identified as prohibited
from doing business with the United States under the International Emergency
Economic Powers Act, the Trading With the Enemy Act, or any other Requirements
of Law.

“Environment” shall mean ambient air, indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources, the workplace or as otherwise defined in
any Environmental Law.

“Environmental Claim” shall mean any claim, notice, demand, order, action, suit,
proceeding or other communication alleging liability for or obligation with
respect to any investigation, remediation, removal, cleanup, response,
corrective action, damages to natural resources, personal injury, property
damage, fines, penalties or other costs resulting from, related to or arising
out of (i) the presence, Release or threatened Release in or into the
Environment of Hazardous Material at any location or (ii) any violation or
alleged violation of any Environmental Law, and shall include any claim seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to health, safety or the Environment.

“Environmental Law” shall mean any and all present and future treaties, laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments, consent
orders, consent decrees, code or other binding requirements, and the common law,
relating to protection of public health or the Environment, the Release or
threatened Release of Hazardous Material, natural resources or natural resource
damages, or occupational safety or health, and any and all Environmental
Permits.

“Environmental Permit” shall mean any permit, license, approval, registration,
notification, exemption, consent or other authorization required by or from a
Governmental Authority under Environmental Law.

“Equipment” shall have the meaning assigned to such term in the Security
Agreement.

 

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“Equity Interest” shall mean, with respect to any person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or nonvoting), of equity of such person,
including, if such person is a partnership, partnership interests (whether
general or limited) and 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 partnership, whether outstanding on the date
hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

“ERISA Affiliate” shall mean, with respect to any person, any trade or business
(whether or not incorporated) that, together with such person, is treated as a
single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan (other
than an event for which the 30-day notice period is waived by regulation);
(b) with respect to a Plan, the failure to satisfy the minimum funding standard
of Section 412 of the Code and Section 302 of ERISA, whether or not waived;
(c) the failure to make by its due date a required installment under
Section 430(j) of the Code with respect to any Plan or the failure to make any
required contribution to a Multiemployer Plan; (d) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA) of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
incurrence by any Company or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan; (f) the receipt
by any Company or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans in a distress termination pursuant to Section 4041(c) of ERISA or to
appoint a trustee to administer any Plan, or the occurrence of any event or
condition which could reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any Plan;
(g) the incurrence by any Company or any of its ERISA Affiliates of any
liability with respect to the withdrawal from any Plan or Multiemployer Plan;
(h) the receipt by any Company or its ERISA Affiliates of any notice, concerning
the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; (i) the “substantial cessation of operations”
within the meaning of Section 4062(e) of ERISA with respect to a Plan resulting
in liability to any Company; (j) the making of any amendment to any Plan which
could result in the imposition of a lien or the posting of a bond or other
security; and (k) the occurrence of a non-exempt prohibited transaction (within
the meaning of Section 4975 of the Code or Section 406 of ERISA) which could
reasonably be expected to result in liability to any Company.

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan” shall mean any Eurodollar Revolving Loan or Eurodollar Term
Loan.

 

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“Eurodollar Revolving Borrowing” shall mean a Borrowing comprised of Eurodollar
Revolving Loans.

“Eurodollar Revolving Loan” shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

“Eurodollar Term Borrowing” shall mean a Borrowing comprised of Eurodollar Term
Loans.

“Eurodollar Term Loan” shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

“Event of Default” shall have the meaning assigned to such term in Section 8.01.

“Excess Amount” shall have the meaning assigned to such term in Section 2.10(h).

“Excess Cash Flow” shall mean, for any Excess Cash Flow Period, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated EBITDA for such
Excess Cash Flow Period, and (ii) the Consolidated Working Capital Adjustment
for such Excess Cash Flow Period, over (b) the sum, without duplication, of:

(i) scheduled principal payments in respect of Indebtedness of the Borrower or
any Subsidiary and the permanent repayment of the principal component of
Capitalized Lease Obligations, in each case made with Internally Generated Cash
during such Excess Cash Flow Period;

(ii) Capital Expenditures and Investments made pursuant to Section 6.04(e) and
(h), in each case made with Internally Generated Cash during such Excess Cash
Flow Period;

(iii) Consolidated Tax Expense, to the extent paid or payable in cash with
respect to such Excess Cash Flow Period;

(iv) without duplication of amounts deducted from Excess Cash Flow in prior
Excess Cash Flow Periods or such Excess Cash Flow Period, to the extent set
forth in a certificate of a Responsible Officer delivered to the Administrative
Agent at or before the time the Compliance Certificate for the period ending
simultaneously with such Excess Cash Flow Period is required to be delivered
pursuant to Section 5.01(d), the aggregate amount that shall be required to be
paid in cash in respect of Capital Expenditures to be made by the Borrower or
any Subsidiary during the 90 days following such Excess Cash Flow Period
pursuant to binding contracts (the “Contract Amount”) entered into prior to or
during such Excess Cash Flow Period; provided that to the extent the aggregate
amount of Internally Generated Cash actually utilized to finance such Capital
Expenditures during such 90-day period is less than the Contract Amount, the
amount of such shortfall shall be added to Excess Cash Flow for the Excess Cash
Flow Period following such Excess Cash Flow Period;

 

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(v) the aggregate amount actually paid by Borrower and its Subsidiaries in cash
during such Excess Cash Flow Period on account of Consolidated Interest Expense;

(vi) the aggregate amount of any cash payments made during such Excess Cash Flow
Period in respect of expenses and losses (minus the aggregate amount of any cash
received in respect of gains) referred to in clause (f) of the definition of
“Consolidated Net Income” included in determining Consolidated Net Income for
such Excess Cash Flow Period;

(vii) reasonable and customary expenses incurred in connection with the
issuance, prepayment, amendment or refinancing of Indebtedness or issuance of
Equity Interests or consummation of an Asset Sale permitted hereunder during
such Excess Cash Flow Period to the extent paid from Internally Generated Cash;
and

(viii) reasonable fees, costs and expenses paid from Internally Generated Cash
that are incurred in connection with the Transactions or any Permitted
Acquisition (whether or not consummated) in respect of any employment
agreements, change in control, stock based compensation or employee incentive
agreement or plan or other employee benefit agreement or plan arising in
connection with the Transactions or such Permitted Acquisition or the occurrence
of a change in control as defined under such compensation agreement or plan;
provided that the deduction from Excess Cash Flow shall be limited to (1) in the
case of the Transactions, severance payments and payments arising in connection
with the change of control of the Acquired Business, in each case to the extent
made during the Excess Cash Flow Period ending December 31, 2012 and (2) in each
case of Permitted Acquisitions occurring after the Closing Date, $5.0 million of
payments made during the relevant Excess Cash Flow Period.

“Excess Cash Flow Period” shall mean (i) the period taken as one accounting
period from January 1, 2012 and ending December 31, 2012 and (ii) each fiscal
year of Borrower thereafter.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any Obligation of Borrower hereunder, (a) taxes imposed on or
measured by its overall net income or profits or franchise taxes imposed on it
(in lieu of net income taxes), however denominated, by a jurisdiction (or any
subdivision thereof or therein) as a result of the recipient being organized or
having its principal office or, in the case of any Lender, its applicable
lending office in such jurisdiction, or by any other jurisdiction (or any
subdivision thereof or therein) as a result of a present or former connection
between the recipient and such jurisdiction (other than solely as a result of
the recipient’s being party to, executing, receiving payments under or enforcing
the Loan Documents), (b) any branch profits taxes or similar taxes imposed on a
Lender by a jurisdiction described in clause (a), (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by Borrower under
Section 2.16), any U.S. federal withholding tax that is imposed on interest
payments pursuant to any Requirements of Law that are in effect at the time such
Foreign Lender becomes a party hereto (or designates a new lending office),
except to the extent that such Foreign Lender or such Foreign Lender’s assignor,
if any, was entitled,

 

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immediately prior to such assignment (or designation), to receive additional
amounts or indemnity payments with respect to such withholding tax pursuant to
Section 2.15; provided that this subclause (c) shall not apply to any tax
imposed on a Lender in connection with an interest or participation in any Loan
or other obligation that such Lender was required to acquire pursuant to
Section 2.14(d), (d) any U.S. federal withholding tax that is attributable to
such Lender’s failure to comply with Section 2.15(e), (e) any Taxes imposed
pursuant to FATCA or (f) penalties and interest imposed by a Governmental
Authority with respect to any of the foregoing.

“Existing Lien” shall have the meaning assigned to such term in Section 6.02(c).

“Existing Letters of Credit” shall mean, as of the Closing Date, those letters
of credit set forth on Annex II.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date hereof
(and any amended or successor version that is substantively comparable, provided
that any such amended or successor version imposes criteria that are not
substantially more onerous than those contained in such sections as enacted on
the Closing Date) and regulations, published administrative guidance, and
official interpretations thereof.

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

“Fee Letter” shall mean the confidential fee letter, dated as of April 3, 2011,
among Borrower, the Arrangers and certain of their Affiliates, and any other fee
letters entered into from time to time related to the Loan Documents.

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the LC
Participation Fees, the Fronting Fees and all fees payable pursuant to
Section 2.05(c).

“Final Maturity Date” shall mean the latest of the Revolving Maturity Date, the
Term Loan Maturity Date and any Incremental Term Loan Maturity Date applicable
to existing Incremental Term Loans, as of any date of determination.

“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended.

“Foreign Asset Sale” shall have the meaning assigned to such term in
Section 2.10(c)(iii).

 

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“Foreign Lender” shall mean any Lender that is not a United States person under
and as defined in Section 7701(a)(30) of the Code.

“Foreign Subsidiary” shall mean a Subsidiary that is (i) organized under the
laws of a jurisdiction other than the United States or any state thereof or the
District of Columbia or (ii) a direct or indirect Subsidiary of a Subsidiary
described in clause (i).

“Fronting Fee” shall have the meaning assigned to such term in Section 2.05(c).

“Fund” shall mean any 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 business.

“Funding Guarantor” shall have the meaning assigned to such term in
Section 7.10.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

“Governmental Authority” shall mean the government of the United States or any
other nation, or of any political subdivision thereof, whether state, provincial
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, the
European Central Bank or the Organisation for Economic Co-operation and
Development).

“Governmental Real Property Disclosure Requirements” shall mean any Requirements
of Law of any Governmental Authority requiring notification of the buyer,
lessee, mortgagee, assignee or other transferee of any Real Property, facility,
establishment or business, or notification, registration or filing to or with
any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including any transfer of control) of any Real
Property, facility, establishment or business, of the actual or threatened
presence or Release in or into the Environment, or the use, disposal or handling
of Hazardous Material on, at, under or near the Real Property, facility,
establishment or business to be sold, leased, mortgaged, assigned or
transferred.

“Guaranteed Obligations” shall have the meaning assigned to such term in
Section 7.01.

“Guarantees” shall mean the guarantees issued pursuant to Article VII by the
Subsidiary Guarantors.

“Guarantor Obligations” shall have the meaning assigned to such term in
Section 7.08(a).

“Guarantors” shall mean the Subsidiary Guarantors.

 

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“Hazardous Materials” shall mean the following: hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs; asbestos or any asbestos-containing materials in any form or
condition; radon or any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant or chemicals, wastes, materials,
compounds, constituents or substances, subject to regulation or which can give
rise to liability under any Environmental Laws.

“Hedging Agreement” shall mean any swap, cap, collar, forward purchase or
similar agreements or arrangements dealing with interest rates, currency
exchange rates or commodity prices, either generally or under specific
contingencies.

“Hedging Obligations” shall mean obligations under or with respect to Hedging
Agreements.

“Immaterial Subsidiaries” shall mean, as of any date, any Subsidiary designated
as such by the Borrower (i) whose total assets, as of that date, are less than
$1.0 million and whose total assets, as of that date and together with the total
assets of all other Immaterial Subsidiaries as of such date, are less than $5.0
million and (ii) whose total revenues for the most recent 12-month period do not
exceed $1.0 million and whose total revenues for the most recent 12-month
period, together with the total revenues for the most recent 12-month period for
all other Immaterial Subsidiaries, do not exceed $5.0 million; provided,
however, that a Subsidiary will not be considered to be an Immaterial Subsidiary
if it, directly or indirectly, Guarantees or otherwise provides direct credit
support for any Indebtedness of any Loan Party.

“Increase Effective Date” shall have the meaning assigned to such term in
Section 2.20(a).

“Increase Joinder” shall have the meaning assigned to such term in
Section 2.20(c).

“Incremental Term Loan” shall have the meaning assigned to such term in
Section 2.20(a).

“Incremental Term Loan Commitment” shall have the meaning assigned to such term
in Section 2.20(a). Each Incremental Term Loan shall be either an ABR Term Loan
or a Eurodollar Term Loan.

“Incremental Term Loan Maturity Date” shall have the meaning assigned to such
term in Section 2.20(c)(iv).

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or advances; (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments;
(c) all obligations of such person upon which interest charges are customarily
paid or accrued; (d) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person;
(e) all obligations of such person issued or assumed as the deferred purchase
price of property or services (excluding (i) trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms,
(ii) deferred compensation owed by the Acquired Business and its Subsidiaries to
the extent arising or incurred prior to the Closing Date and (iii) earnouts,
escrows, holdbacks and similar deferred payment obligations so long as they are

 

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contingent or not yet fixed); (f) all obligations of others of the kind referred
to in the foregoing clauses (a) through (e) and the following clauses
(g) through (j) secured by any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, but
limited to the fair market value of such property; (g) all Capital Lease
Obligations, Purchase Money Obligations and synthetic lease obligations of such
person; (h) all Hedging Obligations to the extent required to be reflected as a
liability on a balance sheet of such person; (i) all Attributable Indebtedness
of such person; (j) all obligations of such person for the reimbursement of any
obligor in respect of letters of credit, letters of guaranty, bankers’
acceptances and similar credit transactions; and (k) all Contingent Obligations
of such person in respect of Indebtedness or obligations of others of the kinds
referred to in clauses (a) through (j) above. The Indebtedness of any person
shall include the Indebtedness of any other entity (including any partnership in
which such person is a general partner) to the extent such person is liable
therefor as a result of such person’s ownership interest in or other
relationship with such entity, but only to the extent there is recourse to such
Person for payment thereof. Notwithstanding any provision herein to the
contrary, Indebtedness shall be determined without giving effect to any OID or
upfront fees (which shall be deemed to constitute like amounts of OID) (without
in any way limiting the provisions of Section 2.20(c)(v)).

“Indemnified Taxes” shall mean all Taxes other than Excluded Taxes.

“Indemnitee” shall have the meaning assigned to such term in Section 10.03(b).

“Information” shall have the meaning assigned to such term in Section 10.12.

“Insurance Policies” shall mean the insurance policies and coverages required to
be maintained by each Loan Party which is an owner of Mortgaged Property with
respect to the applicable Mortgaged Property pursuant to Section 5.04 and all
renewals and extensions thereof.

“Insurance Requirements” shall mean, collectively, all provisions of the
Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Mortgaged Property
and applicable to the Mortgaged Property or any use or condition thereof.

“Intellectual Property” shall have the meaning assigned to such term in
Section 3.06(a).

“Intercompany Note” shall mean a promissory note substantially in the form of
Exhibit P.

“Interest Election Request” shall mean a request by Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.08(b), substantially in the form of Exhibit E.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan (including
Swingline Loans), the last Business Day of each March, June, September and
December to occur during any period in which such Loan is outstanding, (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Loan with an Interest Period of more than three months’ duration,

 

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each day prior to the last day of such Interest Period that occurs at intervals
of three months’ duration after the first day of such Interest Period, (c) with
respect to any Revolving Loan or Swingline Loan, the Revolving Maturity Date or
such earlier date on which the Revolving Commitments are terminated and (d) with
respect to any Term Loan, the Term Loan Maturity Date or an Incremental Term
Loan Maturity Date, as the case may be.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or nine or twelve months if agreed to by all affected Lenders) thereafter, as
Borrower may elect; provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing; provided,
however, that an Interest Period shall be limited to the extent required under
Section 2.03(e).

“Internally Generated Cash” shall mean any cash of the Borrower or any
Subsidiary that is not generated from an Asset Sale, a Casualty Event, an
incurrence of Indebtedness, an issuance of Equity Interests or a capital
contribution.

“Investments” shall have the meaning assigned to such term in Section 6.04.

“Issuing Bank” shall mean, as the context may require, (a) UBS AG, Stamford
Branch, in its capacity as issuer of Letters of Credit issued by it; (b) Bank of
America, N.A., in its capacity as issuer of the Existing Letters of Credit;
(c) any other Lender that may become an Issuing Bank pursuant to
Sections 2.18(j) and (k) in its capacity as issuer of Letters of Credit issued
by such Lender; or (d) collectively, all of the foregoing.

“Joinder Agreement” shall mean a joinder agreement substantially in the form of
Exhibit F.

“Labarge SEC Action” shall mean that certain formal investigation that the SEC
commenced of the Acquired Business in June, 2009, relating to the internal
controls of the Acquired Business regarding its use of estimates of completion
costs for certain long-term production contracts.

“Landlord Access Agreement” shall mean a Landlord Access Agreement,
substantially in the form of Exhibit G, or such other form as may reasonably be
acceptable to the Administrative Agent.

“LC Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.18. The amount of the LC Commitment shall
initially be $10.0 million, but in no event exceed the Revolving Commitment.

 

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“LC Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a drawing under a Letter of Credit.

“LC Exposure” shall mean at any time the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all Reimbursement Obligations outstanding at such time. The
LC Exposure of any Revolving Lender at any time shall mean its Pro Rata
Percentage of the aggregate LC Exposure at such time.

“LC Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

“LC Request” shall mean a request by Borrower in accordance with the terms of
Section 2.18(b) and substantially in the form of Exhibit H, or such other form
as shall be approved by the Administrative Agent.

“Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, access
agreements and any other agreements (including all amendments, extensions,
replacements, renewals, modifications and/or guarantees thereof), whether or not
of record and whether now in existence or hereafter entered into, affecting the
use or occupancy of all or any portion of any Real Property.

“Lender Addendum” shall mean with respect to any Lender on the Closing Date, a
lender addendum in the form of Exhibit I, to be executed and delivered by such
Lender on the Closing Date as provided in Section 10.15.

“Lender Participation Notice” shall have the meaning assigned to such term in
Section 2.21(c).

“Lenders” shall mean (a) the financial institutions that have become a party
hereto pursuant to a Lender Addendum or Increase Joinder and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Assumption, other than, in each case, any such financial institution that has
ceased to be a party hereto pursuant to an Assignment and Assumption. Unless the
context clearly indicates otherwise, the term “Lenders” shall include the
Swingline Lender.

“Letter of Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower pursuant to Section 2.18.

“Letter of Credit Expiration Date” shall mean the date which is five Business
Days prior to the Revolving Maturity Date.

“LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent to be
the arithmetic mean of the offered rates for deposits in dollars with a term
comparable to such Interest Period that appears on the Telerate British Bankers
Assoc. Interest Settlement Rates Page (as defined below) at approximately 11:00
a.m., London, England time, on the second full London Business Day preceding the
first day of such Interest Period; provided, however, that (i) if no comparable
term

 

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for an Interest Period is available, the LIBOR Rate shall be determined using
the weighted average of the offered rates for the two terms most nearly
corresponding to such Interest Period and (ii) if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page,
“LIBOR Rate” shall mean, with respect to each day during each Interest Period
pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the
rate per annum equal to the rate at which the Administrative Agent is offered
deposits in dollars at approximately 11:00 a.m., London, England time, two
London Business Days prior to the first day of such Interest Period in the
London interbank market for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to its
portion of the amount of such Eurodollar Borrowing to be outstanding during such
Interest Period. Notwithstanding the foregoing, for purposes of clause (c) of
the definition of Alternate Base Rate, the rates referred to above shall be the
rates as of 11:00 a.m., London, England time, on the date of determination
(rather than the second London Business Day preceding the date of
determination). “Telerate British Bankers Assoc. Interest Settlement Rates Page”
shall mean the display designated as Reuters Screen LIBOR01 Page (or such other
page as may replace such page on such service for the purpose of displaying the
rates at which dollar deposits are offered by leading banks in the London
interbank deposit market).

“Lien” shall mean, with respect to any property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encumbrance of any kind or any arrangement to provide
priority or preference or any filing of any financing statement under the UCC or
any other similar notice of lien under any similar notice or recording statute
of any Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing;
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
property; and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” shall mean this Agreement, the Letters of Credit, the Notes (if
any), the Intercompany Note, and the Security Documents and, solely for purposes
of paragraph (e) of Section 8.01, the Fee Letter.

“Loan Parties” shall mean Borrower and the Subsidiary Guarantors.

“Loans” shall mean, as the context may require, a Revolving Loan, a Term Loan or
a Swingline Loan (and shall include any Loans contemplated by Section 2.20).

“London Business Day” shall mean any day on which banks are generally open for
dealings in dollar deposits in the London interbank market.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Change” shall mean with respect to any Person, any change,
effect, development or event that (a) has or would reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
business, assets or results of operations of such

 

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Person and its Subsidiaries, taken as a whole or (b) materially impairs the
ability of such Person and its Subsidiaries to consummate, or prevents or
materially delays, the Merger or any of the other transactions contemplated by
the Acquisition Agreement or would reasonably be expected to do so; provided,
however, that, subject to the last proviso of this sentence, in the case of
clause (a) only, no changes, effects, developments or events resulting from,
arising out of, or attributable to, any of the following shall be deemed to be
or constitute a “Material Adverse Change” or be taken into account when
determining whether a “Material Adverse Change” has occurred or may, would or
could occur: (A) any changes, effects, developments or events in the economy or
the financial, credit or securities markets in general (including changes in
interest or exchange rates), (B) any changes, effects, developments or events in
the industries in which such Person and its Subsidiaries operate, (C) any
changes, effects, developments or events resulting from the announcement or
pendency of the transactions contemplated by the Acquisition Agreement, the
identity of the Borrower or the performance or compliance with the terms of the
Acquisition Agreement (including, in each case, any loss of customers, suppliers
or employees or any disruption in business relationships), (D) any failure, in
and of itself, of such Person to meet internal forecasts, budgets or financial
projections or fluctuations, in and of themselves, in the trading price or
volume of such Person’s common stock (it being understood that the facts, event,
circumstances or occurrences giving rise or contributing to such failure or
fluctuations may be deemed to be, constitute, or be taken into account when
determining the occurrence of, a Material Adverse Change), (E) acts of God,
natural disasters, calamities, national or international political or social
conditions, including the engagement by any country in hostility (whether
commenced before, on or after the date of the Acquisition Agreement, and whether
or not pursuant to the declaration of a national emergency or war), or the
occurrence of a military or terrorist attack, or (F) any changes in Applicable
Law or GAAP (or any interpretation thereof); provided further, however, that,
with respect to clauses (A), (B), (E), and (F), the impact of such changes,
effects, developments or events is not materially and disproportionately adverse
to such Person and its Subsidiaries. As used solely with respect to this
definition, (i) “Person” means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof;
(ii) “Subsidiary” means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person; (iii) “Applicable
Law” means, with respect to any Person, any federal, state or local law
(statutory, common or otherwise), constitution, treaty, convention, ordinance,
code, rule, regulation, order, injunction, judgment, decree, ruling or other
similar requirement enacted, adopted, promulgated or applied by a Governmental
Authority that is binding upon or applicable to such Person, its Subsidiaries or
any of their respective assets, as the same may be amended from time to time
unless expressly specified otherwise in the Acquisition Agreement; (iv) “GAAP”
means United States generally accepted accounting principles consistently
applied; and (v) “Governmental Authority” means any transnational, domestic or
foreign federal, state or local governmental, regulatory or administrative
authority, department, court, agency, commission or official, including any
political subdivision thereof, or any non-governmental self-regulatory agency,
commission or authority.

“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, property, results of operations or financial condition of Borrower and
its Subsidiaries, taken as a whole; (b) material impairment of the ability of
the Loan Parties to fully and timely perform any

 

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of their material obligations under any Loan Document; (c) material impairment
of the rights of or benefits or remedies available to the Lenders or the
Collateral Agent under any Loan Document; or (d) a material adverse effect on
the Collateral or the Liens in favor of the Collateral Agent (for its benefit
and for the benefit of the other Secured Parties) on the Collateral or the
priority of such Liens.

“Material Indebtedness” shall mean any Indebtedness (other than the Loans and
Letters of Credit) of Borrower or any of its Subsidiaries in an aggregate
outstanding principal amount exceeding $10.0 million. For purposes of
determining Material Indebtedness, the “principal amount” in respect of any
Hedging Obligations of any Loan Party at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Loan Party would be
required to pay if the related Hedging Agreement were terminated at such time.

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

“Maximum Available Net Assets” shall have the meaning assigned to such term in
Section 7.10.

“Maximum Rate” shall have the meaning assigned to such term in Section 10.14.

“Merger” shall have the meaning assigned to such term in the first recital
hereto.

“Merger Subsidiary” shall have the meaning assigned to such term in the first
recital hereto.

“MNPI” shall have the meaning assigned to such term in Section 10.01(d).

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage,
deed of trust or any other document, creating and evidencing a Lien on a
Mortgaged Property, which shall be substantially in the form of Exhibit J or
other form reasonably satisfactory to the Collateral Agent, in each case, with
such schedules and including such provisions as shall be necessary to conform
such document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.

“Mortgaged Property” shall mean (a) each Real Property identified as a Mortgaged
Property on Schedule 7(a) to the Perfection Certificate dated the Closing Date
and (b) each Real Property, if any, which shall be subject to a Mortgage
delivered after the Closing Date pursuant to Section 5.11(c).

“Multiemployer Plan” shall mean a multiemployer plan within the meaning of
Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(b) to which any Company or any ERISA Affiliate has within the preceding five
plan years made contributions; or (c) with respect to which any Company could
incur liability.

 

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“Net Cash Proceeds” shall mean:

(a) with respect to any Asset Sale (other than any issuance or sale of Equity
Interests), the cash proceeds received by Borrower or any of its Subsidiaries
(including cash proceeds subsequently received (as and when received by Borrower
or any of its Subsidiaries) in respect of non-cash consideration initially
received) net of (i) selling expenses (including reasonable brokers’ fees or
commissions, legal, accounting and other professional and transactional fees,
transfer and similar taxes and Borrower’s good faith estimate of income taxes
actually paid or payable in connection with such sale); (ii) amounts provided as
a reserve, in accordance with GAAP, against (x) any liabilities under any
indemnification obligations associated with such Asset Sale or (y) any other
liabilities retained by Borrower or any of its Subsidiaries associated with the
properties sold in such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute
Net Cash Proceeds); (iii) Borrower’s good faith estimate of payments required to
be made with respect to unassumed liabilities relating to the properties sold
within 180 days of such Asset Sale (provided that, to the extent such cash
proceeds are not used to make payments in respect of such unassumed liabilities
within 180 days of such Asset Sale, such cash proceeds shall then constitute Net
Cash Proceeds); (iv) the principal amount, premium or penalty, if any, interest
and other amounts on any Indebtedness for borrowed money which is secured by a
Lien on the properties sold in such Asset Sale (so long as such Lien was
permitted to encumber such properties under the Loan Documents at the time of
such sale) and which is repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such properties); and (v) in the case
of any such cash proceeds received (or subsequently received) by any Subsidiary
that is not a Wholly-Owned Subsidiary, the portion of such proceeds allocable to
the holders (other than Borrower and its Subsidiaries) of Equity Interests in
such Subsidiary or any intermediate Subsidiary that is not a Wholly-Owned
Subsidiary;

(b) with respect to any Debt Issuance or any Preferred Stock Issuance by
Borrower or any of its Subsidiaries, the cash proceeds thereof, net of customary
fees, commissions, costs and other expenses incurred in connection therewith;
and

(c) with respect to any Casualty Event, the cash insurance proceeds,
condemnation awards and other compensation received in respect thereof, net of
(i) all reasonable costs and expenses incurred in connection with the collection
of such proceeds, awards or other compensation in respect of such Casualty
Event; (ii) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness and which is secured by a Lien on the property
subject to such Casualty Event (so long as such Lien was permitted to encumber
such property under the Loan Documents at the time of such Casualty Event) and
which is repaid with such cash proceeds, awards or other compensation; and
(iii) in the case of any such cash proceeds, awards or other compensation
received by any Subsidiary that is not a Wholly- Owned Subsidiary, the portion
of such proceeds allocable to the holders (other than Borrower and its
Subsidiaries) of Equity Interests in such Subsidiary or any intermediate
Subsidiary that is not a Wholly-Owned Subsidiary.

“Net Working Capital” shall mean, at any time, Consolidated Current Assets at
such time minus Consolidated Current Liabilities at such time.

 

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“Notes” shall mean any notes evidencing the Term Loans, Revolving Loans or
Swingline Loans issued pursuant to this Agreement, if any, substantially in the
form of Exhibit K-1, K-2 or K-3.

“Obligations” shall mean (a) obligations of Borrower and the other Loan Parties
from time to time arising under or in respect of the due and punctual payment of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (ii) each payment
required to be made by Borrower and the other Loan Parties under this Agreement
in respect of any Letter of Credit, when and as due, including payments in
respect of Reimbursement Obligations, interest thereon and obligations to
provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
Borrower and the other Loan Parties under this Agreement and the other Loan
Documents, and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of Borrower and the other Loan Parties
under or pursuant to this Agreement and the other Loan Documents.

“OFAC” shall have the meaning set forth in the definition of “Embargoed Person.”

“Offered Loans” shall have the meaning assigned to such term in Section 2.21(c).

“Officers’ Certificate” shall mean a certificate executed by the chairman of the
Board of Directors (if an officer), the chief executive officer, the president
or one of the Financial Officers, solely in his or her official capacity as an
officer (and not in his or her individual capacity).

“OID” shall have the meaning assigned to such term in Section 2.20(c)(v).

“Organizational Documents” shall mean, with respect to any person, (i) in the
case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.

“Other Taxes” shall mean all present or future stamp or documentary Taxes or any
other excise, property or similar Taxes, charges or levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document (and any interest, additions to Tax or penalties applicable
thereto).

“Participant” shall have the meaning assigned to such term in Section 10.04(d).

 

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“Participant Register” shall have the meaning assigned to such term in
Section 10.04(d).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

“Perfection Certificate” shall mean a certificate in the form of Exhibit L-1 or
any other form approved by the Collateral Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit L-2 or any other form approved by the Collateral Agent.

“Permitted Acquisition” shall mean any transaction for the (a) acquisition of
all or substantially all of the property of any person, or of any business or
division of any person; or (b) acquisition (including by merger or
consolidation) of the Equity Interests of any person that becomes a Subsidiary
after giving effect such transaction; provided that each of the following
conditions shall be met:

(i) no Default then exists or would result therefrom;

(ii) after giving effect to such transaction on a Pro Forma Basis, (A) if
(i) the sum of (a) any Revolving Borrowings plus (b) the amount drawn under any
Letter of Credit exceeds $1.0 million; or (ii) the aggregate amount of
outstanding Letters of Credit exceeds $5.0 million, the Borrower shall be in
compliance (after giving effect to such transaction on a Pro Forma Basis,
including any Indebtedness assumed or incurred in connection with such
transaction) with the covenant set forth in Section 6.09(a) and (B) the Borrower
would be in compliance with the covenant set forth in Section 6.09(c), assuming
in the case of both (A) and (B) above that such transaction, and all other
Permitted Acquisitions consummated since the first day of the relevant Test
Period ending on or prior to the date of such transaction during such Test
Period, had occurred on the first day of such relevant Test Period;

(iii) no Company shall, in connection with any such transaction, assume or
remain liable with respect to any Indebtedness of the related seller or the
business, person or properties acquired, except to the extent permitted under
Section 6.01;

(iv) the person or business to be acquired shall be, or shall be engaged in, a
business of the type that Borrower and the Subsidiaries are permitted to be
engaged in under Section 6.14 and the property acquired in connection with any
such transaction shall be made subject to the Lien of the Security Documents (to
the extent constituting Collateral thereunder) and shall be free and clear of
any Liens, other than Permitted Collateral Liens;

(v) the Board of Directors of the person to be acquired shall not have indicated
publicly its opposition to the consummation of such acquisition (which
opposition has not been publicly withdrawn);

(vi) all transactions in connection therewith shall be consummated in accordance
in all material respects with all applicable Requirements of Law;

 

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(vii) with respect to any transaction involving Acquisition Consideration of
more than $15.0 million, unless the Administrative Agent shall otherwise agree,
Borrower shall have provided the Administrative Agent and the Lenders with
(A) historical financial statements for the last three fiscal years (or, if
less, the number of years since formation) of the person or business to be
acquired (audited if available without undue cost or delay) and unaudited
financial statements thereof for the most recent interim period which are
available, (B) reasonably detailed projections for the succeeding five years
pertaining to the person or business to be acquired and updated projections for
Borrower after giving effect to such transaction and (C) all such information
and data relating to such transaction or the person or business to be acquired
as may be reasonably requested by the Administrative Agent or the Required
Lenders;

(viii) with respect to any transaction involving Acquisition Consideration of
more than $15.0 million, at least 5 Business Days prior to the proposed date of
consummation of the transaction, Borrower shall have delivered to the
Administrative Agent an Officers’ Certificate certifying that (A) such
transaction complies with this definition (which shall have attached thereto
reasonably detailed backup data and calculations showing such compliance), and
(B) such transaction could not reasonably be expected to result in a Material
Adverse Effect; and

(ix) after giving effect to such transaction on a Pro Forma Basis (including any
Indebtedness assumed or incurred in connection with such transaction), the Total
Leverage Ratio of the Borrower shall be less than 4.25 to 1.0 (assuming that
such transaction, and all other Permitted Acquisitions consummated since the
first day of the relevant Test Period ending on or prior to the date of such
transaction during such Test Period, had occurred on the first day of such
relevant Test Period); provided that, subject to the foregoing limitations, the
aggregate amount of the Acquisition Consideration for all Permitted Acquisitions
since the Closing Date in respect of the acquisition of Subsidiaries that do not
become Subsidiary Guarantors pursuant to Section 5.11 may not exceed $10.0
million; provided further that, in each case, any Equity Interests constituting
all or a portion of Acquisition Consideration shall not have a cash dividend
requirement on or prior to the Final Maturity Date.

“Permitted Collateral Liens” shall mean (a) in the case of Collateral other than
Mortgaged Property, Permitted Liens and (b) in the case of Mortgaged Property,
the Liens described in clauses (a), (b), (d), (e), (g), (i) and (l) of
Section 6.02 in addition to those Liens set forth in Schedule B to the
applicable Mortgage delivered on the Closing Date or upon the date of delivery
of each additional Mortgage under Section 5.11, 5.12 or 5.14.

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

“Permitted Refinancing Indebtedness” shall mean, with respect to any Person, any
modification, refinancing, refunding, renewal or extension of any Indebtedness
of such Person (or any successor of such Person); provided, however, that
(a) the principal amount thereof does not exceed the sum of (i) the outstanding
principal amount of the Indebtedness so modified, refinanced, refunded, renewed
or extended plus (ii) prepayment premiums paid, and reasonable and customary
fees and expenses incurred, in connection with such modification, refinancing,
refunding, renewal or extension, (b) such modification, refinancing, refunding,
renewal or

 

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extension has (i) a final maturity date equal to or later than the final
maturity date of the Indebtedness being modified, refinanced, refunded, renewed
or extended and (ii) a weighted average life to maturity equal to or longer than
the weighted average life to maturity of the Indebtedness being modified,
refinanced, refunded, renewed or extended, (c) the direct and contingent
obligors of such Indebtedness shall not be changed, as a result of or in
connection with such modification, refinancing, refunding, renewal or extension,
(d) the terms of such Indebtedness shall not be changed in any manner that is
materially adverse, taken as a whole, to the Borrower or any Subsidiary, as
applicable, as a result of or in connection with such modification, refinancing,
refunding, renewal or extension, (e) if the Indebtedness being modified,
refinanced, refunded, renewed or extended is subordinated in right of payment
and/or in right of Lien to the Obligations, such modification, refinancing,
refunding, renewal or extension is subordinated in right of payment and/or in
right of Lien (or, in the case of Lien subordination, not secured) to the
Obligations on terms at least as favorable to the Lenders as those contained in
the documentation governing the Indebtedness being so modified, refinanced,
refunded, renewed or extended, (f) if the Indebtedness being modified,
refinanced, refunded, renewed or extended is unsecured, such modification,
refinancing, refunding, renewal or extension shall be unsecured and (g) at the
time of such modification, refinancing, refunding, renewal or extension of such
Indebtedness, no Default shall have occurred and be continuing or result
therefrom.

“Permitted Subordinated Indebtedness” shall mean unsecured Subordinated
Indebtedness the sole obligor of which is Borrower that (i) will not mature
prior to the 91st day following the Final Maturity Date, (ii) has no scheduled
amortization of principal or required or mandatory redemptions, or repurchases,
sinking fund obligation or payments of principal prior to the 91st day following
the Final Maturity Date (other than customary offers to repurchase upon a change
of control, asset sale or condemnation event so long as any such rights are
subordinated to the rights of the Lenders), (iii) is contractually subordinated
or junior in right of payment (including as to “standstill” provisions) to the
Obligations on terms reasonably satisfactory to the Administrative Agent and
(iv) contains covenants, events of default and other material terms that are no
less favorable to the Lenders than the terms and conditions customary for senior
subordinated debt securities of comparable issuers issued in the capital markets
at such time as reasonably determined by the Administrative Agent; provided, for
the avoidance of doubt that any such Indebtedness may be guaranteed by any
Guarantor hereunder to the extent permitted by Section 6.01.

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

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA which is maintained or contributed to by any Company or
its ERISA Affiliate or with respect to which any Company could incur liability
(including under Section 4069 of ERISA).

“Preferred Stock” shall mean, with respect to any person, any and all preferred
or preference Equity Interests (however designated) of such person whether now
outstanding or issued after the Closing Date.

 

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“Preferred Stock Issuance” shall mean the issuance or sale by Borrower or any of
its Subsidiaries of any Preferred Stock after the Closing Date (other than as
permitted by Section 6.01).

“Premises” shall have the meaning assigned thereto in the applicable Mortgage.

“Private Side Communications” shall have the meaning assigned to such term in
Section 10.01(d).

“Private Siders” shall have the meaning assigned to such term in
Section 10.01(d).

“Pro Forma Basis” shall mean on a basis in accordance with GAAP and Regulation
S-X and otherwise reasonably satisfactory to the Administrative Agent, provided
that calculations of Consolidated EBITDA may include Pro Forma Cost Savings (if
applicable) to the extent permitted by the definition thereof and as set forth
in the last paragraph of the definition of “Consolidated EBITDA”.

“Pro Forma Cost Savings” shall mean, with respect to any period, the reduction
in net costs and related adjustments (which may include cost savings resulting
from head count reduction, closure of facilities and similar restructurings):
(a) that were directly attributable to the Merger, any Permitted Acquisition or
an Asset Sale that occurred during the relevant Test Period and are calculated
on a basis that is consistent with Regulation S-X, (b) that were actually
implemented in connection with the Merger, any Permitted Acquisition or an Asset
Sale during the relevant Test Period and are supportable and quantifiable by the
underlying accounting records or (c) that relate to the Merger, any Permitted
Acquisition or an Asset Sale that has occurred and that a Financial Officer of
the Borrower reasonably determines in good faith are probable based upon
specifically identifiable actions to be taken within 12 months of the date of
consummation of the Merger, a Permitted Acquisition or an Asset Sale and such
costs and related adjustments are identifiable, quantifiable and factually
supportable and reasonably satisfactory to the Administrative Agent; provided
that (1) the only cost savings added in the calculation of Consolidated EBITDA
pursuant to this definition in respect of the Transactions shall be the deemed
amount of such cost savings equal to $4.4 million (for the Test Period ended
July 2, 2011), $4.4 million (for the Test Period ended October 1, 2011), $3.3
million (for the Test Period ended December 31, 2011), $2.2 million (for the
Test Period ended March 31, 2012), and $1.1 million (for the Test Period ended
June 30, 2012), (2) the aggregate amount of cost savings added in the
calculation of Consolidated EBITDA pursuant to this definition shall not exceed
$2.5 million in the aggregate for any one Permitted Acquisition and $5.0 million
in the aggregate for any fiscal year and no amount shall be carried forward to
any succeeding fiscal year, (3) in the case of clause (c)(2) a duly completed
certificate (the “Cost Savings Certificate”) signed by a Financial Officer of
the Borrower shall have been delivered to the Administrative Agent, specifying
the relevant transaction and the expected reduction in net costs and related
adjustments in reasonable detail and certifying that (i) such reduction in net
costs and related adjustments is probable based upon the actions specifically
identified in such certificate, (ii) such actions are to be taken within (A) in
the case of any reduction in net costs and related adjustments in connection
with the Transactions, 12 months after the Closing Date and (B) in all other
cases, within 12 months after the consummation of the applicable Permitted
Acquisition or Asset Sale, (4) no reduction in net costs and related adjustments
shall be added pursuant to this

 

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definition 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, or of the actual costs savings realized, (5) reductions in net
costs and related adjustments may no longer be added in calculating Consolidated
EBITDA pursuant to this definition for periods commencing more than 12 months
after the applicable transaction and (6) for each Test Period after the first
Test Period for which cost savings for any Permitted Acquisition or an Asset
Sale are reflected (other than those with respect to the Transactions which are
addressed in clause (1) above), the amount of reduction in net costs and related
adjustments to be included in the calculation of Consolidated EBITDA with
respect to such transaction for such period shall be reduced by 25% in the case
of such Test Period immediately following the first Test Period for which cost
savings for such transaction are reflected, and an additional 25% in the case of
each of such other Test Periods, of the total amount of such reduction in net
costs and related adjustments in respect thereof (in the case of clause (c) as
specified in the Cost Savings Certificate).

“Proposed Discounted Prepayment Amount” shall have the meaning assigned to such
term in Section 2.21(b).

“Pro Rata Percentage” of any Revolving Lender at any time shall mean the
percentage of the total Revolving Commitments of all Revolving Lenders
represented by such Lender’s Revolving Commitment; provided that for purposes of
Section 2.19(b) and (c), “Pro Rata Percentage” shall mean the percentage of the
total Revolving Commitments (disregarding the Revolving Commitment of any
Defaulting Lender to the extent its Swingline Exposure or LC Exposure is
reallocated to the non-Defaulting Lenders) represented by such Lender’s
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Pro Rata Percentage shall be determined based upon the Revolving Commitments
most recently in effect, after giving effect to any assignments.

“property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Equity Interests or other ownership interests of any
person and whether now in existence or owned or hereafter entered into or
acquired, including all Real Property.

“Property Material Adverse Effect” shall have the meaning assigned thereto in
the Mortgage.

“Public Siders” shall have the meaning assigned to such term in
Section 10.01(d).

“Purchase Money Obligation” shall mean, for any person, the obligations of such
person in respect of Indebtedness (including Capital Lease Obligations) incurred
for the purpose of financing all or any part of the purchase price of any
property (including Equity Interests of any person) or the cost of installation,
construction or improvement of any property and any refinancing thereof;
provided, however, that (i) such Indebtedness is incurred within one year after
such acquisition, installation, construction or improvement of such property by
such person and (ii) the amount of such Indebtedness does not exceed 100% of the
cost of such acquisition, installation, construction or improvement, as the case
may be.

 

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“Qualified Capital Stock” of any person shall mean any Equity Interests of such
person that are not Disqualified Capital Stock.

“Qualifying Lenders” shall have the meaning assigned to such term in
Section 2.21(d).

“Qualifying Loans” shall have the meaning assigned to such term in
Section 2.21(d).

“Qui Tam Action” means the qui tam action brought against The Boeing Company and
the Borrower on behalf of the United States of America for alleged violations of
the United States False Claims Act in United States of America ex re Taylor
Smith, Jeannine Prewitt and James Ailes v. The Boeing Company and Ducommun Inc.

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold, mineral or other estate) in and to any and all parcels
of or interests in real property owned, leased or operated by any person,
whether by lease, license or other means, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements
and appurtenant fixtures and equipment, all general intangibles and contract
rights and other property and rights incidental to the ownership, lease or
operation thereof.

“Refinancing” shall mean the repayment in full and the termination of any
commitment to make extensions of credit under all of the outstanding
indebtedness listed on Schedule 1.01(a) of Borrower or any of its Subsidiaries
and the Acquired Business and its Subsidiaries.

“Register” shall have the meaning assigned to such term in Section 10.04(c).

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation S-X” shall mean Regulation S-X promulgated under the Securities Act.

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Reimbursement Obligations” shall mean Borrower’s obligations under
Section 2.18(e) to reimburse LC Disbursements.

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

 

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“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.

“Remaining Loan Party” shall have the meaning assigned to such term in
Section 7.10.

“Repricing Transaction” shall mean the refinancing or repricing by Borrower of
any of the Term Loans under this Agreement (x) with the proceeds of any
Indebtedness (including, without limitation, any new or additional term loans
under this Agreement) or (y) in connection with any amendment to this Agreement,
in either case, (i) having or resulting in an effective interest rate or
weighted average yield (to be determined at the sole discretion of the
Administrative Agent, after giving effect to margins, upfront or similar fees or
original issue discount shared with all lenders or holders thereof, but
excluding the effect of any arrangement, structuring, syndication or other fees
payable in connection therewith that are not shared with all lenders or holders
thereof) as of the date of such refinancing that is, or could be by the express
terms of such Indebtedness (and not by virtue of any fluctuation in Adjusted
LIBOR Rate or Alternate Base Rate, but including by virtue of any LIBOR floor or
Alternate Base Rate floor), less than the Applicable Margin for, or weighted
average yield of (to be determined at the sole discretion of the Administrative
Agent, on the same basis as above) such Term Loans as of the date of such
repricing and (ii) in the case of a refinancing of the applicable Term Loans,
the proceeds of which are used to repay, in whole or in part, principal of such
outstanding Term Loans.

“Required Class Lenders” shall mean (i) with respect to each Class of Term
Loans, Lenders having more than 50% of all Term Loans of such Class outstanding
and (ii) with respect to Revolving Loans, Required Revolving Lenders.

“Required Lenders” shall mean Lenders having more than 50% of the sum of all
Loans outstanding, LC Exposure and unused Commitments; provided that the Loans,
LC Exposure and unused Commitments held or deemed held by any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

“Required Revolving Lenders” shall mean Lenders having more than 50% of all
Revolving Commitments or, after the Revolving Commitments have terminated, more
than 50% of all Revolving Exposure; provided that the Revolving Commitments held
or deemed held by any Defaulting Lender shall be excluded for purposes of making
a determination of Required Revolving Lenders.

“Requirements of Law” shall mean, collectively, any and all applicable
requirements of any Governmental Authority including any and all laws,
judgments, orders, executive orders, decrees, ordinances, rules, regulations,
statutes or case law.

“Response” shall mean (a) “response” as such term is defined in CERCLA, 42
U.S.C. § 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to (i) clean up, remove, treat, abate or in
any other way address any Hazardous Material in the Environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, or to determine the necessity of the activities
described in, clause (i) or (ii) above.

 

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“Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
person in respect of this Agreement.

“Revolving Availability Period” shall mean the period from and including the
Closing Date to but excluding the earlier of (i) the Business Day preceding the
Revolving Maturity Date and (ii) the date of termination of the Revolving
Commitments.

“Revolving Borrowing” shall mean a Borrowing comprised of Revolving Loans.

“Revolving Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans hereunder up to the amount set
forth on Schedule I to the Lender Addendum executed and delivered by such Lender
or by an Increase Joinder, or in the Assignment and Assumption pursuant to which
such Lender assumed its Revolving Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The aggregate amount of the Lenders’ Revolving
Commitments on the Closing Date is $60.0 million.

“Revolving Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Revolving Loans of
such Lender, plus the aggregate amount at such time of such Lender’s LC
Exposure, plus the aggregate amount at such time of such Lender’s Swingline
Exposure.

“Revolving Lender” shall mean a Lender with a Revolving Commitment.

“Revolving Loan” shall mean a Loan made by the Lenders to Borrower pursuant to
Section 2.01(b). Each Revolving Loan shall either be an ABR Revolving Loan or a
Eurodollar Revolving Loan.

“Revolving Maturity Date” shall mean the date that is the five year anniversary
of the Closing Date or, if such date is not a Business Day, the first Business
Day thereafter.

“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.03.

“Sarbanes-Oxley Act” shall mean the United States Sarbanes-Oxley Act of 2002, as
amended, and all rules and regulations promulgated thereunder.

“SEC” has the meaning assigned to such term in Section 10.01(d).

“Secured Obligations” shall mean (a) the Obligations, (b) the due and punctual
payment and performance of all obligations of Borrower and the other Loan
Parties under each Hedging Agreement entered into with any counterparty that is
a Secured Party and (c) the due and punctual payment and performance of all
obligations of Borrower and the other Loan Parties (including overdrafts and
related liabilities) under each Treasury Services Agreement entered into with
any counterparty that is a Secured Party.

 

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“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, each Issuing Bank, the Lenders and each
counterparty to a Hedging Agreement or Treasury Services Agreement if (a) at the
date of entering into such Hedging Agreement or Treasury Services Agreement such
person was an Agent or a Lender or an Affiliate of an Agent or a Lender and
(b) such person executes and delivers to the Administrative Agent a letter
agreement in form and substance acceptable to the Administrative Agent pursuant
to which such person (i) appoints the Collateral Agent as its agent under the
applicable Loan Documents and (ii) agrees to be bound by the provisions of
Sections 9.03, 10.03 and 10.09 as if it were a Lender.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securities Collateral” shall have the meaning assigned to such term in the
Security Agreement.

“Security Agreement” shall mean that certain Security Agreement dated as of the
Closing Date among the Loan Parties and the Collateral Agent for the benefit of
the Secured Parties, as amended from time to time pursuant to the terms hereof
and thereof.

“Security Agreement Collateral” shall mean all property pledged or granted as
collateral pursuant to the Security Agreement (a) on the Closing Date or
(b) thereafter pursuant to Section 5.11.

“Security Documents” shall mean the Security Agreement, the Mortgages and each
other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest in
any property as collateral for the Secured Obligations, and all UCC or other
financing statements or instruments of perfection required by this Agreement,
the Security Agreement, any Mortgage or any other such security document or
pledge agreement to be filed with respect to the security interests in property
and fixtures created pursuant to the Security Agreement or any Mortgage and any
other document or instrument utilized to pledge or grant or purport to pledge or
grant a security interest or lien on any property as collateral for the Secured
Obligations.

“Senior Note Agreement” shall mean any indenture, note purchase agreement or
other agreement pursuant to which the Senior Notes are issued as in effect on
the date hereof and thereafter amended from time to time subject to the
requirements of this Agreement.

“Senior Note Documents” shall mean the Senior Notes, the Senior Note Agreement,
the Senior Note Guarantees and all other documents executed and delivered with
respect to the Senior Notes or the Senior Note Agreement.

“Senior Note Guarantees” shall mean the guarantees of Borrower and the
Subsidiary Guarantors pursuant to the Senior Note Agreement.

 

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“Senior Notes” shall mean Borrower’s 9.75% Senior Notes due 2018 issued pursuant
to the Senior Note Agreement and any registered notes issued by Borrower in
exchange for, and as contemplated by, such notes with substantially identical
terms as such notes.

“Senior Secured Leverage Ratio” shall mean, at any date of determination, the
ratio of (i) Consolidated Indebtedness that is secured by a Lien on assets of
Borrower or its Subsidiaries to (ii) Consolidated EBITDA for the Test Period
then most recently ended.

“Specified Representations” shall have the meaning assigned to such term in
Section 4.01(s).

“Standby Letter of Credit” shall mean any standby letter of credit or similar
instrument issued for the purpose of supporting (a) workers’ compensation
liabilities of Borrower or any of its Subsidiaries, (b) the obligations of
third-party insurers of Borrower or any of its Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third-party insurers to obtain such
letters of credit, (c) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries if required by Requirements of Law or in
accordance with custom and practice in the industry or (d) Indebtedness of
Borrower or any of its Subsidiaries permitted to be incurred under Section 6.01.

“Statutory Reserves” shall mean for any Interest Period for any Eurodollar
Borrowing, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the United States Federal
Reserve System in New York City with deposits exceeding one billion dollars
against “Eurocurrency liabilities” (as such term is used in Regulation D).
Eurodollar Borrowings shall be deemed to constitute Eurodollar liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time to time to any
Lender under Regulation D.

“Subordinated Indebtedness” shall mean Indebtedness of Borrower or any Guarantor
that is by its terms subordinated in right of payment to the Obligations of
Borrower and such Guarantor, as applicable, on terms reasonably acceptable to
the Administrative Agent.

“Subsidiary” shall mean, with respect to any person (the “parent”) at any date,
(i) any person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (ii) any other
corporation, limited liability company, association or other business entity of
which securities or other ownership interests representing more than 50% of the
voting power of all Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the Board of Directors thereof
are, as of such date, owned, controlled or held by the parent and/or one or more
subsidiaries of the parent and (iii) any partnership (a) the sole general
partner or the managing general partner of which is the parent and/or one or
more subsidiaries of the parent or (b) the only general partners of which are
the parent and/or one or more subsidiaries of the parent. Unless the context
requires otherwise, “Subsidiary” refers to a Subsidiary of Borrower.

 

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“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(b),
and each other Subsidiary that is or becomes a party to this Agreement pursuant
to Section 5.11.

“Successful Syndication” shall have the meaning assigned to such term in the Fee
Letter.

“Survey” shall mean a survey of any Mortgaged Property (and all improvements
thereon) which is (i) prepared by a surveyor or engineer licensed to perform
surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated
subsequent to the most recent date upon which shall have occurred any exterior
construction on the site of such Mortgaged Property or any easement, right of
way or other interest in the Mortgaged Property has been granted or become
effective through operation of law or otherwise with respect to such Mortgaged
Property which, in either case, should be depicted on a survey, (iii) complying
in all material respects with the minimum detail requirements of the American
Land Title Association as such requirements are in effect on the date of
preparation of such survey and (iv) sufficient for the Title Company to remove
all standard survey exceptions from the title insurance policy (or commitment)
relating to such Mortgaged Property and issue the endorsements of the type
required by Section 4.01(o)(iii).

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
loans pursuant to Section 2.17, as the same may be reduced from time to time
pursuant to Section 2.07 or Section 2.17. The amount of the Swingline Commitment
shall initially be $10.0 million, but shall in no event exceed the Revolving
Commitment.

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

“Swingline Lender” shall have the meaning assigned to such term in the preamble
hereto.

“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.17.

“Syndication Agent” shall have the meaning assigned to such term in the preamble
hereto.

“Tax Return” shall mean any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

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

“Term Borrowing” shall mean a Borrowing comprised of Term Loans.

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make a Term Loan hereunder on the Closing Date in the
amount set forth on Schedule I to the Lender Addendum executed and delivered by
such Lender. The aggregate amount of the Lenders’ Term Loan Commitments is
$190.0 million.

 

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“Term Loan Lender” shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.

“Term Loan Maturity Date” shall mean the date which is the six year anniversary
of the Closing Date or, if such date is not a Business Day, the first Business
Day thereafter.

“Term Loan Repayment Date” shall have the meaning assigned to such term in
Section 2.09.

“Term Loans” shall mean the term loans made by the Lenders to Borrower pursuant
to Section 2.01(a)(i) or by an Increase Joinder. Each Term Loan shall be either
an ABR Term Loan or a Eurodollar Term Loan.

A “Test Period” at any time shall mean the period of four consecutive fiscal
quarters of Borrower ended on or prior to such time (taken as one accounting
period).

“Title Company” shall mean any title insurance company as shall be retained by
Borrower and reasonably acceptable to the Administrative Agent.

“Title Policy” shall have the meaning assigned to such term in
Section 4.01(o)(iii).

“Total Available Net Assets” shall have the meaning assigned to such term in
Section 7.08(a).

“Total Leverage Ratio” shall mean, at any date of determination, the ratio of
Consolidated Indebtedness on such date to Consolidated EBITDA for the most
recently ended Test Period for which financial statements are available.

“Transaction Documents” shall mean the Acquisition Documents, the Senior Note
Documents, and the Loan Documents.

“Transactions” shall mean, collectively, the transactions to occur on or prior
to the Closing Date pursuant to the Transaction Documents, including (a) the
consummation of the Merger; (b) the execution, delivery and performance of the
Loan Documents and the initial borrowings hereunder; (c) the Refinancing;
(d) the execution, delivery and performance of the Senior Note Documents and the
issuance of the Senior Notes; and (e) the payment of all fees and expenses to be
paid on or prior to the Closing Date and owing in connection with the foregoing.

“Transferred Guarantor” shall have the meaning assigned to such term in
Section 7.09.

“Treasury Services Agreement” shall mean any agreement relating to treasury,
depositary and cash management services or automated clearinghouse transfer of
funds.

 

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“Type,” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time
(except as otherwise specified) in any applicable state or jurisdiction.

“United States” shall mean the United States of America.

“USA PATRIOT Act” shall have the meaning set forth in the definition of “Anti-
Money Laundering Laws.”

“Voting Stock” shall mean, with respect to any person, any class or classes of
Equity Interests pursuant to which the holders thereof have the general voting
power under ordinary circumstances to vote in the election of the Board of
Directors of such person.

“Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100%
of whose Equity Interests (other than directors’ qualifying shares or Equity
Interests that are required to be held by another person in order to satisfy a
foreign Requirement of Law prescribing an equity owner resident in the local
jurisdiction) is at the time owned by such person and/or one or more Wholly
Owned Subsidiaries of such person and (b) any partnership, association, joint
venture, limited liability company or other entity in which such person and/or
one or more Wholly Owned Subsidiaries of such person have a 100% equity interest
at such time.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02 Classification of Loans and Borrowings.

For purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class
and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Borrowing,” “Borrowing
of Term Loans”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type
(e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03 Terms Generally.

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
(a) any definition of or reference to any Loan Document, agreement, instrument
or other document herein 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 the other Loan

 

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Documents), (b) any reference herein to any person shall be construed to include
such person’s successors and assigns, (c) the words “herein,” “hereof” and
“hereunder,” and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time,
(f) 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 and
(g) “on,” when used with respect to the Mortgaged Property or any property
adjacent to the Mortgaged Property, means “on, in, under, above or about.”

SECTION 1.04 Accounting Terms; GAAP.

(a) Except as otherwise expressly provided herein, all financial statements to
be delivered pursuant to this Agreement shall be prepared in accordance with
GAAP as in effect from time to time and all terms of an accounting or financial
nature shall be construed and interpreted in accordance with GAAP, as in effect
on the date hereof unless otherwise agreed to by Borrower and the Required
Lenders.

(b) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature shall be construed, and all computations of
amounts and ratios referred to in, and determinations of compliance with the
provisions of, Section 6.09 (including all relevant definitions used therein or
for such purposes) hereof shall be made without giving effect to any election
under FASB Accounting Standards Codification 805, 810 or 825 (or any other part
of FASB Accounting Standards Codification having a similar result or effect) for
all purposes hereunder, including to value any Indebtedness or other liabilities
of any Loan Party or any Subsidiary of any Loan Party at “fair value” or to
include any gain or loss attributable thereto in the calculation of net income
(or loss) of any Loan Party or any Subsidiary of any Loan Party.

(c) Notwithstanding anything in this Agreement to the contrary, any change in
GAAP that would require operating leases to be treated similarly to capital
leases shall not be given effect in the definition of Indebtedness or any
related definitions or in the computation of any financial ratio or requirement
hereunder.

(d) Notwithstanding any other provision contained herein, in the event of any
changes in GAAP or other accounting principles (“Accounting Changes”) required
by the promulgation of any rule, regulation, pronouncement or opinion of the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC, if such Accounting Changes result
in a change in the method of calculation of any financial covenant, ratio or
requirement of this Agreement, and the Borrower shall so request in writing,
then the Borrower, the Administrative Agent and the Required Lenders agree to
enter into negotiations in order to amend such covenant, ratio or requirement so
as to preserve the original intent thereof in light of such Accounting Changes.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, ratios and requirements of this Agreement shall continue to be
calculated as if such Accounting Changes had not occurred.

 

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SECTION 1.05 Resolution of Drafting Ambiguities.

Each Loan Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of the Loan Documents to which it is
a party, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and thereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation hereof or thereof.

ARTICLE II

THE CREDITS

SECTION 2.01 Commitments.

Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Lender agrees, severally and not jointly:

(a) to make a Term Loan to Borrower on the Closing Date in the principal amount
not to exceed its Term Loan Commitment; and

(b) to make Revolving Loans to Borrower, at any time and from time to time on or
after the Closing Date until the earlier of the Revolving Maturity Date and the
termination of the Revolving Commitment of such Lender in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding that will
not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving
Commitment; provided however, that the aggregate amount of Revolving Loans made
on the Closing Date shall not exceed $10.0 million.

(c) Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
Within the limits set forth in clause (b) above and subject to the terms,
conditions and limitations set forth herein, Borrower may borrow, pay or prepay
and reborrow Revolving Loans.

SECTION 2.02 Loans.

(a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided that the failure of any Lender to make its Loan
shall not in itself relieve any other Lender of its obligation to lend hereunder
(it being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made by such other
Lender). Except for Loans deemed made pursuant to Section 2.18(e)(i) and (ii),
(x) ABR Loans comprising any Borrowing shall be in an aggregate principal amount
that is (i) an integral multiple of $100,000 and not less than $500,000 or
(ii) equal to the remaining available balance of the applicable Commitments and
(y) the Eurodollar Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) an integral multiple of $100,000 and not less than
$1,000,000 or (ii) equal to the remaining available balance of the applicable
Commitments.

 

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(b) Subject to Sections 2.11 and 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as Borrower may request pursuant to
Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
Borrower to repay such Loan in accordance with the terms of this Agreement.
Borrowings of more than one Type may be outstanding at the same time; provided
that Borrower shall not be entitled to request any Borrowing that, if made,
would result in more than eight Eurodollar Borrowings outstanding hereunder at
any one time. For purposes of the foregoing, Borrowings having different
Interest Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.

(c) Except with respect to Loans deemed made pursuant to Section 2.18(e)(ii),
each Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 4:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account as directed by Borrower in the applicable
Borrowing Request maintained with the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date (in the case of any Eurodollar Borrowing), and at least 2
hours prior to the time (in the case of any ABR Borrowing), of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent at the
time of such Borrowing in accordance with paragraph (c) above, and the
Administrative Agent may, in reliance upon such assumption, make available to
Borrower on such date a corresponding amount. If the Administrative Agent shall
have so made funds available, then, to the extent that such Lender shall not
have made such portion available to the Administrative Agent, each of such
Lender and Borrower severally agrees to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to Borrower until the
date such amount is repaid to the Administrative Agent at (i) in the case of
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Lender’s Loan as part of such Borrowing for purposes of this
Agreement, and Borrower’s obligation to repay the Administrative Agent such
corresponding amount pursuant to this Section 2.02(d) shall cease.

(e) Notwithstanding any other provision of this Agreement, Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Revolving
Maturity Date, Term Loan Maturity Date or Incremental Term Loan Maturity Date,
as applicable.

 

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SECTION 2.03 Borrowing Procedure.

To request Loans, Borrower shall deliver, by hand delivery, e-mail through a
“pdf” copy (if arrangements for doing so have been approved by the
Administrative Agent) or telecopier, a duly completed and executed Borrowing
Request to the Administrative Agent (i) in the case of Eurodollar Loans, not
later than 2:00 p.m., New York City time, three Business Days before the date of
the proposed Borrowing or (ii) in the case of ABR Loans, not later than 2:00
p.m., New York City time, on the date of the proposed Borrowing. Each Borrowing
Request shall be irrevocable and shall specify the following information in
compliance with Section 2.02:

(a) whether the requested borrowing is to be a borrowing of Revolving Loans or
Term Loans;

(b) the aggregate amount of such borrowing;

(c) the date of such borrowing, which shall be a Business Day;

(d) whether such borrowing is to be for ABR Loans or Eurodollar Loans; provided
that all borrowings on the Closing Date shall be for ABR Loans (unless the
Arrangers otherwise agree that any borrowings on the Closing Date may be for
Eurodollar Loans);

(e) in the case of Eurodollar Loans, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; provided that until the date on which the
Administrative Agent shall have notified Borrower that a Successful Syndication
has been achieved, the Interest Period shall be one month;

(f) the location and number of Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.02(c); and

(g) that the conditions set forth in Sections 4.02(b)-(e) have been satisfied as
of the date of the notice.

If no election as to the Type of Loans is specified, then the requested
borrowing shall be for ABR Loans. If no Interest Period is specified with
respect to any requested Eurodollar Loan, then Borrower shall be deemed to have
selected an Interest Period of one month’s duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04 Evidence of Debt; Repayment of Loans.

(a) Promise to Repay. Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Term Loan Lender, the principal
amount of each Term Loan of such Term Loan Lender as provided in Section 2.09,
(ii) to the Administrative Agent for the account of each Revolving Lender, the
then unpaid principal amount of each Revolving Loan of such Revolving Lender on
the Revolving Maturity Date and (iii) to the Swingline Lender, the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Maturity
Date and the first date after such Swingline Loan is made that is the 15th or

 

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last day of a calendar month and is at least two Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing is
made, Borrower shall repay all Swingline Loans that were outstanding on the date
such Borrowing was requested.

(b) Lender and Administrative Agent Records. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
Indebtedness of Borrower to such Lender resulting from each Loan made by such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement. The
Administrative Agent shall maintain records including (i) the amount of each
Loan made hereunder, the Type and Class thereof and the Interest Period
applicable thereto; (ii) the amount of any principal or interest due and payable
or to become due and payable from Borrower to each Lender hereunder; and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender’s share thereof. The entries made in
the records maintained by the Administrative Agent and each Lender pursuant to
this paragraph shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided that the failure of any Lender or the
Administrative Agent to maintain such records or any error therein shall not in
any manner affect the obligations of Borrower to repay the Loans in accordance
with their terms. In the event of any conflict between the records maintained by
any Lender and the records of the Administrative Agent in respect of such
matters, the records of the Administrative Agent shall control in the absence of
manifest error.

(c) Promissory Notes. Any Lender by written notice to Borrower (with a copy to
the Administrative Agent) may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in the form
of Exhibit K-1, K-2 or K-3, as the case may be. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the payee named therein (or its registered
assigns).

SECTION 2.05 Fees.

(a) Commitment Fee. Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee (a “Commitment Fee”) equal to the
0.75% per annum on the average daily unused amount of each Revolving Commitment
of such Lender during the period from and including the date hereof to but
excluding the date on which such Revolving Commitment terminates. Accrued
Commitment Fees shall be payable in arrears (A) on the last Business Day of
March, June, September and December of each year, commencing on the last
Business Day of September 2011, and (B) on the date on which such Revolving
Commitment terminates. Commitment Fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
Commitment Fees with respect to Revolving Commitments, a Revolving Commitment of
a Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender
shall be disregarded for such purpose).

 

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(b) Administrative Agent Fees. Borrower agrees to pay to the Administrative
Agent, for its own account, the administrative fees payable in the amounts and
at the times separately agreed upon between Borrower and the Administrative
Agent (the “Administrative Agent Fees”).

(c) LC and Fronting Fees. Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee (“LC Participation
Fee”) with respect to its participations in Letters of Credit, which shall
accrue at a rate equal to the Applicable Margin from time to time used to
determine the interest rate on Eurodollar Revolving Loans pursuant to
Section 2.06 on the average daily amount of such Lender’s LC Exposure (excluding
any portion thereof attributable to Reimbursement Obligations) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender’s Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee (“Fronting Fee”), which shall accrue at the rate of 0.125% per annum on the
average daily amount of the LC Exposure (excluding any portion thereof
attributable to Reimbursement Obligations) during the period from and including
the Closing Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC Exposure
(which Fronting Fee shall not be less than $1,000 for any Letter of Credit), as
well as the Issuing Bank’s customary fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder (which, for as long as UBS AG, Stamford Branch is the
Issuing Bank, will include an issuance fee of $500 per Letter of Credit,
additional drawing fees of $250 per draw, amendment fees of $200 per amendment
and $250 for renewals on each anniversary of an Auto-Renewal Letter of Credit).
Accrued LC Participation Fees and Fronting Fees shall be payable in arrears
(i) on the last Business Day of March, June, September and December of each
year, commencing on the last Business Day of September 2011, and (ii) on the
date on which the Revolving Commitments terminate. Any such fees accruing after
the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand therefor. All LC Participation Fees
and Fronting Fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

(d) All Fees shall be paid on the dates due, in immediately available funds in
dollars, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that Borrower shall pay the Fronting Fees and other
fees payable pursuant to Section 2.05(c) directly to the Issuing Bank. Fees
payable to UBS AG, Stamford Branch, as Issuing Bank, shall be paid to it in
immediately available funds no later than 11:00 am (New York Time) on the due
date thereof pursuant to wiring information provided separately to the Borrower
by UBS AG, Stamford Branch. Once paid, none of the Fees shall be refundable
under any circumstances.

SECTION 2.06 Interest on Loans.

(a) ABR Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each ABR Borrowing, including each Swingline Loan, shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin in effect from time to time.

 

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(b) Eurodollar Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per annum
equal to the Adjusted LIBOR Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin in effect from time to time.

(c) Default Rate. Notwithstanding the foregoing, if there is (x) an Event of
Default under Section 8.01(a), (b), (g) or (h) or (y) any other Event of
Default, then, automatically in the case of Events of Default under clause (x),
and after the election of the Administrative Agent or the Required Lenders in
the case of Events of Default under clause (y), the Obligations shall, to the
extent permitted by applicable law, bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of amounts constituting
principal on any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section 2.06 or (ii) in the case of
any other outstanding amount, 2% plus the rate applicable to ABR Revolving Loans
as provided in Section 2.06(a) (in either case, the “Default Rate”).

(d) Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan; provided that (i) interest
accrued pursuant to Section 2.06(c) shall be payable on demand, (ii) in the
event of any repayment or prepayment of any Loan (other than a prepayment of an
ABR Revolving Loan or a Swingline Loan without a permanent reduction in
Revolving Commitments), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

(e) Interest Calculation. All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBOR Rate shall be determined by the
Administrative Agent in accordance with the provisions of this Agreement and
such determination shall be conclusive absent manifest error.

SECTION 2.07 Termination and Reduction of Commitments.

(a) Termination of Commitments. The Term Loan Commitments shall automatically
terminate at 5:00 p.m., New York City time, on the Closing Date. The Revolving
Commitments, the Swingline Commitment and the LC Commitment shall automatically
terminate on the Revolving Maturity Date. Notwithstanding the foregoing, all the
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
September 30, 2011, if the initial Credit Extension shall not have occurred by
such time.

(b) Optional Terminations and Reductions. At its option, Borrower may at any
time terminate, or from time to time permanently reduce, the Commitments of any
Class; provided that (i) each reduction of the Commitments of any Class shall be
in an amount that is an integral multiple of $100,000 and not less than
$1,000,000 and (ii) the Revolving Commitments shall not be terminated or reduced
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.10, the aggregate amount of Revolving Exposures would
exceed the aggregate amount of Revolving Commitments.

 

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(c) Borrower Notice. Borrower shall notify the Administrative Agent in writing
of any election to terminate or reduce the Commitments under Section 2.07(b) at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by Borrower pursuant to
this Section shall be irrevocable; provided that a notice of reduction or
termination of the Commitments delivered by Borrower may state that such notice
is conditioned upon the effectiveness of another credit facility, the incurrence
of other Indebtedness, the consummation of a particular disposition or the
occurrence of a Change in Control, or the closing of a securities offering, in
which case such notice may be revoked by Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.

SECTION 2.08 Interest Elections.

(a) Generally. Each Revolving Borrowing and Term Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section.
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
Notwithstanding anything to the contrary, Borrower shall not be entitled to
request any conversion or continuation that, if made, would result in more than
eight Eurodollar Borrowings outstanding hereunder at any one time. This Section
shall not apply to Swingline Borrowings, which may not be converted or
continued.

(b) Interest Election Notice. To make an election pursuant to this Section,
Borrower shall deliver, by hand delivery or telecopier, a duly completed and
executed Interest Election Request to the Administrative Agent not later than
the time that a Borrowing Request would be required under Section 2.03 if
Borrower were requesting Loans of the Type resulting from such election to be
made on the effective date of such election. Each Interest Election Request
shall be irrevocable. Each Interest Election Request shall specify the following
information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
or if outstanding Borrowings are being combined, allocation to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 

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(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”; provided
that until the date on which the Administrative Agent shall have notified
Borrower that a Successful Syndication has been achieved, the Interest Period
shall be one month.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then Borrower shall be deemed to have selected
an Interest Period of one month’s duration.

Promptly following receipt of an Interest Election Request, the Administrative
Agent shall advise each Lender of the details thereof and of such Lender’s
portion of each resulting Borrowing.

(c) Automatic Conversion to ABR Borrowing. If an Interest Election Request with
respect to a Eurodollar Borrowing is not timely delivered prior to the end of
the Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing, the Administrative Agent or
the Required Lenders may require, by notice to Borrower, that (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and
(ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09 Amortization of Term Borrowings.

Borrower shall pay to the Administrative Agent, for the account of the Lenders,
on the dates set forth on Annex I, or if any such date is not a Business Day, on
the immediately preceding Business Day (each such date, a “Term Loan Repayment
Date”), a principal amount of the Term Loans equal to the amount set forth on
Annex I for such date (as adjusted from time to time pursuant to Section 2.10(h)
and Section 2.21(h)), together in each case with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of such payment;
provided that in the event Incremental Term Loans are made, such Incremental
Term Loans shall be repaid on each Term Loan Repayment Date occurring on or
after the applicable Increase Effective Date in an amount set forth in the
Increase Joinder. To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date and all Incremental Term Loans shall
be due and payable on the Incremental Term Loan Maturity Date.

SECTION 2.10 Optional and Mandatory Prepayments of Loans.

(a) Optional Prepayments. Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, subject to the
requirements of this Section 2.10; provided that each partial prepayment of
Loans shall be in an amount that is an integral multiple of $500,000 and not
less than $1,000,000 or, if less, the outstanding principal amount of such
Borrowing.

 

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(b) Revolving Loan Prepayments.

(i) In the event of the termination of all the Revolving Commitments, Borrower
shall, on the date of such termination, repay or prepay all its outstanding
Revolving Borrowings and all outstanding Swingline Loans and replace all
outstanding Letters of Credit or cash collateralize all outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.18(i).

(ii) In the event of any partial reduction of the Revolving Commitments, then
(x) at or prior to the effective date of such reduction, the Administrative
Agent shall notify Borrower and the Revolving Lenders of the sum of the
Revolving Exposures after giving effect thereto and (y) if the sum of the
Revolving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings and third, replace outstanding Letters of Credit or cash
collateralize outstanding Letters of Credit in accordance with the procedures
set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate
such excess.

(iii) In the event that the sum of all Lenders’ Revolving Exposures exceeds the
Revolving Commitments then in effect, Borrower shall, without notice or demand,
immediately first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings, and third, replace outstanding Letters of Credit or cash
collateralize outstanding Letters of Credit in accordance with the procedures
set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate
such excess.

(iv) In the event that the aggregate LC Exposure exceeds the LC Commitment then
in effect, Borrower shall, without notice or demand, immediately replace
outstanding Letters of Credit or cash collateralize outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.18(i), in an
aggregate amount sufficient to eliminate such excess.

(v) In the event that the aggregate Swingline Exposure exceeds the Swingline
Commitment then in effect, Borrower shall, without notice or demand, immediately
repay or prepay Swingline Loans in an aggregate amount sufficient to eliminate
such excess.

(c) Asset Sales. Not later than five Business Days following the receipt of any
Net Cash Proceeds of any Asset Sale by Borrower or any of its Subsidiaries,
Borrower shall make prepayments in accordance with Sections 2.10(h) and (i) in
an aggregate amount equal to 100% of such Net Cash Proceeds; provided that:

(i) no such prepayment shall be required under this Section 2.10(c)(i) with
respect to (A) any Asset Sale permitted by Section 6.06(b) through (f), (B) the
disposition of property which constitutes a Casualty Event, or (C) Asset Sales
for fair market value resulting in no more than $2.5 million in Net Cash
Proceeds per Asset Sale (or series of related Asset Sales) and less than
$5.0 million in Net Cash Proceeds in any fiscal year; provided that clause (C)
shall not apply in the case of any Asset Sale described in clause (b) of the
definition thereof;

 

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(ii) so long as no Default shall then exist or would arise therefrom, such
proceeds shall not be required to be so applied on such date to the extent that
Borrower shall have delivered an Officers’ Certificate to the Administrative
Agent on or prior to such date stating that such Net Cash Proceeds are expected
to be reinvested in fixed or capital assets within 12 months following the date
of such Asset Sale (which Officers’ Certificate shall set forth the estimates of
the proceeds to be so expended); provided that if all or any portion of such Net
Cash Proceeds is not so reinvested within such 12-month period, such unused
portion shall be applied on the last day of such period as a mandatory
prepayment as provided in this Section 2.10(c); provided, further, that if the
property subject to such Asset Sale constituted Collateral, then all property
purchased with the Net Cash Proceeds thereof pursuant to this subsection shall
be made subject to the Lien of the applicable Security Documents in favor of the
Collateral Agent, for its benefit and for the benefit of the other Secured
Parties in accordance with Sections 5.11 and 5.12; and

(iii) notwithstanding any provision of this Section 2.10(c) to the contrary, to
the extent that the Borrower has determined in good faith that repatriation of
any or all of the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary
giving rise to a prepayment under this Section 2.10(c) (a “Foreign Asset Sale”)
would cause material adverse tax consequences (taking into account any foreign
tax credit or benefit received in connection with such repatriation) with
respect to such Net Cash Proceeds, then, to the extent that such material
adverse tax liability is not directly attributable to actions taken by the
Borrower or its Subsidiaries with the intent of avoiding or reducing the
mandatory prepayments otherwise required under this Agreement, the Net Cash
Proceeds from a Foreign Asset Sale so affected may be retained by the applicable
Foreign Subsidiary, provided that on or before the date on which any Net Cash
Proceeds so retained would otherwise have been required to be applied to
reinvestments or prepayments pursuant to this Section 2.10(c), the Borrower
applies an amount equal to such Net Cash Proceeds to such reinvestments or
prepayments as if such Net Cash Proceeds had been received by or was
attributable to the Borrower rather than such Foreign Subsidiary, less the
amount of additional taxes that would have been payable or reserved against if
such Net Cash Proceeds had been repatriated.

(d) Debt Issuance or Preferred Stock Issuance. Not later than five Business Days
following the receipt of any Net Cash Proceeds of any Debt Issuance or Preferred
Stock Issuance by Borrower or any of its Subsidiaries, Borrower shall make
prepayments in accordance with Sections 2.10(h) and (i) in an aggregate amount
equal to 100% of such Net Cash Proceeds.

(e) Reserved.

(f) Casualty Events. Not later than five Business Days following the receipt of
any Net Cash Proceeds from a Casualty Event by Borrower or any of its
Subsidiaries, Borrower shall make prepayments in accordance with
Sections 2.10(h) and (i) in an aggregate amount equal to 100% of such Net Cash
Proceeds; provided that:

 

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(i) so long as no Default shall then exist or arise therefrom, such proceeds
shall not be required to be so applied on such date to the extent that Borrower
shall have delivered an Officers’ Certificate to the Administrative Agent on or
prior to such date stating that such proceeds are expected to be used to repair,
replace or restore any property in respect of which such Net Cash Proceeds were
paid or to reinvest in other fixed or capital assets to be used in Borrower’s
business, no later than 12 months following the date of receipt of such
proceeds; provided that if the property subject to such Casualty Event
constituted Collateral under the Security Documents, then all property purchased
with the Net Cash Proceeds thereof pursuant to this subsection shall be made
subject to the Lien of the applicable Security Documents in favor of the
Collateral Agent, for its benefit and for the benefit of the other Secured
Parties in accordance with Sections 5.11 and 5.12; and

(ii) if any portion of such Net Cash Proceeds shall not be so applied within
such 12-month period, such unused portion shall be applied on the last day of
such period as a mandatory prepayment as provided in this Section 2.10(f).

(g) Excess Cash Flow. No later than five Business Days after the date on which
the financial statements with respect to each fiscal year in which an Excess
Cash Flow Period occurs are or are required to be delivered pursuant to
Section 5.01(a) (without giving effect to any grace period applicable thereto),
Borrower shall make prepayments in accordance with Sections 2.10(h) and (i) in
an aggregate amount equal to (A) the Applicable ECF Percentage of Excess Cash
Flow for the Excess Cash Flow Period then ended minus (B) any voluntary
prepayments of Loans pursuant to Section 2.10(a) made during such Excess Cash
Flow Period with Internally Generated Cash (including voluntary prepayments of
Revolving Loans to the extent accompanied by a simultaneous and equivalent
permanent reduction in the Revolving Commitments).

(h) Application of Prepayments. Prior to any optional or mandatory prepayment
hereunder, Borrower shall select the Borrowing or Borrowings to be prepaid and
shall specify such selection in the notice of such prepayment pursuant to
Section 2.10(i), subject to the provisions of this Section 2.10(h). In the event
of any optional or mandatory prepayment of Term Borrowings made at a time when
Term Borrowings of more than one Class remain outstanding, the aggregate amount
of such prepayment shall be allocated between the Classes of Term Loans pro rata
based on the aggregate principal amount of outstanding Borrowings of each such
Class. Notwithstanding the foregoing any Term Loan Lender may elect, by written
notice to the Administrative Agent at least one Business Day prior to the
prepayment date, to decline all or any portion of any prepayment of its Term
Loans, pursuant to this Section 2.10, in which case the aggregate amount of the
prepayment that would have been applied to prepay such Term Loans, but was so
declined shall be ratably offered to each Term Loan Lender that initially
accepted such prepayment. Any amounts rejected by such Lenders shall be retained
by Borrower. Any prepayments of Term Loans pursuant to Section 2.10(a) shall be
applied to reduce scheduled repayments required under Section 2.09, as directed
by Borrower. Any prepayments of Term Loans pursuant to Section 2.10 (c), (d),
(f) or (g) shall be applied on a pro rata basis among the repayments remaining
to be made on each Term Loan Repayment Date for such Class of Term Loans
(inclusive of the payment due on the Term Loan Maturity Date or Incremental Term
Loan Maturity Date, as the case may be).

 

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Amounts to be applied pursuant to this Section 2.10 to the prepayment of Term
Loans and Revolving Loans shall be applied, as applicable, first to reduce
outstanding ABR Term Loans and ABR Revolving Loans, respectively. Any amounts
remaining after each such application shall be applied to prepay Eurodollar Term
Loans or Eurodollar Revolving Loans, as applicable. Notwithstanding the
foregoing, if the amount of any prepayment of Loans required under this
Section 2.10 shall be in excess of the amount of the ABR Loans at the time
outstanding (an “Excess Amount”), then, at the election of Borrower, only the
portion of the amount of such prepayment as is equal to the amount of such
outstanding ABR Loans shall be immediately prepaid and the Excess Amount shall
be either (A) deposited in an escrow account on terms satisfactory to the
Collateral Agent and applied to the prepayment of Eurodollar Loans on the last
day of the then next-expiring Interest Period for Eurodollar Loans; provided
that (i) interest in respect of such Excess Amount shall continue to accrue
thereon at the rate provided hereunder for the Loans which such Excess Amount is
intended to repay until such Excess Amount shall have been used in full to repay
such Loans and (ii) at any time while a Default has occurred and is continuing,
the Administrative Agent may, and upon written direction from the Required
Lenders shall, apply any or all proceeds then on deposit to the payment of such
Loans in an amount equal to such Excess Amount or (B) prepaid immediately,
together with any amounts owing to the Lenders under Section 2.13.

(i) Notice of Prepayment. Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by written
notice of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 1:00 p.m., New York City time, three Business Days
before the date of prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of prepayment and (iii) in the case of prepayment of a Swingline
Loan, not later than 2:00 p.m., New York City time, on the date of prepayment.
Each such notice shall be irrevocable; provided that a notice of prepayment
delivered by Borrower may state that such notice is conditioned upon the
effectiveness of another credit facility or the closing of a securities
offering, the incurrence of other Indebtedness, the consummation of a particular
disposition or the occurrence of a Change in Control, in which case such notice
may be revoked by Borrower (by notice to the Administrative Agent on or prior to
the specified prepayment date) if such condition is not satisfied. Each such
notice shall specify the prepayment date, the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of a Credit Extension of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing and otherwise in
accordance with this Section 2.10. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.06.

(j) Prepayment Premium. In the event that, within one year of the Closing Date,
(x) Borrower makes any prepayment of Term Loans in connection with any Repricing
Transaction, or (y) effects any amendment of this Agreement resulting in a
Repricing Transaction, Borrower shall pay to the Administrative Agent, for the
ratable account of each of the applicable Term

 

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Loan Lenders, (I) in the case of clause (x), a prepayment premium of 1% of the
amount of the Term Loans being prepaid and (II) in the case of clause (y), a
payment equal to 1% of the aggregate amount of the applicable Term Loans
outstanding immediately prior to such amendment.

SECTION 2.11 Alternate Rate of Interest.

If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be final and
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or

(b) the Administrative Agent determines or is advised in writing by the Required
Lenders that the Adjusted LIBOR Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Eurodollar Borrowing requested to be made
on the first day of such Interest Period shall be made as an ABR Loan, (ii) any
Borrowing that were to have been converted on the first day of such Interest
Period to a Eurodollar Borrowing shall be continued as an ABR Loan and (iii) any
outstanding Eurodollar Borrowing shall be converted, on the last day of the
then-current Interest Period, to an ABR Loan.

SECTION 2.12 Yield Protection.

(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 reflected in the Adjusted LIBOR Rate) or the
Issuing Bank;

(ii) subject any Lender or the Issuing Bank to any Tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a
Letter of Credit or any Loan made by it, or change the basis of taxation of
payments to such Lender or the Issuing Bank in respect thereof (except for
Indemnified Taxes or Other Taxes indemnified under Section 2.15 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the Issuing Bank); or

 

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(iii) impose on any Lender or the Issuing Bank or the London interbank market
any other condition, cost or expense affecting this Agreement or Eurodollar
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 of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender, the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company, if any, 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 Issuing Bank
hereunder (whether of principal, interest or any other amount), then, upon
request of such Lender or the Issuing Bank, Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the Issuing Bank determines (in good
faith, but in its sole absolute discretion) that any Change in Law affecting
such Lender or the Issuing Bank or any lending office of such Lender or such
Lender’s or the Issuing Bank’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the
Issuing Bank’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 held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time Borrower will pay to
such Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section 2.12 (which certificate shall also set
forth in reasonable detail the calculation of such amounts) and delivered to
Borrower shall be conclusive absent manifest error. Borrower shall pay such
Lender or the Issuing Bank, 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 Issuing
Bank to demand compensation pursuant to this Section 2.12 shall not constitute a
waiver of such Lender’s or the Issuing Bank’s right to demand such compensation;
provided that Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
Issuing Bank’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 nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

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SECTION 2.13 Breakage Payments.

In the event of (a) the payment or prepayment, whether optional or mandatory, of
any principal of any Eurodollar Loan earlier than the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan earlier than the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Revolving Loan or Term Loan on the date specified in any notice
delivered pursuant hereto, (d) the assignment of any Eurodollar Loan earlier
than the last day of the Interest Period applicable thereto as a result of a
request by Borrower pursuant to Section 2.16(b), or (e) any assignment of any
Eurodollar Loan prior to the date on which the Arrangers shall have notified
Borrower that a Successful Syndication has been achieved and earlier than the
last day of the Interest Period applicable thereto, then, in any such event,
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBOR Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market. A certificate of any Lender
setting forth in reasonable detail any amount or amounts that such Lender is
entitled to receive pursuant to this Section 2.13 shall be delivered to Borrower
(with a copy to the Administrative Agent) and shall be conclusive and binding
absent manifest error. Borrower shall pay such Lender the amount shown as due on
any such certificate within 5 days after receipt thereof.

SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

(a) Payments Generally. Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal, interest,
fees or Reimbursement Obligations, or of amounts payable under Section 2.12,
2.13, 2.15 or 10.03, or otherwise) on or before the time expressly required
hereunder or under such other Loan Document for such payment (or, if no such
time is expressly required, prior to 2:00 p.m., New York City time), on the date
when due, in immediately available funds, without setoff, deduction or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at
Stamford, Connecticut, except payments to be made directly to the Issuing Bank
or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.12, 2.13, 2.15 and 10.03 shall be made directly to the
persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the persons specified therein. The Administrative Agent shall distribute
any such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars, except as expressly specified
otherwise.

 

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(b) Pro Rata Treatment.

(i) Each payment by Borrower of interest in respect of the Loans shall be
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.

(ii) Each payment on account of principal of the Term Loans shall be allocated
among the Term Loan Lenders pro rata based on the principal amount of the Term
Loans held by the Term Loan Lenders. Each payment by Borrower on account of
principal of the Revolving Borrowings shall be made pro rata according to the
respective outstanding principal amounts of the Revolving Loans then held by the
Revolving Lenders, except as expressly provided in Section 2.20(d).

(c) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
Reimbursement Obligations, interest and fees then due hereunder, such funds
shall be applied (i) first, toward payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, toward
payment of principal and Reimbursement Obligations then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and Reimbursement Obligations then due to such parties. It is understood that
the foregoing does not apply to any adequate protection payments under any
federal, state or foreign bankruptcy, insolvency, receivership or similar
proceeding, and that the Administrative Agent may, subject to any applicable
federal, state or foreign bankruptcy, insolvency, receivership or similar
orders, distribute any adequate protection payments it receives on behalf of the
Lenders to the Lenders in its sole discretion (i.e., whether to pay the earliest
accrued interest, all accrued interest on a pro rata basis or otherwise).

(d) Sharing of Set-Off. If any Lender (and/or the Issuing Bank, which shall be
deemed a “Lender” for purposes of this Section 2.14(d)) shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or other Obligations resulting in
such Lender’s receiving payment of a proportion of the aggregate amount of its
Loans and accrued interest thereon or other Obligations 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 Loans and such other
obligations 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 Loans and other amounts owing them,
provided that:

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

 

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(ii) the provisions of this paragraph shall not be construed to apply to (x) any
payment made by Borrower pursuant to and in accordance with the express terms of
this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to Borrower or
any Subsidiary thereof (as to which the provisions of this paragraph (d) shall
apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Requirements of Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation. If under applicable bankruptcy,
insolvency or any similar law any Secured Party receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.14(d) applies, such Secured
Party shall to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights to which the Secured Party
is entitled under this Section 2.14(d) to share in the benefits of the recovery
of such secured claim.

(e) Borrower Default. Unless the Administrative Agent shall have received notice
from Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that Borrower will not make such payment, the Administrative Agent may
assume that Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Bank, 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 Issuing Bank 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 Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

(f) Discounted Voluntary Prepayments. Notwithstanding anything in this Agreement
to the contrary, it is understood and agreed that Section 2.14(b)(i),
Section 2.14(b)(ii) and Section 2.14(d) shall not apply to payments made to
those Lenders agreeing to prepayments of their Term Loans by the Borrower
pursuant to Discounted Voluntary Prepayments permitted under Section 2.21.

SECTION 2.15 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
Obligation of the Loan Parties hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes (including any Other Taxes); provided that if the applicable
withholding agent shall be required by applicable Requirements of Law (as
determined in the good faith discretion of the applicable withholding agent) to
deduct or withhold any Indemnified Taxes (including any Other Taxes) from such
payments, then (i) the sum payable shall be increased by the Loan Parties as
necessary so that

 

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after all required deductions or withholdings have been made (including
deductions or withholdings applicable to additional sums payable under this
Section) the Administrative Agent or Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made, (ii) the applicable withholding agent shall make such
deductions or withholdings and (iii) the applicable withholding shall timely pay
the full amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable Requirements of Law.

(b) Payment of Other Taxes by Borrower. Without limiting the provisions of
paragraph (a) above, Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Requirements of Law.

(c) Indemnification by Borrower. The Loan Parties shall jointly and severally
indemnify the Administrative Agent and each Lender, within thirty (30) days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable by the
Administrative Agent or such Lender, as the case may be, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other 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 Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Loan Party to a Governmental Authority,
the relevant Loan Party shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of any withholding tax with respect to any payments hereunder or
under any other Loan Document shall, to the extent it may lawfully do so,
deliver to Borrower and to the Administrative Agent, at the time or times
reasonably requested by Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable Requirements of
Law as will permit such payments to be made without withholding or at a reduced
rate of withholding. In addition, any Lender, if requested by Borrower or the
Administrative Agent, shall deliver such other documentation or information
prescribed by applicable Requirements of Law or reasonably requested by Borrower
or the Administrative Agent as will enable 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 above two sentences, in the case of any withholding taxes that are not U.S.
taxes, the completion, execution and submission of non-U.S. federal forms shall
not be required if in the Lender’s reasonable judgment exercised in good faith
such completion, execution or submission would subject such Lender to any
unreimbursed cost or expense, would be disadvantageous to such Lender in any
material respect or would require such Lender to disclose information it
reasonably deems confidential.

 

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Without limiting the generality of the foregoing, any Foreign Lender shall, to
the extent it may lawfully do so, deliver to 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 request of Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

(i) duly completed copies of Internal Revenue Service Form W-8BEN (or any
successor forms) claiming eligibility for benefits of an income tax treaty to
which the United States of America is a party,

(ii) duly completed copies of Internal Revenue Service Form W-8ECI (or any
successor forms),

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) a
certificate, in substantially the form of Exhibit Q, or any other form approved
by the Administrative Agent, to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code,
or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code, and that no payments in connection with the Loan Documents are
effectively connected with such Foreign Lender’s conduct of a U.S. trade or
business and (y) duly completed copies of Internal Revenue Service Form W-8BEN
(or any successor forms) certifying to such Lender’s entitlement to a complete
exemption from United States withholding tax under the portfolio interest
exception,

(iv) to the extent a Foreign Lender is not the beneficial owner (for example,
where the Foreign Lender is a partnership or participating Lender granting a
typical participation), an Internal Revenue Service Form W-8IMY, accompanied by
a Form W-8ECI, W-8BEN, a certificate in substantially the form of Exhibit Q,
Form W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that, if the Foreign Lender is a partnership (and not a
participating Lender) and one or more beneficial owners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
certificate, in substantially the form of Exhibit Q (with appropriate
revisions), on behalf of such beneficial owner(s), or

(v) any other form prescribed by applicable Requirements of Law as a basis for
claiming exemption from or a reduction in United States federal withholding tax
duly completed together with such supplementary documentation as may be
prescribed by applicable Requirements of Law to permit Borrower and the
Administrative Agent to determine the withholding or deduction required to be
made.

Any Lender that is not a Foreign Lender shall deliver to 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 as prescribed by
applicable law or upon the request of Borrower or the Administrative Agent),
duly executed and properly completed copies of Internal Revenue Service Form W-9
(or any successor form(s)) certifying that it is not subject to backup
withholding.

 

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Each Lender shall, from time to time after the initial delivery by such Lender
of the forms described above, whenever a lapse in time or change in such
Lender’s circumstances renders such forms, certificates or other evidence so
delivered obsolete or inaccurate, promptly (1) deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) renewals, amendments or additional or successor forms, properly
completed and duly executed by such Lender, together with any other certificate
or statement of exemption required in order to confirm or establish such
Lender’s status or that such Lender is entitled to an exemption from or
reduction in U.S. federal withholding tax or (2) notify Administrative Agent and
Borrower of its inability to deliver any such forms, certificates or other
evidence.

Each Foreign Lender that is entitled to an exemption from or reduction of any
withholding tax imposed under FATCA shall comply with any certification,
documentation, information or other reporting necessary to establish an
exemption from withholding under FATCA and shall provide any other documentation
reasonably requested by the Borrower or the Administrative Agent sufficient for
the Administrative Agent and the Borrower to comply with their obligations under
FATCA and to determine that such Foreign Lender has complied with such
applicable reporting requirements. Solely for purposes of the immediately
preceding sentence, “FATCA” shall include any amendments made to FATCA after the
date of this Agreement.

(f) Treatment of Certain Refunds. If the Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section, it shall pay to the applicable Loan Party an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Loan Party under this Section with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
expenses of the Administrative Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that such Loan Party, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to such Loan Party (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender or in the event the Administrative Agent or such Lender is required
to repay such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent or any Lender to make available
its Tax Returns (or any other information relating to its Taxes that it deems
confidential) to the Loan Party or any other person. Notwithstanding anything to
the contrary, in no event will the Administrative Agent or any Lender be
required to pay any amount to a Loan Party the payment of which would place the
Administrative Agent or such Lender in a less favorable net after-tax position
than the Administrative Agent or such Lender would have been in if the
Indemnified Taxes or Other Taxes giving rise to such refund had never been
imposed in the first instance.

 

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(g) Payments. For purposes of this Section 2.15, any payments by the
Administrative Agent to a Lender of any amounts received by the Administrative
Agent from Borrower on behalf of such Lender shall be treated as a payment from
Borrower to such Lender.

(h) Issuing Bank. For all purposes of this Section 2.15, the term Lender shall
include the Issuing Bank.

SECTION 2.16 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.12, or requires Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, then such Lender shall 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 judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 2.12 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment. A certificate setting forth such costs and expenses
submitted by such Lender to Borrower shall be conclusive absent manifest error.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.12, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.15, or if any Lender is a Defaulting Lender, or if Borrower exercises
its replacement rights under Section 10.02(d), then 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 10.04), all of its interests, rights and obligations under this
Agreement and the other 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:

(i) Borrower shall have paid to the Administrative Agent the processing and
recordation fee specified in Section 10.04(b);

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
amounts (x) under Section 2.13 and (y) payable pursuant to Section 2.10(j) if a
Lender is being replaced pursuant to Section 10.02(d) in connection with a
Repricing Transaction), from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or Borrower (in the case of all other
amounts;

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.12 or payments required to be made pursuant to Section 2.15,
such assignment will result in a reduction in such compensation or payments
thereafter; and

 

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(iv) such assignment does not conflict with applicable Requirements of Law.

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

Each Lender agrees that, if Borrower elects to replace such Lender in accordance
with this Section 2.16(b), it shall promptly execute and deliver to the
Administrative Agent an Assignment and Assumption to evidence the assignment and
shall deliver to the Administrative Agent any Note (if Notes have been issued in
respect of such Lender’s Loans) subject to such Assignment and Assumption;
provided that the failure of any such Lender to execute an Assignment and
Assumption shall not render such assignment invalid and such assignment shall be
recorded in the Register.

SECTION 2.17 Swingline Loans.

(a) Swingline Commitment. Subject to the terms and conditions set forth herein,
the Swingline Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.17 and in its discretion, to make Swingline
Loans to Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$10.0 million or (ii) the sum of the total Revolving Exposures exceeding the
total Revolving Commitments; provided that the Borrower shall not use the
proceeds of any Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, Borrower may borrow, repay and reborrow Swingline Loans.

(b) Swingline Loans. To request a Swingline Loan, Borrower shall deliver, by
hand delivery, e-mail through a “pdf” copy (if arrangements for doing so have
been approved by the Swingline Lender) or telecopier, a duly completed and
executed Borrowing Request to the Administrative Agent and the Swingline Lender,
not later than 3:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and the amount of the requested Swingline Loan.
Each Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower to an account as directed by Borrower in
the applicable Borrowing Request maintained with the Administrative Agent (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.18(e), by remittance to the Issuing Bank)
by 4:00 p.m., New York City time, on the requested date of such Swingline Loan.
Borrower shall not request a Swingline Loan if at the time of or immediately
after giving effect to the Extension of Credit contemplated by such request a
Default has occurred and is continuing or would result therefrom. Swingline
Loans shall be made in minimum amounts of $1,000,000 and integral multiples of
$500,000 above such amount.

(c) Prepayment. Borrower shall have the right at any time and from time to time
to repay any Swingline Loan, in whole or in part, upon giving written notice to
the Swingline Lender and the Administrative Agent before 2:00 p.m., New York
City time, on the proposed date of prepayment.

 

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(d) Participations. The Swingline Lender may at any time in its discretion by
written notice given to the Administrative Agent (provided such notice
requirement shall not apply if the Swingline Lender and the Administrative Agent
are the same entity) not later than 11:00 a.m., New York City time, on the next
succeeding Business Day following such notice require the Revolving Lenders to
acquire participations on such Business Day in all or a portion of the Swingline
Loans then outstanding. Such notice shall specify the aggregate amount of
Swingline Loans in which Revolving Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Revolving Lender, specifying in such notice such Lender’s Pro Rata
Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (so long as such
payment shall not cause such Lender’s Revolving Exposure to exceed such Lender’s
Revolving Commitment). Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.02(c) with respect to Loans made by such
Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify Borrower of any
participations in any Swingline Loan acquired by the Revolving Lenders pursuant
to this paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from Borrower (or other party on behalf
of Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent. Any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.

SECTION 2.18 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, Borrower may
request the Issuing Bank, and the Issuing Bank agrees, to issue Letters of
Credit for its own account or the account of a Subsidiary in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period (provided that
Borrower shall be a co-applicant, and be jointly and severally liable, with
respect to each Letter of Credit issued for the account of a Subsidiary). The
Issuing Bank shall have no obligation to issue, and Borrower shall not request
the issuance of, any Letter of Credit at any time if after giving effect to such
issuance, the LC Exposure would exceed the LC

 

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Commitment or the total Revolving Exposure would exceed the total Revolving
Commitments. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by Borrower to, or entered into by
Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control. All Existing Letters of Credit shall
be deemed to have been issued pursuant hereto, and from and after the Closing
Date shall be subject to and governed by the terms and conditions hereof.

(b) Request for Issuance, Amendment, Renewal, Extension; Certain Conditions and
Notices. To request the issuance of a Letter of Credit or the amendment, renewal
or extension of an outstanding Letter of Credit, Borrower shall deliver, by hand
or telecopier (or transmit by electronic communication, if arrangements for
doing so have been approved by the Issuing Bank), an LC Request to the Issuing
Bank and the Administrative Agent not later than 11:00 a.m. on the fifth
Business Day preceding the requested date of issuance, amendment, renewal or
extension (or such later date and time as is acceptable to the Issuing Bank).

A request for an initial issuance of a Letter of Credit shall specify in form
and detail satisfactory to the Issuing Bank:

(i) the proposed issuance date of the requested Letter of Credit (which shall be
a Business Day);

(ii) the amount thereof;

(iii) the expiry date thereof (which shall not be later than the close of
business on the Letter of Credit Expiration Date);

(iv) the name and address of the beneficiary thereof;

(v) whether the Letter of Credit is to be issued for its own account or for the
account of one of its Subsidiaries (provided that Borrower shall be a
co-applicant, and therefore jointly and severally liable, with respect to each
Letter of Credit issued for the account of a Subsidiary);

(vi) the documents to be presented by such beneficiary in connection with any
drawing thereunder;

(vii) the full text of any certificate to be presented by such beneficiary in
connection with any drawing thereunder; and

(viii) such other matters as the Issuing Bank may require.

A request for an amendment, renewal or extension of any outstanding Letter of
Credit shall specify in form and detail satisfactory to the Issuing Bank:

(ix) the Letter of Credit to be amended, renewed or extended;

 

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(x) the proposed date of amendment, renewal or extension thereof (which shall be
a Business Day);

(xi) the nature of the proposed amendment, renewal or extension; and

(xii) such other matters as the Issuing Bank may require.

If requested by the Issuing Bank, Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and, upon issuance, amendment, renewal or extension of each
Letter of Credit, Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension, (i) the LC
Exposure shall not exceed the LC Commitment, (ii) the total Revolving Exposures
shall not exceed the total Revolving Commitments and (iii) the conditions set
forth in Article IV in respect of such issuance, amendment, renewal or extension
shall have been satisfied. Unless the Issuing Bank and the Administrative Agent
shall agree otherwise, no Letter of Credit shall be in an initial amount less
than $100,000, in the case of a Commercial Letter of Credit, or $100,000, in the
case of a Standby Letter of Credit, or is to be denominated in a currency other
than Dollars.

Upon the issuance of any Letter of Credit or amendment, renewal, extension or
modification to a Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent, who shall promptly notify each Revolving Lender, thereof,
which notice shall be accompanied by a copy of such Letter of Credit or
amendment, renewal, extension or modification to a Letter of Credit and the
amount of such Lender’s respective participation in such Letter of Credit
pursuant to Section 2.18(d). If the Issuing Bank is not the same person as the
Administrative Agent, on the first Business Day of each calendar month, the
Issuing Bank shall provide to the Administrative Agent a report listing all
outstanding Letters of Credit and the amounts and beneficiaries thereof and the
Administrative Agent shall promptly provide such report to each Revolving
Lender.

(c) Expiration Date.

(i) Each Letter of Credit shall expire at or prior to the close of business on
the earlier of (x) the date which is one year after the date of the issuance of
such Letter of Credit (or, in the case of any renewal or extension thereof, one
year after such renewal or extension) and (y) the Letter of Credit Expiration
Date.

(ii) If Borrower so requests in any Letter of Credit Request, the Issuing Bank
may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”);
provided that any such Auto-Renewal Letter of Credit must permit the Issuing
Bank to prevent any such renewal 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 in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the Issuing Bank, Borrower shall not be required to make a
specific request to the Issuing Bank for any such renewal. Once an Auto-Renewal
Letter of Credit has been issued, the Revolving Lenders shall be deemed to have
authorized (but may not require) the Issuing Bank to permit the

 

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renewal of such Letter of Credit at any time to an expiry date not later than
the earlier of (i) one year from the date of such renewal and (ii) the Letter of
Credit Expiration Date; provided that the Issuing Bank shall not permit any such
renewal if (x) the Issuing Bank has determined that it would have no obligation
at such time to issue such Letter of Credit in its renewed form under the terms
hereof (by reason of the provisions of Section 2.18(l) or otherwise), or (y) it
has received notice on or before the day that is two Business Days before the
date which has been agreed upon pursuant to the proviso of the first sentence of
this paragraph, (1) from the Administrative Agent that any Revolving Lender
directly affected thereby has elected not to permit such renewal or (2) from the
Administrative Agent, any Lender or Borrower that one or more of the applicable
conditions specified in Section 4.02 are not then satisfied.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
irrevocably grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Revolving Lender’s Pro Rata Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Revolving Lender’s Pro Rata Percentage of each LC Disbursement made by the
Issuing Bank and not reimbursed by Borrower on the date due as provided in
Section 2.18(e), or of any reimbursement payment required to be refunded to
Borrower for any reason. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, or expiration, termination or cash
collateralization of any Letter of Credit and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Any
payment hereunder by any Revolving Lender shall be in dollars.

(e) Reimbursement.

(i) If the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, Borrower shall reimburse such LC Disbursement by paying to the Issuing
Bank an amount equal to such LC Disbursement not later than 3:00 p.m., New York
City time, on the date that such LC Disbursement is made if Borrower shall have
received notice of such LC Disbursement prior to 11:00 a.m., New York City time,
on such date, or, if such notice has not been received by Borrower prior to such
time on such date, then not later than 3:00 p.m., New York City time, on the
Business Day immediately following the day that Borrower receives such notice;
provided that Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with ABR Revolving Loans or Swingline Loans in an equivalent amount and, to the
extent so financed, Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Loans or Swingline Loans.

 

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(ii) If Borrower fails to make such payment when due, the Issuing Bank shall
notify the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
Borrower in respect thereof and such Revolving Lender’s Pro Rata Percentage
thereof. Each Revolving Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Lender shall have received such
notice later than 12:00 noon, New York City time, on any day, not later than
11:00 a.m., New York City time, on the immediately following Business Day), an
amount equal to such Revolving Lender’s Pro Rata Percentage of the unreimbursed
LC Disbursement in the same manner as provided in Section 2.02(c) with respect
to Revolving Loans made by such Revolving Lender, and the Administrative Agent
will promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. The Administrative Agent will promptly pay to the Issuing
Bank any amounts received by it from Borrower pursuant to the above paragraph
prior to the time that any Revolving Lender makes any payment pursuant to the
preceding sentence and any such amounts received by the Administrative Agent
from Borrower thereafter will be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made such payments and to the Issuing
Bank, as appropriate.

(iii) If any Revolving Lender shall not have made its Pro Rata Percentage of
such LC Disbursement available to the Administrative Agent as provided above,
each of such Revolving Lender and Borrower severally agrees to pay interest on
such amount, for each day from and including the date such amount is required to
be paid in accordance with the foregoing to but excluding the date such amount
is paid, to the Administrative Agent for the account of the Issuing Bank at
(i) in the case of Borrower, the rate per annum set forth in Section 2.18(h) and
(ii) in the case of such Lender, at a rate determined by the Administrative
Agent in accordance with banking industry rules or practices on interbank
compensation.

(f) Obligations Absolute. The Reimbursement Obligation of Borrower as provided
in Section 2.18(e) shall be absolute, unconditional and irrevocable, and shall
be paid and performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Letter of Credit or this Agreement, or any
term or provision therein; (ii) any draft or other document presented under a
Letter of Credit being proved to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that fails to comply with the terms of
such Letter of Credit; (iv) any other event or circumstance whatsoever, whether
or not similar to any of the foregoing, that might, but for the provisions of
this Section 2.18(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the obligations of Borrower hereunder; (v) the fact
that a Default shall have occurred and be continuing; or (vi) any material
adverse change in the business, property, results of operations, prospects or
condition, financial or otherwise, of Borrower and its Subsidiaries. None of the
Agents, the Lenders, the Issuing Bank or any of their Affiliates shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank

 

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from liability to Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by Borrower
to the extent permitted by applicable Requirements of Law) suffered by Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly give written
notice to the Administrative Agent and Borrower of such demand for payment and
whether the Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve Borrower of its Reimbursement Obligation to the Issuing Bank and the
Revolving Lenders with respect to any such LC Disbursement (other than with
respect to the timing of such Reimbursement Obligation set forth in
Section 2.18(e)).

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest payable on
demand, for each day from and including the date such LC Disbursement is made to
and including the date that Borrower is required to reimburse such LC
Disbursement under Section 2.18(e)(i), at the interest rate then in effect for
ABR Loans, and thereafter, at the rate per annum determined pursuant to
Section 2.06(c) until (but excluding) the date that Borrower reimburses such LC
Disbursement. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to Section 2.18(e) to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

(i) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, Borrower shall deposit on terms and in accounts
satisfactory to the Collateral Agent, in the name of the Collateral Agent and
for the benefit of the Revolving Lenders, an amount in cash equal to the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to Borrower described in Section 8.01(g) or (h). Funds so deposited
shall be applied by

 

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the Collateral Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of outstanding Reimbursement Obligations or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other Obligations of Borrower under this
Agreement. If Borrower is required to provide an amount of cash collateral under
this Section 2.18(i) as a result of the occurrence of an Event of Default, such
amount plus any accrued interest or realized profits with respect to such
amounts (to the extent not applied as aforesaid) shall be returned to Borrower
within three Business Days after all Events of Default have been cured or
waived.

(j) Additional Issuing Banks. Borrower may, at any time and from time to time,
designate one or more additional Revolving Lenders to act as an issuing bank
under the terms of this Agreement, with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld), the Issuing Bank and such
Revolving Lender(s). Any Revolving Lender designated as an issuing bank pursuant
to this paragraph (j) shall have all the rights and obligations of the Issuing
Bank under the Loan Documents with respect to Letters of Credit issued or to be
issued by it, and all references in the Loan Documents to the term “Issuing
Bank” shall, with respect to such Letters of Credit, be deemed to refer to such
Revolving Lender in its capacity as the Issuing Bank, as the context shall
require. The Administrative Agent shall notify the Lenders of any such
additional Issuing Bank. If at any time there is more than one Issuing Bank
hereunder, Borrower may, in its discretion, select which Issuing Bank is to
issue any particular Letter of Credit.

(k) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign as
Issuing Bank hereunder at any time upon at least 30 days’ prior notice to the
Lenders, the Administrative Agent and Borrower. The Issuing Bank may be replaced
at any time by written agreement among Borrower, each Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank. At the time any
such resignation of the Issuing Bank shall become effective, Borrower shall pay
all unpaid fees accrued for the account of the retiring Issuing Bank pursuant to
Section 2.05(c). From and after the effective date of any such resignation or
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued by it thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or replacement of an Issuing Bank,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such resignation or
replacement, but shall not be required to issue additional Letters of Credit.

(l) Other. The Issuing Bank shall be under no obligation to issue any Letter of
Credit if

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

(ii) the issuance of such Letter of Credit would violate one or more policies of
the Issuing Bank.

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

SECTION 2.19 Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

(a) the Commitment Fee shall cease to accrue on the Commitment of such Lender so
long as it is a Defaulting Lender (except to the extent it is payable to the
Issuing Bank pursuant to clause (b)(v) below);

(b) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:

(i) so long as no Default or Event of Default has occurred and is continuing,
all or any part of such Swingline Exposure and LC Exposure shall be reallocated
among the non-Defaulting Lenders in accordance with their respective Pro Rata
Percentages but only to the extent the sum of all non-Defaulting Lenders’
Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC
Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving
Commitments;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, Borrower shall within one Business Day following notice
by the Administrative Agent (x) first, prepay such Defaulting Lender’s Swingline
Exposure and (y) second, cash collateralize such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.18(i) for so long as
such LC Exposure is outstanding;

(iii) if any portion of such Defaulting Lender’s LC Exposure is cash
collateralized pursuant to clause (ii) above, Borrower shall not be required to
pay the LC Participation Fee with respect to such portion of such Defaulting
Lender’s LC Exposure so long as it is cash collateralized;

 

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(iv) if any portion of such Defaulting Lender’s LC Exposure is reallocated to
the non-Defaulting Lenders pursuant to clause (i) above, then the LC
Participation Fee with respect to such portion shall be allocated among the
non-Defaulting Lenders in accordance with their Pro Rata Percentages; or

(v) if any portion of such Defaulting Lender’s LC Exposure is neither cash
collateralized nor reallocated pursuant to this Section 2.19(b), then, without
prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder,
the Commitment Fee that otherwise would have been payable to such Defaulting
Lender (with respect to the portion of such Defaulting Lender’s Revolving
Commitment that was utilized by such LC Exposure) and the LC Participation Fee
payable with respect to such Defaulting Lender’s LC Exposure shall be payable to
the Issuing Bank until such LC Exposure is cash collateralized and/or
reallocated;

(c) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not
be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Revolving
Commitments of the non-Defaulting Lenders and/or cash collateralized in
accordance with Section 2.19(b), and participations in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in accordance with their respective Pro Rata Percentages
(and Defaulting Lenders shall not participate therein);

(d) 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

(e) any amount payable to such Defaulting Lender hereunder (whether on account
of principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.14(d) but
excluding Section 2.16(b)) may, in lieu of being distributed to such Defaulting
Lender, be retained by the Administrative Agent in a segregated non-interest
bearing account and, subject to any applicable Requirements of Law, be applied
at such time or times as may be determined by the Administrative Agent
(i) first, to the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent hereunder, (ii) second, pro rata, to the payment of any
amounts owing by such Defaulting Lender to the Issuing Bank or Swingline Lender
hereunder, (iii) third, to the funding of any Loan or the funding or cash
collateralization of any participation in any Swingline Loan or Letter of Credit
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, (iv) fourth, if so determined by the Administrative Agent and Borrower,
held in such account as cash collateral for future funding obligations of the
Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of
any amounts owing to Borrower or the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by Borrower or any Lender against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement and (vi) sixth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if such
payment is (x) a prepayment of the principal amount of any Loans or
Reimbursement Obligations in respect of LC Disbursements which a Defaulting
Lender has funded its participation obligations and (y) made at a time when the
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satisfied, such payment shall be applied solely to prepay the Loans of, and
Reimbursement Obligations owed to, all non-Defaulting Lenders pro rata prior to
being applied to the prepayment of any Loans, or Reimbursement Obligations owed
to, any Defaulting Lender.

In the event that the Administrative Agent, Borrower, the Issuing Bank or the
Swingline Lender, as the case may be, each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans in accordance with its Pro Rata Percentage, 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. The rights and remedies against a Defaulting
Lender under this Section 2.19 are in addition to other rights and remedies that
Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender and
the non-Defaulting Lenders may have against such Defaulting Lender. The
arrangements permitted or required by this Section 2.19 shall be permitted under
this Agreement, notwithstanding any limitation on Liens or the pro rata sharing
provisions or otherwise.

SECTION 2.20 Increase in Commitments.

(a) Borrower Request. Borrower may by written notice to the Administrative Agent
elect to request (x) prior to the Revolving Maturity Date, an increase to the
existing Revolving Commitments and/or (y) the establishment of one or more new
Term Loan Commitments (each, an “Incremental Term Loan Commitment”) by an amount
not in excess of $75.0 million in the aggregate and (other than increases of
Revolving Commitments or the establishment of Incremental Term Loan Commitments
using the entire remaining amount of such $75.0 million) not less than $25.0
million individually. Each such notice shall specify (i) the date (each, an
“Increase Effective Date”) on which Borrower proposes that the increased or new
Commitments shall be effective, which shall be a date not less than 10 Business
Days after the date on which such notice is delivered to the Administrative
Agent and (ii) the identity of each person (which must be an Eligible Assignee)
to whom Borrower proposes any portion of such increased or new Commitments be
allocated and the amounts of such allocations; provided that any existing Lender
approached to provide all or a portion of the increased or new Commitments may
decline, in its sole discretion, to provide such increased or new Commitment.

(b) Conditions. The increased or new Commitments shall become effective, as of
such Increase Effective Date; provided that:

(i) each of the conditions set forth in Section 4.02 shall be satisfied;

(ii) no Default or Event of Default shall have occurred and be continuing or
would result from the borrowings to be made on the Increase Effective Date;

 

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(iii) after giving pro forma effect to the increase in Commitments (assuming all
existing Revolving Commitments and any proposed additional Revolving Commitments
under this Section 2.20 have been fully drawn) and to any change in Consolidated
EBITDA and any increase in Indebtedness resulting from the consummation of any
Permitted Acquisition concurrently with such borrowings as of the date of the
most recent financial statements delivered pursuant to Section 5.01(a) or
Section 5.01(b), (A) Borrower shall be in compliance with the covenant set forth
in Section 6.09(a) (irrespective of whether such covenant has been tested as of
the most recently ended fiscal period) as of the date of the most recent
financial statements delivered pursuant to Section 5.01(a) or Section 5.01(b)
and (B) the Senior Secured Leverage Ratio shall not be greater than 2.50 to
1.00;

(iv) Borrower shall make any payments required pursuant to Section 2.13 in
connection with any adjustment of Revolving Loans pursuant to Section 2.20(d);
and

(v) Borrower shall deliver or cause to be delivered any legal opinions or other
documents reasonably requested by the Administrative Agent in connection with
any such transaction.

(c) Terms of New Loans and Commitments. The terms and provisions of Loans made
pursuant to the new Commitments shall be as follows:

(i) terms and provisions of Loans made pursuant to Incremental Term Loan
Commitments (“Incremental Term Loans”) shall be, except as otherwise set forth
herein or in the Increase Joinder, identical to the Term Loans (it being
understood that Incremental Term Loans may be a part of the Term Loans);

(ii) the terms and provisions of Revolving Loans made pursuant to new
Commitments shall be identical to the Revolving Loans;

(iii) the weighted average life to maturity of any Incremental Term Loans shall
be no shorter than the weighted average life to maturity of the existing Term
Loans;

(iv) the maturity date of Incremental Term Loans (the “Incremental Term Loan
Maturity Date”) shall not be earlier than the Final Maturity Date;

(v) the Applicable Margins for the Incremental Term Loans shall be determined by
Borrower and the Lenders of the Incremental Term Loans; provided that in the
event that the Applicable Margins for any Incremental Term Loans are greater
than the Applicable Margins for the Term Loans by more than 50 basis points,
then the Applicable Margins for the Term Loans shall be increased to the extent
necessary so that the Applicable Margins for the Incremental Term Loans are no
greater than 50 basis points above the Applicable Margins for the Term Loans;
provided, further, that in determining the Applicable Margins applicable to the
Term Loans and the Incremental Term Loans, (x) original issue discount (“OID”)
or upfront fees (which shall be deemed to constitute like amounts of OID)
payable by Borrower to the Lenders of the Term Loans or the Incremental Term
Loans in the primary syndication thereof shall be included (with OID being
equated to interest based on an assumed four-year life to maturity),
(y) customary arrangement or commitment fees payable to the Lead Arrangers (or
their affiliates) in connection with the Term Loans or to one or more

 

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arrangers (or their affiliates) of the Incremental Term Loans shall be excluded
and (z) any floor for the Adjusted LIBOR Rate or Alternate Base Rate applicable
to the Incremental Term Loans that is higher than the respective floor for the
Adjusted LIBOR Rate or Alternate Base Rate applicable to the Term Loans shall be
equated to an increase in the interest rate margin in the amount of the increase
in such floor; and

(vi) to the extent that the terms and provisions of Incremental Term Loans are
not identical to the Term Loans (except to the extent permitted by clause (iii),
(iv) or (v) above) they shall be reasonably satisfactory to the Administrative
Agent.

The increased or new Commitments shall be effected by a joinder agreement (the
“Increase Joinder”) executed by Borrower, the Administrative Agent and each
Lender making such increased or new Commitment, in form and substance
satisfactory to each of them. The Increase Joinder may, without the consent of
any other Lenders, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provisions of this Section 2.20. In
addition, unless otherwise specifically provided herein, all references in Loan
Documents to Revolving Loans or Term Loans shall be deemed, unless the context
otherwise requires, to include references to Revolving Loans made pursuant to
new Commitments and Incremental Term Loans that are Term Loans, respectively,
made pursuant to this Agreement.

(d) Adjustment of Revolving Loans. To the extent the Commitments being increased
on the relevant Increase Effective Date are Revolving Commitments, then each
Revolving Lender that is acquiring a new or additional Revolving Commitment on
the Increase Effective Date shall make a Revolving Loan, the proceeds of which
will be used to prepay the Revolving Loans of the other Revolving Lenders
immediately prior to such Increase Effective Date, so that, after giving effect
thereto, the Revolving Loans outstanding are held by the Revolving Lenders pro
rata based on their Revolving Commitments after giving effect to such Increase
Effective Date. If there is a new borrowing of Revolving Loans on such Increase
Effective Date, the Revolving Lenders after giving effect to such Increase
Effective Date shall make such Revolving Loans in accordance with
Section 2.01(b).

(e) Making of New Term Loans. On any Increase Effective Date on which new
Commitments for Term Loans are effective, subject to the satisfaction of the
foregoing terms and conditions, each Lender of such new Commitment shall make a
Term Loan to Borrower in an amount equal to its new Commitment.

(f) Equal and Ratable Benefit. The Loans and Commitments established pursuant to
this paragraph shall constitute Loans and Commitments 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 Guarantees and security interests created by the Security
Documents, except that the new Loans may be subordinated in right of payment or
the Liens securing the new Loans may be subordinated, in each case, as set forth
in the Increase Joinder. The Loan Parties shall take any actions reasonably
required by the Administrative Agent to ensure and/or demonstrate that the Lien
and security interests granted by the Security Documents continue to be
perfected under the UCC or otherwise after giving effect to the establishment of
any such Term Loans or any such new Commitments.

 

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SECTION 2.21 Discounted Voluntary Prepayments.

(a) Notwithstanding anything to the contrary in this Agreement, the Borrower
shall have the right at any time and from time to time to prepay Term Loans at a
discount to the par value of such Term Loans (each, a “Discounted Voluntary
Prepayment”) pursuant to the procedures described in this Section 2.21; provided
that (A) any Discounted Voluntary Prepayment shall be offered to all Term Loan
Lenders on a pro rata basis based on the then outstanding principal amount of
Term Loans, (B) no Default or Event of Default has occurred and is continuing or
would result from the Discounted Voluntary Prepayment, (C) no Discounted
Voluntary Prepayment may be made with the proceeds from Revolving Loans or
Swingline Loans, (D) at the time of and after giving effect to any Discounted
Voluntary Prepayment, the sum of undrawn Revolving Commitments and unrestricted
cash and Cash Equivalents of the Borrower and the Guarantors shall not be less
than $40.0 million, (E) Borrower shall in no event deliver more than three
Discounted Prepayment Option Notices to the Administrative Agent during the term
of this Agreement and (F) Borrower provides a certificate of a Financial Officer
certifying (i) as to the items in (B), (C) and (D) above and (ii) that Borrower
and its Subsidiaries have no MNPI at the time of the making of the Discounted
Voluntary Prepayment that could reasonably be expected to affect a Term Loan
Lender’s decision as to whether to participate in the Discounted Voluntary
Prepayment.

(b) To the extent the Borrower seeks to make a Discounted Voluntary Prepayment,
it will provide written notice to the Administrative Agent substantially in the
form of Exhibit R hereto (each, a “Discounted Prepayment Option Notice”) that
the Borrower desires to prepay the Term Loans in an aggregate principal amount
specified therein by the Borrower (each, a “Proposed Discounted Prepayment
Amount”), in each case at a discount to the par value of such Term Loans as
specified below. The Discounted Prepayment Option Notice shall specify with
respect to the proposed Discounted Voluntary Prepayment: (A) the Proposed
Discounted Prepayment Amount of Term Loans, which shall not be less than $15.0
million, (B) a discount range (which may be a single percentage) selected by the
Borrower with respect to such proposed Discounted Voluntary Prepayment
(representing the percentage of par of the principal amount of Term Loans to be
prepaid) (the “Discount Range”), and (C) the date by which Term Loan Lenders are
required to indicate their election to participate in such proposed Discounted
Voluntary Prepayment which shall be at least five Business Days following the
date of the Discounted Prepayment Option Notice (the “Acceptance Date”).

(c) Upon receipt of a Discounted Prepayment Option Notice in accordance with
Section 2.21(b), the Administrative Agent shall promptly notify each Lender
thereof. On or prior to the Acceptance Date, each such Lender may specify (it
being understood and agreed that no Lender shall be required to deliver a Lender
Participation Notice or to otherwise make any of its Loans available for
purposes of any Discounted Voluntary Prepayment unless it so chooses to deliver
a Lender Participation Notice and in such case to make its Term Loans available
for a Discounted Voluntary Prepayment pursuant to the terms hereof) by written
notice substantially in the form of Exhibit S hereto (each, a “Lender
Participation Notice”) to the Administrative Agent (A) a minimum price (the
“Acceptable Price”) within the Discount Range (for example, 80% of the par value
of the Term Loans to be prepaid) and (B) a maximum principal amount (subject to
rounding requirements specified by the Administrative Agent) of Term Loans with
respect to which such Lender is willing to permit a Discounted Voluntary
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Acceptable Price (“Offered Loans”) (which, for the avoidance of doubt, need not
be any or all of a Term Loan Lender’s Term Loans). Based on the Acceptable
Prices and principal amounts of Loans specified by the Lenders in the applicable
Lender Participation Notice, the Administrative Agent, in consultation with the
Borrower, shall determine the applicable discount for Term Loans (the
“Applicable Discount”), which Applicable Discount shall be (A) the percentage
specified by the Borrower if the Borrower has selected a single percentage
pursuant to Section 2.21(b) for the Discounted Voluntary Prepayment or
(B) otherwise, the lowest Acceptable Price at which the Borrower can pay the
Proposed Discounted Prepayment Amount in full (determined by adding the
principal amounts of Offered Loans commencing with the Offered Loans with the
lowest Acceptable Price); provided, however, that in the event that such
Proposed Discounted Prepayment Amount cannot be repaid in full at any Acceptable
Price, the Applicable Discount shall be the highest Acceptable Price specified
by the Lenders that is within the Discount Range. The Applicable Discount shall
be applicable for all Lenders who have offered to participate in the Voluntary
Discounted Prepayment and have Qualifying Loans (as defined below). Any Term
Loan Lender with outstanding Term Loans whose Lender Participation Notice is not
received by the Administrative Agent by the Acceptance Date shall be deemed to
have declined to accept a Discounted Voluntary Prepayment of any of its Term
Loans at any discount to their par value within the Applicable Discount.

(d) The Borrower shall make a Discounted Voluntary Prepayment by prepaying those
Term Loans (or the respective portions thereof) offered by the Term Loan Lenders
(“Qualifying Lenders”) that specify an Acceptable Price that is equal to or
lower than the Applicable Discount (“Qualifying Loans”) at the Applicable
Discount; provided that if the aggregate proceeds required to prepay all
Qualifying Loans (disregarding any interest payable at such time) would exceed
the amount of aggregate proceeds required to prepay the Proposed Discounted
Prepayment Amount, such amounts in each case calculated by applying the
Applicable Discount, the Borrower shall prepay such Qualifying Loans ratably
among the Qualifying Lenders based on their respective principal amounts of such
Qualifying Loans (subject to rounding requirements specified by the
Administrative Agent). If the aggregate proceeds required to prepay all
Qualifying Loans (disregarding any interest payable at such time) would be less
than the amount of aggregate proceeds required to prepay the Proposed Discounted
Prepayment Amount, such amounts in each case calculated by applying the
Applicable Discount, the Borrower shall prepay all Qualifying Loans.

(e) Each Discounted Voluntary Prepayment shall be made within four Business Days
of the Acceptance Date (or such other date as the Administrative Agent shall
reasonably agree, given the time required to calculate the Applicable Discount
and determine the amount and holders of Qualifying Loans), upon irrevocable
notice substantially in the form of Exhibit T hereto (each a “Discounted
Voluntary Prepayment Notice”), delivered to the Administrative Agent no later
than 11:00 a.m. (New York City time), three Business Days prior to the date of
such Discounted Voluntary Prepayment, which notice shall specify the date and
amount of the Discounted Voluntary Prepayment and the Applicable Discount
determined by the Administrative Agent. Upon receipt of any Discounted Voluntary
Prepayment Notice, the Administrative Agent shall promptly notify each relevant
Lender thereof. If any Discounted Voluntary Prepayment Notice is given, the
amount specified in such notice shall be due and payable to the applicable
Lenders, subject to the Applicable Discount on the applicable Loans, on the date
specified therein together with accrued interest (on the par principal amount)
to but

 

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not including such date on the amount prepaid. Prior to the delivery of a
Discounted Voluntary Prepayment Notice, upon written notice to the
Administrative Agent, the Borrower may withdraw its offer to make a Discounted
Voluntary Prepayment pursuant to any Discounted Prepayment Option Notice.

(f) To the extent not expressly provided for herein, each Discounted Voluntary
Prepayment shall be consummated pursuant to reasonable procedures (including as
to timing, rounding and calculation of Applicable Discount in accordance with
Section 2.21(c) above) established by the Administrative Agent in consultation
with the Borrower.

(g) Discounted Voluntary Prepayments shall not be taken into consideration in
determining Excess Cash Flow or any reductions to Excess Cash Flow in connection
with Section 2.10(g).

(h) Discounted Voluntary Prepayments shall be applied to reduce Term Loans in
inverse order of maturity, beginning with the Term Loans that are payable on the
Term Loan Maturity Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders (with references to
the Companies being references thereto after giving effect to the Transactions
unless otherwise expressly stated) that:

SECTION 3.01 Organization; Powers.

Each Company (a) is duly organized and validly existing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
carry on its business as now conducted and to own and lease its property and
(c) is qualified and in good standing (to the extent such concept is applicable
in the applicable jurisdiction) to do business in every jurisdiction where such
qualification is required, except in such jurisdictions where the failure to so
qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. There is no
existing material default under any Organizational Document of any Company or
any event which, with the giving of notice or passage of time or both, would
constitute a material default by any party thereunder.

SECTION 3.02 Authorization; Enforceability.

Each Loan Document to be entered into by each Loan Party, and each of the
Transactions, is within such Loan Party’s powers and have been duly authorized
by all necessary action on the part of such Loan Party. This Agreement has been
duly executed and delivered by each Loan Party and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

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SECTION 3.03 No Conflicts.

Except as set forth on Schedule 3.03, the Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or made and are in
full force and effect, (ii) filings necessary to perfect Liens created by the
Loan Documents, (iii) filings required by the SEC in connection with the sale of
the Senior Notes, any registration of the Senior Notes with the SEC that may
occur after the date hereof and the entering into of this Agreement and
(iv) consents, approvals, registrations, filings, permits or actions the failure
to obtain or perform which could not reasonably be expected to result in a
Material Adverse Effect, (b) will not violate the Organizational Documents of
any Company, (c) will not violate any material Requirements of Law in any
material respect, (d) will not violate or result in a default or require any
consent or approval under any indenture, agreement or other instrument binding
upon any Company or its property, or give rise to a right thereunder to require
any payment to be made by any Company, except for violations, defaults or the
creation of such rights that could not reasonably be expected to result in a
Material Adverse Effect, and (e) will not result in the creation or imposition
of any Lien on any property of any Company, except Liens created by the Loan
Documents and Permitted Liens.

SECTION 3.04 Financial Statements; Projections.

(a) Historical Financial Statements. Borrower has heretofore delivered to the
Lenders (i) audited consolidated balance sheets and related statements of
income, stockholders’ equity and cash flows of (x) Borrower for each of the most
recent three fiscal years ending on or before December 31, 2010, audited by and
accompanied by the unqualified opinion of PricewaterhouseCoopers LLP,
independent public accountants and (y) the Acquired Business for each of the
most recent three fiscal years ending more than 60 days prior to the Closing
Date, audited by and accompanied by the unqualified opinion of KPMG LLP,
independent public accountants and (ii) unaudited consolidated balance sheets
and related statements of income and cash flows of each of Borrower and the
Acquired Business for each fiscal quarter since the date of the most recent
audit for the Borrower and the Acquired Business, as applicable, for the period
elapsed from the beginning of the most recent fiscal year to the end of such
fiscal quarter and for the comparable periods of the preceding fiscal year (with
respect to which the independent auditors have performed a SAS 100 review). Such
financial statements and all financial statements delivered pursuant to
Sections 5.01(a) and (b) have been prepared in accordance with GAAP and present
fairly and accurately the financial condition and results of operations and cash
flows of Borrower and the Acquired Business as of the dates and for the periods
to which they relate subject (other than with respect to audited annual
financial statements) to year-end audit adjustments and the absence of
footnotes.

(b) No Liabilities. As of the Closing Date, except as set forth in the financial
statements referred to in Section 3.04(a), there are no liabilities of any
Company of any kind, whether accrued, contingent, absolute, determined,
determinable or otherwise, which could reasonably be expected to result in a
Material Adverse Effect, and there is no existing condition,

 

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situation or set of circumstances which could reasonably be expected to result
in such a liability, other than liabilities under the Loan Documents and the
Senior Note Documents. Since December 31, 2010, there has been no event, change,
circumstance or occurrence that, individually or in the aggregate, has had or
could reasonably be expected to result in a Material Adverse Effect.

(c) Pro Forma Financial Statements. Borrower has heretofore delivered to the
Lenders (i) a pro forma consolidated and consolidating balance sheet and related
statements of income for Borrower, as well as pro forma EBITDA, for the fiscal
year ended December 31, 2010 and for the latest four-quarter period ending with
the latest period covered by the financial statements referred to in
Section 3.04(a)(ii), in each case after giving effect to the Transactions and
(ii) forecasts of the financial performance of Borrower and its subsidiaries
(x) on an annual basis, through 2018 and (y) on a quarterly basis for the next
eight quarters. Such pro forma financial statements have been prepared in good
faith by the Loan Parties, based on the assumptions stated therein (which
assumptions are believed by the Loan Parties on the date hereof and on the
Closing Date to be reasonable), are based on the best information available to
the Loan Parties as of the date of delivery thereof, accurately reflect all
adjustments required to be made to give effect to the Transactions, and in
accordance with Regulation S-X, and present fairly in all material respects the
pro forma consolidated financial position and results of operations of Borrower
as of such date and for such periods, assuming that the Transactions had
occurred at such dates.

(d) Forecasts. The forecasts of financial performance of Borrower and its
subsidiaries furnished to the Lenders have been prepared in good faith by
Borrower and based on assumptions believed by Borrower to be reasonable at the
time made (it being understood that actual results may vary significantly from
any such projected or forecasted results).

SECTION 3.05 Properties.

(a) Generally. Each Company has good title to, or valid leasehold interests in,
all its property material to its business, free and clear of all Liens except
for, in the case of Collateral, Permitted Collateral Liens and, in the case of
all other material property, Permitted Liens and irregularities or deficiencies
in title that, individually or in the aggregate, do not interfere with its
ability to conduct its business as currently conducted or to utilize such
property for its intended purpose. The property of the Companies, taken as a
whole, (i) is in good operating order, condition and repair (ordinary wear and
tear excepted), except to the extent that the failure to be in such condition
could not be reasonably expected to result in a Material Adverse Effect, and
(ii) constitutes all the property which is required for the business and
operations of the Companies as presently conducted.

(b) Real Property. Schedules 7(a) and 7(b) to the Perfection Certificate dated
the Closing Date contain a true and complete list, as of the Closing Date, of
each interest in Real Property (i) owned by any Company as of the date hereof
and describes the type of interest therein held by such Company and whether such
owned Real Property is leased and (ii) leased, subleased or otherwise occupied
or utilized by any Company, as lessee, sublessee, franchisee or licensee, as of
the date hereof and describes the type of interest therein held by such Company.

 

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(c) No Casualty Event. As of the Closing Date, no Company has received any
written notice of, nor does any Company have any knowledge of, the occurrence or
pendency or contemplation of any Casualty Event affecting all or any portion of
its property. No Mortgage encumbers improved Real Property that is located in an
area that has been identified by the Secretary of Housing and Urban Development
as an area having special flood hazards within the meaning of the National Flood
Insurance Act of 1968 unless flood insurance available under such Act has been
obtained in accordance with Section 5.04.

(d) Collateral. Each Company owns or has rights to use all of the Collateral and
all rights with respect to any of the foregoing used in, necessary for or
material to each Company’s business as currently conducted. The use by each
Company of such Collateral and all such rights with respect to the foregoing do
not infringe on the rights of any person other than such infringement which
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. No claim has been made and remains outstanding that
any Company’s use of any Collateral does or may violate the rights of any third
party that could, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.06 Intellectual Property.

(a) Ownership/No Claims. Each Company owns, or is licensed to use, all patents,
patent applications, trademarks, trade names, service marks, copyrights, trade
secrets, proprietary information, domain names, know-how and processes necessary
for the conduct of its business as currently conducted (the “Intellectual
Property”), except for those the failure to own or license which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property except, in any such
case, for any claim that could not reasonably be expected to result in a
Material Adverse Effect. The use of such Intellectual Property by each Company
does not infringe the rights of any person, no claims asserting such
infringement are pending by any person and to each Loan Party’s knowledge no
valid basis exists for such a claim, except for such claims and infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

(b) Registrations. Schedule 11(a) and 11(b) to the Perfection Certificate list
as of the date hereof each patent, trademark registration, copyright
registration and any application for issuance or registration of the same
included in the Collateral and each license or other agreement entered into by
any Loan Party granting any right to use or authorize or enable any other person
to use any patent, trademark or copyright included in the Collateral. Each such
patent, trademark registration and copyright registration listed in Schedule
11(a) and 11(b) to the Perfection Certificate is valid, subsisting and in full
force and effect as of the date hereof.

(c) No Violations or Proceedings. To each Loan Party’s knowledge, on and as of
the date hereof, there is no material violation by others of any right of such
Loan Party with respect to any copyright, patent or trademark listed in Schedule
11(a) or 11(b) to the Perfection Certificate, pledged by it under the name of
such Loan Party except as may be set forth on Schedule 3.06(c).

 

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SECTION 3.07 Equity Interests and Subsidiaries.

(a) Equity Interests. Schedules 1(a) and 9(a) to the Perfection Certificate
dated the Closing Date set forth a list, as of the Closing Date, of (i) all the
Subsidiaries of Borrower and their jurisdictions of organization as of the
Closing Date and (ii) the number of each class of its Equity Interests
outstanding, in each case, on the Closing Date. All Equity Interests of each
Company are duly and validly issued and, in the case of each entity that is a
corporation, are fully paid and non-assessable, and, other than the Equity
Interests of Borrower, are owned by Borrower, directly or indirectly through
Wholly Owned Subsidiaries. Each Loan Party is the record and beneficial owner
of, and has good and marketable title to, the Equity Interests pledged by it
under the Security Agreement, free of any and all Liens, rights or claims of
other persons, except the security interest created by the Security Agreement,
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
such Equity Interests.

(b) No Consent of Third Parties Required. No consent of any person including any
other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary or
reasonably desirable (from the perspective of a secured party) in connection
with the creation, perfection or first priority status of the security interest
of the Collateral Agent in any Equity Interests pledged to the Collateral Agent
for the benefit of the Secured Parties under the Security Agreement or the
exercise by the Collateral Agent of the voting or other rights provided for in
the Security Agreement or the exercise of remedies in respect thereof.

(c) Organizational Chart. An accurate organizational chart, showing the
ownership structure of Borrower and each Subsidiary on the Closing Date, and
after giving effect to the Transactions, is set forth on Schedule 9(c) to the
Perfection Certificate dated the Closing Date.

SECTION 3.08 Litigation; Compliance with Laws.

There are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority now pending or, to the knowledge of any Company,
threatened against or affecting any Company or any business, property or rights
of any Company (i) that involve any Loan Document or any of the Transactions or
(ii) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect. Except for matters
covered by Section 3.18, no Company or any of its property is in violation of
any Requirements of Law or any restrictions of record or agreements affecting
any Company’s Real Property or is in default with respect to any Requirements of
Law, where such violation or default, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 3.09 Reserved.

SECTION 3.10 Federal Reserve Regulations.

No Company is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.
No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the regulations of the Board, including Regulation T, U
or X. The pledge of the Securities Collateral pursuant to the Security Agreement
does not violate such regulations.

SECTION 3.11 Investment Company Act.

No Company is an “investment company” or a company “controlled” by an
“investment company,” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

SECTION 3.12 Use of Proceeds.

Borrower will use the proceeds of (a) the Term Loans made on the Closing Date to
effect the Merger and the Refinancing and pay related fees and expenses, (b) any
Incremental Term Loans for the purposes specified in the Increase Joinder and
(c) the Revolving Loans and Swingline Loans on and after the Closing Date for
general corporate purposes (including to effect Permitted Acquisitions) not to
exceed $10.0 million on the Closing Date.

SECTION 3.13 Taxes.

Each Company has (a) timely filed or caused to be timely filed all federal Tax
Returns and all material state, local and foreign Tax Returns required to have
been filed by it and all such Tax Returns are true and correct in all material
respects, (b) duly and timely paid, collected or remitted or caused to be duly
and timely paid, collected or remitted all material Taxes (whether or not shown
on any Tax Return) due and payable, collectible or remittable by it and all
assessments received by it, except Taxes that are being contested in good faith
by appropriate proceedings and for which such Company has set aside on its books
adequate reserves in accordance with GAAP and (c) satisfied all of its material
withholding tax obligations. Each Company has made adequate provision in
accordance with GAAP for all material Taxes not yet due and payable. Each
Company is unaware of any proposed or pending Tax assessments, deficiencies or
audits that could be reasonably expected to, individually or in the aggregate,
result in a Material Adverse Effect. No Company has ever “participated” in a
“listed transaction” within the meaning of Treasury Regulation Section 1.6011-4.

SECTION 3.14 No Material Misstatements.

No written information, report, financial statement, certificate, Borrowing
Request, LC Request, exhibit or schedule furnished by or on behalf of any
Company to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
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Memorandum, other than forward looking information and information of a general
economic or industry nature, contained or contains any material misstatement of
fact or omitted or omits to state any material fact necessary to make the
statements therein, when taken as a whole in the light of the circumstances
under which they were or are made, not misleading as of the date such
information is dated or certified; provided that to the extent any such written
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each Company represents only that it acted
in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule (it being understood that actual results may vary significantly from
any such projected or forecasted results).

SECTION 3.15 Labor Matters.

As of the Closing Date, there are no strikes, lockouts or slowdowns against any
Company pending or, to the knowledge of any Company, threatened. The hours
worked by and payments made to employees of any Company have not been in
violation of the Fair Labor Standards Act of 1938, as amended, or any other
applicable federal, state, local or foreign law dealing with such matters in any
manner which, in each case, could reasonably be expected to result in a Material
Adverse Effect. All payments due from any Company, or for which any claim may be
made against any Company, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Company except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Company is bound.

SECTION 3.16 Solvency.

Immediately after the consummation of the Transactions to occur on the Closing
Date and immediately following the making of each Loan and after giving effect
to the application of the proceeds of each Loan, (a) the fair value of the
assets of each Loan Party (individually and on a consolidated basis with its
Subsidiaries), at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will be greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) each Loan Party (individually and on a consolidated basis with its
Subsidiaries) will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will not have unreasonably small capital with which to conduct
its business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.

For purposes of this representation, the amount of any contingent liability at
any time shall be computed as the amount that would reasonably be expected to
become an actual and matured liability, and any subrogation and/or contribution
rights will be considered in determining the amount of such liability.

 

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SECTION 3.17 Employee Benefit Plans.

Each Plan is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in a Material Adverse Effect on any
Company or any of its ERISA Affiliates or the imposition of a Lien on any of the
property of any Company. Except as set forth on Schedule 3.17, the present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the property of all such underfunded Plans. Using actuarial assumptions and
computation methods consistent with subpart I of subtitle E of Title IV of
ERISA, the aggregate liabilities of each Company or its ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan, could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.18 Environmental Matters.

(a) Except as set forth in Schedule 3.18 or as, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect:

(i) The Companies and their businesses, operations and Real Property are in
compliance with, and the Companies have no liability under, any applicable
Environmental Law; and under the currently effective business plan of the
Companies, no expenditures or operational adjustments will be required in order
to comply with applicable Environmental Laws during the next five years;

(ii) The Companies have obtained all Environmental Permits required for the
conduct of their businesses and operations, and the ownership, operation and use
of their property. All such Environmental Permits are valid and in good standing
and, under the currently effective business plan of the Companies, no
expenditures or operational adjustments will be required in order to renew or
modify such Environmental Permits prior to the Final Maturity Date;

(iii) There has been no Release or threatened Release of Hazardous Material on,
at, under or from any Real Property or facility presently or formerly owned,
leased or operated by the Companies or their predecessors in interest that could
result in liability by the Companies under any applicable Environmental Law;

(iv) There is no Environmental Claim pending or, to the knowledge of the
Companies, threatened against the Companies, or relating to the Real Property
currently or formerly owned, leased or operated by the Companies or their
predecessors in interest or relating to the operations of the Companies, and
there are no actions, activities, circumstances, conditions, events or incidents
that could form the basis of such an Environmental Claim;

 

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(v) No person with an indemnity or contribution obligation to the Companies
relating to compliance with or liability under Environmental Law is in default
with respect to such obligation;

(vi) No Company is obligated to perform any action or otherwise incur any
expense under Environmental Law pursuant to any order, decree, judgment or
agreement by which it is bound or has assumed by contract, agreement or
operation of law, and no Company is conducting or financing any Response
pursuant to any Environmental Law with respect to any Real Property or any other
location;

(vii) No Real Property or facility owned, operated or leased by the Companies
and, to the knowledge of the Companies, no Real Property or facility formerly
owned, operated or leased by the Companies or any of their predecessors in
interest is (i) listed or proposed for listing on the National Priorities List
promulgated pursuant to CERCLA or (ii) listed on the Comprehensive Environmental
Response, Compensation and Liability Information System promulgated pursuant to
CERCLA or (iii) included on any similar list maintained by any Governmental
Authority including any such list relating to petroleum;

(viii) No Lien has been recorded or, to the knowledge of any Company, threatened
under any Environmental Law with respect to any Real Property or other assets of
the Companies; and

(ix) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not require any
notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup pursuant to any Governmental Real Property Disclosure
Requirements or any other applicable Environmental Law.

SECTION 3.19 Insurance.

Each Company has insurance in such amounts and covering such risks and
liabilities as are customary for companies of a similar size engaged in similar
businesses in similar locations. Schedule 3.19 sets forth a true, complete and
correct description of all insurance maintained by each Company as of the
Closing Date. All insurance maintained by the Companies is in full force and
effect, all premiums have been duly paid, no Company has received notice of
violation or cancellation thereof, the Premises, and the use, occupancy and
operation thereof, comply in all material respects with all Insurance
Requirements, and there exists no default under any Insurance Requirement.

SECTION 3.20 Security Documents.

(a) Security Agreement. The Security Agreement is effective to create in favor
of the Collateral Agent for the benefit of the Secured Parties, legal, valid and
enforceable Liens on, and security interests in, the Security Agreement
Collateral and, when (i) financing statements and other filings in appropriate
form are filed in the offices specified on Schedule 6 to the Perfection
Certificate and (ii) upon the taking of possession or control by the Collateral
Agent of the Security Agreement Collateral with respect to which a security
interest may be perfected only by possession or control (which possession or
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extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the grantors in the Security Agreement Collateral to the extent
that such Liens and security interests can be perfected under the UCC by the
filing of financing statements (other than fixture filings) and the taking of
possession or control (excluding Collateral as to which the provision of
possession or control is not required under the Security Agreement), in each
case subject to no Liens other than Permitted Collateral Liens.

(b) PTO Filing; Copyright Office Filing. Upon the execution and delivery of the
Security Agreement, the filing of an appropriate financing statement and the
filing of a notice of security interest in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, the Liens
created by such Security Agreement shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the grantors
thereunder in Copyrights, Trademarks and Patents (each as defined in the
Security Agreement) registered or applied for with the United States Copyright
Office and the United States Patent and Trademark Office, as the case may be, in
each case subject to no Liens other than Permitted Liens.

(c) Mortgages. Each Mortgage, when recorded in the appropriate filing office, is
or shall be effective to create, in favor of the Collateral Agent, for its
benefit and the benefit of the Secured Parties, legal, valid and enforceable
first priority perfected Liens on, and security interests in, all of the Loan
Parties’ right, title and interest in and to the Mortgaged Properties described
therein and the proceeds thereof, subject only to Permitted Collateral Liens or
other Liens acceptable to the Collateral Agent.

(d) Valid Liens. Each Security Document delivered pursuant to Sections 5.11,
5.12 and 5.14 will, upon execution and delivery thereof, be effective to create
in favor of the Collateral Agent, for the benefit of the Secured Parties, legal,
valid and enforceable Liens on, and security interests in, all of the Loan
Parties’ right, title and interest in and to the Collateral thereunder, and
(i) when all appropriate filings or recordings are made in the appropriate
offices as may be required under applicable law and (ii) upon the taking of
possession or control by the Collateral Agent of such Collateral with respect to
which a security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent
required by any Security Document), such Security Document will constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the Loan Parties in such Collateral, in each case subject to no Liens other than
the applicable Permitted Collateral Liens.

SECTION 3.21 Acquisition Documents.

Schedule 3.21 lists (i) each exhibit, schedule, annex or other attachment to the
Acquisition Agreement and (ii) each material agreement, certificate, instrument,
letter or other document contemplated by the Acquisition Agreement or any item
referred to in clause (i) to be entered into, executed or delivered or to become
effective in connection with the Merger or otherwise entered into, executed or
delivered in connection with the Merger. The Lenders have been furnished true
and complete copies of each Acquisition Document to the extent executed and
delivered on or prior to the Closing Date.

 

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SECTION 3.22 Anti-Terrorism and Anti-Money Laundering Laws.

(a) No Loan Party, none of its Subsidiaries and, to the knowledge of each Loan
Party, none of its Affiliates and none of the respective officers, directors,
brokers or agents of such Loan Party, such Subsidiary or Affiliate (i) has
violated or is in violation of Anti-Terrorism Laws or Anti-Money Laundering Laws
or (ii) has been convicted of, has been charged with, or is under investigation
by, a Governmental Authority for violations of Anti-Terrorism Laws, Anti-Money
Laundering Laws or any other Requirements of Law.

(b) The Loan Parties maintain, and will continue to maintain, an export control
and trade sanctions compliance program that includes appropriate measures to
monitor compliance with applicable export control, trade sanctions, and corrupt
practices statutes and regulations sufficient to provide reasonable assurances
that the funds used by the Loan Parties to make payments hereunder to the
Agents, the Issuing Bank or the Lenders will not be derived from activities that
violate Anti-Terrorism Laws, Anti-Money Laundering or any other Requirements of
Law and shall not constitute property of, or be beneficially owned directly or
indirectly by, an Embargoed Person.

(c) No Loan Party, none of its Subsidiaries and, to the knowledge of each Loan
Party, none of its Affiliates and none of the respective officers, directors,
brokers or agents of such Loan Party, such Subsidiary or such Affiliate is
acting or benefiting in any capacity in connection with the Loans is an
Embargoed Person, is a shell bank or is subject to special measures because of
money laundering concerns under Section 311 of the USA PATRIOT Act and its
implementing regulations.

(d) No Loan Party, none of its Subsidiaries and, to the knowledge of each Loan
Party, none of its Affiliates and none of the respective officers, directors,
brokers or agents of such Loan Party, such Subsidiary or such Affiliate acting
or benefiting in any capacity in connection with the Loans (i) has in the past
five (5) years conducted or currently conducts any business or has in the past
five (5) years engaged in or currently engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Embargoed
Person, (ii) deals in, or otherwise engages in any transaction related to, any
property or interests in property blocked pursuant to any Anti-Terrorism Law or
(iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
Anti-Terrorism Law.

SECTION 3.23 Foreign Corrupt Practices.

In the past five years, neither any Loan Party nor any of its Subsidiaries, nor
any director, officer, or employee, nor, to such Loan Party’s knowledge, any
agent or representative acting directly or indirectly on behalf of the Loan
Party or any of its Subsidiaries, has taken or will take any unlawful action in
furtherance of a corrupt offer, payment, promise to pay, or authorization or
approval of the payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government official” (including any
officer or employee of a government or government-owned or controlled entity or
of a public international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political party or
party official or candidate for political office) to influence official action
or secure an improper

 

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advantage. Each Loan Party and its Subsidiaries have conducted their businesses
in material compliance with applicable anti-corruption laws and have instituted
and maintained and will continue to maintain policies designed to promote and
achieve compliance with such laws and with the representation and warranty
contained herein.

ARTICLE IV

CONDITIONS TO CREDIT EXTENSIONS

SECTION 4.01 Conditions to Initial Credit Extension.

The obligation of each Lender and, if applicable, each Issuing Bank to fund the
initial Credit Extension requested to be made by it shall be subject to the
prior or concurrent satisfaction of each of the conditions precedent set forth
in this Section 4.01.

(a) Loan Documents. There shall have been delivered to the Administrative Agent
an executed counterpart of each of the Loan Documents and an executed Perfection
Certificate with schedules.

(b) Corporate Documents. The Administrative Agent shall have received:

(i) a certificate of the secretary or assistant secretary of each Loan Party
dated the Closing Date, certifying (A) that attached thereto is a true and
complete copy of each Organizational Document of such Loan Party certified (to
the extent applicable) as of a recent date by the Secretary of State of the
state of its organization, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of the Loan Documents to
which such person is a party and, in the case of Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect and (C) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party (together
with a certificate of another officer as to the incumbency and specimen
signature of the secretary or assistant secretary executing the certificate in
this clause (i)); and

(ii) a certificate as to the good standing of each Loan Party as of a recent
date, from such Secretary of State (or other applicable Governmental Authority).

(c) Officers’ Certificate. The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of Borrower, confirming compliance with the
conditions precedent set forth in this Section 4.01 (to the extent not subject
to the discretion of an Arranger, the Administrative Agent, or such other person
other than a Company) and Section 4.02(c).

 

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(d) Financings and Other Transactions, etc.

(i) The Merger and the other Transactions shall have been consummated or shall
be consummated substantially concurrently on the Closing Date, in each case in
accordance with the terms hereof and the terms of the Acquisition Agreement,
without any waiver or amendment thereof or consent thereof that would materially
adversely affect the Arrangers (it being understood and agreed that (a) any
change in the purchase price and/or (b) any waiver or amendment of any condition
contained in the Acquisition Agreement regarding any rejection or disapproval by
the SEC of any of the material terms or conditions of that certain Offer of
Settlement of the Acquired Business executed by the Acquired Business on
March 18, 2011, is deemed to materially adversely affect the Arrangers) unless
consented to by the Arrangers.

(ii) Borrower shall have received $200.0 million in gross proceeds from the
issuance and sale of the Senior Notes to an institution acceptable to the
Arrangers (as such amount may be reduced by underwriting fees or any issuance of
the Senior Notes with OID).

(iii) The Refinancing shall have been consummated in full to the satisfaction of
the Lenders with all liens in favor of the existing lenders being
unconditionally released; the Administrative Agent shall have received “pay-off”
letters in form and substance reasonably satisfactory to the Administrative
Agent with respect to all debt being refinanced in the Refinancing; and the
Administrative Agent shall have received such UCC termination statements,
mortgage releases, releases of assignments of leases and rents, releases of
security interests in Intellectual Property and other instruments, in each case
in proper form for recording, as the Administrative Agent shall have reasonably
requested to release and terminate of record the Liens securing such debt.

(e) Financial Statements; Pro Forma Balance Sheet; Projections. The Lenders
shall have received the financial statements and forecasts described in
Section 3.04.

(f) Indebtedness and Minority Interests. After giving effect to the Transactions
and the other transactions contemplated hereby, no Company (including, for the
avoidance of doubt, the Acquired Business and its Subsidiaries) shall have
outstanding any Indebtedness for borrowed money or Preferred Stock other than
(i) the Loans and Credit Extensions hereunder, (ii) the Senior Notes, (iii) the
Indebtedness listed on Schedule 6.01(b) and (iv) Indebtedness owed to Borrower
or any Guarantor.

(g) Opinions of Counsel. The Administrative Agent shall have received a
favorable written opinion of (i) Gibson, Dunn & Crutcher LLP, special counsel
for the Loan Parties, (ii) each local counsel listed on Schedule 4.01(g), in
each case (A) dated the Closing Date, (B) addressed to the Arrangers, the
Agents, the Issuing Bank and the Lenders and (C) covering such matters relating
to the Loan Documents and the Transactions as the Administrative Agent shall
reasonably request.

(h) Solvency Certificate. The Administrative Agent shall have received a
solvency certificate in substance reasonably satisfactory to the Administrative
Agent and in the form of Exhibit O, dated the Closing Date and signed by the
chief financial officer of Borrower or, in lieu thereof, at the option of
Borrower, a written opinion, in form and substance and from an independent
investment banking or appraisal firm reasonably satisfactory to the
Administrative Agent, as to the solvency of each of the Loan Parties after
giving effect to the Transactions.

 

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(i) Reserved.

(j) Consents. To the extent required by the Acquisition Agreement, all necessary
governmental and material third party approvals in connection with the
Transactions shall have been obtained and shall be in effect or any such
requirement shall be waived in accordance with the Acquisition Agreement (other
than any such approvals, the failure of which to obtain could not reasonably be
expected to materially adversely affect (in the Arrangers’ reasonable
determination) the interests of the Arrangers or as approved in writing by the
Arrangers). Without limiting the foregoing, to the extent required by the
Acquisition Agreement, all requisite shareholder approvals and consents required
by applicable law or the transactional documents with respect to the Acquisition
Agreement and the governing documents of Borrower necessary to effect the Merger
shall have been obtained and shall be in full force and effect.

(k) Reserved.

(l) Reserved.

(m) Fees. The Arrangers, Administrative Agent, the Collateral Agent and the
Lenders shall have received all Fees, all fees payable pursuant to the Fee
Letter and all other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced on or before the Business Day prior to the
Closing Date, reimbursement or payment of all reasonable and documented
out-of-pocket expenses (including the reasonable legal fees and expenses of
Latham & Watkins LLP, special counsel to the Agents, and the fees and expenses
of a single local counsel in each jurisdiction determined to be reasonably
necessary or advisable by the Arrangers) required to be reimbursed or paid by
Borrower hereunder or under any other Loan Document or the Commitment Letter.

(n) Personal Property Requirements. The Collateral Agent shall have received:

(i) all certificates, agreements or instruments representing or evidencing the
Securities Collateral, accompanied by instruments of transfer and stock powers
(as applicable), undated and endorsed in blank (it being understood that the
Equity Interests required to be delivered to the Collateral Agent shall be
limited, in the case of any Foreign Subsidiary, to (A) Voting Stock of any
Subsidiary which is a controlled foreign corporation (as defined in
Section 957(a) of the Code) representing 65% of the total voting power of all
outstanding Voting Stock of such Subsidiary and (B) 100% of the Equity Interests
of any Foreign Subsidiary not constituting Voting Stock of any such controlled
foreign corporation (as defined in Section 957(a) of the Code);

(ii) the Intercompany Note executed by and among Borrower and each of its
Subsidiaries, accompanied by instruments of transfer undated and endorsed in
blank;

(iii) all other certificates, agreements, including Control Agreements, or
instruments necessary to perfect the Collateral Agent’s security interest in all
Chattel Paper, all Instruments, all Deposit Accounts and all Investment Property
of each Loan Party (as each such term is defined in the Security Agreement and
to the extent required by the Security Agreement);

 

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(iv) UCC financing statements in appropriate form for filing under the UCC,
filings with the United States Patent and Trademark Office and United States
Copyright Office and such other documents under applicable Requirements of Law
in each jurisdiction as may be necessary or appropriate or, in the opinion of
the Collateral Agent, desirable to perfect the Liens created, or purported to be
created, by the Security Documents;

(v) certified copies of UCC, United States Patent and Trademark Office and
United States Copyright Office, tax and judgment lien searches, bankruptcy and
pending lawsuit searches or equivalent reports or searches, each of a recent
date listing all effective financing statements, lien notices or comparable
documents that name any Loan Party as debtor and that are filed in those state
and county jurisdictions in which any Loan Party is organized or maintains its
chief executive office and such other searches that are required by the
Perfection Certificate or that the Collateral Agent deems necessary or
appropriate, none of which encumber the Collateral covered or intended to be
covered by the Security Documents (other than Permitted Collateral Liens or any
other Liens acceptable to the Collateral Agent);

(vi) with respect to each location set forth on Schedule 4.01(n)(vi), a Landlord
Access Agreement or Bailee Letter, as applicable; provided that no such Landlord
Access Agreement or Bailee Letter shall be required with respect to any Real
Property that could not be obtained after the Loan Party that is the lessee of
such Real Property or owner of the inventory or other personal property
Collateral stored with the bailee thereof, as applicable, shall have used all
commercially reasonable efforts to do so; and

(vii) evidence acceptable to the Collateral Agent of payment or arrangements for
payment by the Loan Parties of all applicable recording taxes, fees, charges,
costs and expenses required for the recording of the Security Documents.

Notwithstanding the foregoing, with respect to any Collateral the security
interest in which may not be perfected by filing of an intellectual property
security agreement with the United States Patent and Trademark Office or United
States Copyright Office, as the case may be, filing of a UCC financing
statement, or possession of such Collateral, if the perfection of the Collateral
Agent’s security interest in such Collateral may not be accomplished on or prior
to the Closing Date without undue burden or expense or after Borrower’s use of
commercially reasonable efforts to do so, then delivery of such information or
the documents and instruments for perfection of such security interest shall not
constitute a condition precedent to the initial Credit Extension. Borrower
agrees to take the actions set forth on Schedule 5.14 with respect to such
information, documents and instruments not delivered on or prior to the Closing
Date.

(o) Real Property Requirements. The Collateral Agent shall have received:

(i) a Mortgage encumbering each Mortgaged Property in favor of the Collateral
Agent, for the benefit of the Secured Parties, duly executed and acknowledged by
each Loan Party that is the owner of or holder of any interest in such Mortgaged
Property, and otherwise in form for recording in the recording office of each
applicable political subdivision where each such Mortgaged Property is situated,
together with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof to create a lien
under applicable Requirements of Law, and such financing statements and any
other instruments necessary to grant a mortgage lien under the laws of any
applicable jurisdiction, all of which shall be in form and substance reasonably
satisfactory to Collateral Agent;

 

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(ii) with respect to each Mortgaged Property, such consents, approvals,
amendments, supplements, estoppels or other instruments as necessary to
consummate the Transactions or as shall reasonably be deemed necessary by the
Collateral Agent in order for the owner or holder of the fee constituting such
Mortgaged Property to grant the Lien contemplated by the Mortgage with respect
to such Mortgaged Property;

(iii) with respect to each Mortgage, a policy of title insurance (or marked up
title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of such Mortgage as a valid first mortgage Lien (subject to
Permitted Collateral Liens) on the Mortgaged Property and fixtures described
therein in the amount equal to not less than 115% of the fair market value of
such Mortgaged Property and fixtures, which fair market value is set forth on
Schedule 4.01(o)(iii), which policy (or such marked-up commitment) (each, a
“Title Policy”) shall (A) be issued by the Title Company, (B) to the extent
necessary, include such reinsurance arrangements (with provisions for direct
access, if necessary) as shall be reasonably acceptable to the Collateral Agent,
(C) contain a “tie-in” or “cluster” endorsement, if available under applicable
law (i.e., policies which insure against losses regardless of location or
allocated value of the insured property up to a stated maximum coverage amount),
(D) have been supplemented by such endorsements (or where such endorsements are
not available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Collateral Agent) as shall be reasonably requested
by the Collateral Agent (including endorsements on matters relating to usury,
first loss, last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien,
subdivision, mortgage recording tax, separate tax lot, and so-called
comprehensive coverage over covenants and restrictions), and (E) contain no
exceptions to title other than exceptions reasonably acceptable to the
Collateral Agent;

(iv) with respect to each Mortgaged Property, such affidavits, certificates,
information (including financial data) and instruments of indemnification
(including a so-called “gap” indemnification) as shall be required to induce the
Title Company to issue the Title Policy/ies and endorsements contemplated above;

(v) evidence reasonably acceptable to the Collateral Agent of payment by
Borrower of all Title Policy premiums, search and examination charges, escrow
charges and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages and issuance of the Title
Policies referred to above;

(vi) with respect to each Mortgaged Property, copies of all Leases in which
Borrower or any Subsidiary holds the lessor’s interest or other agreements
relating to possessory interests, if any;

(vii) with respect to each Mortgaged Property, each Company shall have made all
notifications, registrations and filings, to the extent required by, and in
accordance with, all Governmental Real Property Disclosure Requirements
applicable to such Mortgaged Property;

 

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(viii) Surveys with respect to each Mortgaged Property; and

(ix) a completed Federal Emergency Management Agency Standard Flood Hazard
Determination with respect to each Mortgaged Property.

Notwithstanding the foregoing, if the perfection of the Collateral Agent’s
security interest in any Mortgaged Property may not be accomplished on or prior
to the Closing Date without undue burden or expense or after Borrower’s use of
commercially reasonable efforts to do so, then delivery of documents and
instruments for perfection of such security interest in any Mortgaged Property
shall not constitute a condition precedent to the initial Credit Extension.
Borrower agrees to take the actions set forth on Schedule 5.14 with respect to
such information, documents and instruments not delivered on or prior to the
Closing Date.

(p) Insurance. The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by
Section 5.04 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a “standard” or “New
York” lender’s loss payable or mortgagee endorsement (as applicable) and shall
name the Collateral Agent, on behalf of the Secured Parties, as additional
insured, in form and substance satisfactory to the Administrative Agent.

(q) USA PATRIOT Act. The Lenders and the Administrative Agent shall have
received from the Borrower and each of the Guarantors, at least five
(5) Business Days prior to the Closing Date, all documentation and other
information that may be required by the Lenders in order to enable compliance
with applicable “know your customer” and anti-money laundering rules and
regulations, including the information and any documentation required under
Section 10.13.

(r) Reserved.

(s) Accuracy of Acquisition Agreement Representations and Specified
Representations. The representations made by the Acquired Business in the
Acquisition Agreement that are material to the interests of the Lenders but only
to the extent that Borrower or Merger Subsidiary has the right to terminate its
obligations under the Acquisition Agreement as a result of a breach of such
representations in the Acquisition Agreement (the “Acquisition Agreement
Representations”) and (B) the Specified Representations (as defined below),
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of such date (except (x) to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects on and as of such earlier date and (y) to the extent any
such representation and warranty is qualified as to “materiality” or “Material
Adverse Effect”, in which case it shall be true and correct in all respects).
For purposes hereof, “Specified Representations” means the representations and
warranties relating to Borrower, the Acquired Business, their Subsidiaries and
their businesses set forth in Sections 3.01, 3.02, 3.03(a), 3.03(b), 3.03(c),
3.05(a) (first sentence and as to Collateral only), 3.07 (as to ownership of
Equity Interests that constitute Collateral only), 3.10, 3.11 3.16, 3.20 and
3.22 (but only to the extent relating to Collateral in which a Lien in favor of
the Collateral Agent is required to be perfected by the Closing Date pursuant to
clauses (n) and (o) above).

 

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(t) No Material Adverse Change. There shall not have been any Material Adverse
Change with respect to the Acquired Business and its Subsidiaries since
January 2, 2011.

SECTION 4.02 Conditions to All Credit Extensions.

The obligation of each Lender and each Issuing Bank to make any Credit Extension
(including the initial Credit Extension) shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.

(a) Notice. The Administrative Agent shall have received a Borrowing Request as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) if Loans are being requested or, in the case of
the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing
Bank and the Administrative Agent shall have received an LC Request as required
by Section 2.18(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a Borrowing
Request as required by Section 2.17(b).

(b) No Default. At the time of and immediately after giving effect to such
Credit Extension (other than the initial Credit Extension) and the application
of the proceeds thereof, no Default or Event of Default shall have occurred and
be continuing on such date.

(c) Representations and Warranties. Each of the representations and warranties
made by any Loan Party set forth in Article III hereof or in any other Loan
Document shall be true and correct in all material respects (except that any
representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects (subject to such
“materiality” or “Material Adverse Effect” qualifier)) on and as of the date of
such Credit Extension with the same effect as though made on and as of such
date, except to the extent such representations and warranties expressly relate
to an earlier date; provided that the only representations relating to the
Borrower, the Acquired Business, their Subsidiaries and their businesses the
accuracy of which shall be a condition to the initial Credit Extension shall be
the Acquisition Agreement Representations and the Specified Representations.

(d) No Legal Bar.

(i) No order, judgment or decree of any Governmental Authority shall purport to
restrain any Lender from making any Loans to be made by it.

(ii) No injunction or other restraining order shall have been issued, shall be
pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this Agreement or
the making of Loans hereunder.

(e) Pro Forma Financial Covenant Compliance. After the Closing Date and solely
in connection with any Credit Extension that utilizes any Revolving Commitments,
(1) the Borrower shall be in compliance on a Pro Forma Basis (including balance
sheet amounts after giving pro forma effect to any requested Credit Extension)
with Section 6.09(a) (irrespective of whether such financial covenant has been
tested for the most recently ended Test Period) and (2) solely with respect to
Credit Extensions made prior to the time when financial statements for the Test
Period ending October 1, 2011 are available, the maximum Total Leverage Ratio
(calculated on a Pro Forma Basis and including balance sheet amounts after
giving pro forma effect to any requested Credit Extension) shall not exceed 5.25
to 1.0.

 

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Each of the delivery of a Borrowing Request or an LC Request and the acceptance
by Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty (which, in the case of clause (i) of
Section 4.02(d), shall be limited to the knowledge of the Borrower) by Borrower
and each other Loan Party that on the date of such Credit Extension (both
immediately before and after giving effect to such Credit Extension and the
application of the proceeds thereof) the conditions contained in
Sections 4.02(b)-(e) have been satisfied (it being understood that Sections
4.02(d) and (e) shall not be tested on the Closing Date). Borrower shall provide
such information (including calculation in reasonable detail of the covenants in
Section 6.09) as the Administrative Agent may reasonably request to confirm that
the conditions in Sections 4.02(b)-(e) have been satisfied.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Loan Party warrants, covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, each Loan Party will, and will cause
each of its Subsidiaries to:

SECTION 5.01 Financial Statements, Reports, etc.

Furnish to the Administrative Agent and each Lender:

(a) Annual Reports. As soon as available and in any event within 90 days (or
such earlier date on which Borrower is required to file a Form 10-K under the
Exchange Act) after the end of each fiscal year, beginning with the fiscal year
ending December 31, 2011, (i) the consolidated balance sheet of Borrower as of
the end of such fiscal year and related consolidated statements of income, cash
flows and stockholders’ equity for such fiscal year, in comparative form with
such financial statements as of the end of, and for, the preceding fiscal year,
and notes thereto, all prepared in accordance with GAAP and accompanied by an
opinion of PricewaterhouseCoopers LLC or other independent public accountants of
recognized national standing (which opinion shall not be qualified as to scope
(other than any customary qualifications in respect of businesses, operations or
persons acquired pursuant to a Permitted Acquisition for periods prior to the
consummation of such Permitted Acquisition) or contain any explanatory paragraph
expressing substantial doubt about the ability of the Borrower to continue as a
going concern), stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of operations
and cash flows of Borrower as of the dates and for the periods specified in
accordance with GAAP, (ii) a management report setting forth customary
information with respect to project backlog and (iii) a narrative report and

 

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management’s discussion and analysis of the financial condition and results of
operations of Borrower for such fiscal year, as compared to amounts for the
previous fiscal year (it being understood that the information required by
clause (i) and (iii), and, to the extent contained therein, clause (ii), may be
furnished in the form of a Form 10-K);

(b) Quarterly Reports. As soon as available and in any event within 45 days (or
such earlier date on which Borrower is required to file a Form 10-Q under the
Exchange Act) after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the fiscal quarter ending July 2, 2011, (i) the
consolidated balance sheet of Borrower as of the end of such fiscal quarter and
related consolidated statements of income and cash flows for such fiscal quarter
and for the then elapsed portion of the fiscal year, in comparative form with
the consolidated statements of income and cash flows for the comparable periods
in the previous fiscal year (provided that with respect to any fiscal quarter
that ends on or prior to the first anniversary of the Closing Date, the
foregoing requirement that such financial statements be presented in comparative
form shall only apply to the extent financial statements of Borrower or the
Acquired Business exist for such comparable periods in the previous fiscal
year), and notes thereto, all prepared in accordance with GAAP and accompanied
by a certificate of a Financial Officer stating that such financial statements
fairly present, in all material respects, the consolidated financial condition,
results of operations and cash flows of Borrower as of the date and for the
periods specified in accordance with GAAP consistently applied, and on a basis
consistent with audited financial statements referred to in clause (a) of this
Section, subject to normal year-end audit adjustments, (ii) a management report
setting forth customary information with respect to project backlog, and (iii) a
narrative report and management’s discussion and analysis, of the financial
condition and results of operations for such fiscal quarter and the then elapsed
portion of the fiscal year, as compared to the comparable periods in the
previous fiscal year (it being understood that the information required by
clause (i) and (iii), and, to the extent contained therein, clause (ii), may be
furnished in the form of a Form 10-Q);

(c) Reserved;

(d) Financial Officer’s Certificate. (i) Concurrently with any delivery of
financial statements under Section 5.01(a) or (b), a Compliance Certificate
(A) certifying that no Default has occurred or, if such a Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto, (B) beginning with the fiscal quarter
ending October 1, 2011, setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
financial covenants contained in Section 6.09(a) (unless such financial covenant
is not being tested during the relevant fiscal quarter, in which case, a
certification as to the fact that the covenant in Section 6.09(a) is not
required to be tested during such fiscal quarter) and 6.09(c) and, concurrently
with any delivery of financial statements under Section 5.01(a) above,
demonstrating compliance with Section 6.09(b) (beginning with the fiscal year
ending December 31, 2011) and Borrower’s calculation of Excess Cash Flow
(beginning with the fiscal year ending December 31, 2012) and (C) showing how
Consolidated EBITDA was calculated for such period; and (ii) concurrently with
any delivery of financial statements under Section 5.01(a) above, beginning with
the fiscal year ending December 31, 2011, a report of the accounting firm
opining on or certifying such financial statements stating that in the course of
its regular audit of the financial statements of Borrower and its Subsidiaries,
which audit was conducted in accordance with generally accepted

 

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auditing standards, such accounting firm obtained no knowledge that any Default
insofar as it relates to financial or accounting matters has occurred or, if in
the opinion of such accounting firm such a Default has occurred, specifying the
nature and extent thereof;

(e) Financial Officer’s Certificate Regarding Collateral. Concurrently with any
delivery of financial statements under Section 5.01(a), a certificate of a
Financial Officer setting forth the information required pursuant to the
Perfection Certificate Supplement or confirming that there has been no change in
such information since the date of the Perfection Certificate or latest
Perfection Certificate Supplement (it being understood and agreed that Borrower
may combine this certificate with any of the other certificates required
pursuant to this Section 5.01 (it being understood and agreed that doing so
shall not in any way affect any of the timing requirements hereunder));

(f) Public Reports. Promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by
any Company with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed to holders of its Indebtedness
pursuant to the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor), as the case may be;

(g) Management Letters. Promptly after the receipt thereof by any Company, a
copy of any “management letter” received by any such person from its certified
public accountants and the management’s responses thereto;

(h) Budgets. Within 45 days after the beginning of each fiscal year, a budget
for Borrower in form reasonably satisfactory to the Administrative Agent, but to
include balance sheets, statements of income and sources and uses of cash, for
(i) each month of such fiscal year prepared in detail and (ii) each fiscal year
thereafter, through and including the fiscal year in which the Final Maturity
Date occurs, prepared in summary form, in each case, accompanied by the
statement of a Financial Officer of Borrower to the effect that the budget of
Borrower is a reasonable estimate for the periods covered thereby and, promptly
when available, any significant revisions of such budget;

(i) Organization. Concurrently with any delivery of financial statements under
Section 5.01(a), an accurate organizational chart as required by
Section 3.07(c), or confirmation that there are no changes to Schedule 9(a) or
Schedule 9(c) to the Perfection Certificate;

(j) Organizational Documents. Promptly provide copies of any Organizational
Documents that have been amended or modified in accordance with the terms
hereof; and

(k) Other Information. Promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of any
Company, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

 

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SECTION 5.02 Litigation and Other Notices.

Furnish to the Administrative Agent and each Lender written notice of the
following promptly (and, in any event, within five Business Days after any
Responsible Officer of Borrower becomes aware thereof):

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

(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit, litigation or proceeding,
whether at law or in equity by or before any Governmental Authority, (i) against
any Company or any Affiliate thereof that could reasonably be expected to result
in a Material Adverse Effect or (ii) with respect to any Loan Document;

(c) any material development adverse in any material respect to any Loan Party
in either the Qui Tam Action or the Labarge SEC Action;

(d) any event or development that, individually or when aggregated with other
events or developments, has resulted in, or could reasonably be expected to
result in a Material Adverse Effect;

(e) the occurrence of a Casualty Event in excess of $1,000,000;

(f) (i) the incurrence of any material Lien (other than Permitted Collateral
Liens) on, or claim asserted against any of the Collateral or (ii) the
occurrence of any other event which could materially affect the value of the
Collateral.

SECTION 5.03 Existence; Businesses and Properties.

(a) Do or cause to be done all things necessary to preserve, renew and maintain
in full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05 or Section 6.06 or, in the case of any Subsidiary,
where the failure to perform such obligations, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
privileges, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; comply
with all applicable Requirements of Law (including (i) any and all zoning,
building, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Real Property; (ii) any
applicable export control regulations and (iii) laws and regulations relating to
foreign corrupt practices as described in Section 3.23, but not including any
Environmental Law subject to Section 5.09) and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted, except where
the failure to comply, individually or in the aggregate, could not

 

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reasonably be expected to result in a Material Adverse Effect; and at all times
maintain, preserve and protect all property material to the conduct of such
business and keep such property in good repair, working order and condition
(other than wear and tear occurring in the ordinary course of business) and from
time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect; provided that nothing in this Section 5.03(b) shall prevent (i) sales of
property, consolidations or mergers by or involving any Company in accordance
with Section 6.05 or Section 6.06; (ii) the withdrawal by any Company of its
qualification as a foreign corporation in any jurisdiction where such
withdrawal, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect; or (iii) the abandonment by any Company
of any rights, franchises, licenses, trademarks, trade names, copyrights or
patents that such person reasonably determines are not useful to its business or
no longer commercially desirable.

SECTION 5.04 Insurance.

(a) Generally. Keep its insurable property adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to such
extent and against such risks as is customary with companies in the same or
similar businesses operating in the same or similar locations, including
insurance with respect to Mortgaged Properties and other properties material to
the business of the Companies against such casualties and contingencies and of
such types, in such amounts and with such deductibles as is customary in the
case of similar businesses operating in the same or similar locations, including
(i) physical hazard insurance on an “all risk” basis, (ii) commercial general
liability against claims for bodily injury, death or property damage covering
any and all insurable claims, (iii) explosion insurance in respect of any
boilers, machinery or similar apparatus constituting Collateral, (iv) business
interruption insurance and (v) worker’s compensation insurance and such other
insurance as may be required by any Requirements of Law.

(b) Requirements of Insurance. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof (unless otherwise agreed by the
Collateral Agent in its reasonable discretion), (ii) name the Collateral Agent
as mortgagee (in the case of property insurance) or additional insured on behalf
of the Secured Parties (in the case of liability insurance) or loss payee (in
the case of property insurance), as applicable and (iii) if reasonably requested
by the Collateral Agent, include a breach of warranty clause.

(c) Flood Insurance. With respect to each Mortgaged Property, obtain flood
insurance in such total amount as the Administrative Agent or the Required
Lenders may from time to time require, if at any time the area in which any
improvements located on any Mortgaged Property is designated a “flood hazard
area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.

 

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(d) Broker’s Report. Deliver to the Administrative Agent and the Collateral
Agent and the Lenders a report of a reputable insurance broker with respect to
such insurance and such supplemental reports with respect thereto as the
Administrative Agent or the Collateral Agent may from time to time reasonably
request.

(e) Mortgaged Properties. No Loan Party that is an owner of Mortgaged Property
shall take any action that is reasonably likely to be the basis for termination,
revocation or denial of any insurance coverage required to be maintained under
such Loan Party’s respective Mortgage or that could be the basis for a defense
to any claim under any Insurance Policy maintained in respect of the Premises,
and each Loan Party shall otherwise comply in all material respects with all
Insurance Requirements in respect of the Premises; provided, however, that each
Loan Party may, at its own expense and after written notice to the
Administrative Agent, (i) contest the applicability or enforceability of any
such Insurance Requirements by appropriate legal proceedings, the prosecution of
which does not constitute a basis for cancellation or revocation of any
insurance coverage required under this Section 5.04 or (ii) cause the Insurance
Policy containing any such Insurance Requirement to be replaced by a new policy
complying with the provisions of this Section 5.04.

(f) In the event that the proceeds of any insurance claim are paid to any Loan
Party after an Event of Default has occurred and the Administrative Agent has
terminated the Commitments and/or declared the Loans and Reimbursement
Obligations due and payable, any such proceeds shall be held in trust for the
benefit of the Collateral Agent and immediately after receipt thereof shall be
paid to the Collateral Agent for application in accordance with Section 8.02 of
this Agreement.

SECTION 5.05 Obligations and Taxes.

(a) Payment of Obligations. Pay its Indebtedness and other obligations promptly
and in accordance with their terms unless the failure to pay could not
reasonably be expected to result in a Material Adverse Effect and pay and
discharge promptly when due all Taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, services, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien other than a Permitted Lien upon such
properties or any part thereof; provided that such payment and discharge shall
not be required with respect to any such Tax, assessment, charge, levy or claim
to the extent (i) the validity or amount thereof shall be contested in good
faith by appropriate proceedings timely instituted and diligently conducted and
the applicable Company shall have set aside on its books adequate reserves or
other appropriate provisions with respect thereto in accordance with GAAP,
(ii) such contest operates to suspend collection of the contested obligation,
Tax, assessment or charge and enforcement of a Lien other than a Permitted Lien,
(iii) the failure to pay could not reasonably be expected to result in a
Material Adverse Effect and (iv) in the case of Collateral, the applicable
Company shall have (a) caused any proceeding instituted contesting such Lien to
stay the sale or forfeiture of any portion of the Collateral on account of such
Lien, and (b) at the option and at the request of the Administrative Agent, to
the extent such Lien is in an amount in excess of $500,000, maintained cash
reserves in an amount sufficient to pay and discharge such Lien and the
Administrative Agent’s reasonable estimate of all interest and penalties related
thereto.

 

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(b) Filing of Returns. Timely and to its knowledge at the time of filing
correctly file all material Tax Returns required to be filed by it. Withhold,
collect and remit all material Taxes that it is required to collect, withhold or
remit.

SECTION 5.06 Employee Benefits.

(a) Comply in all respects with the applicable provisions of ERISA and the Code,
except to the extent that such noncompliance could not reasonably be expected to
result in a Material Adverse Effect and (b) furnish to the Administrative Agent
(x) as soon as possible after, and in any event within 5 days after any
Responsible Officer of any Company or any ERISA Affiliates of any Company knows
or has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Companies or any of their ERISA Affiliates in an aggregate amount
exceeding $1,000,000 or the imposition of a Lien, a statement of a Financial
Officer of Borrower setting forth details as to such ERISA Event and the action,
if any, that the Companies propose to take with respect thereto; (y) upon
request by the Administrative Agent, copies of (i) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any Company or any
ERISA Affiliate with the Internal Revenue Service with respect to each Plan;
(ii) the most recent actuarial valuation report for each Plan; (iii) all notices
received by any Company or any ERISA Affiliate from a Multiemployer Plan sponsor
or any governmental agency concerning an ERISA Event; and (iv) such other
documents or governmental reports or filings relating to any Plan (or employee
benefit plan sponsored or contributed to by any Company) as the Administrative
Agent shall reasonably request and (z) promptly following any request therefor,
copies of (i) any documents described in Section 101(k) of ERISA that any
Company or its ERISA Affiliate may request with respect to any Multiemployer
Plan and (ii) any notices described in Section 101(1) of ERISA that any Company
or its ERISA Affiliate may request with respect to any Multiemployer Plan;
provided that if any Company or its ERISA Affiliate has not requested such
documents or notices from the administrator or sponsor of the applicable
Multiemployer Plan, the applicable Company or ERISA Affiliate shall promptly
make a request for such documents or notices from such administrator or sponsor
and shall provide copies of such documents and notices promptly after receipt
thereof.

SECTION 5.07 Maintaining Records; Access to Properties and Inspections; Annual
Meetings.

(a) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law are made of all
dealings and transactions in relation to its business and activities. Each
Company will permit any representatives designated by the Administrative Agent
or any Lender to visit and inspect the financial records and the property of
such Company at reasonable times and as often as may be reasonably requested,
and permit any representatives designated by the Administrative Agent or any
Lender to discuss the affairs, finances, accounts and condition of any Company
with the officers and employees thereof and advisors therefor (including
independent accountants), in each case during normal business hours with
reasonable advance notice; provided, however, that unless an Event of Default
has occurred and is continuing, the Loan Parties shall only be required to pay
the expenses of one such visitation and inspection each fiscal year.

 

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(b) Within 150 days after the end of each fiscal year of the Companies, at the
request of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location, venue and time or, at the option of the
Administrative Agent, by conference call, the costs of such venue or call to be
paid by Borrower) with all Lenders who choose to attend such meeting, at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of the Companies and the budgets presented for the
current fiscal year of the Companies.

SECTION 5.08 Use of Proceeds.

Use the proceeds of the Loans only for the purposes set forth in Section 3.12
and request the issuance of Letters of Credit only for the purposes set forth in
the definition of Commercial Letter of Credit or Standby Letter of Credit, as
the case may be.

SECTION 5.09 Compliance with Environmental Laws; Environmental Reports.

(a) Comply, and use commercially reasonable efforts to cause all lessees and
other persons occupying Real Property owned, operated or leased by any Company
to comply with all Environmental Laws and Environmental Permits applicable to
its operations and Real Property except to the extent that any noncompliance
would not be reasonably expected to result in a Material Adverse Effect or
Property Material Adverse Effect, if applicable; obtain and renew all material
Environmental Permits applicable to its operations and Real Property; and
conduct all Responses required by, and in accordance with, Environmental Laws;
provided that no Company shall be required to undertake any Response 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.

(b) If a Default caused by reason of a breach of Section 3.18 or Section 5.09(a)
shall have occurred and be continuing for more than 20 days without the
Companies commencing activities reasonably likely to cure such Default in
accordance with Environmental Laws, at the written request of the Administrative
Agent or the Required Lenders through the Administrative Agent, provide to the
Lenders within 45 days after such request, at the expense of Borrower, an
environmental assessment report regarding the matters which are the subject of
such Default, including, where appropriate, soil and/or groundwater sampling,
prepared by an environmental consulting firm and, in the form and substance,
reasonably acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Response to address them.

SECTION 5.10 Reserved.

SECTION 5.11 Additional Collateral; Additional Guarantors.

(a) Subject to this Section 5.11, with respect to any property acquired after
the Closing Date by any Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject, promptly (and in
any event within 30 days after the acquisition thereof or such later date as the
Collateral Agent may agree in its sole discretion) (i) execute and deliver to
the Administrative Agent and the Collateral Agent such amendments or supplements
to the relevant Security Documents or such other documents as the Administrative

 

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Agent or the Collateral Agent shall deem reasonably necessary or advisable to
grant to the Collateral Agent, for its benefit and for the benefit of the other
Secured Parties, a Lien on such property subject to no Liens other than
Permitted Collateral Liens, and (ii) take all actions necessary to cause such
Lien to be duly perfected to the extent required by such Security Document in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Collateral Agent such documents as the Administrative
Agent or the Collateral Agent shall reasonably require to confirm the validity,
perfection and priority of the Lien of the Security Documents on such
after-acquired properties.

(b) With respect to any person that is or becomes a Wholly-Owned Subsidiary
after the Closing Date (except for Immaterial Subsidiaries), promptly (and in
any event within 30 days after such person becomes a Subsidiary or such later
date as the Collateral Agent may agree in its sole discretion) (i) deliver to
the Collateral Agent the certificates, if any, representing all of the Equity
Interests of such Subsidiary, together with undated stock powers or other
appropriate instruments of transfer executed and delivered in blank by a duly
authorized officer of the holder(s) of such Equity Interests, and all
intercompany notes owing from such Subsidiary to any Loan Party together with
instruments of transfer executed and delivered in blank by a duly authorized
officer of such Loan Party, as required by the Security Agreement, and
(ii) cause such new Subsidiary to the extent that it is a Domestic Subsidiary
(A) to execute a Joinder Agreement or such comparable documentation to become a
Subsidiary Guarantor and a joinder agreement to the applicable Security
Agreement, substantially in the form annexed thereto, and (B) to take all
actions reasonably necessary or advisable in the opinion of the Administrative
Agent or the Collateral Agent to cause the Lien created by the applicable
Security Agreement to be duly perfected to the extent required by such agreement
in accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent. Notwithstanding the foregoing,
(1) the Equity Interests required to be delivered to the Collateral Agent
pursuant to clause (i) of this Section 5.11(b) and the Equity Interests required
to be pledged to the Collateral Agent under the Loan Documents shall be limited,
in the case of any Foreign Subsidiary, to (A) Voting Stock of any Subsidiary
which is a controlled foreign corporation (as defined in Section 957(a) of the
Code) representing 65% of the total voting power of all outstanding Voting Stock
of such Subsidiary and (B) 100% of the Equity Interests of any Foreign
Subsidiary not constituting Voting Stock of any such controlled foreign
corporation (as defined in Section 957(a) of the Code). No Equity Interests
owned by any first-tier Foreign Subsidiary or any of its Subsidiaries will be
required to be pledged to secure the Secured Obligations and no first-tier
Foreign Subsidiary (nor the Subsidiaries of a first-tier Foreign Subsidiary)
will be required to become a Subsidiary Guarantor or to pledge any of its assets
to secure the Secured Obligations.

(c) Promptly grant to the Collateral Agent, within 30 days of the acquisition
thereof or such later date as the Collateral Agent may agree in its sole
discretion, a security interest in and Mortgage on (i) each Real Property owned
in fee by such Loan Party as is acquired by such Loan Party after the Closing
Date and that, together with any improvements thereon, individually has a fair
market value of at least $5.0 million and (ii) unless the Collateral Agent
otherwise consents, each leased Real Property of such Loan Party which lease
individually provides for annual rental payments of at least $2.0 million, in
each case, as additional security for the

 

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Secured Obligations (unless the subject property is already mortgaged to a third
party to the extent permitted by Section 6.02 and, in the case of clause (ii),
it is understood and agreed that Borrower may not be able to provide a security
interest and Mortgage on such leased Real Property after its commercially
reasonable efforts to do so). Such Mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent and the Collateral Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Collateral Liens or other
Liens acceptable to the Collateral Agent. The Mortgages or instruments related
thereto shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Mortgages and all
taxes, fees and other charges payable in connection therewith shall be paid in
full. Such Loan Party shall otherwise take such actions and execute and/or
deliver to the Collateral Agent such documents as the Administrative Agent or
the Collateral Agent shall require to confirm the validity, perfection and
priority of the Lien of any existing Mortgage or new Mortgage against such
after-acquired Real Property (including a Title Policy, a Survey, flood
determinations and evidence of flood insurance where applicable, and local
counsel opinion (in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent) in respect of such Mortgage).

SECTION 5.12 Security Interests; Further Assurances.

Promptly, upon the reasonable request of the Administrative Agent or the
Collateral Agent, at Borrower’s expense, execute, acknowledge and deliver, or
cause the execution, acknowledgment and delivery of, and thereafter register,
file or record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary for the continued validity, perfection and
priority of the Liens on the Collateral covered thereby subject to no other
Liens except as permitted by the applicable Security Document, or obtain any
consents or waivers as may be necessary or appropriate in connection therewith.
Deliver or cause to be delivered to the Administrative Agent and the Collateral
Agent from time to time such other documentation, consents, authorizations,
approvals and orders in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent as the Administrative Agent and
the Collateral Agent shall reasonably deem necessary to perfect or maintain the
Liens on the Collateral pursuant to the Security Documents. Upon the exercise by
the Administrative Agent, the Collateral Agent or any Lender of any power,
right, privilege or remedy pursuant to any Loan Document which requires any
consent, approval, registration, qualification or authorization of any
Governmental Authority execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent, the
Collateral Agent or such Lender may reasonably require. If the Administrative
Agent, the Collateral Agent or the Required Lenders determine that they are
required by Requirements of Law to have appraisals prepared in respect of the
Real Property of any Loan Party constituting Collateral, Borrower shall provide
to the Administrative Agent appraisals that satisfy the applicable requirements
of the Real Estate Appraisal Reform Amendments of FIRREA and are otherwise in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent.

 

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SECTION 5.13 Information Regarding Collateral.

Not effect any change (i) in any Loan Party’s legal name, (ii) in the location
of any Loan Party’s chief executive office, (iii) in any Loan Party’s identity
or organizational structure, (iv) in any Loan Party’s Federal Taxpayer
Identification Number or organizational identification number, if any, or (v) in
any Loan Party’s jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it shall have
given the Collateral Agent and the Administrative Agent not less than 10 days’
prior written notice (in the form of an Officers’ Certificate), or such lesser
notice period agreed to by the Collateral Agent, of its intention so to do,
clearly describing such change and providing such other information in
connection therewith as the Collateral Agent or the Administrative Agent may
reasonably request and (B) it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the perfection and priority of
the security interest of the Collateral Agent for the benefit of the Secured
Parties in the Collateral, if applicable. Each Loan Party agrees to promptly
provide the Collateral Agent with certified Organizational Documents reflecting
any of the changes described in the preceding sentence.

SECTION 5.14 Post-Closing Collateral Matters.

Execute and deliver the documents and complete the tasks set forth on
Schedule 5.14, in each case within the time limits specified on such schedule
(with any such time frame permitted to be extended by the Administrative Agent
in its sole discretion).

SECTION 5.15 Maintenance of Ratings.

Use commercially reasonable efforts to cause the Loans and Borrower’s corporate
credit/family ratings to continue to be publicly rated by Standard & Poor’s
Ratings Group and Moody’s Investors Service Inc. (but not to maintain a specific
rating).

ARTICLE VI

NEGATIVE COVENANTS

Each Loan Party warrants, covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in full
and all Letters of Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, no Loan Party will, nor will they cause or permit
any Subsidiaries to:

SECTION 6.01 Indebtedness.

Incur, create, assume or permit to exist, directly or indirectly, any
Indebtedness, except

(a) Indebtedness incurred under this Agreement and the other Loan Documents;

 

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(b) (i) Indebtedness outstanding on the Closing Date and listed on
Schedule 6.01(b), (ii) the Senior Notes and Senior Note Guarantees (including
any notes and guarantees issued in exchange therefor in accordance with the
registration rights document entered into in connection with the issuance of the
Senior Notes and Senior Note Guarantees) and (iii) Permitted Refinancing
Indebtedness in respect thereof (including any Indebtedness to the extent the
proceeds of such Indebtedness are deposited and used to defease or to discharge
the Indebtedness being refinanced in full);

(c) Indebtedness under Hedging Obligations with respect to interest rates,
foreign currency exchange rates or commodity prices, in each case not entered
into for speculative purposes; provided that if such Hedging Obligations relate
to interest rates, (i) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and
(ii) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which such
Hedging Obligations relate;

(d) Indebtedness of any Loan Party to any other Loan Party permitted by
Section 6.04(f);

(e) Indebtedness in respect of Purchase Money Obligations and Capital Lease
Obligations, and refinancings or renewals thereof, in an aggregate amount not to
exceed $15.0 million at any time outstanding;

(f) Indebtedness incurred by Foreign Subsidiaries in an aggregate principal
amount for all Foreign Subsidiaries not to exceed $10.0 million at any time
outstanding;

(g) Indebtedness in respect of bid, performance or surety bonds, completion
guarantees and appeal bonds, workers’ compensation claims, self-insurance
obligations and bankers acceptances issued for the account of any Company in the
ordinary course of business, including guarantees or obligations of any Company
with respect to letters of credit supporting such bid, performance or surety
bonds, completion guarantees and appeal bonds, workers’ compensation claims,
self-insurance obligations and bankers acceptances (in each case other than for
an obligation for money borrowed);

(h) Contingent Obligations of any Loan Party in respect of Indebtedness
otherwise permitted under this Section 6.01 (other than, in the case of any
Permitted Refinancing Indebtedness, as may be limited by the definition
thereof);

(i) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five Business Days of incurrence;

(j) Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;

(k) Indebtedness incurred by Borrower and its Subsidiaries consisting of the
financing of insurance premiums in the ordinary course of business;

 

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(l) unsecured Indebtedness of any person acquired pursuant to a Permitted
Acquisition, which Indebtedness was not incurred in contemplation of such
Permitted Acquisition, and any Permitted Refinancing Indebtedness thereof;
provided that after giving effect to the Indebtedness permitted under this
Section 6.01(l) on a Pro Forma Basis, the Total Leverage Ratio shall not be
greater than 4.25:1.00;

(m) unsecured Indebtedness consisting of promissory notes issued by any Loan
Party to current or former officers, directors and employees, their respective
estates, spouses or former spouses to finance the purchase or redemption of
Equity Interests of Borrower solely to the extent cash could be distributed to
any such person under Section 6.07(b);

(n) (i) Permitted Subordinated Indebtedness of Borrower or any Additional Senior
Unsecured Indebtedness of Borrower and (ii) any Permitted Refinancing
Indebtedness thereof; provided that after giving effect to the incurrence of any
Indebtedness permitted under this Section 6.01(n) on a Pro Forma Basis the Total
Leverage Ratio shall not be greater than 4.25:1.00; and

(o) unsecured Indebtedness of any Company in an aggregate amount for all
Companies not to exceed $12.5 million at any time outstanding.

SECTION 6.02 Liens.

Create, incur, assume or permit to exist, directly or indirectly, any Lien on
any property now owned or hereafter acquired by it or on any income or revenues
or rights in respect of any thereof, except the following (collectively, the
“Permitted Liens”):

(a) inchoate Liens for taxes, assessments or governmental charges or levies not
yet due and payable or delinquent and Liens for taxes, assessments or
governmental charges or levies, which are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property subject to any such Lien;

(b) Liens in respect of property of any Company imposed by Requirements of Law,
which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as, without limitation, carriers’,
warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s
and mechanics’ Liens and other similar Liens arising in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the
value of the property of the Companies, taken as a whole, and do not materially
impair the use thereof in the operation of the business of the Companies, taken
as a whole and (ii) which, if they secure obligations that are then due and
unpaid, are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such
Lien;

 

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(c) any Lien in existence on the Closing Date and set forth on Schedule 6.02(c)
and any Lien granted as a replacement or substitute therefor; provided that any
such replacement or substitute Lien (i) except as permitted by the definition of
Permitted Refinancing Indebtedness in respect of the Indebtedness secured by
such Lien, does not secure an aggregate amount of Indebtedness, if any, greater
than that secured on the Closing Date and (ii) does not encumber any property
other than the property subject thereto on the Closing Date (any such Lien, an
“Existing Lien”);

(d) easements, rights-of-way, restrictions (including zoning restrictions),
covenants, licenses, encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies on or with respect to any Real
Property, in each case whether now or hereafter in existence, not (i) securing
Indebtedness, (ii) individually or in the aggregate materially impairing the
value or marketability of such Real Property or (iii) individually or in the
aggregate materially interfering with the ordinary conduct of the business of
the Companies at such Real Property;

(e) Liens arising out of judgments, attachments or awards not resulting in an
Event of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for
which adequate reserves have been made;

(f) Liens (other than any Lien imposed by ERISA) (x) imposed by Requirements of
Law or deposits made in connection therewith in the ordinary course of business
in connection with workers’ compensation, unemployment insurance and other types
of social security legislation, (y) incurred in the ordinary course of business
to secure the performance of tenders, statutory obligations (other than excise
Taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases,
government contracts, trade contracts, performance and return of money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money) or (z) arising by virtue of deposits made in the ordinary course of
business to secure liability for premiums to insurance carriers; provided that
(i) with respect to clauses (x), (y) and (z) of this paragraph (f), such Liens
are for amounts not yet due and payable or delinquent or, to the extent such
amounts are so due and payable, such amounts are being contested in good faith
by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP and (ii) to the extent such Liens are not imposed by
Requirements of Law, such Liens shall in no event encumber any property other
than cash and Cash Equivalents and letters of credit issued to support payment
of such obligations;

(g) Leases of the properties of any Company granted by such Company to third
parties, in each case entered into in the ordinary course of such Company’s
business so long no such Leases, individually or in the aggregate, interfere in
any material respect with the ordinary conduct of the business of any Company or
materially impair the use (for its intended purposes) or the value of the
property subject thereto;

(h) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by any Company in the
ordinary course of business;

(i) Liens securing Indebtedness incurred pursuant to Section 6.01(e); provided
that any such Liens attach only to the property being financed pursuant to such
Indebtedness and do not encumber any other property of any Company (other than
improvements thereon and any proceeds from the sale thereof);

 

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(j) bankers’ Liens, rights of setoff and other similar Liens existing solely
with respect to cash and Cash Equivalents on deposit in one or more accounts
maintained by any Company, in each case granted in the ordinary course of
business in favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled accounts and
netting arrangements; provided that, unless such Liens are non-consensual and
arise by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;

(k) Reserved;

(l) Liens granted pursuant to the Security Documents to secure the Secured
Obligations;

(m) licenses of Intellectual Property granted by any Company in the ordinary
course of business and not interfering in any material respect with the ordinary
conduct of business of the Companies;

(n) the filing of UCC financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods;

(o) Liens securing Indebtedness incurred pursuant to Section 6.01(f); provided
that (i) such Liens do not extend to, or encumber, property which constitutes
Collateral and (ii) such Liens extend only to the property (or Equity Interests)
of the Foreign Subsidiary incurring such Indebtedness;

(p) Liens granted to the financial institution providing the relevant Accounts
Receivable Program solely with respect to the accounts receivable actually sold
for which cash has been received by a Loan Party pursuant to the terms of such
Accounts Receivable Program;

(q) Liens attached to cash earnest money deposits made by a Company in
connection with any letter of intent or purchase agreement entered into by a
Loan Party; provided that not more than 10% of the purchase price in respect of
such letter of intent or purchase agreement has been deposited as a cash earnest
money deposit;

(r) Liens on Equity Interests or assets to be sold pursuant to an agreement
entered into for the sale or disposition of all or substantially all the Equity
Interests or assets of a Subsidiary or for any Asset Sale or disposition of
assets not constituting an Asset Sale, in each case to the extent permitted by
the terms hereof, pending the closing of such sale or disposition; provided that
in no case shall any such Liens secure (either directly or indirectly) the
repayment of any Indebtedness;

(s) Liens on the Equity Interests of a joint venture owned by a Loan Party
pursuant to a joint venture agreement or Liens on the Equity Interests of a
joint venture securing Indebtedness incurred by such joint venture so long as
the recourse of any lender in respect of such Indebtedness against any Loan
Party is limited to such Equity Interests or proceeds from the sale thereof;

 

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(t) 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;

(u) Liens encumbering proceeds of Indebtedness permitted to be incurred pursuant
to Section 6.01(b)(iii) (but not, for the avoidance of doubt, securing such
Indebtedness) that are deposited and used to defease or to discharge the
Indebtedness being refinanced; and

(v) Liens incurred in the ordinary course of business of any Company with
respect to obligations that do not in the aggregate for all Companies exceed
$10.0 million at any time outstanding, so long as such Liens, to the extent
covering any Collateral, are junior to the Liens granted pursuant to the
Security Documents;

provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents.

SECTION 6.03 Sale and Leaseback Transactions.

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 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 (a “Sale and
Leaseback Transaction”) unless (i) the sale of such property is permitted by
Section 6.06 and (ii) any Attributable Indebtedness and any Liens arising in
connection with its use of such property are permitted by Section 6.01 and
Section 6.02, respectively.

SECTION 6.04 Investment, Loan, Advances and Acquisition.

Directly or indirectly, lend money or credit (by way of guarantee or otherwise)
or make advances to any other person, or purchase or acquire any Equity
Interests, bonds, notes, debentures, guarantees or other obligations or
securities of, or any other interest in, or make any capital contribution to,
any other person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or purchase or acquire (in one
transaction or a series of transactions) any assets (all of the foregoing,
collectively, “Investments”), except that the following shall be permitted:

(a) the Companies may consummate the Transactions in accordance with the
provisions of the Transaction Documents;

(b) Investments outstanding on the Closing Date and identified on
Schedule 6.04(b);

(c) the Companies may (i) acquire and hold accounts receivables owing to any of
them if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms, provided that such trade terms
may include such concessionary trade terms in the ordinary course of business as
the Borrower deems reasonable under the circumstances, (ii) invest in, acquire
and hold cash and Cash Equivalents, (iii) endorse negotiable instruments held
for collection in the ordinary course of business or (iv) make lease, utility
and other similar deposits in the ordinary course of business;

 

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(d) Hedging Obligations incurred pursuant to Section 6.01(c);

(e) loans and advances to directors, employees and officers of Borrower and the
Subsidiaries for bona fide business purposes, including the purchase of Equity
Interests of Borrower, in an aggregate amount not to exceed $1.0 million at any
time outstanding; provided that no loans in violation of Section 402 of the
Sarbanes-Oxley Act shall be permitted hereunder;

(f) Investments (i) by any Company in Borrower or any existing Subsidiary
Guarantor and (ii) by a Subsidiary that is not a Subsidiary Guarantor in any
other existing Subsidiary that is not a Subsidiary Guarantor; provided that any
Investment by or in a Loan Party in the form of a loan or advance shall be
evidenced by the Intercompany Note and, in the case of a loan or advance by a
Loan Party, pledged by such Loan Party as Collateral pursuant to the Security
Documents;

(g) Investments in securities of trade creditors or customers in the ordinary
course of business received in connection with the settlement of debts, the
satisfaction of judgments, settlements, compromises or resolutions of
litigation, arbitration or other disputes, upon foreclosure or pursuant to any
plan of reorganization or liquidation or similar arrangement upon the bankruptcy
or insolvency of such trade creditors or customers;

(h) Permitted Acquisitions;

(i) mergers and consolidations in compliance with Section 6.05;

(j) Investments made by Borrower or any Subsidiary as a result of consideration
received in connection with an Asset Sale made in compliance with Section 6.06
or a disposition of assets not constituting an Asset Sale;

(k) to the extent applicable and permitted by Section 6.09(b), Capital
Expenditures;

(l) Investments in Foreign Subsidiaries which are in an aggregate amount not to
exceed $15.0 million;

(m) Investments to the extent that the consideration therefor consists of
Qualified Capital Stock of Borrower or the proceeds of the issuance of Qualified
Capital Stock of Borrower to the extent not resulting in a Change in Control;

(n) Investments consisting of prepaid expenses, negotiable instruments held for
collection and lease, utility and workers’ compensation, performance and other
similar deposits made in the ordinary course of business of the Borrower and its
Subsidiaries;

(o) Investments consisting of cash earnest money deposits in connection with an
acquisition permitted by this Agreement; provided that not more than 10% of the
purchase price in respect of such acquisition has been deposited as a cash
earnest money deposit;

 

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(p) advances to suppliers of amounts provided by customers for the purchase of
materials and the preparation of goods and inventory in respect of customer
contracts entered into in the ordinary course of business;

(q) Investments held by a person acquired or merged into a Loan Party so long as
such Investments (i) were not acquired in contemplation of such acquisition or
merger and (ii) do not require any additional capital contributions be made by
any Loan Party;

(r) other Investments in an aggregate amount not to exceed $10.0 million at any
time outstanding; and

(s) Investments consisting of Equity Interests owned by a Loan Party in a
Captive Insurance Entity and capital contributions in such Captive Insurance
Entity consisting of insurance premiums in respect of insurance acquired in the
ordinary course that is customary for companies of a similar size engaged in
similar businesses in similar locations, in each case, as the Borrower;
provided, however, that the aggregate amount of all such Investments made
(i) during the period commencing on the date the Captive Insurance Entity is
created and ending on the last day of the fiscal year in which such Captive
Insurance Entity is created shall not exceed an amount to be agreed upon by the
Administrative Agent and the Borrower and (ii) during each fiscal year
thereafter shall not exceed an amount to be agreed upon by the Administrative
Agent and the Borrower.

An Investment shall be deemed to be outstanding to the extent not returned in
the same form as the original Investment to Borrower or any Subsidiary
Guarantor.

SECTION 6.05 Mergers and Consolidations.

Wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation (or unconditionally agree to do any of the foregoing at
any future time), except that the following shall be permitted:

(a) the Transactions as contemplated by the Transaction Documents;

(b) Asset Sales in compliance with Section 6.06;

(c) acquisitions in compliance with Section 6.04;

(d) any Subsidiary may merge or consolidate with or into Borrower or any
Subsidiary Guarantor (as long as Borrower is the surviving person in the case of
any merger or consolidation involving Borrower and a Subsidiary Guarantor is the
surviving person and remains a Wholly Owned Subsidiary of Borrower in any other
case); provided that the Lien on and security interest in such property granted
or to be granted in favor of the Collateral Agent under the Security Documents
shall be maintained or created in accordance with the provisions of Section 5.11
or Section 5.12, as applicable;

(e) any Foreign Subsidiary may merge or consolidate with or into any other
Foreign Subsidiary; and

 

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(f) any Subsidiary may dissolve, liquidate or wind up its affairs at any time;
provided that (i) such dissolution, liquidation or winding up, as applicable,
could not reasonably be expected to have a Material Adverse Effect and (ii) the
Lien on and security interest in any property of such Subsidiary granted or to
be granted in favor of the Collateral Agent under the Security Documents shall
be maintained or created in accordance with the provisions of Section 5.11 or
Section 5.12, as applicable;.

To the extent the Required Lenders or all the Lenders, as applicable, waive the
provisions of this Section 6.05 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this Section 6.05, such Collateral
(unless sold to a Company) shall be sold free and clear of the Liens created by
the Security Documents, and, so long as Borrower shall have provided the
Administrative Agent such certifications or documents as the Administrative
Agent shall reasonably request in order to demonstrate compliance with this
Section 6.05, the Agents shall take all actions they deem appropriate in order
to effect the foregoing.

SECTION 6.06 Asset Sales.

Effect any Asset Sale, or agree to effect any Asset Sale, except that the
following shall be permitted:

(a) Asset Sales at fair market value; provided that (i) at the time of such
Asset Sale, no Default shall exist or would result from such Asset Sale,
(ii) the aggregate fair market value of assets disposed in respect of all Asset
Sales pursuant to this clause (b) shall not exceed $50.0 million with respect to
all Asset Sales in the aggregate and (iii) at least 75% of the purchase price
for all property subject to such Asset Sale shall be paid to Borrower or such
Subsidiary solely in cash and Cash Equivalents;

(b) leases of real or personal property in the ordinary course of business and
in accordance with the applicable Security Documents;

(c) the Transactions as contemplated by the Transaction Documents;

(d) mergers, liquidations and consolidations in compliance with Section 6.05(d),
(e) and (f);

(e) Investments in compliance with Section 6.04;

(f) sales of 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 sale are promptly applied to the purchase price of such
replacement property; and

(g) Asset Sales resulting in no more than $500,000 in Net Cash Proceeds for any
individual transaction and no more than $2.0 million in Net Cash Proceeds of all
Asset Sales of Companies pursuant to this clause (g) in the aggregate in any
fiscal year.

To the extent the Required Lenders or all the Lenders, as applicable, waive the
provisions of this Section 6.06 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this Section 6.06, such Collateral
(unless sold to a Company) shall be sold free and

 

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clear of the Liens created by the Security Documents, and, so long as Borrower
shall have provided the Administrative Agent such certifications or documents as
the Administrative Agent shall reasonably request in order to demonstrate
compliance with this Section 6.06, the Agents shall take all actions reasonably
necessary in order to effect the foregoing.

For purposes of Section 6.06(a)(iii), the following shall be deemed to be cash:
(a) the assumption of any liabilities of Borrower or any Subsidiary with respect
to, and the release of Borrower or such Subsidiary from all liability in respect
of, any Indebtedness of Borrower or the Subsidiaries permitted hereunder (in the
amount of such Indebtedness) and (b) securities received by Borrower or any
Subsidiary from the transferee that are promptly converted by Borrower or such
Subsidiary into cash, to the extent of the cash received in that conversion.

SECTION 6.07 Dividends.

Authorize, declare or pay, directly or indirectly, any Dividends with respect to
any Company, except that the following shall be permitted:

(a) Dividends by any Company to Borrower or to any Guarantor that is a Wholly
Owned Subsidiary of Borrower;

(b) payments to Borrower, to repurchase or redeem Qualified Capital Stock of
Borrower held by officers, directors or employees or former officers, directors
or employees (or their transferees, estates or beneficiaries under their
estates) of any Company, upon their death, disability, retirement, severance or
termination of employment or service; provided that the aggregate cash
consideration paid for all such redemptions and payments shall not exceed, in
any fiscal year, the sum of (x) $1.0 million (and up to 50% of such $1.0 million
not used in any fiscal year may be carried forward to the next succeeding (but
no other) fiscal year), plus (y) the amount of any Net Cash Proceeds received by
or contributed to Borrower after the Closing Date from the issuance and sale
after the Closing Date of Qualified Capital Stock of Borrower to officers,
directors or employees of any Company that have not been used to make any
repurchases, redemptions or payments under this clause (b), plus (z) the net
cash proceeds of any “key- man” life insurance policies of any Company received
after the Closing Date that have not been used to make any repurchases,
redemptions or payments under this clause (b);

(c) the Borrower and each Subsidiary may declare and make dividend payments or
other distributions solely in Qualified Capital Stock of such Person;

(d) pro rata dividends or other distributions made by a Subsidiary that is not a
Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent
interest in the case of a Subsidiary that is an entity other than a
corporation);

(e) cashless repurchases of Equity Interests deemed to occur upon exercise of
stock options if such Equity Interest represents a portion of the exercise price
of such options;

(f) cash payments in lieu of the issuance of fractional shares in connection
with the exercise of warrants, options or other securities convertible into or
exchangeable for Equity Interests of the Company; and

 

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(g) for so long as no Default or Event of Default has occurred and is continuing
at the time of any such Dividend or would result therefrom, Dividends not in
excess of $7.5 million per fiscal year.

SECTION 6.08 Transactions with Affiliates.

Enter into, directly or indirectly, any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of any Company (other than between or among Borrower and one or more
Subsidiary Guarantors), other than any transaction or series of related
transactions in the ordinary course of business on terms and conditions at least
as favorable to such Company as would reasonably be obtained by such Company at
that time in a comparable arm’s-length transaction with a person other than an
Affiliate, except that the following shall be permitted:

(a) Dividends permitted by Section 6.07;

(b) Investments permitted by Sections 6.04(e), (f)(ii), and (l);

(c) reasonable and customary director, officer and employee compensation
(including bonuses) and other benefits (including retirement, health, stock
option and other benefit plans) and reasonable indemnification and severance
arrangements, in each case approved by the Board of Directors of Borrower;

(d) transactions pursuant to agreements or plans in existence on the Closing
Date and set forth on Schedule 6.08 any modification thereto or any transaction
contemplated thereby in any replacement agreement or plan therefor so long as
such modification or replacement (taken as a whole) is not more disadvantageous
to any Loan Party than the respective agreement or plan existing on the Closing
Date;

(e) sales of Qualified Capital Stock of Borrower to Affiliates of Borrower not
otherwise prohibited by the Loan Documents and the granting of registration and
other customary rights in connection therewith;

(f) any transaction with an Affiliate where the only consideration paid by any
Loan Party is Qualified Capital Stock of Borrower; and

(g) the Transactions as contemplated by the Transaction Documents.

SECTION 6.09 Financial Covenants.

(a) Maximum Total Leverage Ratio. If, at any time during the relevant fiscal
quarter, (i) the sum of (a) any Revolving Borrowings plus (b) the amount drawn
under any Letter of Credit exceeds $1.0 million; or (ii) the aggregate amount of
outstanding Letters of Credit exceeds $5.0 million, permit the Total Leverage
Ratio, as of the last day of any Test Period set forth in the table below, to
exceed the ratio set forth opposite such period in the table below:

 

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Test Period Ending

   Leverage Ratio  

October 1, 2011

     5.25 to 1.0   

December 31, 2011

     5.25 to 1.0   

March 31, 2012

     5.25 to 1.0   

June 30, 2012

     5.25 to 1.0   

September 29, 2012

     5.00 to 1.0   

December 31, 2012

     4.75 to 1.0   

March 30, 2013

     4.75 to 1.0   

June 29, 2013

     4.75 to 1.0   

September 28, 2013

     4.25 to 1.0   

December 31, 2013

     4.00 to 1.0   

March 29, 2014

     4.00 to 1.0   

June 28, 2014

     4.00 to 1.0   

September 27, 2014

     3.75 to 1.0   

December 31, 2014

     3.75 to 1.0   

April 4, 2015

     3.75 to 1.0   

July 4, 2015

     3.75 to 1.0   

October 4, 2015 and the end of each fiscal quarter thereafter

     3.25 to 1.0   

(b) Limitation on Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made during any fiscal year set forth below, to exceed the amount
set forth opposite such fiscal year below:

 

Period

   Amount
(in millions)  

Fiscal year ending December 31, 2011

   $ 24.0   

Fiscal year ending December 31, 2012

   $ 27.0   

Fiscal year ending December 31, 2013

   $ 28.0   

Each fiscal year thereafter

   $ 30.0   

; provided, however, that (x) if the aggregate amount of Capital Expenditures
made in any fiscal year shall be less than the maximum amount of Capital
Expenditures permitted under this Section 6.09(b) for such fiscal year (before
giving effect to any carryover), then the amount of such shortfall may be added
to the amount of Capital Expenditures permitted under this Section 6.09(b) for
the immediately succeeding (but not any other) fiscal year and (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to such
fiscal year (before giving effect to any carryover).

 

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(c) Minimum Consolidated EBITDA. Permit Consolidated EBITDA as at the end of any
fiscal quarter for any Test Period ending on or after October 1, 2011 to be less
than $50 million.

SECTION 6.10 Prepayments of Other Indebtedness; Modifications of Organizational
Documents and Other Documents, etc.

Directly or indirectly:

(a) make any payment or prepayment of principal of, interest (including default
interest) on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of,
any Indebtedness outstanding under the Senior Note Documents, any Subordinated
Indebtedness (including Permitted Subordinated Indebtedness), any Additional
Senior Unsecured Indebtedness or any Permitted Refinancing Indebtedness of any
of the foregoing, except (i) in connection with (A) a refinancing, refunding,
renewal, exchange or extension of the Permitted Subordinated Indebtedness,
Senior Notes or Additional Senior Unsecured Indebtedness permitted by
Section 6.01(b) or (n), as the case may be or (B) regularly scheduled interest
payments in accordance with the terms of such Senior Note Documents, Additional
Senior Unsecured Indebtedness and, subject to the subordination provisions
applicable thereto, Subordinated Indebtedness (including Permitted Subordinated
Indebtedness), (ii) a refinancing of Indebtedness listed on Schedule 6.01(b) and
permitted by Section 6.01(b) or (iii) any payment to the extent made with
Qualified Capital Stock of Borrower;

(b) amend or modify, or permit the amendment or modification of, any provision
of any Transaction Document, any document governing any Additional Senior
Unsecured Indebtedness or any Subordinated Indebtedness (including any Permitted
Subordinated Indebtedness) or any document governing any Accounts Receivable
Program, in each case in any manner that is adverse in any material respect to
the interests of the Lenders;

(c) terminate, amend or modify any of its Organizational Documents (including
(x) by the filing or modification of any certificate of designation and (y) any
election to treat any Pledged Securities (as defined in the Security Agreement)
as a “security” under Section 8-103 of the UCC other than concurrently with the
delivery of certificates representing such Pledged Securities to the Collateral
Agent) or any agreement to which it is a party with respect to its Equity
Interests (including any stockholders’ agreement), or enter into any new
agreement with respect to its Equity Interests, other than any such amendments
or modifications or such new agreements which are not adverse in any material
respect to the interests of the Lenders; provided that Borrower may issue such
Equity Interests, so long as such issuance is not prohibited by Section 6.12 or
any other provision of this Agreement, and may amend or modify its
Organizational Documents to authorize any such Equity Interests; or

(d) cause or permit any other obligation (other than the Secured Obligations,
the Guaranteed Obligations, the Senior Notes and any Additional Senior Unsecured
Indebtedness) to constitute “Designated Senior Debt” or such other comparable
term under the terms of any Subordinated Indebtedness (including Permitted
Subordinated Indebtedness).

 

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SECTION 6.11 Limitation on Certain Restrictions on Subsidiaries.

Directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(a) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by Borrower or any
Subsidiary, or pay any Indebtedness owed to Borrower or a Subsidiary, (b) make
loans or advances to Borrower or any Subsidiary or (c) transfer any of its
properties to Borrower or any Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) applicable Requirements of Law;
(ii) this Agreement and the other Loan Documents; (iii) (a) the Senior Note
Documents, (b) Additional Senior Unsecured Indebtedness and Permitted
Refinancing Indebtedness with respect thereto, so long as such encumbrances or
restrictions are not, taken as a whole, more restrictive to Borrower and its
Subsidiaries in any material respect than those in this Agreement, and
(c) Subordinated Indebtedness and Permitted Refinancing Indebtedness with
respect thereto, so long as such encumbrances or restrictions are not, taken as
a whole, more restrictive to Borrower and its Subsidiaries in any material
respect than those in the Senior Note Documents; (iv) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of a Subsidiary; (v) customary provisions restricting assignment of any
agreement entered into by a Subsidiary in the ordinary course of business;
(vi) any holder of a Lien permitted by Section 6.02 restricting the transfer of
the property subject thereto; (vii) customary restrictions and conditions
contained in any agreement relating to the sale of any property permitted under
Section 6.06 pending the consummation of such sale; (viii) any agreement in
effect at the time such Subsidiary becomes a Subsidiary of Borrower, so long as
such agreement was not entered into in connection with or in contemplation of
such person becoming a Subsidiary of Borrower; (ix) without affecting the Loan
Parties’ obligations under Section 5.11, customary provisions in partnership
agreements, limited liability company organizational governance documents, asset
sale and stock sale agreements and other similar agreements entered into in the
ordinary course of business that restrict the transfer of ownership interests in
or other rights in respect of such partnership, limited liability company or
similar person; (x) restrictions on cash or other deposits or net worth imposed
by suppliers, landlords, customers, insurance and surety or bonding companies
under contracts entered into in the ordinary course of business; (xi) any
instrument governing Indebtedness assumed in connection with any Permitted
Acquisition, which encumbrance or restriction is not applicable to any person,
or the properties or assets of any person, other than the person or the
properties or assets of the person so acquired; (xii) in the case of any joint
venture which is not a Loan Party in respect of any matters referred to in
clauses (b) and (c) above, such person’s Organizational Documents or its joint
venture agreement or stockholders agreements solely to the extent affecting the
Equity Interests of or property held in the subject joint venture; and
(xiii) any encumbrances or restrictions imposed by any amendments or Permitted
Refinancing Indebtedness that is otherwise permitted by the Loan Documents of
the contracts, instruments or obligations referred to in clauses (iii) or
(viii) above; provided that such amendments are no more materially restrictive
with respect to such encumbrances and restrictions than those prior to such
amendment and, in connection with Permitted Refinancing Indebtedness, the
restrictions contained in such definition are complied with.

 

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SECTION 6.12 Limitation on Issuance of Capital Stock.

(a) With respect to Borrower, issue any Equity Interest that is not Qualified
Capital Stock.

(b) With respect to any Subsidiary, issue any Equity Interest (including by way
of sales of treasury stock but not including directors’ qualifying shares or
Equity Interests that are required to be held by another person in order to
satisfy a foreign Requirement of Law requiring an equity owner resident in the
local jurisdiction) or any options or warrants to purchase, or securities
convertible into, any Equity Interest, except (i) for stock splits, stock
dividends and additional issuances of Equity Interests which do not decrease the
percentage ownership of Borrower or any Subsidiaries in any class of the Equity
Interest of such Subsidiary and (ii) Subsidiaries of Borrower formed after the
Closing Date in accordance with Section 6.13 may issue Equity Interests to
Borrower or the Subsidiary of Borrower which is to own such Equity Interests.
All Equity Interests issued in accordance with this Section 6.12(b) shall, to
the extent required by Sections 5.11 and 5.12 or any Security Agreement or if
such Equity Interests are issued by Borrower, be delivered to the Collateral
Agent for pledge pursuant to the applicable Security Agreement.

SECTION 6.13 Limitation on Creation of Subsidiaries.

Establish, create or acquire any additional Subsidiaries without the prior
written consent of the Required Lenders; provided that, without such consent,
Borrower may (i) establish or create one or more Wholly Owned Subsidiaries of
Borrower or (ii) acquire one or more Subsidiaries in connection with a Permitted
Acquisition, so long as, in each case, Section 5.11(b) shall be complied with to
the extent required by such section.

SECTION 6.14 Business.

With respect to Borrower and the Subsidiaries, engage (directly or indirectly)
in any business other than those businesses in which Borrower and its
Subsidiaries are engaged on the Closing Date as described in the Confidential
Information Memorandum (or, in the good faith judgment of the Board of
Directors, which are substantially related thereto or are reasonable extensions
thereof).

SECTION 6.15 Reserved.

SECTION 6.16 Fiscal Year.

Change its fiscal year-end to a date other than December 31.

SECTION 6.17 No Further Negative Pledge.

Enter into any agreement, instrument, deed or lease which prohibits or limits
the ability of any Company to create, incur, assume or suffer to exist any Lien
upon any of their respective properties or revenues, whether now owned or
hereafter acquired, or which requires the grant of any security for an
obligation if security is granted for another obligation, except the following:
(1) this Agreement and the other Loan Documents; (2) covenants in documents
creating Liens

 

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permitted by Section 6.02 prohibiting further Liens on the properties encumbered
thereby; (3) the Senior Note Documents; (4) any Additional Senior Unsecured
Indebtedness and Permitted Refinancing Indebtedness with respect thereto, so
long as such covenants are not, taken as a whole, more restrictive to Borrower
and its Subsidiaries in any material respect than those in this Agreement;
(5) any Subordinated Indebtedness and Permitted Refinancing Indebtedness with
respect thereto, so long as such covenants are no not, taken as a whole, more
restrictive to Borrower and its Subsidiaries in any material respect than those
in the Senior Note Documents; (6) any other agreement that does not restrict in
any manner (directly or indirectly) Liens created pursuant to the Loan Documents
on any Collateral securing the Secured Obligations and does not require the
direct or indirect granting of any Lien securing any Indebtedness or other
obligation by virtue of the granting of Liens on or pledge of property of any
Company to secure the Secured Obligations; and (7) any prohibition or limitation
that (a) exists pursuant to applicable Requirements of Law, (b) consists of
customary restrictions and conditions contained in any agreement relating to the
sale of any property permitted under Section 6.06 pending the consummation of
such sale, (c) restricts subletting or assignment of leasehold interests
contained in any Lease governing a leasehold interest of Borrower or a
Subsidiary, (d) exists in any agreement assumed in connection with any Permitted
Acquisition, which encumbrance or restriction is not applicable to any person,
or the properties or assets of any person, other than the person or the
properties or assets of the person so acquired, (e) customary provisions
restricting assignment or any other transfer of any agreement entered into by
the Borrower or a Subsidiary in the ordinary course of business, (f) customary
provisions with respect to distributions of assets or property in joint venture
agreements, asset sale agreements, stock sale agreements and other similar
agreements not otherwise prohibited hereunder; provided that such encumbrances
or restrictions apply only to the assets or property subject to such joint
venture, asset sale, stock sale or similar agreement or to the assets or
property being sold or disposed of, as the case may be, (g) restrictions on cash
or other deposits or net worth imposed by suppliers, landlords, customers,
insurance and surety or bonding companies under contracts entered into in the
ordinary course of business, (h) in the case of any joint venture which is not a
Loan Party, exists in such person’s Organizational Documents or its joint
venture agreement or stockholders agreements solely to the extent affecting the
Equity Interests of or property held in the subject joint venture, and (i) is
imposed by any amendments or Permitted Refinancing Indebtedness that is
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clause (3) or (7)(d); provided that such amendments
are no more materially restrictive with respect to such prohibitions and
limitations than those prior to such amendment and, in connection with Permitted
Refinancing Indebtedness, the restrictions contained in such definition are
complied with.

SECTION 6.18 Compliance with Anti-Terrorism and Anti-Money Laundering Laws.

(a) Directly or indirectly, in connection with the Loans, (i) conduct any
business or engage in making or receiving any contribution of funds, goods or
services to or for the benefit of any Embargoed Person, (ii) deal in, or
otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to any Anti-Terrorism Law or (iii) engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any Anti-Terrorism Law.

 

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(b) Knowingly directly or indirectly, in connection with the Loans, cause or
permit any of the funds of such Loan Party that are used to repay the Loans to
be derived from any unlawful activity with the result that the making of the
Loans or the repayment of the Loans would be in violation of any Anti-Terrorism
Law, any Anti-Money Laundering Law or any other Requirements of Law.

(c) Cause or permit (i) an Embargoed Person to have any direct or indirect
interest in or benefit of any nature whatsoever in the Loan Parties or (ii) any
of the funds or properties of the Loan Parties that are used to repay the Loans
to constitute property of, or be beneficially owned directly or indirectly by,
an Embargoed Person.

(d) The Loan Parties shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable discretion,
confirming the Loan Parties’ compliance with this Section 6.18.

ARTICLE VII

GUARANTEE

SECTION 7.01 The Guarantee.

The Guarantors hereby jointly and severally guarantee, as a primary obligor and
not as a surety to each Secured Party and their respective successors and
assigns, the prompt payment in full when due (whether at stated maturity, by
required prepayment, declaration, demand, by acceleration or otherwise) of the
principal of and interest on (including any interest, fees, costs or charges
that would accrue but for the provisions of the Title 11 of the United States
Code after any bankruptcy or insolvency petition under Title 11 of the United
States Code) the Loans made by the Lenders to, and the Notes held by each Lender
of, Borrower, and all other Secured Obligations from time to time owing to the
Secured Parties by any Loan Party under any Loan Document or any Hedging
Agreement or Treasury Services Agreement entered into with a counterparty that
is a Secured Party, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the “Guaranteed
Obligations”). The Guarantors hereby jointly and severally agree that if
Borrower or other Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same in cash, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

SECTION 7.02 Obligations Unconditional.

The obligations of the Guarantors under Section 7.01 shall constitute a guaranty
of payment and to the fullest extent permitted by applicable Requirements of
Law, are absolute, irrevocable and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the Guaranteed Obligations of Borrower under this Agreement, the Notes, if
any, or any other agreement or instrument referred to herein or therein, or any

 

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substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or Guarantor (except for payment in full). Without limiting
the generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of the Guarantors
hereunder which shall remain absolute, irrevocable and unconditional under any
and all circumstances as described above:

(i) at any time or from time to time, without notice to the Guarantors, the time
for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

(ii) any of the acts mentioned in any of the provisions of this Agreement or the
Notes, if any, or any other agreement or instrument referred to herein or
therein shall be done or omitted;

(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be amended in any respect, or any right
under the Loan Documents or any other agreement or instrument referred to herein
or therein shall be amended or waived in any respect or any other guarantee of
any of the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;

(iv) any Lien or security interest granted to, or in favor of, Issuing Bank or
any Lender or Agent as security for any of the Guaranteed Obligations shall fail
to be perfected; or

(v) the release of any other Guarantor pursuant to Section 7.09.

The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that any Secured Party
exhaust any right, power or remedy or proceed against Borrower under this
Agreement or the Notes, if any, or any other agreement or instrument referred to
herein or therein, or against any other person under any other guarantee of, or
security for, any of the Guaranteed Obligations. The Guarantors waive any and
all notice of the creation, renewal, extension, waiver, termination or accrual
of any of the Guaranteed Obligations and notice of or proof of reliance by any
Secured Party upon this Guarantee or acceptance of this Guarantee, and the
Guaranteed Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this Guarantee, and all
dealings between Borrower and the Secured Parties shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. This
Guarantee shall be construed as a continuing, absolute, irrevocable and
unconditional guarantee of payment without regard to any right of offset with
respect to the Guaranteed Obligations at any time or from time to time held by
Secured Parties, and the obligations and liabilities of the Guarantors hereunder
shall not be conditioned or contingent upon the pursuit by the Secured Parties
or any other person at any time of any right or remedy against Borrower or
against any other person which may be or become liable in respect of all or any
part of the Guaranteed Obligations or against any collateral security or
guarantee therefor or right of offset with respect

 

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thereto. This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Guarantors and the
successors and assigns thereof, and shall inure to the benefit of the Lenders,
and their respective successors and assigns, notwithstanding that from time to
time during the term of this Agreement there may be no Guaranteed Obligations
outstanding.

SECTION 7.03 Reinstatement.

The obligations of the Guarantors under this Article VII shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of Borrower or other Loan Party in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.

SECTION 7.04 Subrogation; Subordination.

Each Guarantor hereby agrees that until the indefeasible payment and
satisfaction in full in cash of all Guaranteed Obligations and the expiration
and termination of the Commitments of the Lenders under this Agreement it shall
not assert any claim and shall not exercise any right or remedy, direct or
indirect, arising by reason of any performance by it of its guarantee in
Section 7.01, whether by subrogation, as a result of the contribution rights
under Section 7.10 or otherwise, against Borrower or any other Guarantor of any
of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations. Any Indebtedness of any Loan Party permitted pursuant to
Section 6.01(d) shall be subordinated to such Loan Party’s Secured Obligations
in the manner set forth in the Intercompany Note evidencing such Indebtedness.

SECTION 7.05 Remedies.

The Guarantors jointly and severally agree that, as between the Guarantors and
the Lenders, the obligations of Borrower under this Agreement and the Notes, if
any, may be declared to be forthwith due and payable as provided in Section 8.01
(and shall be deemed to have become automatically due and payable in the
circumstances provided in Section 8.01) for purposes of Section 7.01,
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against Borrower and that, in the event of such declaration (or such obligations
being deemed to have become automatically due and payable), such obligations
(whether or not due and payable by Borrower) shall forthwith become due and
payable by the Guarantors for purposes of Section 7.01.

SECTION 7.06 Instrument for the Payment of Money.

Each Guarantor hereby acknowledges that the guarantee in this Article VII
constitutes an instrument for the payment of money, and consents and agrees that
any Lender or Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring a motion-action under New York CPLR Section 3213.

 

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SECTION 7.07 Continuing Guarantee.

The guarantee in this Article VII is a continuing guarantee of payment and
performance (and not merely of collection), and shall apply to all Guaranteed
Obligations whenever arising.

SECTION 7.08 General Limitation on Guarantee Obligations.

It being understood that the intent of the Secured Parties is to obtain a
guaranty from each Guarantor, and the intent of each Guarantor is to incur
guarantee obligations, in an amount no greater than the largest amount that
would not render such obligations subject to avoidance under Section 548 of the
Bankruptcy Code or any applicable state law relating to fraudulent conveyances
or fraudulent transfers, it is hereby agreed that:

(a) If (i) the sum (without duplication) of the obligations of the Guarantors
hereunder (the “Guarantor Obligations”) exceed (ii) the sum (the “Total
Available Net Assets”) of the Maximum Available Net Assets (as defined in
Section 7.10) of the Loan Parties with positive Maximum Available Net Assets, in
the aggregate, then the Guarantor Obligations of each Guarantor shall be limited
to the greater of (x) Total Available Net Assets and (y) the value received by
such Guarantor in connection with the incurrence of the Guarantor Obligations to
the greatest extent such value can be determined; and

(b) if, but for the operation of this Section 7.08(b) and notwithstanding
Section 7.08(a), the Guarantor Obligations of any Guarantor hereunder otherwise
would be subject to avoidance under Section 548 of the Bankruptcy Code or any
applicable state law relating to fraudulent conveyances or fraudulent transfers,
taking into consideration such Guarantor’s (i) rights of contribution,
reimbursement and indemnity from the Borrower and the other Guarantors with
respect to amounts paid by such Guarantor in respect of the Obligations
(including pursuant to Section 7.10) (calculated so as to reasonably maximize
the total amount of obligations able to be incurred hereunder), and (ii) rights
of subrogation to the rights of the Secured Parties, then the Guarantor
Obligations of such Guarantor shall be the largest amount, if any, that would
not leave such Guarantor, after the incurrence of such obligations, insolvent or
with unreasonable small capital within the meaning of Section 548 of the
Bankruptcy Code or any applicable state law relating to fraudulent conveyances
or fraudulent transfers, or otherwise make such obligations subject to such
avoidance.

Any Person asserting that the Guarantor Obligations of such Guarantor are
subject to Section 7.08(a) or are avoidable as referenced in Section 7.08(b)
shall have the burden (including the burden of production and of persuasion) of
proving (a) the extent to which such Guarantor Obligations, by operation of
Section 7.08(a), are less than the Obligations of the Borrower owed to the
Secured Parties or (b) that, without giving effect to Section 7.08(b), such
Guarantor’s Guarantor Obligations hereunder would be avoidable and the extent to
which such Guarantor Obligations, by operation of Section 7.08(b), are less than
such Obligations of the Borrower, as the case may be.

 

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SECTION 7.09 Release of Guarantors.

If, in compliance with the terms and provisions of the Loan Documents, all or
substantially all of the Equity Interests of any Guarantor are sold or otherwise
transferred (a “Transferred Guarantor”) to a person or persons, none of which is
Borrower or a Subsidiary, such Transferred Guarantor shall, upon the
consummation of such sale or transfer, be automatically released from its
obligations under this Agreement (including under Section 10.03 hereof) and its
obligations to pledge and grant any Collateral owned by it pursuant to any
Security Document and the pledge of such Equity Interests to the Collateral
Agent pursuant to the Security Agreements shall be automatically released, and,
so long as Borrower shall have provided the Administrative Agent such
certifications or documents as the Administrative Agent shall reasonably request
to demonstrate compliance with this Agreement, the Collateral Agent shall take
such actions as are necessary to effect each release described in this
Section 7.09 in accordance with the relevant provisions of the Security
Documents.

SECTION 7.10 Right of Contribution.

In order to provide for just and equitable contribution, indemnity and
reimbursement among the Guarantors and any other Loan Parties, including the
Borrower, in connection with the execution of this Agreement, the Loan Parties
have agreed among themselves that if any Guarantor satisfies some or all of the
Guaranteed Obligations (a “Funding Guarantor”), the Funding Guarantor shall be
entitled to contribution, indemnity or reimbursement, as applicable, from the
other Loan Parties that have positive Maximum Available Net Assets for all
payments made by the Funding Guarantor in satisfying the Guaranteed Obligations,
so that each Loan Party that remains obligated under this Article VII or any
other guaranty or otherwise for the Obligations at the time that a Funding
Guarantor makes such payment, without regard to the making of such payment (a
“Remaining Loan Party”), and has a positive Maximum Available Net Assets shall
bear a portion of such payment equal to the percentage that such Remaining Loan
Party’s Maximum Available Net Assets bears to the aggregate Maximum Available
Net Assets of all Loan Parties that have positive Maximum Available Net Assets,
provided that no Remaining Loan Party’s obligation to make such contribution,
indemnity or reimbursement payments hereunder shall exceed an amount equal to
the Maximum Available Net Assets of such Remaining Loan Party. Each Guarantor’s
right of contribution shall be subject to the terms and conditions of
Section 7.04.

As used herein,

“Available Net Assets” shall mean, with respect to any Loan Party, the amount,
as of the respective date of calculation, by which the sum of a person’s assets
(including subrogation, indemnity, contribution, reimbursement and similar
rights that the Loan Party may have, but excluding any such rights in respect of
the Guarantor Obligations and the Senior Note Guarantees), determined on the
basis of a “fair valuation” or their “fair saleable value” (whichever is the
applicable test under Section 548 and other relevant provisions of the
Bankruptcy Code and the relevant state fraudulent conveyance or transfer laws),
is greater than the amount that will be required to pay all of such person’s
debts, in each case matured or unmatured, contingent or otherwise, as of the
date of calculation, but excluding liabilities arising under this Article VII
and excluding, to the maximum extent permitted by Requirements of Law with the
objective of avoiding rendering such person insolvent, liabilities subordinated
to the Obligations arising out of loans or advances made to such Loan Party by
any other person, and

 

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“Maximum Available Net Assets” shall mean, with respect to any Loan Party, the
greatest of the Available Net Assets of such Loan Party calculated as of the
following dates: (A) the date on which such person becomes a Loan Party and
becomes obligated under any Senior Note or Senior Note Guarantee, and (B) each
date on which such Loan Party expressly reaffirms its Guarantee under Article
VII.

Each Guarantor shall be deemed to expressly reaffirm its Guarantee upon each
borrowing of a Loan and each Letter of Credit issuance. The meaning of the terms
“fair valuation” and “fair saleable value” and the calculation of assets and
liabilities shall be determined and made in accordance with the relevant
provisions of the Bankruptcy Code and applicable state fraudulent conveyance or
transfer laws.

The provisions of this Section 7.10 shall in no respect limit the obligations
and liabilities of any Guarantor to the Administrative Agent, the Issuing Bank,
the Swingline Lender and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders
for the full amount guaranteed by such Guarantor hereunder.

ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.01 Events of Default.

Upon the occurrence and during the continuance of the following events (“Events
of Default”):

(a) default shall be made in the payment of any principal of any Loan or any
Reimbursement Obligation when and as the same shall become due and payable,
whether at the due date thereof (including a Term Loan Repayment Date) or at a
date fixed for prepayment (whether voluntary or mandatory) thereof or by
acceleration thereof or otherwise;

(b) default shall be made in the payment of any interest on any Loan or any Fee
or any other amount (other than an amount referred to in paragraph (a) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days;

(c) any representation or warranty made or deemed made in or in connection with
any Loan Document or the borrowings or issuances of Letters of Credit hereunder,
or any representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect (or, to the extent qualified as to
materiality, in any respect) when so made, deemed made or furnished;

(d) default shall be made in the due observance or performance by any Company of
any covenant, condition or agreement contained in Section 5.02 (other than
5.02(e)), 5.03(a), 5.08 or 5.14 or in Article VI; provided that any Event of
Default under Section 6.09(a) shall not constitute an Event of Default with
respect to the Term Loans until the earlier of (x) the date that

 

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is 45 days after the date such Event of Default arises and is continuing with
respect to the Revolving Loans and/or Revolving Commitments and (y) the date on
which the Administrative Agent or the Revolving Lenders have accelerated the
maturity of the Revolving Loans or have commenced the exercise of remedies with
respect to the Revolving Loans and/or Revolving Commitments;

(e) default shall be made in the due observance or performance by any Company of
any covenant, condition or agreement contained in any Loan Document (other than
those specified in paragraphs (a), (b) or (d) immediately above) and such
default shall continue unremedied or shall not be waived for a period of 30 days
after written notice thereof from the Administrative Agent or any Lender to
Borrower;

(f) any Company shall (i) fail to pay any principal or interest, regardless of
amount, due in respect of any Indebtedness (other than the Obligations), when
and as the same shall become due and payable beyond any applicable grace period,
or (ii) fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or governing any
such Indebtedness if the effect of any failure referred to in this clause (ii)
is to cause, or to permit the holder or holders of such Indebtedness or a
trustee or other representative on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity or become subject to a mandatory offer
purchase by the obligor; provided that, it shall not constitute an Event of
Default pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $10.0 million at any
one time (provided that, in the case of Hedging Obligations, the amount counted
for this purpose shall be the amount payable by all Companies if such Hedging
Obligations were terminated at such time);

(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Borrower, any Material Subsidiary, or of a substantial part of the
property of Borrower or any Material Subsidiary, under Title 11 of the U.S.
Code, as now constituted or hereafter amended, or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law; (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Borrower, any Material Subsidiary, or of a substantial part
of the property of Borrower or any Material Subsidiary; or (iii) the winding-up
or liquidation of Borrower or any Material Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(h) Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other federal,
state or foreign bankruptcy, insolvency, receivership or similar law;
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
clause (g) above; (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Borrower
or any Material Subsidiary or for a substantial part of the property of Borrower
or any Material Subsidiary; (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding; (v) make a
general assignment for the benefit of creditors; (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(vii) take any action for the purpose of effecting any of the foregoing; or
(viii) wind up or liquidate;

 

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(i) one or more judgments, orders or decrees for the payment of money in an
aggregate amount in excess of $10.0 million (to the extent not paid or covered
by insurance provided by a reputable and solvent insurance company that has not
denied liability therefor) shall be rendered against any Company or any
combination thereof and the same shall remain undischarged, unvacated or
unbonded for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon properties of any Company to enforce any such judgment;

(j) one or more ERISA Events shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

(k) any security interest and Lien on Collateral with a value in excess of $1.0
million purported to be created by any Security Document shall cease to be in
full force and effect, or shall cease to give the Collateral Agent, for the
benefit of the Secured Parties, the Liens, rights, powers and privileges
purported to be created and granted under such Security Document (including a
perfected first priority security interest in and Lien on all of the Collateral
thereunder (except as otherwise expressly provided in such Security Document))
in favor of the Collateral Agent, or shall be asserted by Borrower or any other
Loan Party not to be a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement or such Security Document) security
interest in or Lien on the Collateral covered thereby;

(l) any Loan Document or any material provisions thereof shall at any time and
for any reason be declared by a court of competent jurisdiction to be null and
void, or a proceeding shall be commenced by any Loan Party or any other person,
or by any Governmental Authority, seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Loan Party shall repudiate or deny any portion of its
liability or obligation for the Obligations; or

(m) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders (or at the request of the Required Revolving Lenders as set
forth in the final sentence of this paragraph) shall, by notice to Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans and
Reimbursement Obligations then outstanding to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans and Reimbursement
Obligations so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other Obligations of Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Borrower and the Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event, with respect to

 

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Borrower described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans and Reimbursement
Obligations then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other Obligations of Borrower accrued hereunder and
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by Borrower and the Guarantors, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
Notwithstanding the foregoing, solely in connection with an Event of Default
under Section 6.09(a), the Required Revolving Lenders may request the
Administrative Agent to take, and the Administrative Agent shall, by notice to
the Borrower, take the actions referenced in clauses (i) and (ii) in the
immediately preceding sentence in respect of the Revolving Commitments and/or
the Revolving Loans (it being understood and agreed that for the avoidance of
doubt this sentence shall in no way limit the ability of the Required Lenders to
request the Administrative Agent to take the actions referenced in clauses
(i) and (ii) in the immediately preceding sentence for an Event of Default under
Section 6.09(a) subject to the proviso set forth in Section 8.01(d)).

SECTION 8.02 Application of Proceeds.

The proceeds received by the Collateral Agent in respect of any sale of,
collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Collateral Agent of its remedies shall be
applied, in full or in part, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as
follows:

(a) First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization including
compensation to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the Collateral Agent in
connection therewith and all amounts for which the Collateral Agent is entitled
to indemnification pursuant to the provisions of any Loan Document, together
with interest on each such amount at the highest rate then in effect under this
Agreement from and after the date such amount is due, owing or unpaid until paid
in full;

(b) Second, to the payment of all other reasonable costs and expenses of such
sale, collection or other realization including compensation to the other
Secured Parties and their agents and counsel and all costs, liabilities and
advances made or incurred by the other Secured Parties in connection therewith,
together with interest on each such amount at the highest rate then in effect
under this Agreement from and after the date such amount is due, owing or unpaid
until paid in full;

(c) Third, without duplication of amounts applied pursuant to clauses (a) and
(b) above, to the indefeasible payment in full in cash, pro rata, of interest
and other amounts constituting Obligations (other than principal, Reimbursement
Obligations and obligations to cash collateralize Letters of Credit) and any
fees, premiums and scheduled periodic payments due under Hedging Agreements or
Treasury Services Agreements constituting Secured Obligations and any interest
accrued thereon, in each case equally and ratably in accordance with the
respective amounts thereof then due and owing;

 

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(d) Fourth, to the indefeasible payment in full in cash, pro rata, of principal
amount of the Obligations and any premium thereon (including Reimbursement
Obligations and obligations to cash collateralize Letters of Credit) and any
breakage, termination or other payments under Hedging Agreements and Treasury
Services Agreements constituting Secured Obligations and any interest accrued
thereon; and

(e) Fifth, the balance, if any, to the person lawfully entitled thereto
(including the applicable Loan Party or its successors or assigns) or as a court
of competent jurisdiction may direct.

In the event that any such proceeds are insufficient to pay in full the items
described in clauses (a) through (e) of this Section 8.02, the Loan Parties
shall remain liable, jointly and severally, for any deficiency.

ARTICLE IX

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

SECTION 9.01 Appointment and Authority.

Each of the Lenders and the Issuing Bank hereby irrevocably appoints UBS AG,
Stamford Branch, to act on its behalf as the Administrative Agent and the
Collateral Agent hereunder and under the other Loan Documents and authorizes
such Agents to take such actions on its behalf and to exercise such powers as
are delegated to such Agents by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto, including, without
limitation, the release of the Guarantee of a Subsidiary Guarantor and the
release of the Lien securing the Secured Obligations on any asset of a Loan
Party, in each case pursuant to the terms hereof. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Collateral Agent,
the Lenders and the Issuing Bank, and neither Borrower nor any other Loan Party
shall have rights as a third party beneficiary of any of such provisions.

SECTION 9.02 Rights as a Lender.

Each person serving as an 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 an Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
each person serving as an Agent hereunder in its individual capacity. Such
person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with Borrower or any Subsidiary or other Affiliate thereof
as if such person were not an Agent hereunder and without any duty to account
therefor to the Lenders.

SECTION 9.03 Exculpatory Provisions.

No Agent shall have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. Without limiting the generality of the
foregoing, no Agent:

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

 

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(ii) shall 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 such 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 such Agent shall not be required to take
any action that, in its judgment or the judgment of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable
Requirements of Law; and

(iii) shall, 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 Borrower or any of its Affiliates that is
communicated to or obtained by the person serving as such Agent or any of its
Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (x) 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 such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Section 10.02) or (y) in the absence of its own gross negligence or willful
misconduct. No Agent shall be deemed to have knowledge of any Default unless and
until notice describing such Default is given to such Agent by Borrower, a
Lender or the Issuing Bank.

No Agent shall 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 such Agent. Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement with
reference to the Administrative Agent or the Collateral 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 merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.

Each party to this Agreement acknowledges and agrees that the Administrative
Agent may use an outside service provider for the tracking of all UCC financing
statements required to be filed pursuant to the Loan Documents and notification
to the Administrative Agent, of, among other things, the upcoming lapse or
expiration thereof, and that any such service provider will be deemed to be
acting at the request and on behalf of Borrower and the other Loan Parties. No
Agent shall be liable for any action taken or not taken by any such service
provider.

 

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SECTION 9.04 Reliance by Agent.

Each 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. Each
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 of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the Issuing
Bank, the Administrative Agent may presume that such condition is satisfactory
to such Lender or the Issuing Bank unless the Administrative Agent shall have
received notice to the contrary from such Lender or the Issuing Bank prior to
the making of such Loan or the issuance of such Letter of Credit. Each Agent may
consult with legal counsel (who may be counsel for Borrower), independent
accountants and other experts selected by it, and shall be entitled to rely upon
the advice of any such counsel, accountants or experts and shall not be liable
for any action taken or not taken by it in accordance with such advice.

SECTION 9.05 Delegation of Duties.

Each 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, or delegate any
and all such rights and powers to, any one or more sub-agents appointed by such
Agent. Each 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 each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.

SECTION 9.06 Resignation of Agent.

(a) Each Agent may at any time give notice of its resignation to the Lenders,
the Issuing Bank and Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with Borrower, to
appoint a successor, which shall be a financial institution 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 Agent gives notice of its resignation, then the retiring Agent may on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent meeting
the qualifications set forth above provided that if the Agent shall notify
Borrower and the Lenders that no qualifying person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Collateral Agent on
behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the
retiring Collateral Agent shall continue to hold such collateral security as
nominee until such time as a successor Collateral Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through an Agent shall

 

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instead be made by or to each Lender and the Issuing Bank directly, until such
time as the Required Lenders appoint a successor Agent as provided for above in
this paragraph. Upon the acceptance of a successor’s appointment as Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) Agent, and
the retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this paragraph). The fees payable by Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between Borrower and such successor. After the retiring Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this
Article IX and Section 10.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring
Agent was acting as Agent.

(b) Any resignation by UBS AG, Stamford Branch as Administrative Agent pursuant
to Section 9.06(a) shall, unless UBS AG, Stamford Branch gives notice to
Borrower otherwise, also constitute its resignation as Issuing Bank and
Swingline Lender, and such resignation as Issuing Bank and Swingline Lender
shall become effective simultaneously with the discharge of the Administrative
Agent from its duties and obligations as set forth in the immediately preceding
paragraph (except as to already outstanding Letters of Credit and LC Obligations
and Swingline Loans, as to which the Issuing Bank and the Swingline Lender shall
continue in such capacities until the LC Exposure relating thereto shall be
reduced to zero and such Swingline Loans shall have been repaid, as applicable,
or until the successor Administrative Agent shall succeed to the roles of
Issuing Bank and Swingline Lender in accordance with the next sentence and
perform the actions required by the next sentence). Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, unless UBS AG,
Stamford Branch and such successor gives notice to Borrower otherwise, (i) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Issuing Bank and Swingline Lender and
(ii) the successor Issuing Bank 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 the retiring Issuing to effectively
assume the obligations of the retiring Issuing Bank with respect to such Letters
of Credit. At the time any such resignation of the Issuing Bank shall become
effective, Borrower shall pay all unpaid fees accrued for the account of the
retiring Issuing Bank pursuant to Section 2.05(c).

SECTION 9.07 Non-Reliance on Agent and Other Lenders.

Each Lender and the Issuing Bank acknowledges that it has, independently and
without reliance upon any 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 Agreement. Each Lender further represents and
warrants that it has had the opportunity to review the Confidential Information
Memorandum and each other document made available to it on the Platform in
connection with this Agreement and has acknowledged and accepted the terms and
conditions applicable to the recipients thereof. Each Lender and the Issuing
Bank also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender 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.

 

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SECTION 9.08 Withholding Tax.

To the extent required by any applicable law, the Administrative Agent may
withhold from any payment to any Lender an amount equivalent to any applicable
withholding Tax. Without limiting the provisions of Section 2.15(a) or (c), each
Lender and the Issuing Bank shall, and does hereby, indemnify the Administrative
Agent, and shall make payable in respect thereof within 30 days after demand
therefor, against any and all Taxes and any and all related losses, claims,
liabilities and expenses (including fees, charges and disbursements of any
counsel for the Administrative Agent) paid or incurred by or asserted against
the Administrative Agent by the Internal Revenue Service or any other
Governmental Authority as a result of the failure of the Administrative Agent to
properly withhold Tax from amounts paid to or for the account of any Lender for
any reason (including, without limitation, because the appropriate form was not
delivered or not property executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstance that rendered the exemption
from, or reduction of withholding Tax ineffective). A certificate as to the
amount of such payment or liability delivered to any Lender or the Issuing Bank
by the Administrative Agent shall be conclusive absent manifest error. Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender or Issuing
Bank under this Agreement or any other Loan Document against any amount due the
Administrative Agent under this Section 9.08. The agreements in this
Section 9.08 shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all other Obligations.

SECTION 9.09 No Other Duties, etc.

Anything herein to the contrary notwithstanding, none of the Joint Bookrunners,
the Joint Lead Arrangers, the Syndication Agent or the Documentation Agent
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, the Collateral
Agent, a Lender or the Issuing Bank hereunder or as explicitly set forth herein.

SECTION 9.10 Enforcement.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and 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, or as the Required Lenders may require or otherwise
direct, for the benefit of all the Lenders and the Issuing Bank; 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 Issuing Bank or the Swingline Lender from exercising the
rights and remedies that inure to its benefit (solely in its capacity as Issuing

 

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Bank or Swingline Lender, as the case may be) hereunder and under the other Loan
Documents, (c) any Lender from exercising setoff rights in accordance with, and
subject to, the terms of this Agreement, 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 bankruptcy or insolvency law.

SECTION 9.11 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 Reimbursement 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

(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, Reimbursement 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
Issuing Bank and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Bank and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Issuing Bank and the
Administrative Agent under Article II or Section 10.08) allowed in such judicial
proceeding; and

(ii) 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 Issuing Bank to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Bank, 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 Article II and
Section 10.08.

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
Issuing Bank any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the Issuing Bank to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the Issuing Bank or in any such proceeding.

SECTION 9.12 Collateral and Guaranty Matters.

The Lenders and the Issuing Bank (and each other Secured Party by their
acceptance of the benefits of the Loan Documents shall deem to) irrevocably
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien on any property granted to or held by the Collateral Agent under any
Loan Document if approved, authorized or ratified in

 

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writing in accordance with Section 10.02, or pursuant to Section 6.05 or
Section 6.06. Upon request by the Collateral Agent at any time, the Required
Lenders will confirm in writing the Collateral Agent’s authority to release its
interest in particular types or items of property in accordance with this
Section.

ARTICLE X

MISCELLANEOUS

SECTION 10.01 Notices.

(a) Generally. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in paragraph
(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 telecopier as follows:

(i) if to any Loan Party, to Borrower at:

Ducommun Incorporated

23301 Wilmington Avenue

Carson, California 90745-6209

Attention: General Counsel

Telecopier No.: (310) 513-7279

(ii) if to the Administrative Agent, the Collateral Agent or Issuing Bank, to it
at:

UBS AG, Stamford Branch

677 Washington Boulevard, 6th Floor

Stamford, Connecticut 06901

Attention: Banking Products Services Agency

Telecopier No.: (203) 719-3180

Email: DL-UBSAgency@ubs.com

(iii) if to a Lender, to it at its address (or telecopier number) set forth in
its Administrative Questionnaire; and

(iv) if to the Swingline Lender, to it at:

UBS Loan Finance LLC

677 Washington Boulevard, 6th Floor

Stamford, Connecticut 06901

Attention: Banking Products Services Agency

Telecopier No.: (203) 719-3180

Email: DL-UBSAgency@ubs.com

 

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Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier 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 delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b). Any party hereto may change its address or telecopier number for
notices and other communications hereunder by written notice to Borrower, the
Agents, the Issuing Bank and the Swingline Lender.

(b) Electronic Communications. Notices and other communications to the Lenders
and the Issuing Bank hereunder may (subject to the provisions of this
Section 10.01) 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 Issuing Bank pursuant to Article II if such Lender or the
Issuing Bank, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Administrative Agent, the Collateral Agent or Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it (including
pursuant to the provisions of this Section 10.01); provided that approval of
such procedures may be limited to particular notices or communications.

Each Loan Party hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative Agent or the Lenders pursuant to this Agreement and any
other Loan Document, including all notices, requests, financial statements,
financial and other reports, certificates and other information materials (the
“Communications”), by transmitting them in an electronic medium in a format
reasonably acceptable to the Administrative Agent at DL-UBSAgency@ubs.com or at
such other e-mail address(es) provided to Borrower from time to time or in such
other form as the Administrative Agent shall require. In addition, each Loan
Party agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in this Agreement or any other Loan Document or in
such other form as the Administrative Agent shall require. Nothing in this
Section 10.01 shall prejudice the right of the Agents, the Issuing Bank, any
Lender or any Loan Party to give any notice or other communication pursuant to
this Agreement or any other Loan Document in any other manner specified in this
Agreement or any other Loan Document or as any such Agent or the Issuing Bank,
as the case may be, shall require.

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); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, 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.

 

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To the extent consented to by the Administrative Agent in writing from time to
time, the Administrative Agent agrees that receipt of the Communications (other
than any such Communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any
election of an interest rate or interest period relating thereto), (ii) relates
to the payment of any principal or other amount due under this Agreement prior
to the scheduled date therefor, (iii) provides notice of any Default under this
Agreement or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any borrowing or other extension
of credit hereunder) by the Administrative Agent at its e-mail address(es) set
forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents.

(c) Platform. Each Loan Party further agrees that any Agent may make the
Communications available to the Lenders by posting the Communications on
SyndTrak or a substantially similar secure electronic transmission system (the
“Platform”). The Platform is provided “as is” and “as available.” The Agents do
not warrant the accuracy or completeness of the Communications, or the adequacy
of the Platform and expressly disclaim liability for errors or omissions in the
communications. No warranty of any kind, express, implied or statutory,
including, without limitation, 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 in connection with the
Communications or the Platform. In no event shall any Agent or any of its
Related Parties have any liability to the Loan Parties, any Lender or any other
person for damages of any kind, including direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of any Loan Party’s or such Agent’s
transmission of communications through the Internet, except to the extent the
liability of such person is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from such person’s gross negligence
or willful misconduct.

(d) Public/Private. Each Loan Party hereby authorizes the Administrative Agent
to distribute (i) to Private Siders all Communications, including any
Communication that Borrower identifies in writing is to be distributed to
Private Siders only so long as Borrower is given reasonable prior notice of any
such distribution (“Private Side Communications”), and (ii) to Public Siders all
Communications other than any Private Side Communication. Borrower represents
and warrants that no Communication (other than Private Side Communications)
contains any MNPI. Borrower agrees to designate as Private Side Communications
only those Communications or portions thereof that it reasonably believes in
good faith include MNPI. The Borrower agrees to use all commercially reasonable
efforts not to designate any Communications provided under Section 5.01(a),
(b) and (d) as Private Side Communications. “Private Siders” shall mean Lenders’
employees and representatives who have declared that they are authorized to
receive MNPI. “Public Siders” shall mean Lenders’ employees and representatives
who have not declared that they are authorized to receive MNPI; it being
understood that Public Siders may be engaged in investment and other
market-related activities with respect to Borrower’s or its affiliates’
securities or loans. “MNPI” shall mean material non-public information (within
the meaning of United States federal securities laws) with respect to Borrower,
its affiliates and any of their respective securities.

 

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Each Lender acknowledges that United States federal and state securities laws
prohibit any person from purchasing or selling securities on the basis of
material, non-public information concerning the issuer of such securities or,
subject to certain limited exceptions, from communicating such information to
any other person. Each Lender confirms that it has developed procedures designed
to ensure compliance with these securities laws.

Each Lender acknowledges that circumstances may arise that require it to refer
to Communications that may contain MNPI. Accordingly, each Lender agrees that it
will use commercially reasonable efforts to designate at least one individual to
receive Private Side Communications on its behalf in compliance with its
procedures and applicable law and identify such designee (including such
designee’s contact information) on such Lender’s Administrative Questionnaire.
Each Lender agrees to notify the Administrative Agent in writing from time to
time of such Lender’s designee’s e-mail address to which notice of the
availability of Private Side Communications may be sent by electronic
transmission.

Each Lender that elects not to be given access to Private Side Communications
does so voluntarily and, by such election, (i) acknowledges and agrees that the
Agents and other Lenders may have access to Private Side Communications that
such electing Lender does not have and (ii) takes sole responsibility for the
consequences of, and waives any and all claims based on or arising out of, not
having access to Private Side Communications.

SECTION 10.02 Waivers; Amendment.

(a) Generally. No failure or delay by any Agent, the Issuing Bank or any Lender
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of each Agent,
the Issuing Bank and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by this Section 10.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time. No notice or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances.

(b) Required Consents. Subject to Section 10.02(c) and (d), neither this
Agreement nor any other Loan Document nor any provision hereof or thereof may be
waived, amended, supplemented or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by Borrower and
the Administrative Agent or, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Administrative Agent,
the Collateral Agent (in the case of any Security Document) and the Loan Party
or Loan Parties that are party thereto, in each case with the written consent of
the Required Lenders; provided that no such agreement shall be effective if the
effect thereof would:

 

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(i) increase the Commitment of any Lender without the written consent of such
Lender (it being understood that no amendment, modification, termination, waiver
or consent with respect to any condition precedent, covenant or Default shall
constitute an increase in the Commitment of any Lender);

(ii) reduce the principal amount or premium, if any, of any Loan (except in
connection with a payment contemplated by clause (viii) below) or LC
Disbursement or reduce the rate of interest thereon including by modification of
any provision establishing a minimum rate (other than interest pursuant to
Section 2.06(c)), or reduce any Fees payable hereunder, or change the form or
currency of payment of any Obligation, without the written consent of each
Lender directly affected thereby (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in the rate of interest for purposes of this clause (ii));

(iii) (A) change the scheduled final maturity of any Loan, or any scheduled date
of payment (or permitted prepayment) of or the installment otherwise due on the
principal amount of any Term Loan under Section 2.09, (B) postpone the date for
payment of any Reimbursement Obligation or any interest, premium or fees payable
hereunder, (C) reduce the amount of, waive or excuse any such payment (other
than waiver of any increase in the interest rate pursuant to Section 2.06(c)),
or (D) postpone the scheduled date of expiration of any Commitment or any Letter
of Credit beyond the Revolving Maturity Date, in any case, without the written
consent of each Lender directly affected thereby;

(iv) increase the maximum duration of Interest Periods hereunder, without the
written consent of each Lender directly affected thereby;

(v) permit the assignment or delegation by Borrower of any of its rights or
obligations under any Loan Document, without the written consent of each Lender;

(vi) release Borrower or all or substantially all of the Subsidiary Guarantors
from their Guarantee (except as expressly provided in Article VII), or limit
their liability in respect of such Guarantee, without the written consent of
each Lender;

(vii) release all or a substantial portion of the Collateral from the Liens of
the Security Documents or alter the relative priorities of the Secured
Obligations entitled to the Liens of the Security Documents, in each case
without the written consent of each Lender (it being understood that additional
Classes of Loans pursuant to Section 2.20 or consented to by the Required
Lenders may be equally and ratably secured by the Collateral with the then
existing Secured Obligations under the Security Documents);

(viii) change Section 2.14(b), (c) or (d) in a manner that would alter the pro
rata sharing of payments or setoffs required thereby or any other provision in a
manner that would alter the pro rata allocation among the Lenders of Loan
disbursements, including the requirements of Sections 2.02(a), 2.17(d) and
2.18(d), without the written consent of each Lender directly affected thereby;

 

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(ix) change any provision of this Section 10.02(b) or Section 10.02(c) or (d),
without the written consent of each Lender directly affected thereby (except for
additional restrictions on amendments or waivers for the benefit of Lenders of
additional Classes of Loans pursuant to Section 2.20 or consented to by the
Required Lenders);

(x) change the percentage set forth in the definition of “Required Lenders,”
“Required Class Lenders,” “Required Revolving Lenders” or any other provision of
any Loan Document (including this Section) specifying the number or percentage
of Lenders (or Lenders of any Class) required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender (or each Lender of such Class, as the
case may be);

(xi) change the application of prepayments as among or between Classes under
Section 2.10(h), without the written consent of the Required Class Lenders of
each Class that is being allocated a lesser prepayment as a result thereof (it
being understood that the Required Lenders may waive, in whole or in part, any
prepayment so long as the application, as between Classes, of any portion of
such prepayment that is still required to be made is not changed and, if
additional Classes of Term Loans under this Agreement pursuant to Section 2.20
or consented to by the Required Lenders are made, such new Term Loans may be
included on a pro rata basis in the various prepayments required pursuant to
Section 2.10(h)), in which case such additional Term Loans may be included in
the definition of “Required Class Lenders” in respect of the reference to “each
Class of Term Loans,” without the consent of the Required Lenders or the
Required Class Lenders);

(xii) reserved;

(xiii) subordinate the Obligations to any other obligation, without the written
consent of each Lender;

(xiv) change or waive any provision of Article X as the same applies to any
Agent, or any other provision hereof as the same applies to the rights or
obligations of any Agent, in each case without the written consent of such
Agent;

(xv) change or waive any obligation of the Lenders relating to the issuance of
or purchase of participations in Letters of Credit, without the written consent
of the Administrative Agent and the Issuing Bank;

(xvi) change or waive any provision hereof relating to Swingline Loans
(including the definition of “Swingline Commitment”), without the written
consent of the Swingline Lender; or

(xvii) expressly change or waive any condition precedent in Section 4.02 to any
Revolving Borrowing without the written consent of the Required Revolving
Lenders.

Notwithstanding anything to the contrary herein:

(I) no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except to the extent the consent of such
Lender would be required under clause (i), (ii) or (iii) in the proviso to the
first sentence of this Section 10.02(b);

 

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(II) any Loan Document may be waived, amended, supplemented or modified pursuant
to an agreement or agreements in writing entered into by Borrower and the
Administrative Agent (without the consent of any Lender) solely to cure a defect
or error, or to grant a new Lien for the benefit of the Secured Parties or
extend an existing Lien over additional property;

(III) this Agreement may be amended as provided in Section 2.20 with the consent
of the Borrower and the Administrative Agent without the consent of any Lender);

(IV) until the end of a reasonable period of time after the earlier of (x) the
completion of Successful Syndication and (y) the date that is 60 days after the
Closing Date, this Agreement may be amended pursuant to a written instrument or
instruments executed by the Administrative Agent at the direction of the
Arrangers (and without the consent of any other person (provided that the
Arrangers shall have consulted with Borrower)) in order to implement the
provisions of the Fee Letter under “Market Flex” (and subject to the limitations
therein); provided that no such amendment with respect to any Class of Loans
shall be adverse to the Lenders of such Class. A reduction in the aggregate
amount of Commitments of any Class with (or without) a corresponding increase in
the aggregate amount of Commitments of the other Class (whether such increase is
provided by Lenders party to this Agreement on the Closing Date or by new
Lenders that become party hereto) shall not be deemed adverse to the Lenders of
any Class; it being understood that no Lender shall be required to increase its
Commitment without its consent evidenced in writing. At the request of the
Arrangers, Borrower shall execute each amendment pursuant to this clause (IV),
but Borrower’s failure or refusal to execute such amendment shall not affect the
validity thereof;

(V) any amendment, modification, termination or waiver of any provision of
Section 6.09(a) (other than definitions related to Section 6.09(a) and other
than changes to the proviso in Section 8.01(d), each of which for the avoidance
of doubt shall require the written concurrence of the Required Lenders), shall
be effective with only the written concurrence of the Required Revolving
Lenders; and

(VI) any amendment that would extend the Term Loan Maturity Date, the Revolving
Maturity Date or the Incremental Term Loan Maturity Date with respect to any
Loans or Commitments, provide for any increased pricing (including fees) for any
Lenders agreeing to extend their Loans or Commitments pursuant to the terms of
such amendment and any corresponding modifications under this Agreement related
thereto may be effected pursuant to an agreement or agreements in writing
entered into by the Loan Parties, Administrative Agent, and those Lenders
holding the Loans or Commitments who are directly and adversely affected
thereby.

(c) Collateral. Without the consent of any other person, the applicable Loan
Party or Parties and the Administrative Agent and/or Collateral Agent may (in
its or their respective sole discretion, or shall, to the extent required by any
Loan Document) enter into any amendment or waiver of any Loan Document, or enter
into any new agreement or instrument, to effect the granting, perfection,
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Collateral or additional property to become Collateral for the benefit of the
Secured Parties, or as required by local law to give effect to, or protect any
security interest for the benefit of the Secured Parties, in any property or so
that the security interests therein comply with applicable Requirements of Law.

(d) Dissenting Lenders. If, in connection with any proposed change, waiver,
discharge or termination of the provisions of this Agreement as contemplated by
Section 10.02(b), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then Borrower shall have the right to replace all, but not less than
all, of such non-consenting Lender or Lenders (so long as all non-consenting
Lenders are so replaced) with one or more persons pursuant to Section 2.16(b) so
long as at the time of such replacement each such new Lender consents to the
proposed change, waiver, discharge or termination.

SECTION 10.03 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Borrower shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent and their respective Affiliates (including the reasonable fees, charges
and disbursements of one primary counsel for the Administrative Agent, the
Collateral Agent and the Arrangers and one local counsel in each jurisdiction
determined to be reasonably necessary or advisable by the Arrangers) in
connection with the syndication of the credit facilities provided for herein
(including the obtaining and maintaining of CUSIP numbers for the Loans), the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendment, amendment and
restatement, modification or waiver of the provisions hereof or thereof (whether
or not the transactions contemplated hereby or thereby shall be consummated),
including in connection with post-closing searches to confirm that security
filings and recordations have been properly made and including any costs and
expenses of the service provider referred to in Section 9.03, (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iii) all documented out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank (including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank), 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 10.03, 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 and (iv) all documentary and similar taxes and
charges in respect of the Loan Documents.

(b) Indemnification by Borrower. Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), the Collateral Agent (and any sub-agent
thereof) each Lender and the Issuing Bank, 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 reasonable and documented
out-of-pocket losses, claims, damages, liabilities and related expenses
(including the reasonable fees, charges and disbursements of one primary counsel
for all Indemnitees, one local counsel in each relevant jurisdiction and, in the
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perceived conflict of interest, one additional counsel in each relevant
jurisdiction to each group of affected Indemnitees similarly situated) incurred
by any Indemnitee or asserted against any Indemnitee by any party hereto or any
third party 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
amendment, amendment and restatement, modification or waiver of the provisions
hereof or thereof, or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the Issuing Bank 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 or threatened
Release of Hazardous Materials on, at, under or from any property owned, leased
or operated by any Company at any time, or any Environmental Claim related in
any way to any Company, 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
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; 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 nonappealable judgment to have resulted solely from the gross negligence or
willful misconduct of such Indemnitee or any controlled affiliate, officer or
director of such Indemnitee.

(c) Reimbursement by Lenders. To the extent that Borrower for any reason fails
to indefeasibly pay any amount required under paragraph (a) or (b) of this
Section 10.03 to be paid by it to the Administrative Agent (or any sub-agent
thereof), the Collateral Agent, the Issuing Bank, the Swingline 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 Collateral Agent (or any
sub-agent thereof), the Issuing Bank, the Swingline 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) of
such unpaid amount (such indemnity shall be effective whether or not the related
losses, claims, damages, liabilities and related expenses are incurred or
asserted by any party hereto or any third party); provided that (i) 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 Collateral Agent (or any
sub-agent thereof), the Swingline Lender or the Issuing Bank 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 Collateral Agent (or any
sub-agent thereof), the Swingline Lender or Issuing Bank in connection with such
capacity and (ii) such indemnity for the Swingline Lender or the Issuing Bank
shall not include losses incurred by the Swingline Lender or the Issuing Bank
due to one or more Lenders defaulting in their obligations to purchase
participations of Swingline Exposure under Section 2.17(d) or LC Exposure under
Section 2.18(d) or to make Revolving Loans under Section 2.18(e) (it being
understood that this proviso shall not affect the Swingline Lender’s or the
Issuing Bank’s rights against any Defaulting Lender). The obligations of the
Lenders under this paragraph (c) are subject to the provisions of Section 2.14.
For purposes hereof, a Lender’s “pro rata share” shall be determined based upon
its share of the sum of the total Revolving Exposure, outstanding Term Loans and
unused Commitments at the time.

 

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(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Requirements of Law, no Loan Party shall assert, and each Loan Party
hereby waives, 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
paragraph (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
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.

(e) Payments. All amounts due under this Section shall be payable not later than
3 Business Days after demand therefor.

SECTION 10.04 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 assigns permitted hereby, except that Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent, the Collateral Agent, the Issuing
Lender, the Swingline Lender 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 paragraph (b) of this
Section 10.04, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section 10.04 or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section
(and any other attempted assignment or transfer by Borrower 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
paragraph (d) of this Section and, to the extent expressly contemplated hereby,
the other Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

(b) Assignments by Lenders.

(i) Subject to the conditions set forth in paragraph (b)(ii) below, 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 at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld or delayed) of:

(A) Borrower; provided that no consent of Borrower shall be required for an
assignment to (1) a Lender, an Affiliate of a Lender or an Approved Fund or
(2) if an Event of Default has occurred and is continuing or prior to the
completion of the primary syndication of the Commitments and Loans (as
determined by the Arrangers), any other assignee; provided further that when
required, Borrower’s consent shall be deemed to have been given unless Borrower
objects to such assignment within five Business Days after receiving written
notice of such assignment;

 

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(B) the Administrative Agent; provided that no consent of the Administrative
Agent shall be required for an assignment of (x) any Revolving Commitment to an
assignee that is a Lender with a Revolving Commitment immediately prior to
giving effect to such assignment or (y) all or any portion of a Term Loan to a
Lender, an Affiliate of a Lender or an Approved Fund; and

(C) the Issuing Bank and the Swingline Lender; provided that no consent of the
Issuing Bank or the Swingline Lender shall be required for an assignment of all
or any portion of a Term Loan.

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

(A) except in the case of any assignment made in connection with the primary
syndication of the Commitment and Loans by the Arrangers or an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, 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 $5.0 million, in the case of any assignment in respect of Revolving
Loans and/or Revolving Commitments, or $1.0 million, in the case of any
assignment in respect of Term Loans and/or Term Loan Commitments, unless each of
the Administrative Agent and, so long as no Default has occurred and is
continuing, Borrower otherwise consent (each such consent not to be unreasonably
withheld or delayed);

(B) 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 Loan or the Commitment assigned, except that this
clause (ii) shall not prohibit any Lender from assigning all or a portion of its
rights and obligations among separate tranches on a non-pro rata basis; and

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
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and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Sections 2.12, 2.13, 2.15 and 10.03 with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 10.04(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of Borrower, shall maintain a copy of each Assignment and Assumption
delivered to it 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 LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and Borrower, the Administrative Agent, the Issuing Bank 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,
notwithstanding notice to the contrary. The Register shall be available for
inspection by Borrower, the Issuing Bank (with respect to Revolving Lenders
only), the Collateral Agent, the Swingline Lender (with respect to Revolving
Lenders only) and any Lender (with respect to its own interest only), at any
reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, Borrower, the Administrative Agent, the Issuing Bank or the Swingline
Lender sell participations to any person (other than a natural person or
Borrower or any of its 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 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) Borrower, the
Administrative Agent and the Lenders and Issuing Bank shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

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 the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(i), (ii) or (iii) of the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (e) of this Section, Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.15
(subject to such Participant satisfying the requirements of those Sections as if
it were a Lender) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. 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 such Participant agrees to be
subject to Section 2.14 as though it were a Lender.

 

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Each Lender that sells a participation shall, acting solely for this purpose as
an 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 this
Agreement (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register to any
person (including the identity of any Participant or any information relating to
a Participant’s interest in the obligations under this Agreement) except to the
extent that such disclosure is necessary to establish that such interest 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.

(e) Limitations on Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 2.12, 2.13 and 2.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower’s prior written consent (not to be
unreasonably withheld or delayed).

(f) 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 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. In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of Borrower or the Administrative Agent, collaterally
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity 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 Requirements of 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.

 

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SECTION 10.05 Survival of Agreement.

All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agents, the Issuing Bank or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.12, 2.14, 2.15 and Article X (other than
Section 10.12) shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Loans, the payment of the Reimbursement Obligations, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

SECTION 10.06 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
and the other Loan Documents, any separate letter agreements with respect to
fees payable to the Administrative Agent (including the “Market Flex” provisions
in the Fee Letter) and the “Syndication” and “Clear Market” provisions of the
Commitment 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 telecopier or other
electronic transmission (i.e. a “pdf” or “tif” document) shall be effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 10.07 Severability.

Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

SECTION 10.08 Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender, the
Issuing Bank, and each of their respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by applicable
Requirements of Law but in each case subject to the last sentence of this
section, 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

 

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obligations (in whatever currency) at any time owing by such Lender, the Issuing
Bank or any such Affiliate to or for the credit or the account of Borrower or
any other Loan Party against any and all of the obligations of Borrower or such
Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the Issuing Bank, irrespective of whether or not such
Lender or the Issuing Bank shall have made any demand under this Agreement or
any other Loan Document and although such obligations of Borrower or such Loan
Party may be contingent or unmatured or are owed to a branch or office of such
Lender or the Issuing Bank different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender, the
Issuing Bank and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such
Lender, the Issuing Bank or their respective Affiliates may have. Each Lender
and the Issuing Bank agrees to notify 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.
Each Lender and the Issuing Bank (in each case on behalf of itself and its
Affiliates) agrees that it shall not exercise any of its rights of setoff and
application without the prior written consent of the Collateral Agent.

SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process.

(a) Governing Law. This Agreement and the transactions contemplated hereby, and
any and all claims, controversies, disputes, or causes of action between the
parties under 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, or the facts or circumstances
leading to the execution of this Agreement or any other Loan Document, whether
in contract, tort or otherwise, shall be construed in accordance with and
governed by the laws (including statutes of limitation) of the State of New
York, without regard to conflicts of law principles that would require the
application of the laws of another jurisdiction.

(b) Submission to Jurisdiction. Each Loan Party hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court 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, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action 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 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
any other Loan Document shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.

(c) Venue. Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent permitted by applicable Requirements of Law, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in Section 10.09(b). Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
Requirements of Law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

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(d) Service of Process. Each party hereto irrevocably consents to service of
process in any action or proceeding arising out of or relating to any Loan
Document, in the manner provided for notices (other than telecopier) in
Section 10.01. Nothing in this Agreement or any other Loan Document will affect
the right of any party hereto to serve process in any other manner permitted by
applicable Requirements of Law.

SECTION 10.10 Waiver of Jury Trial.

Each Loan Party hereby waives, to the fullest extent permitted by applicable
Requirements of 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,
any other Loan Document or the transactions contemplated hereby (whether based
on contract, tort or any other theory). Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party 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 by, among other
things, the mutual waivers and certifications in this Section.

SECTION 10.11 Headings.

Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

SECTION 10.12 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent, the Lenders and the Issuing Bank agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (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 requested by any Governmental Authority or regulatory authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable Requirements
of Law 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 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 10.12, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and its
obligations or (iii) any rating agency for the purpose of obtaining a credit
rating applicable to any Lender, (g) with the consent of Borrower or

 

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(h) 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 Issuing Bank or any of their respective
Affiliates from a source other than Borrower that is not to the knowledge of
such recipient subject to confidentiality obligations to Borrower. For purposes
of this Section, “Information” means all information received from Borrower or
any of its Subsidiaries relating to Borrower or any of its Subsidiaries or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Bank on a
nonconfidential basis prior to disclosure by Borrower or any of its
Subsidiaries. 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.

SECTION 10.13 USA PATRIOT Act Notice and Customer Identification Information and
Verification.

Each Lender that is subject to the Bank Secrecy Act, as amended by the USA
PATRIOT Act, and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notify Borrower that pursuant to the customer identification
program and “know your customer” regulations and requirements of the Bank
Secrecy Act, they are required to obtain information and documentation, verify
identity, and record information that identifies each Loan Party, which
information includes the name, street address and taxpayer or other government
identification number (and other identifying information or documentation in the
event this information is insufficient to comply with the information or
verification requirements) that will allow such Lender or the Administrative
Agent, as applicable, to identify and verify the identity of each Loan Party.
This information and any documentation must be delivered to the Lenders and the
Administrative Agent no later than five days prior to the Closing Date and
thereafter promptly upon request. This notice is given in accordance with the
requirements of the Bank Secrecy Act and is effective as to the Lenders and the
Administrative Agent.

SECTION 10.14 Interest Rate Limitation.

Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable Requirements of Law
(collectively, the “Charges”), shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable
Requirements of Law, the rate of interest payable in respect of such Loan
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

 

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SECTION 10.15 Lender Addendum.

Each Lender to become a party to this Agreement as of the Closing Date shall do
so by delivering to the Administrative Agent a Lender Addendum duly executed by
such Lender, Borrower and the Administrative Agent.

SECTION 10.16 Obligations Absolute.

To the fullest extent permitted by applicable Requirements of Law, all
obligations of the Loan Parties hereunder shall be absolute and unconditional
irrespective of:

(a) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Loan Party;

(b) any lack of validity or enforceability of any Loan Document or any other
agreement or instrument relating thereto against any Loan Party;

(c) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from any Loan Document or any other agreement or
instrument relating thereto;

(d) any exchange, release or non-perfection of any other Collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Obligations;

(e) any exercise or non-exercise, or any waiver of any right, remedy, power or
privilege under or in respect hereof or any Loan Document; or

(f) any other circumstances which might otherwise constitute a defense available
to, or a discharge of, the Loan Parties.

[Signature Pages Follow]

 

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

 

DUCOMMUN INCORPORATED By:   /s/ Joseph Bellino   Name:   Joseph Bellino   Title:
  Vice President and Chief Financial Officer CMP DISPLAY SYSTEMS, INC. DUCOMMUN
AEROSTRUCTURES, INC. DUCOMMUN TECHNOLOGIES, INC. MILTEC CORPORATION

DUCOMMUN AEROSTRUCTURES NEW YORK, INC.

DUCOMMUN LABARGE TECHNOLOGIES, INC. LABARGE/STC, INC. LABARGE ELECTRONICS, INC.
LABARGE ACQUISITION COMPANY, INC. By:   /s/ Joseph Bellino   Name:   Joseph
Bellino   Title:   Vice President COMPOSITE STRUCTURES, LLC DUCOMMUN
AEROSTRUCTURES MEXICO, LLC By:   Ducommun AeroStructures, Inc., its Sole Member
By:   /s/ Joseph Bellino   Name:   Joseph Bellino   Title:   Vice President

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

UBS SECURITIES LLC, as an Arranger By:   /s/ Mary E. Evans   Name:   Mary E.
Evans   Title:   Attorney-in-Fact By:   /s/ Irja R. Otsa   Name:   Irja R. Otsa
  Title:   Associate Director, Banking Products Services, US UBS AG, STAMFORD
BRANCH, as an Issuing Bank, Administrative Agent and Collateral Agent By:   /s/
Mary E. Evans   Name:   Mary E. Evans   Title:   Associate Director, Banking
Products Services, US By:   /s/ Irja R. Otsa   Name:   Irja R. Otsa   Title:  
Associate Director, Banking Products Services, US UBS LOAN FINANCE LLC, as
Swingline Lender By:   /s/ Mary E. Evans   Name:   Mary E. Evans   Title:  
Associate Director, Banking Products Services, US By:   /s/ Irja R. Otsa   Name:
  Irja R. Otsa   Title:   Associate Director, Banking Products Services, US

 

S-2

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CREDIT SUISSE SECURITIES (USA) LLC, as an Arranger and as Syndication Agent By:
  /s/ Michael Speller   Name:   Michael Speller   Title:   Managing Director

 

S-3

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Documentation Agent By:   Geoff
Anfuso   Name:   Geoff Anfuso   Title:   SVP

 

S-4

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

BANK OF AMERICA, N.A., as an Issuing Bank By:   /s/ Joseph Eitel   Name:  
Joseph Eitel   Title:   SVP

 

S-5

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Annex I

Amortization Table

 

Date    Term Loan Amount  

September 30, 2011

   $ 475,000   

December 31, 2011

   $ 475,000   

March 31, 2012

   $ 475,000   

June 30, 2012

   $ 475,000   

September 30, 2012

   $ 475,000   

December 31, 2012

   $ 475,000   

March 31, 2013

   $ 475,000   

June 30, 2013

   $ 475,000   

September 30, 2013

   $ 475,000   

December 31, 2013

   $ 475,000   

March 31, 2014

   $ 475,000   

June 30, 2014

   $ 475,000   

September 30, 2014

   $ 475,000   

December 31, 2014

   $ 475,000   

March 31, 2015

   $ 475,000   

June 30, 2015

   $ 475,000   

September 30, 2015

   $ 475,000   

December 31, 2015

   $ 475,000   

March 31, 2016

   $ 475,000   

June 30, 2016

   $ 475,000   

September 30, 2016

   $ 475,000   

December 31, 2016

   $ 475,000   

March 31, 2017

   $ 475,000   

Term Loan Maturity Date

   $ 179,075,000   

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

Annex II

Existing Letters of Credit

1. $150,000.00. Expiry 04/30/12; Beneficiary: Federal Insurance Company (Chubb)

2. $250,000.00. Expiry 04/30/12; Beneficiary: The Travelers Indemnity Company

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

Schedule 1.01(a)

Refinancing Indebtedness to be Repaid

Indebtedness pursuant to that certain Loan Agreement dated as of December 22,
2008 (as amended, restated, supplemented or otherwise modified through the date
hereof) among LaBarge, Inc. (as predecessor in interest of Ducommun LaBarge
Technologies, Inc.), LaBarge Electronics, Inc., LaBarge Acquisition Company,
Inc., the Lenders from time to time party thereto and U.S. Bank National
Association, as the Agent, and the related interest rate swap agreement between
LaBarge Acquisition Company, Inc. and U.S. Bank National Association.

Indebtedness pursuant to that certain Second Amended and Restated Credit
Agreement dated as of June 26, 2009 (as amended, restated, supplemented or
otherwise modified through the date hereof) among the Borrower, each Lender from
time to time party thereto and Bank of America, N.A., as Administrative Agent,
Swing Line Lender and L/C Issuer, including the letter of credit facility
thereunder.

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

Schedule 1.01(b)

Subsidiary Guarantors

Ducommun AeroStructures, Inc., a Delaware corporation

Ducommun Technologies, Inc., an Arizona corporation

CMP DISPLAY SYSTEMS, INC., a California corporation

COMPOSITE STRUCTURES, LLC, a Delaware limited liability company

Ducommun Aerostructures New York, Inc., a New York corporation

MILTEC CORPORATION, an Alabama corporation

Ducommun AeroStructures Mexico, LLC, a Delaware limited liability company

Ducommun LaBarge Technologies, Inc., a Delaware corporation

LaBarge/STC, Inc., a Texas corporation

LaBarge Electronics, Inc., a Missouri corporation

LaBarge Acquisition Company, Inc., a Missouri corporation

 

2

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Schedule 3.03

Governmental Approvals; Compliance with Laws

None.

 

3

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

Schedule 3.06(c)

Violations or Proceedings

None.

 

4

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

Schedule 3.17

Employee Benefit Plans

The Borrower has three unfunded supplemental retirement plans. The first plan
was suspended in 1986, but continues to cover certain former executives. The
second plan was suspended in 1997, but continues to cover certain current and
retired directors. The third plan covers one former executive. The accumulated
benefit obligations under these plans at December 31, 2010 and December 31, 2009
were $1,490,000 and $1,637,000, respectively, which are included in accrued
liabilities.

 

5

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Schedule 3.18

Environmental Matters

None.

 

6

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Schedule 3.19

Insurance

Insurance and Limits

($millions)

 

Borrower and all its Subsidiaries

           

Aviation Products Liability

   QBE Line Slip    $ 150.0   

Property

   FM Global      487.0   

GL/Auto - Primary/Umbrella

   One Beacon      20.0   

GL/Auto - Excess

   Chubb      20.0   

GL/Auto - Excess

   Continental Casualty      15.0   

D&O Primary

   St. Paul      10.0   

D&O Excess

   Chubb      10.0   

D&O Side A

   ACE      10.0   

Crime

   Chubb      5.0   

Fiduciary Liability

   Chubb      10.0   

Borrower (excluding Ducommun LaBarge Technologies, Inc. and its Subsidiaries and

MILTEC CORPORATION)

  

Workers Compensation

   Zurich    MILTEC CORPORATION      

Workers Compensation

   State Fund of Alabama/Sentry   

Employment Practices Liability

   Hartford      2.0   

Ducommun LaBarge

Technologies, Inc. and its

Subsidiaries

     

Workers Compensation

   Hartford/Captive (Archway)   

Employment Practices Liability

   Chubb      5.0   

 

7

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Schedule 3.21

Acquisition Documents

Agreement and Plan of Merger, dated as of April 3, 2011, among Ducommun
Incorporated, DLBMS, Inc. and LaBarge, Inc. (as predecessor in interest of
Ducommun LaBarge Technologies, Inc.)

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Technologies, Inc.) and Craig E.
LaBarge.

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Technologies, Inc.) and Donald H.
Nonnenkamp.

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Techologies, Inc.) and Randy L.
Buschling.

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Technologies, Inc.) and Teresa K.
Huber.

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Technologies, Inc.) and John R.
Parmley.

Employment Agreement, dated as of April 3, 2011, between LaBarge, Inc. (as
predecessor in interest of Ducommun LaBarge Technologies, Inc.) and William D.
Bitner.

Voting Agreement dated as of April 3, 2011, among Ducommun Incorporated and
certain stockholders of LaBarge, Inc.

 

8

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Schedule 4.01(g)

Local Counsel

Kutak Rock, LLP, Scottsdale, AZ

Balch & Bingham LLP, Birmingham, AL

Armstrong Teasdale LLP, St. Louis, MO

 

9

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

Schedule 4.01(n)(vi)

Landlord Access Agreements

Spirit Aerosystems, 3355 S. Oliver, Wichita, KS

AMI Metals, 10606 Commerce Way, Fontana, CA

 

10

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Schedule 4.01(o)(iii)

Title Insurance Amounts

 

Property Address

   Fair Market Value  

268/316 E. Gardena Blvd.

Gardena, CA 90248

   $ 17,250,000   

1885 N. Batavia St.

Orange, CA 92865

   $ 11,500,000   

801 Royal Oaks Dr.

Monrovia, CA 91016

   $ 11,500,000   

3333 Main Street

Parsons, KS 67357

   $ 1,437,500   

2222 East Pensar Drive

Appleton, WI 54911

   $ 3,599,500   

11616 East 51st St.

Tulsa, OK 74146

   $ 2,449,500   

810 Champlin Avenue

Berryville, AR 72616

   $ 2,403,500   

1505 Maiden Lane

Joplin, MO 64801

   $ 2,219,500   

 

11

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Schedule 5.14

Post-Closing Matters

 

1. Within 30 days after the Closing Date, deliver a property insurance
certificate to the Collateral Agent that (a) is reasonably satisfactory to the
Collateral Agent, (b) names the Collateral Agent as lenders’ loss payee,
(c) reflects an expiration date of not earlier than June 28, 2012 and
(d) contains an endorsement thereto reasonably satisfactory to the Collateral
Agent (it being understood that the form of endorsement previously provided to
counsel to the Arrangers is reasonably satisfactory to the Collateral Agent).

 

2. Within 45 days after the Closing Date, deliver a fully executed securities
account control agreement that is reasonably satisfactory to the Collateral
Agent in respect of the Borrower’s money market account at Bank of America
described as “Fund #238 Money Market Reserves” in the Perfection Certificate,
unless the Collateral Agent determines in its sole discretion that the benefit
of obtaining such securities account control agreement is outweighed by the
burden of obtaining such agreement.

 

3.

If the deposit accounts in the name of LaBarge, Inc., LaBarge Electronics, Inc.,
LaBarge Acquisition Company, Inc. or LaBarge/STC, Inc. immediately prior to the
Closing Date maintained at US Bank are not closed within 60 days after the
Closing Date, then, in respect of any such accounts that do not constitute
Excluded Accounts (as defined in the Security Agreement), the Borrower shall
within 30 days after such 60th day either (a) close such accounts or (b) enter
into control agreements over such accounts in favor of the Collateral Agent that
are reasonably satisfactory to the Collateral Agent.

 

4. To the extent any of the deliverables required by Section 4.01(o)(i), (ii),
(iii), (iv), (v), (vii) or (viii) with respect to the Mortgaged Properties have
not been delivered (or executed and delivered as the case may be) on or prior to
the Closing Date to the Collateral Agent, deliver (or execute and deliver, as
the case may be) such deliverables to the Collateral Agent within 45 days after
the Closing Date, in each case in form and substance reasonably satisfactory to
the Collateral Agent.

 

5. Deliver, for each relevant Mortgaged Property at the time delivery of a fully
executed Mortgage reasonably satisfactory to the Collateral Agent with respect
to such Mortgaged Property is made in connection with Section 4.01(o)(i)
pursuant to the immediately preceding clause 4, a favorable and executed written
opinion of (a) Gibson Dunn & Crutcher LLP (California), (b) Armstrong Teasdale
LLP (Missouri), (c) Powell, Brewer & Reddick, LLP (Kansas), (d) Reinhart Boemer
Van Deuren s.c. (Wisconsin), (e) McAfee & Taft (Oklahoma) and/or (f) Mitchell,
Williams, Selig, Gates & Woodyard, P.L.L.C. (Arkansas), in each case in form and
substance reasonably satisfactory to the Collateral Agent.

 

12

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Schedule 6.01(b)

Existing Indebtedness

In connection with the acquisition of Ducommun Aerostructures New York, Inc. in
December 2008, the Borrower issued a promissory note in the initial principal
amount of $7,000,000 with interest of 5% per annum payable annually on each
anniversary of the closing date (December 23). Principal of the promissory note
in the amount of $4,000,000 was paid on June 23, 2010 and $3,000,000 is payable
on December 23, 2013.

 

13

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Schedule 6.02(c)

Existing Liens

None.

 

14

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

Schedule 6.04(b)

Existing Investments

Ducommun Technologies, Inc. owns 100% of Ducommun Technologies (Thailand) Ltd.

MILTEC CORPORATION owns 49% of Joint Venture Applied Science and Technology,
LLC.

Ducommun LaBarge Technologies, Inc. owns 940,000 shares of Norwood Abbey, Ltd.

Ducommun LaBarge Technologies, Inc. owns 1 common share of Archway Insurance
Ltd.

 

15

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Schedule 6.08

Transactions with Affiliates

None.

 

16

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EXHIBIT A

[Form of]

ADMINISTRATIVE QUESTIONNAIRE

DUCOMMUN INCORPORATED

 

Agent Address:    UBS AG, Stamford Branch    Return form
to:                                                                     677
Washington Boulevard    Telephone: (203) 719-3000    Stamford, Connecticut 06901
   Facsimile:                                           
E-mail:                                         

It is very important that all of the requested information be completed
accurately and that this questionnaire be returned promptly. If your institution
is sub-allocating its allocation, please fill out an administrative
questionnaire for each legal entity.

Legal Name of Lender to appear in Documentation:

  

 

Signature Block Information:                                       
                                         
                                                                             

 

•    Signing Credit Agreement

     Yes         No   

•    Coming in via Assignment

     Yes         No   

Type of Lender: __________________

(Bank, Asset Manager, Broker/Dealer, CLO/CDO; Finance Company, Hedge Fund,
Insurance, Mutual Fund, Pension Fund, Other Regulated Investment Fund, Special
Purpose Vehicle, Other - please specify)

Lender Parent:                                        
                                         
                                         
                                                               

 

Domestic Address

       Eurodollar Address                           

 

A-1

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Contacts/Notification Methods: Borrowings, Paydowns, Interest, Fees, etc.

 

     

Primary Credit Contact

       

Secondary Credit Contact

Name:              Company:              Title:              Address:           
  Telephone:              Facsimile:              E-Mail Address:             
     

Primary Operations Contact

       

Secondary Operations Contact

Name:              Company:              Title:              Address:           
  Telephone:              Facsimile:              E-Mail Address:             
     

Bid Contact

       

L/C Contact

Name:              Company:              Title:              Address:           
  Telephone:              Facsimile:              E-Mail Address:             

 

A-4

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Lender’s Domestic Wire Instructions

 

Bank Name:      ABA/Routing No.:      Account Name:      Account No.:      FFC
Account Name:      FFC Account No.:      Attention:      Reference:     
Lender’s Foreign Wire Instructions Currency:      Bank Name:      Swift/Routing
No.:      Account Name:      Account No.:      FFC Account Name:      FFC
Account No.:      Attention:      Reference:      Agent’s Wire Instructions   
[The Agent’s wire instructions will be disclosed at the time of closing.] Bank
Name:      ABA/Routing No.:      Account Name:      Account No.:      FFC
Account Name:      FFC Account No.:      Attention:      Reference:     

 

A-4

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Tax Documents

NON-U.S. LENDER INSTITUTIONS:

 

I. Corporations:

If your institution is incorporated outside of the United States for U.S.
federal income tax purposes, and is the beneficial owner of the interest and
other income it receives, you must complete one of the following three tax
forms, as applicable to your institution: a.) Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively
Connected to a U.S. Trade or Business), or c.) Form W-8EXP (Certificate of
Foreign Government or Governmental Agency).

A U.S. taxpayer identification number is required for any institution submitting
Form W-8ECI. It is also required on Form W-8BEN for certain institutions
claiming the benefits of a tax treaty with the U.S. Please refer to the
instructions when completing the form applicable to your institution. In
addition, please be advised that U.S. tax regulations do not permit the
acceptance of faxed forms. An original tax form must be submitted.

 

II. Flow-Through Entities:

If your institution is organized outside the U.S., and is classified for U.S.
federal income tax purposes as either a Partnership, Trust, Qualified or
Non-Qualified Intermediary, or other non- U.S. flow-through entity, an original
Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity,
or Certain U.S. Branches for United States Tax Withholding) must be completed by
the intermediary together with a withholding statement. Flow-through entities
other than Qualified Intermediaries are required to include tax forms for each
of the underlying beneficial owners.

Please refer to the instructions when completing this form. In addition, please
be advised that U.S. tax regulations do not permit the acceptance of faxed
forms. Original tax form(s) must be submitted.

U.S. LENDER INSTITUTIONS:

If your institution is incorporated or organized within the United States, you
must complete and return Form W-9 (Request for Taxpayer Identification Number
and Certification). Please be advised that we request that you submit an
original Form W-9.

Pursuant to the language contained in the tax section of the Credit Agreement,
the applicable tax form for your institution must be completed and returned
prior to the first payment of income. Failure to provide the proper tax form
when requested may subject your institution to U.S. tax withholding.

 

A-4

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EXHIBIT B

[Form of]

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement defined below, 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 Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, 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 rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including participations in any Letters of Credit and
Swingline Loans included in such facilities) 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) 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 pursuant to clauses
(i) and (ii) above being referred to herein collectively as, the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.

 

1. Assignor: ______________________________________________

 

2. Assignee: ______________________________________________

                        [and is an Affiliate/Approved Fund of [identify
Lender]1]

 

3. Borrower: Ducommun Incorporated, a Delaware corporation

 

4. Administrative Agent: UBS AG, Stamford Branch, as the administrative agent
under the Credit Agreement

 

1  Select as applicable.

 

B-1

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5. Credit Agreement: The Credit Agreement dated as of June 28, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Ducommun Incorporated, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES
(USA) LLC, as joint lead arrangers (in such capacity, “Arrangers”), UBS LOAN
FINANCE LLC, as swingline lender (in such capacity, “Swingline Lender”), UBS AG,
STAMFORD BRANCH, as an Issuing Bank, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such
capacity, “Collateral Agent”) for the Secured Parties and the Issuing Bank,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in such
capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit.

 

6. Assigned Interest:

 

Facility Assigned

   Aggregate
Amount of
Commitment/Loans
for all Lenders      Amount of
Commitment/Loans
Assigned      Percentage
Assigned of
Commitment/Loans2  

Term Loans

   $         $           %   

Revolving Loans

   $         $           %   

 

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

B-4

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

Effective Date: _____________ ___, 201__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]3

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:       Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:       Title:

Consented to and Accepted:

 

DUCOMMUN INCORPORATED4 By:      

Name:

Title:

UBS AG, STAMFORD BRANCH,

as Administrative Agent [and an Issuing Bank]5

By:      

Name:

Title:

 

3  This date may not be fewer than 5 Business days after the date of assignment
unless the Administrative Agent otherwise agrees.

4  To be completed to the extent consent is required under Section 10.04(b) of
the Credit Agreement.

5  Reference to Issuing Bank required for an assignment of Revolving
Commitments.

 

B-4

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

By:      

Name:

Title:

 

[BANK OF AMERICA, N.A.,

as an Issuing Bank

By:      

Name:

Title: ]6

[UBS LOAN FINANCE LLC,

as Swingline Lender

By:      

Name:

Title:

By:      

Name:

Title: ]7

 

 

6  Reference to Issuing Bank required for an assignment of Revolving
Commitments.

7  Reference to Swingline Lender required for an assignment of Revolving
Commitments.

 

B-4

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

ANNEX 1 to Assignment and Assumption

DUCOMMUN INCORPORATED

CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the 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 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 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 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
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under 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 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 Assigned Interest and either it, or the Person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, (vi) if it is not already a Lender under the Credit Agreement,
attached to the Assignment and Assumption is an Administrative Questionnaire in
the form of Exhibit A to the Credit Agreement, (vii) the Administrative Agent
has received a processing and recordation fee of $3,500 as of the Effective Date
and (viii) if it is a Foreign Lender, attached to the Assignment and Assumption
is any documentation required to be delivered by it pursuant to Section 2.15 of
the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the 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 that 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 Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued to but excluding the Effective Date and to the Assignee for amounts
that have accrued from and after the Effective Date.

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
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be
construed in accordance with and governed by, the law of the State of New York
without regard to conflicts of principles of law that would require the
application of the laws of another jurisdiction.

 

-2-

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EXHIBIT C

[Form of]

BORROWING REQUEST

UBS AG, Stamford Branch,

   as Administrative Agent for

the Lenders referred to below,

677 Washington Boulevard

Stamford, Connecticut 06901

Attention: [            ]

Re: Ducommun Incorporated

[Date]

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of June 28, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES
(USA) LLC, as joint lead arrangers (in such capacity, “Arrangers”), UBS LOAN
FINANCE LLC, as swingline lender (in such capacity, “Swingline Lender”), UBS AG,
STAMFORD BRANCH, as an Issuing Bank, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such
capacity, “Collateral Agent”) for the Secured Parties and the Issuing Bank,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in such
capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit. Borrower
hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the terms on which such Borrowing is requested to be made:

 

(A) Class of Borrowing   

[Revolving Borrowing]

[Term Borrowing]

[Swingline Loan]

(B) Principal amount of Borrowing8    _____________________________

 

8  ABR Loans must be in an amount that is at least $500,000 and an integral
multiple of $100,000 or equal to the remaining available balance of the
applicable Commitments. Eurodollar Loans must be in an amount that is at least
$1,000,000 and an integral multiple of $100,000 or equal to the remaining
available balance of the applicable Commitments.

 

C-1

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

(C) Date of Borrowing (which is a Business Day)    __________________________
(D) Type of Borrowing    [ABR] [Eurodollar]9 (E) Interest Period and the last
day thereof10    __________________________ (F) Funds are requested to be
disbursed to Borrower’s account with UBS AG, Stamford Branch (Account
No.                ).   

Borrower hereby represents and warrants that the conditions to lending specified
in Sections [4.02(b), (c), (d) and (e)]11 of the Credit Agreement are satisfied
as of the date hereof.

[Signature Page Follows]

 

 

9  Shall be ABR for Swingline Loans.

10  Shall be subject to the definition of “Interest Period” in the Credit
Agreement.

11  Modify to include only Section 4.02(c) solely in respect of borrowings to be
made on the Closing Date.

 

C-3

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

DUCOMMUN INCORPORATED By:      

Name:

Title: [Responsible Officer]

 

 

C-3

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

EXHIBIT D

[Form of]

COMPLIANCE CERTIFICATE

I, [            ], the [Financial Officer] of Ducommun Incorporated (in such
capacity and not in my individual capacity), hereby certify that, with respect
to that certain Credit Agreement dated as of June 28, 2011 (as it may be
amended, modified, extended or restated from time to time, the “Credit
Agreement”; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among Ducommun Incorporated, a Delaware corporation, as
borrower (the “Borrower”), the Subsidiary Guarantors party thereto, the Lenders
party thereto, UBS Securities LLC and Credit Suisse Securities (USA) LLC, as
Arrangers, UBS Loan Finance LLC, as Swingline Lender, UBS AG, Stamford Branch,
as an Issuing Bank, Administrative Agent and Collateral Agent, Wells Fargo Bank,
National Association, as Documentation Agent, Credit Suisse Securities (USA)
LLC, as Syndication Agent, and Bank of America, N.A., as an Issuing Bank:

a. Attached hereto as Schedule 1 are detailed calculations12 demonstrating
compliance by the Loan Parties with the financial covenants contained in
Sections 6.09(a)13, 6.09(b)14 and 6.09(c)15 of the Credit Agreement. The Loan
Parties are in compliance with such Sections as of the date hereof.

b. Attached hereto as Schedule 2 are detailed calculations setting forth the
Borrower’s Excess Cash Flow.16

c. Attached hereto as Schedule 3 is the report of [accounting firm].17

 

12 

Which calculations shall be in reasonable detail satisfactory to the
Administrative Agent and shall include, among other things, an explanation of
the methodology used in such calculations and a breakdown of the components of
such calculations.

 

13 

If the financial covenant contained in Section 6.09(a) of the Credit Agreement
is not required to be tested as of the date of the Compliance Certificate
pursuant to the terms of the Credit Agreement, include instead a certification
as to such fact. The first quarter for testing this covenant is the fiscal
quarter ending October 1, 2011.

 

14 

Calculations to demonstrate compliance with Section 6.09(b) to accompany annual
financial statements only (beginning with the fiscal year ending December 31,
2011).

 

15 

The first quarter for testing this covenant is the fiscal quarter ending
October 1, 2011.

 

16 

To accompany annual financial statements only (beginning with the fiscal year
ending December 31, 2012).

 

17 

To accompany annual financial statements only (beginning with the fiscal year
ending December 31, 2011). The report must opine or certify that, with respect
to its regular audit of such financial statements, which audit was conducted in
accordance with generally accepted accounting standards, the accounting firm
obtained no knowledge that any Default insofar as it relates to financial or
accounting matters has occurred or, if in the opinion of such accounting firm
such a Default has occurred, specifying the nature and extent thereof.

 

D-1

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

d. The Borrower was in compliance with each of the covenants set forth in
Sections 6.09 of the Credit Agreement at all times during and since
[            ].

e. No Default has occurred under the Credit Agreement which has not been
previously disclosed, in writing, to the Administrative Agent pursuant to a
Compliance Certificate.18

 

18 

If a Default shall have occurred, an explanation specifying the nature and
extent of such Default shall be provided on a separate page together with an
explanation of the corrective action taken or proposed to be taken with respect
thereto (include, as applicable, information regarding actions, if any, taken
since prior certificate).

 

D-3

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

Dated this [        ] day of [                ], 201[         ].

 

DUCOMMUN INCORPORATED By:       Name:     Title:   [Financial Officer]

 

D-3

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

SCHEDULE 1

Financial Covenants

 

(A) Maximum Total Leverage Ratio: Consolidated Indebtedness to Consolidated
EBITDA

 

Consolidated Indebtedness as of [         ], 201[         ]         Consolidated
EBITDA calculation19: (i) + (ii)20 – (iii)21      

(i)     Consolidated Net Income for the Test Period ended [         ],
201[         ]

       

(ii)    (a) Consolidated Interest Expense for such period, plus

       

(b) Consolidated Amortization Expense for such period, plus

       

(c) Consolidated Depreciation Expense for such period, plus

       

(d) Consolidated Tax Expense for such period, plus

       

 

19 

Other than for purposes of calculating Excess Cash Flow, Consolidated EBITDA
shall be calculated on a Pro Forma Basis (including Pro Forma Cost Savings if
applicable) to give effect to the Merger, any Permitted Acquisition and Asset
Sales (other than any dispositions in the ordinary course of business)
consummated at any time on or after the first day of the Test Period and prior
to the date of determination as if the Merger and each such Permitted
Acquisition had been effected on the first day of such period and as if each
such Asset Sale had been consummated on the day prior to the first day of such
period. Please see the definition of “Pro Forma Cost Savings” in the Credit
Agreement for an explanation of what may be included in Consolidated EBITDA (and
any required supporting documentation) to the extent Consolidated EBITDA is
being calculated after giving effect to any Pro Forma Cost Savings. Consolidated
EBITDA shall be calculated without regard to (1) the cumulative effect of a
change in accounting principles during such period and (2) effects of
adjustments pursuant to GAAP resulting from the application of purchase
accounting in relation to the Merger or any Permitted Acquisition.

20 

Items in (ii) are to be added in each case only to the extent deducted in
determining Consolidated Net Income and without duplication.

21 

The aggregate amount of items in (iii) are to be subtracted to the extent
increasing Consolidated Net Income.

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

(e) (i) costs and expenses directly incurred in connection with the
Transactions, and (ii) costs and expenses in respect of any employment agreement
(including severance costs), change in control (including with respect to the
long term incentive program of the Acquired Business), stock based compensation
or employee incentive agreement in respect of the Transactions (not to exceed
$10.0 million), plus

  ____________________   

(f) the aggregate amount of all other non-cash charges, expenses or losses
reducing Consolidated Net Income (excluding any non-cash charge, expense or loss
that results in an accrual of a reserve for cash charges in any future period
and any non-cash charge, expense or loss relating to write-offs, write-downs or
reserves with respect to accounts or inventory) for such period, plus

 

____________________

  

(g) (i) fees, expenses, financing costs, severance costs and management bonuses
incurred or paid in connection with any Permitted Acquisition after the Closing
Date, including attorneys’ fees and (ii) costs and expenses in respect of any
employment agreement, change in control, stock based compensation or employee
incentive agreement or plan or other employee benefit agreement or plan arising
in connection with a Permitted Acquisition after the Closing Date or the
occurrence of a change in control as defined under such compensation agreement
or plan; provided that amounts under this clause (g) shall not exceed $5.0
million per fiscal year, plus

 

____________________

  

(h) reasonable and customary fees, expenses, premiums and other charges in
connection with the issuance or repayment of Indebtedness, the issuance of
Equity Interests, any refinancing transaction, amendment or other modification
of any debt instrument, the making of any Investment, any Asset Sale or
disposition not constituting an Asset Sale, in each case to the extent permitted
by the terms of this Agreement (in each case whether or not consummated and in
each case including reasonable and customary investment banking and attorneys’
fees), plus

 

____________________

  

(i) any losses attributable to the extinguishment of any Hedging Obligations or
other derivative instruments, plus

 

____________________

  

(j) any extraordinary or non-recurring loss, expense or charge recorded or
recognized by Borrower or any of its Subsidiaries during such period; provided
that the amount of any non-recurring loss, expense or charge during any period
shall not exceed $5.0 million, plus

 

____________________

  

(k) any net loss from discontinued operations and any net loss on disposal of
discontinued operations.

 

____________________

  

 

-2-

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(iii)  (a) all non-cash items increasing Consolidated Net Income (other than (1)
the accrual of revenue or recording of receivables in the ordinary course of
business and (2) any non-cash items to be received in cash in any future period
or any non-cash income or gain that results from a reversal of write-offs,
write-downs and reserves with respect to accounts or inventory) for such period,
(b) any gains attributable to the extinguishment of any Hedging Obligations or
other derivative instruments, (c) any extraordinary or non-recurring gain
recorded or recognized by Borrower or any of its Subsidiaries during such period
and (d) any net gain from discontinued operations or any net gain on disposal of
discontinued operations.

   ____________________    Consolidated EBITDA22:    ____________________   

Consolidated Indebtedness to Consolidated EBITDA =

   [    ]:1.00   

Covenant Requirement for Test Period Ending:

   May not exceed:   

October 1, 2011

   5.25 to 1.0   

December 31, 2011

   5.25 to 1.0   

March 31, 2012

   5.25 to 1.0   

June 30, 2012

   5.25 to 1.0   

September 29, 2012

   5.00 to 1.0   

December 31, 2012

   4.75 to 1.0   

March 30, 2013

   4.75 to 1.0   

June 29, 2013

   4.75 to 1.0   

September 28, 2013

   4.25 to 1.0   

December 31, 2013

   4.00 to 1.0   

 

22 

Consolidated EBITDA (1) for the fiscal quarter ended on July 3, 2010 shall be
deemed to be $23.676 million, (2) for the fiscal quarter ended on October 2,
2010 shall be deemed to be $21.313 million, (3) for the fiscal quarter ended on
December 31, 2010 shall be deemed to be $19.770 million and (4) for the fiscal
quarter ended on April 2, 2011 shall be deemed to be $21.288 million.

 

-2-

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

March 29, 2014

   4.00 to 1.0   

June 28, 2014

   4.00 to 1.0   

September 27, 2014

   3.75 to 1.0   

December 31, 2014

   3.75 to 1.0   

April 4, 2015

   3.75 to 1.0   

July 4, 2015

   3.75 to 1.0   

October 4, 2015 and the end of each fiscal quarter thereafter

   3.75 to 1.0   

 

-2-

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(B) Maximum Capital Expenditures

 

Capital Expenditures

   ____________________   

Covenant Requirement:23

   No more than:   

Fiscal year ending December 31, 2011

   $24.0 million   

Fiscal year ending December 31, 2012

   $27.0 million   

Fiscal year ending December 31, 2013

   $28.0 million   

Each fiscal year thereafter

   $30.0 million   

 

23 

If the aggregate amount of Capital Expenditures made in any fiscal year is less
than the maximum amount of Capital Expenditures permitted for such fiscal year
(before giving effect to any carryover), then the amount of such shortfall may
be added to the amount of Capital Expenditures permitted below for the
immediately succeeding (but not any other) fiscal year. In determining whether
any amount is available for carryover, the amount expended in any fiscal year
shall first be deemed to be from the amount allocated to such fiscal year
(before giving effect to any carryover).

 

-2-

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(C) Minimum Consolidated EBITDA

 

Consolidated EBITDA for the Test Period ended [     ],

201[    ] (calculated in accordance with (A) above)

   ____________________   

Covenant Requirement

   No less than $50 million as at the end of the fiscal quarter for the Test
Period then ended   

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SCHEDULE 2

 

Excess Cash Flow Calculation: (a) + (b) - (c)      

(a)    Consolidated EBITDA for Excess Cash Flow Period ended [        ],
201[    ]

   ___________________   

(b)    Consolidated Working Capital Adjustment for Excess Cash Flow Period ended
[        ], 201[    ]

   ___________________   

(c)    (i) scheduled principal payments in respect of Indebtedness of the
Borrower or any Subsidiary and the permanent repayment of the principal
component of Capitalized Lease Obligations, in each case made with Internally
Generated Cash during such Excess Cash Flow Period, plus

   ___________________   

(ii) Capital Expenditures and Investments made pursuant to Section 6.04(e) and
(h) of the Credit Agreement, in each case made with Internally Generated Cash
during such Excess Cash Flow Period, plus

   ___________________   

(iii) Consolidated Tax Expense, to the extent paid or payable in cash with
respect to such Excess Cash Flow Period, plus

   ___________________   

(iv) without duplication of amounts deducted from Excess Cash Flow in prior
Excess Cash Flow Periods or such Excess Cash Flow Period, to the extent set
forth in a certificate of a Responsible Officer delivered to the Administrative
Agent at or before the time the Compliance Certificate for the period ending
simultaneously with such Excess Cash Flow Period is required to be delivered
pursuant to Section 5.01(d) of the Credit Agreement, the aggregate amount that
shall be required to be paid in cash in respect of Capital Expenditures to be
made by the Borrower or any Subsidiary during the 90 days following such Excess
Cash Flow Period pursuant to binding contracts (the “Contract Amount”) entered
into prior to or during such Excess Cash Flow Period; provided that to the
extent the aggregate amount of Internally Generated Cash actually utilized to
finance such Capital Expenditures during such 90-day period is less than the
Contract Amount, the amount of such shortfall shall be added to Excess Cash Flow
for the Excess Cash Flow Period following such Excess Cash Flow Period, plus

   ___________________   

(v) the aggregate amount actually paid by Borrower and its Subsidiaries in cash
during such Excess Cash Flow Period on account of Consolidated Interest Expense,
plus

   ____________________   

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(vi) the aggregate amount of any cash payments made during such Excess Cash Flow
Period in respect of expenses and losses (minus the aggregate amount of any cash
received in respect of gains) referred to in clause (f) of the definition of
“Consolidated Net Income” included in determining Consolidated Net Income for
such Excess Cash Flow Period, plus

   ____________________   

(vii) reasonable and customary expenses incurred in connection with the
issuance, prepayment, amendment or refinancing of Indebtedness or issuance of
Equity Interests or consummation of an Asset Sale permitted hereunder during
such Excess Cash Flow Period to the extent paid from Internally Generated Cash,
plus

   ____________________   

(viii) reasonable fees, costs and expenses paid from Internally Generated Cash
that are incurred in connection with the Transactions or any Permitted
Acquisition (whether or not consummated) in respect of any employment
agreements, change in control, stock based compensation or employee incentive
agreement or plan or other employee benefit agreement or plan arising in
connection with the Transactions or such Permitted Acquisition or the occurrence
of a change in control as defined under such compensation agreement or plan;
provided that the deduction from Excess Cash Flow shall be limited to (1) in the
case of the Transactions, severance payments and payments arising in connection
with the change of control of the Acquired Business, in each case to the extent
made during the Excess Cash Flow Period ending December 31, 2012 and (2) in each
case of Permitted Acquisitions occurring after the Closing Date, $5.0 million of
payments made during the relevant Excess Cash Flow Period.

   ____________________   

Excess Cash Flow

   ____________________   

 

-2-

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SCHEDULE 3

Report of Accounting Firm

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EXHIBIT E

[Form of]

INTEREST ELECTION REQUEST

UBS AG, Stamford Branch,

  as Administrative Agent

677 Washington Boulevard

Stamford, Connecticut 06901

Attention: [                ]

[Date]

Re: Ducommun Incorporated

Ladies and Gentlemen:

This Interest Election Request is delivered to you pursuant to Section 2.08 of
the Credit Agreement dated as of June 28, 2011 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation (“Borrower”),
the Subsidiary Guarantors (such term and each other capitalized term used but
not defined herein having the meaning given it in Article I of the Credit
Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES (USA)
LLC, as joint lead arrangers (in such capacity, “Arrangers”), UBS LOAN FINANCE
LLC, as swingline lender (in such capacity, “Swingline Lender”), UBS AG,
STAMFORD BRANCH, as an Issuing Bank, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such
capacity, “Collateral Agent”) for the Secured Parties and the Issuing Bank,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in such
capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit.

Borrower hereby requests that on [            ]24 (the “Interest Election
Date”),

1. $[            ] of the presently outstanding principal amount of the Loans
originally made on [            ],

 

24 

Shall be a Business Day that is (a) the date hereof in the case of a conversion
into ABR Loans to the extent this Interest Election Request is delivered to the
Administrative Agent prior to 2:00 p.m., New York City time on the date hereof,
otherwise the Business Day following the date of delivery hereof, and (b) three
Business Days following the date hereof in the case of a conversion
into/continuation of Eurodollar Loans to the extent this Interest Election
Request is delivered to the Administrative Agent prior to 2:00 p.m. New York
City time on the date hereof, otherwise the fourth Business Day following the
date of delivery hereof, in each case.

 

E-1

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2. and all presently being maintained as [ABR Loans] [Eurodollar Loans],

3. be [converted into] [continued as],

4. [Eurodollar Loans having an Interest Period of
[one/two/three/six/nine/twelve]25 months] [ABR Loans].

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the proposed Interest Election Date, both
before and after giving effect thereto and to the application of the proceeds
therefrom:

(a) the foregoing [conversion] [continuation] complies with the terms and
conditions of the Credit Agreement (including, without limitation, Section 2.08
of the Credit Agreement);

(b) no Default has occurred and is continuing, or would result from such
proposed [conversion] [continuation].

[Signature Page Follows]

 

25 

Interest periods of nine or twelve months are only permissible with the consent
of all affected Lenders.

 

E-3

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Borrower has caused this Interest Election Request to be executed and delivered
by its duly authorized officer as of the date first written above.

 

DUCOMMUN INCORPORATED By:       Name:     Title:  

 

E-3

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EXHIBIT F

[Form of]

JOINDER AGREEMENT

Reference is made to the Credit Agreement, dated as of June 28, 2011 (the
“Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given to it in Article I of
the Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE
SECURITIES (USA) LLC, as joint lead arrangers (in such capacity, “Arrangers”),
UBS LOAN FINANCE LLC, as swingline lender (in such capacity, “Swingline
Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and as collateral
agent (in such capacity, “Collateral Agent”) for the Secured Parties and the
Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in
such capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit.

W I T N E S S E T H:

WHEREAS, the Guarantors have entered into the Credit Agreement and the Security
Agreement in order to induce the Lenders to make the Loans and the Issuing Bank
to issue Letters of Credit to or for the benefit of Borrower;

WHEREAS, pursuant to Section 5.11(b) of the Credit Agreement, each Wholly-Owned
Domestic Subsidiary (except for any Immaterial Subsidiary) that was not in
existence on the date of the Credit Agreement is required to become a Guarantor
under the Credit Agreement by executing a Joinder Agreement. The undersigned
Subsidiary (the “New Guarantor”) is executing this joinder agreement (“Joinder
Agreement”) to the Credit Agreement in order to induce the Lenders to make
additional Revolving Loans and the Issuing Bank to issue Letters of Credit and
as consideration for the Loans previously made and Letters of Credit previously
issued.

NOW, THEREFORE, the Administrative Agent, Collateral Agent and the New Guarantor
hereby agree as follows:

1. Guarantee. In accordance with Section 5.11(b) of the Credit Agreement, the
New Guarantor by its signature below becomes a Guarantor under the Credit
Agreement with the same force and effect as if originally named therein as a
Guarantor.

2. Representations and Warranties. The New Guarantor hereby (a) agrees to all
the terms and provisions of the Credit Agreement applicable to it as a Guarantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct in all
material respects (except that any representation and warranty that is qualified
as to “materiality” or “Material Adverse Effect” shall be true and correct in
all respects) on and as of the date hereof. Each reference to a Guarantor in the
Credit Agreement shall be deemed to include the New Guarantor. The New Guarantor
hereby attaches supplements to the schedules to the Credit Agreement applicable
to it to the extent relevant.

 

F-1

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3. Severability. Any provision of this Joinder Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

4. Counterparts. This Joinder Agreement may be executed in counterparts, each of
which shall constitute an original. Delivery of an executed signature page to
this Joinder Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Joinder Agreement.

5. No Waiver. Except as expressly supplemented hereby, the Credit Agreement
shall remain in full force and effect.

6. Notices. All notices, requests and demands to or upon the New Guarantor, any
Agent or any Lender shall be governed by the terms of Section 10.01 of the
Credit Agreement.

7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[Signature Pages Follow]

 

F-4

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

 

[NEW GUARANTOR] By:       Name:     Title:   Address for Notices:

 

UBS AG, STAMFORD BRANCH,
as Administrative Agent and Collateral Agent

By:       Name:     Title:  

By:       Name:     Title:  

 

F-4

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[Note: Schedules to be attached.]

 

F-4

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EXHIBIT G

[Form of]

LANDLORD ACCESS AGREEMENT

 

RECORDING REQUESTED BY:

Latham & Watkins LLP

 

AND WHEN RECORDED MAIL TO:

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022-4802

Attn: Tamara Katz, Esq.

 

Re: [NAME OF MORTGAGOR]

 

Location: [PROPERTY]

 

Municipality:

 

County:

 

State:

 

   

Space above this line for recorder’s use only

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING

This MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE
FILING, dated as of                                              , 20      (as
it may be amended, supplemented or otherwise modified from time to time, this
“Mortgage”), by and from [NAME OF MORTGAGOR], a
                                                     , with an address at
                                         
                                                     (“Mortgagor”) to UBS AG,
STAMFORD BRANCH, with an address at 677 Washington Boulevard, 6th Floor,
Stamford, Connecticut 06901 as Collateral Agent for the benefit of the Secured
Parties (in such capacity, together with its successors and assigns,
“Mortgagee”).

RECITALS:

WHEREAS, reference is made to that certain Credit Agreement, dated as of the
date hereof (as it may be amended, amended and restated, restated, replaced,
supplemented or otherwise modified, the “Credit Agreement”), entered into by and
among DUCOMMUN INCORPORATED, a Delaware corporation (“Borrower”), the Subsidiary
Guarantors (as defined therein), the Lenders (as defined therein), UBS
SECURITIES LLC and CREDIT SUISSE SECURITIES (USA) LLC, as joint lead arrangers,
UBS LOAN FINANCE LLC, as swingline lender, UBS AG, STAMFORD BRANCH, as an
issuing bank, as administrative agent for the Lenders and as collateral agent
(in such capacity, “Collateral Agent”) for the Secured Parties and the Issuing
Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent, CREDIT
SUISSE SECURITIES (USA) LLC, as syndication agent, and BANK OF AMERICA, N.A., as
an issuing bank.

 

G-1

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WHEREAS, either (a) Mortgagor is Borrower or (b) Mortgagor is the wholly owned
subsidiary of Borrower or (c) Borrower directly or indirectly owns a controlling
interest in Mortgagor or (d) Borrower is the sole member or a member of
Mortgagor or (e) Borrower is the general or managing partner of Mortgagor, as a
result of any of which Mortgagor is a direct or indirect beneficiary of the
Loans and other accommodations of Lenders and Lender Counterparties as set forth
in the Credit Agreement and may receive advances therefrom, whether or not
Mortgagor is a party to the Credit Agreement;

WHEREAS, in consideration of the making of the Loan and other accommodations of
Lenders as set forth in the Credit Agreement, Mortgagor has agreed, subject to
the terms and conditions hereof, each other Loan Document (as defined in the
Credit Agreement), to secure Mortgagor’s obligations under the Loan Documents as
set forth herein; and

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Mortgagee and Mortgagor agree as follows:

SECTION 1. DEFINITIONS

1.1 Definitions. Capitalized terms used herein (including the recitals hereto)
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement. In addition, as used herein, the following terms shall have
the following meanings:

“Indebtedness” shall have the meaning ascribed to it in the Credit Agreement.

“Mortgaged Property” means all of Mortgagor’s interest in (i) the real property
described in Exhibit A, together with any greater or additional estate therein
as hereafter may be acquired by Mortgagor (the “Land”); (ii) all improvements
now owned or hereafter acquired by Mortgagor, now or at any time situated,
placed or constructed upon the Land subject to the Permitted Liens, (the
“Improvements”; the Land and Improvements are collectively referred to as the
“Premises”); (iii) all materials, supplies, equipment, apparatus and other items
of personal property now owned or hereafter acquired by Mortgagor and now or
hereafter attached to, installed in or used in connection with any of the
Improvements or the Land, and water, gas, electrical, telephone, storm and
sanitary sewer facilities and all other utilities whether or not situated in
easements (the “Fixtures”); (iv) all right, title and interest of Mortgagor in
and to all goods, accounts, general intangibles, instruments, documents, chattel
paper and all other personal property of any kind or character, including such
items of personal property as defined in the UCC (defined below), now owned or
hereafter acquired by Mortgagor and now or hereafter affixed to, placed upon,
used in connection with, arising from or otherwise related to the Premises (the
“Personalty”); (v) all reserves, escrows or impounds required under the Credit
Agreement and all deposit accounts maintained by Mortgagor with respect to the
Mortgaged Property (the “Deposit Accounts”); (vi) all leases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) which grant to any Person

 

G-2

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

(other than Mortgagor) a possessory interest in, or the right to use, all or any
part of the Mortgaged Property, together with all related security and other
deposits subject to depositors rights and requirements of law (the “Leases”);
(vii) all of the rents, revenues, royalties, income, proceeds, profits, security
and other types of deposits subject to depositors rights and requirements of
law, and other benefits paid or payable by parties to the Leases for using,
leasing, licensing possessing, operating from, residing in, selling or otherwise
enjoying the Mortgaged Property (the “Rents”), (viii) to the extent mortgageable
or assignable all other agreements, such as construction contracts, architects’
agreements, engineers’ contracts, utility contracts, maintenance agreements,
management agreements, service contracts, listing agreements, guaranties,
warranties, permits, licenses, certificates and entitlements in any way relating
to the construction, use, occupancy, operation, maintenance, enjoyment or
ownership of the Mortgaged Property (the “Property Agreements”); (ix) to the
extent mortgageable or assignable all rights, privileges, tenements,
hereditaments, rights-of-way, easements, appendages and appurtenances
appertaining to the foregoing; (x) all property tax refunds payable to Mortgagor
(the “Tax Refunds”); (xi) all accessions, replacements and substitutions for any
of the foregoing and all proceeds thereof (the “Proceeds”); (xii) all insurance
policies, unearned premiums therefor and proceeds from such policies covering
any of the above property now or hereafter acquired by Mortgagor (the
“Insurance”); and (xiii) all of Mortgagor’s right, title and interest in and to
any awards, damages, remunerations, reimbursements, settlements or compensation
heretofore made or hereafter to be made by any governmental authority pertaining
to the Land, Improvements, Fixtures or Personalty (the “Condemnation Awards”).
As used in this Mortgage, the term “Mortgaged Property” shall mean all or, where
the context permits or requires, any portion of the above or any interest
therein.

“Obligations” means all of the agreements, covenants, conditions, warranties,
representations and other obligations of Mortgagor (including, without
limitation, the obligation to repay the Indebtedness) under the Credit
Agreement, any other Loan Documents.

“UCC” means the Uniform Commercial Code of New York or, if the creation,
perfection and enforcement of any security interest herein granted is governed
by the laws of a state other than New York, then, as to the matter in question,
the Uniform Commercial Code in effect in that state.

1.2 Interpretation. References to “Sections” shall be to Sections of this
Mortgage unless otherwise specifically provided. Section headings in this
Mortgage are included herein for convenience of reference only and shall not
constitute a part of this Mortgage for any other purpose or be given any
substantive effect. The rules of construction set forth in the Credit Agreement
shall be applicable to this Mortgage mutatis mutandis. If any conflict or
inconsistency exists between this Mortgage and the Credit Agreement, the Credit
Agreement shall govern.

SECTION 2. GRANT

To secure the full and timely payment of the Indebtedness and the full
performance of the Obligations, Mortgagor MORTGAGES, GRANTS, BARGAINS, ASSIGNS,
SELLS and CONVEYS WITH POWER OF SALE (if available under State law), to
Mortgagee the

 

G-3

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

Mortgaged Property, subject, however, to the Permitted Liens, TO HAVE AND TO
HOLD the Mortgaged Property to Mortgagee, and Mortgagor does hereby bind itself,
its successors and assigns to WARRANT AND FOREVER DEFEND the title to the
Mortgaged Property unto Mortgagee for so long as any of the Obligations remain
outstanding, upon the trust, terms and conditions contained herein.

SECTION 3. WARRANTIES, REPRESENTATIONS AND COVENANTS

3.1 Title. Mortgagor represents and warrants to Mortgagee that except for the
Permitted Liens, (a) Mortgagor owns the Mortgaged Property free and clear of any
liens, claims or interests, and (b) this Mortgage creates valid, enforceable
first priority liens and security interests against the Mortgaged Property.

3.2 First Lien Status. Mortgagor shall preserve and protect the first lien and
security interest status of this Mortgage and the other Loan Documents to the
extent related to the Mortgaged Property. If any lien or security interest other
than a Permitted Lien is asserted against the Mortgaged Property, Mortgagor
shall promptly, and at its expense, (a) give Mortgagee a detailed written notice
of such lien or security interest (including origin, amount and other terms),
and (b) pay the underlying claim in full or take such other action so as to
cause it to be released.

3.3 Payment and Performance. Mortgagor shall pay the Indebtedness when due under
the Loan Documents and shall perform the Obligations in full when they are
required to be performed as required under the Loan Documents.

3.4 Replacement of Fixtures and Personalty. Except as otherwise permitted in the
Credit Agreement, Mortgagor shall not, without the prior written consent of
Mortgagee, permit any of the Fixtures or Personalty to be removed at any time
from the Land or Improvements, unless the removed item is removed temporarily
for maintenance and repair or, if removed permanently, is obsolete and is
replaced by an article of equal or better suitability and value, owned by
Mortgagor subject to the liens and security interests of this Mortgage and the
other Loan Documents, and free and clear of any other lien or security interest
except such as may be permitted under the Credit Agreement or first approved in
writing by Mortgagee.

3.5 Inspection. Mortgagor shall permit Mortgagee, and Mortgagee’s agents,
representatives and employees, upon reasonable prior notice to Mortgagor, to
inspect the Mortgaged Property and all books and records of Mortgagor located
thereon, and to conduct such environmental and engineering studies as Mortgagee
may reasonably require; provided, such inspections and studies shall not
materially interfere with the use and operation of the Mortgaged Property and
subject to any restrictions as set forth in Schedule A hereto.

3.6 Covenants Running with the Land. All Obligations contained in this Mortgage
are intended by Mortgagor and Mortgagee to be, and shall be construed as,
covenants running with the Mortgaged Property. As used herein, “Mortgagor” shall
refer to the party named in the first paragraph of this Mortgage and to any
subsequent owner of all or any portion of the Mortgaged Property. All Persons
who may have or acquire an interest in the Mortgaged

 

G-4

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

Property shall be deemed to have notice of, and be bound by, the terms of the
Credit Agreement and the other Loan Documents; however, no such party shall be
entitled to any rights thereunder without the prior written consent of
Mortgagee. In addition, all of the covenants of Mortgagor in any Loan Document
party thereto are incorporated herein by reference and, together with covenants
in this Section, shall be covenants running with the land.

3.7 Condemnation Awards and Insurance Proceeds. Except as otherwise stated in
the Credit Agreement, Mortgagor assigns all awards and compensation to which it
is entitled for any condemnation or other taking, or any purchase in lieu
thereof, to Mortgagee and authorizes Mortgagee to collect and receive such
awards and compensation and to give proper receipts and acquittances therefor,
subject to the terms of the Credit Agreement. Mortgagor assigns to Mortgagee all
proceeds of any insurance policies insuring against loss or damage to the
Mortgaged Property, subject to the terms of the Credit Agreement. Mortgagor
authorizes Mortgagee to collect and receive such proceeds and authorizes and
directs the issuer of each of such insurance policies to make payment for all
such losses directly to Mortgagee, instead of to Mortgagor and Mortgagee
jointly, subject to the terms of the Credit Agreement.

3.8 Change in Tax Law. Upon the enactment of or change in (including, without
limitation, a change in interpretation of) any applicable law (i) deducting or
allowing Mortgagor to deduct from the value of the Mortgaged Property for the
purpose of taxation any lien or security interest thereon or (ii) subjecting
Mortgagee or any of the Lenders to any tax or changing the basis of taxation of
mortgages, deeds of trust, or other liens or debts secured thereby, or the
manner of collection of such taxes, in each such case, so as to affect this
Mortgage, the Obligations or Mortgagee, and the result is to increase the taxes
imposed upon or the cost to Mortgagee of maintaining the Obligations, or to
reduce the amount of any payments receivable hereunder, then, and in any such
event, Mortgagor shall, on demand, pay to Mortgagee and the Lenders additional
amounts to compensate for such increased costs or reduced amounts, provided that
if any such payment or reimbursement shall be unlawful, or taxable to Mortgagee,
or would constitute usury or render the Indebtedness wholly or partially
usurious under applicable law, then Mortgagor shall pay or reimburse Mortgagee
or the Lenders for payment of the lawful and non-usurious portion thereof.

3.9 Mortgage Tax. Except as otherwise stated in the Credit Agreement, Mortgagor
shall (i) pay when due any tax imposed upon it or upon Mortgagee or any Lender
or Lender Counterparty pursuant to the tax law of the state in which the
Mortgaged Property is located in connection with the execution, delivery and
recordation of this Mortgage and any of the other Loan Documents, and
(ii) prepare, execute and file any form required to be prepared, executed and
filed in connection therewith.

3.10 Reduction Of Secured Amount. In the event that the amount secured by the
Mortgage is less than the Indebtedness, then the amount secured shall be reduced
only by the last and final sums that Borrower repays with respect to the
Indebtedness and shall not be reduced by any intervening repayments of the
Indebtedness unless arising from the Mortgaged Property. So long as the balance
of the Indebtedness exceeds the amount secured, any payments of the Indebtedness
shall not be deemed to be applied against, or to reduce, the portion of the
Indebtedness secured by this Mortgage. Such payments shall instead be deemed to
reduce only such portions of the Indebtedness as are secured by other collateral
located outside of the state in which the Mortgaged Property is located or as
are unsecured.

 

G-5

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3.11 Prohibited Transfers. Except as expressly permitted by the Credit
Agreement, Mortgagor shall not, without the prior written consent of Mortgagee,
sell, lease or convey all or any part of the Mortgaged Property.

SECTION 4. DEFAULT AND FORECLOSURE

4.1 Remedies. If an Event of Default has occurred and is continuing beyond any
applicable notice, cure or grace period, Mortgagee may, at Mortgagee’s election,
exercise any or all of the following rights, remedies and recourses: (a) declare
the Indebtedness to be immediately due and payable, without further notice,
presentment, protest, notice of intent to accelerate, notice of acceleration,
demand or action of any nature whatsoever (each of which hereby is expressly
waived by Mortgagor), whereupon the same shall become immediately due and
payable; (b) enter the Mortgaged Property and take exclusive possession thereof
and of all books, records and accounts relating thereto or located thereon. If
Mortgagor remains in possession of the Mortgaged Property after an Event of
Default and without Mortgagee’s prior written consent, Mortgagee may invoke any
legal remedies to dispossess Mortgagor; (c) hold, lease, develop, manage,
operate or otherwise use the Mortgaged Property upon such terms and conditions
as Mortgagee may deem reasonable under the circumstances (making such repairs,
alterations, additions and improvements and taking other actions, from time to
time, as Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions hereof; (d) institute proceedings for the complete foreclosure of
this Mortgage, either by judicial action or by power of sale, in which case the
Mortgaged Property may be sold for cash or credit in one or more parcels. With
respect to any notices required or permitted under the UCC, Mortgagor agrees
that ten (10) days’ prior written notice shall be deemed commercially
reasonable. At any such sale by virtue of any judicial proceedings, power of
sale, or any other legal right, remedy or recourse, the title to and right of
possession of any such property shall pass to the purchaser thereof, and to the
fullest extent permitted by law, Mortgagor shall be completely and irrevocably
divested of all of its right, title, interest, claim, equity, equity of
redemption, and demand whatsoever, either at law or in equity, in and to the
property sold and such sale shall be a perpetual bar both at law and in equity
against Mortgagor, and against all other Persons claiming or to claim the
property sold or any part thereof, by, through or under Mortgagor. Mortgagee or
any of the Lenders may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee shall credit the portion of the purchase price that
would be distributed to Mortgagee against the Indebtedness in lieu of paying
cash. In the event this Mortgage is foreclosed by judicial action, appraisement
of the Mortgaged Property is waived; (e) make application to a court of
competent jurisdiction for, and obtain from such court as a matter of strict
right and without notice to Mortgagor or regard to the adequacy of the Mortgaged
Property for the repayment of the Indebtedness, the appointment of a receiver of
the Mortgaged Property, and Mortgagor irrevocably consents to such appointment.
Any such receiver shall have all the usual powers and duties of receivers in
similar cases, including the full power to rent, maintain and otherwise operate
the Mortgaged Property upon such terms as may be approved by the court, and
shall apply such Rents in accordance with the provisions hereof; and/or
(f) exercise all other rights, remedies and recourses granted under the Loan
Documents or otherwise available at law or in equity.

 

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4.2 Separate Sales. The Mortgaged Property may be sold in one or more parcels
and in such manner and order as Mortgagee in its sole discretion may elect; the
right of sale arising out of any Event of Default shall not be exhausted by any
one or more sales.

4.3 Remedies Cumulative, Concurrent and Nonexclusive. Mortgagee shall have all
rights, remedies and recourses granted in the Loan Documents and available at
law or equity (including the UCC), which rights (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently against
Mortgagor or others obligated under the Loan Documents, or against the Mortgaged
Property, or against any one or more of them, at the sole discretion of
Mortgagee or the Lenders, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive. No action by
Mortgagee or the Lenders in the enforcement of any rights, remedies or recourses
under the Loan Documents or otherwise at law or equity shall be deemed to cure
any Event of Default.

4.4 Release of and Resort to Collateral. Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created in
or evidenced by the Loan Documents or their status as a first and prior lien and
security interest in and to the Mortgaged Property. For payment of the
Indebtedness, Mortgagee may resort to any other security in such order and
manner as Mortgagee may elect.

4.5 Waiver of Redemption, Notice and Marshalling of Assets. To the fullest
extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives
and releases (a) all benefit that might accrue to Mortgagor by virtue of any
present or future statute of limitations or law or judicial decision exempting
the Mortgaged Property from attachment, levy or sale on execution or providing
for any stay of execution, exemption from civil process, redemption or extension
of time for payment; (b) all notices of any Event of Default or of Mortgagee’s
election to exercise or the actual exercise of any right, remedy or recourse
provided for under the Loan Documents; and (c) any right to a marshalling of
assets or a sale in inverse order of alienation. Borrower waives the statutory
right of redemption and equity of redemption.

4.6 Discontinuance of Proceedings. If Mortgagee or the Lenders shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Mortgagee or the Lenders shall have the unqualified right to do so and,
in such an event, Mortgagor and Mortgagee or the Lenders shall be restored to
their former positions with respect to the Obligations, the Loan Documents, the
Mortgaged Property and otherwise, and the rights, remedies, recourses and powers
of Mortgagee or the Lenders shall continue as if the right, remedy or recourse
had never been invoked, but no such discontinuance or abandonment shall waive
any Event of Default which may then exist or the right of Mortgagee or the
Lenders thereafter to exercise any right, remedy or recourse under the Loan
Documents for such Event of Default.

 

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4.7 Application of Proceeds. The proceeds of any sale of, and the Rents and
other amounts generated by the holding, leasing, management, operation or other
use of the Mortgaged Property, shall be applied by Mortgagee (or the receiver,
if one is appointed) in accordance with the terms of the Credit Agreement.

4.8 Occupancy After Foreclosure. Any sale of the Mortgaged Property or any part
thereof will divest all right, title and interest of Mortgagor in and to the
property sold. Subject to applicable law, any purchaser at a foreclosure sale
will receive immediate possession of the property purchased. If Mortgagor
retains possession of such property or any part thereof subsequent to such sale,
Mortgagor will be considered a tenant at sufferance of the purchaser, and will,
if Mortgagor remains in possession after demand to remove, be subject to
eviction and removal, forcible or otherwise, with or without process of law.

4.9 Additional Advances and Disbursements; Costs of Enforcement. If any Event of
Default exists, Mortgagee and each of the Lenders shall have the right, but not
the obligation, to cure such Event of Default in the name and on behalf of
Mortgagor in accordance with the Credit Agreement. All sums advanced and
expenses incurred at any time by Mortgagee or any Lender under this Section, or
otherwise under this Mortgage or any of the other Loan Documents or applicable
law, shall bear interest from the date that such sum is advanced or expense
incurred if not repaid within five (5) days after demand therefor, to and
including the date of reimbursement, computed at the rate or rates at which
interest is then computed on the Indebtedness, and all such sums, together with
interest thereon, shall be secured by this Mortgage. Mortgagor shall pay all
expenses (including reasonable attorneys’ fees and expenses) of or incidental to
the perfection and enforcement of this Mortgage and the other Loan Documents, or
the enforcement, compromise or settlement of the Indebtedness or any claim under
this Mortgage and the other Loan Documents, and for the curing thereof, or for
defending or asserting the rights and claims of Mortgagee or the Lenders in
respect thereof, by litigation or otherwise.

4.10 No Mortgagee in Possession. Neither the enforcement of any of the remedies
under this Section, the assignment of the Rents and Leases under Section 5, the
security interests under Section 6, nor any other remedies afforded to Mortgagee
or the Lenders under the Loan Documents, at law or in equity shall cause
Mortgagee or any Lender to be deemed or construed to be a mortgagee in
possession of the Mortgaged Property, to obligate Mortgagee or any Lender to
lease the Mortgaged Property or attempt to do so, or to take any action, incur
any expense, or perform or discharge any obligation, duty or liability
whatsoever under any of the Leases or otherwise.

SECTION 5. ASSIGNMENT OF RENTS AND LEASES

5.1 Assignment. In furtherance of and in addition to the assignment made by
Mortgagor herein, Mortgagor hereby absolutely and unconditionally assigns,
sells, transfers and conveys to Mortgagee all of its right, title and interest
in and to all Leases, whether now existing or hereafter entered into, and all of
its right, title and interest in and to all Rents. This assignment is an
absolute assignment and not an assignment for additional security only. So long
as no Event of

 

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Default shall have occurred and be continuing, Mortgagor shall have a revocable
license from Mortgagee to exercise all rights extended to the landlord under the
Leases, including the right to receive and collect all Rents and to hold the
Rents in trust for use in the payment and performance of the Obligations and to
otherwise use the same. The foregoing license is granted subject to the
conditional limitation that no Event of Default shall have occurred and be
continuing. Upon the occurrence and during the continuance of an Event of
Default, whether or not legal proceedings have commenced, and without regard to
waste, adequacy of security for the Obligations or solvency of Mortgagor, the
license herein granted shall automatically expire and terminate, without notice
by Mortgagee (any such notice being hereby expressly waived by Mortgagor).

5.2 Perfection Upon Recordation. Mortgagor acknowledges that Mortgagee has taken
all reasonable actions necessary to obtain, and that upon recordation of this
Mortgage Mortgagee shall have, to the extent permitted under applicable law, a
valid and fully perfected, first priority, present assignment of the Rents
arising out of the Leases and all security for such Leases subject to the
Permitted Liens and in the case of security deposits, rights of depositors and
requirements of law. Mortgagor acknowledges and agrees that upon recordation of
this Mortgage Mortgagee’s interest in the Rents shall be deemed to be fully
perfected, “choate” and enforced as to Mortgagor and all third parties,
including, without limitation, any subsequently appointed trustee in any case
under Title 11 of the United States Code (the “Bankruptcy Code”), without the
necessity of commencing a foreclosure action with respect to this Mortgage,
making formal demand for the Rents, obtaining the appointment of a receiver or
taking any other affirmative action.

5.3 Bankruptcy Provisions. Without limitation of the absolute nature of the
assignment of the Rents hereunder, Mortgagor and Mortgagee agree that (a) this
Mortgage shall constitute a “security agreement” for purposes of Section 552(b)
of the Bankruptcy Code, (b) the security interest created by this Mortgage
extends to property of Mortgagor acquired before the commencement of a case in
bankruptcy and to all amounts paid as Rents, and (c) such security interest
shall extend to all Rents acquired by the estate after the commencement of any
case in bankruptcy.

SECTION 6. SECURITY AGREEMENT

6.1 Security Interest. This Mortgage constitutes a “security agreement” on
personal property within the meaning of the UCC and other applicable law and
with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts,
Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards.
To this end, Mortgagor grants to Mortgagee a first and prior security interest
in the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance, Condemnation Awards and all other
Mortgaged Property which is personal property to secure the payment of the
Indebtedness and performance of the Obligations subject to the Permitted Liens,
and agrees that Mortgagee shall have all the rights and remedies of a secured
party under the UCC with respect to such property. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the
Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax
Refunds, Proceeds, Insurance and Condemnation Awards sent to Mortgagor at least
ten (10) days prior to any action under the UCC shall constitute reasonable
notice to Mortgagor.

 

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6.2 Financing Statements. Mortgagor shall execute and deliver to Mortgagee, in
form and substance satisfactory to Mortgagee, such financing statements and such
further assurances as Mortgagee may, from time to time, reasonably consider
necessary to create, perfect and preserve Mortgagee’s security interest
hereunder and Mortgagee may cause such statements and assurances to be recorded
and filed, at such times and places as may be required or permitted by law to so
create, perfect and preserve such security interest. Mortgagor’s chief executive
office is at the address set forth on Appendix B to the Credit Agreement.

6.3 Fixture Filing. This Mortgage shall also constitute a “fixture filing” for
the purposes of the UCC against all of the Mortgaged Property which is or is to
become fixtures. Information concerning the security interest herein granted may
be obtained at the addresses of Debtor (Mortgagor) and Secured Party (Mortgagee)
as set forth in the first paragraph of this Mortgage.

SECTION 7. ATTORNEY-IN-FACT

Mortgagor hereby irrevocably appoints Mortgagee and its successors and assigns,
as its attorney-in-fact, which agency is coupled with an interest and with full
power of substitution, (a) to execute and/or record any notices of completion,
cessation of labor or any other notices that Mortgagee deems appropriate to
protect Mortgagee’s interest, if Mortgagor shall fail to do so within ten
(10) days after written request by Mortgagee, (b) upon the issuance of a deed
pursuant to the foreclosure of this Mortgage or the delivery of a deed in lieu
of foreclosure, to execute all instruments of assignment, conveyance or further
assurance with respect to the Leases, Rents, Deposit Accounts, Fixtures,
Personalty, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Mortgagee’s security interests and rights in or to any of the Mortgaged
Property, if Mortgagor shall fail to do so within ten (10) days after written
request by Mortgagee, and (d) while any Event of Default exists, to perform any
obligation of Mortgagor hereunder; provided, (i) Mortgagee shall not under any
circumstances be obligated to perform any obligation of Mortgagor; (ii) any sums
advanced by Mortgagee in such performance shall be added to and included in the
definition of Indebtedness and shall bear interest at the rate or rates at which
interest is then computed on the Indebtedness provided that from the date
incurred said advance is not repaid within five (5) days demand therefor;
(iii) Mortgagee as such attorney-in-fact shall only be accountable for such
funds as are actually received by Mortgagee; and (iv) Mortgagee shall not be
liable to Mortgagor or any other person or entity for any failure to take any
action which it is empowered to take under this Section.

 

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SECTION 8. MORTGAGEE AS AGENT

Mortgagee has been appointed to act as Mortgagee hereunder by Lenders and, by
their acceptance of the benefits hereof, Lender Counterparties. Mortgagee shall
be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including the release or substitution of
Mortgaged Property), solely in accordance with this Mortgage and the Credit
Agreement; provided, Mortgagee shall exercise, or refrain from exercising, any
remedies provided for herein in accordance with the instructions of Required
Lenders. In furtherance of the foregoing provisions of this Section, each Lender
Counterparty, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Mortgaged Property, it
being understood and agreed by such Lender Counterparty that all rights and
remedies hereunder may be exercised solely by Mortgagee for the benefit of
Lenders and Lender Counterparties in accordance with the terms of this Section.
Mortgagee shall at all times be the same Person that is Administrative Agent
under the Credit Agreement. Written notice of resignation by Administrative
Agent pursuant to terms of the Credit Agreement shall also constitute notice of
resignation as Mortgagee under this Mortgage; removal of Administrative Agent
pursuant to the terms of the Credit Agreement shall also constitute removal as
Mortgagee under this Mortgage; and appointment of a successor Administrative
Agent pursuant to the terms of the Credit Agreement shall also constitute
appointment of a successor Mortgagee under this Mortgage. Upon the acceptance of
any appointment as Administrative Agent under the terms of the Credit Agreement
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Mortgagee under this Mortgage, and the
retiring or removed Mortgagee under this Mortgage shall promptly (i) transfer to
such successor Mortgagee all sums, securities and other items of Mortgaged
Property held hereunder, together with all records and other documents necessary
or appropriate in connection with the performance of the duties of the successor
Mortgagee under this Mortgage, and (ii) execute and deliver to such successor
Mortgagee such amendments to financing statements, and take such other actions,
as may be necessary or appropriate in connection with the assignment to such
successor Mortgagee of the security interests created hereunder, whereupon such
retiring or removed Mortgagee shall be discharged from its duties and
obligations under this Mortgage thereafter accruing. After any retiring or
removed Administrative Agent’s resignation or removal hereunder as Mortgagee,
the provisions of this Mortgage shall continue to enure to its benefit as to any
actions taken or omitted to be taken by it under this Mortgage while it was
Mortgagee hereunder.

SECTION 9. TERMINATION AND RELEASE.

Upon payment and performance in full of the Obligations, subject to and in
accordance with the terms and provisions of the Credit Agreement, Mortgagee, at
Mortgagor’s expense, shall release the liens and security interests created by
this Mortgage or reconvey the Mortgaged Property to Mortgagor.

SECTION 10. LOCAL LAW PROVISIONS

[to be provided, if any, by local counsel or title company]

 

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SECTION 11. MULTI-SITE REAL ESTATE TRANSACTIONS.

Mortgagor acknowledges that this Mortgage is one of a number of Mortgages and
other security documents (“Other Mortgages”) that secure the Obligations.
Mortgagor agrees that, subject to the terms of Section 9 hereof, the lien of
this Mortgage shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of Mortgagee, and
without limiting the generality of the foregoing, the lien hereof shall not be
impaired by any acceptance by Mortgagee of any security for or guarantees of the
Obligations, or by any failure, neglect or omission on the part of Mortgagee to
realize upon or protect any Obligation or any collateral security therefor
including the Other Mortgages. Subject to the terms of Section 9 hereof, the
lien of this Mortgage shall not in any manner be impaired or affected by any
release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations or of any of the
collateral security therefor, including the Other Mortgages or any guarantee
thereof, and, to the fullest extent permitted by applicable law, Mortgagee may
at its discretion foreclose, exercise any power of sale, or exercise any other
remedy available to it under any or all of the Other Mortgages without first
exercising or enforcing any of its rights and remedies hereunder. Such exercise
of Mortgagee’s rights and remedies under any or all of the Other Mortgages shall
not in any manner impair the indebtedness hereby secured or the lien of this
Mortgage and any exercise of the rights and remedies of Mortgagee hereunder
shall not impair the lien of any of the Other Mortgages or any of Mortgagee’s
rights and remedies thereunder. To the fullest extent permitted by applicable
law, Mortgagor specifically consents and agrees that Mortgagee may exercise its
rights and remedies hereunder and under the Other Mortgages separately or
concurrently and in any order that it may deem appropriate and waives any right
of subrogation.

SECTION 12. MISCELLANEOUS

12.1 Notices. Any notice and other communication required or permitted to be
given under this Mortgage shall be given in accordance with the notice
provisions of the Credit Agreement to the address set forth therein.

12.2 Governing Law. THE PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION,
PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE
MORTGAGED PROPERTY IS LOCATED. ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE
RIGHTS AND OBLIGATIONS OF MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD
RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW
YORK.

12.3 Severability. In case any provision in or obligation under this Mortgage
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.

 

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12.4 Credit Agreement. In the event of any conflict or inconsistency with the
terms of this Mortgage and the terms of the Credit Agreement, the Credit
Agreement shall control.

12.5 Time of Essence. Time is of the essence of this Mortgage.

12.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER
ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT
IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS
AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 12.6 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.

12.7 Successors and Assigns. This Mortgage shall be binding upon and inure to
the benefit of Mortgagee and Mortgagor and their respective successors and
assigns. Mortgagor shall not, without the prior written consent of Mortgagee,
assign any rights, duties or obligations hereunder.

12.8 No Waiver. Any failure by Mortgagee to insist upon strict performance of
any of the terms, provisions or conditions of the Loan Documents shall not be
deemed to be a waiver of same, and Mortgagee shall have the right at any time to
insist upon strict performance of all of such terms, provisions and conditions.
No failure or delay on the part of Mortgagee or any Lender in the exercise of
any power, right or privilege hereunder or under any other Loan

 

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Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Mortgage and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

12.9 Subrogation. To the extent proceeds of the Loan have been used to
extinguish, extend or renew any indebtedness against the Mortgaged Property,
then Mortgagee shall be subrogated to all of the rights, liens and interests
existing against the Mortgaged Property and held by the holder of such
indebtedness and such former rights, liens and interests, if any, are not
waived, but are continued in full force and effect in favor of Mortgagee.

12.10 Waiver of Stay, Moratorium and Similar Rights. Mortgagor agrees, to the
full extent that it may lawfully do so, that it will not at any time insist upon
or plead or in any way take advantage of any appraisement, valuation, stay,
marshalling of assets, extension, redemption or moratorium law now or hereafter
in force and effect so as to prevent or hinder the enforcement of the provisions
of this Mortgage or the indebtedness secured hereby, or any agreement between
Mortgagor and Mortgagee or any rights or remedies of Mortgagee.

12.11 Entire Agreement. This Mortgage and the other Loan Documents embody the
entire agreement and understanding between Mortgagee and Mortgagor and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties.

12.12 Counterparts. This Mortgage is being executed in several counterparts, all
of which are identical, except that to facilitate recordation, if the Mortgaged
Property is situated offshore or in more than one county, descriptions of only
those portions of the Mortgaged Property located in the county in which a
particular counterpart is recorded shall be attached as Exhibit A thereto. Each
of such counterparts shall for all purposes be deemed to be an original and all
such counterparts shall together constitute but one and the same instrument.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, Mortgagor has on the date set forth in the acknowledgment
hereto, effective as of the date first above written, caused this instrument to
be duly executed and delivered by authority duly given.

 

[NAME OF MORTGAGOR] By:     Name:   Title:  

 

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[APPROPRIATE NOTARY BLOCK TO BE PROVIDED BY LOCAL COUNSEL]

 

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EXHIBIT A TO

MORTGAGE

Legal Description of Premises: [See attached]

 

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EXHIBIT H

[Form of]

LC REQUEST [AMENDMENT]

Dated (26)

UBS AG, Stamford Branch, as Administrative Agent under the Credit Agreement (as
amended, modified or supplemented from time to time, the “Credit Agreement”),
dated as of June 28, 2011, among Ducommun Incorporated, the Lenders from time to
time party thereto, UBS Securities LLC and Credit Suisse Securities (USA) LLC,
as Joint Lead Arrangers, UBS Loan Finance LLC, as Swingline Lender, UBS AG,
Stamford Branch, as an Issuing Bank, Administrative Agent and Collateral Agent,
Wells Fargo Bank, National Association, as Documentation Agent, Credit Suisse
Securities (USA) LLC, as Syndication Agent, and Bank of America, N.A., as an
Issuing Bank.

677 Washington Boulevard

Stamford, Connecticut 06901

Attention: [            ]

[Name and Address of Issuing Bank

if different from Administrative Agent]

Ladies and Gentlemen:

We hereby request that [name of proposed Issuing Bank], as Issuing Bank under
the Credit Agreement, [issue] [amend] [renew] [extend] [a] [an existing]
[Standby] [Commercial] Letter of Credit for the account of the undersigned(27)
on (28) (the “Date of [Issuance] [Amendment] [Renewal] [Extension]”) in the
aggregate stated amount of (29). [Such Letter of Credit was originally issued on
[date].] The requested Letter of Credit [shall be] [is] denominated in Dollars.

For purposes of this LC Request, unless otherwise defined herein, all
capitalized terms used herein which are defined in the Credit Agreement shall
have the respective meaning provided therein.

 

26  Date of LC Request.

27  Note that if the LC Request is for the account of a Subsidiary, Borrower
shall be a co-applicant, and be jointly and severally liable, with respect to
each Letter of Credit issued for the account or in favor of any Subsidiary.

28  Date of Issuance [Amendment] [Renewal] [Extension] which shall be at least
five Business Days after the date of this LC Request, if this LC Request is
delivered to the Issuing Bank by 11:00 a.m., New York City time (or such shorter
period as is acceptable to the Issuing Bank).

29  Aggregate initial stated amount of Letter of Credit.

 

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The beneficiary of the requested Letter of Credit [will be] [is] (30), and such
Letter of Credit [will be] [is] in support of (31) and [will have] [has] a
stated expiration date of (32). [Describe the nature of the amendment, renewal
or extension.]

We hereby certify that:

(1) The conditions to the [issuance][amendment][renewal][extension] of the
Letter of Credit requested herein specified in Sections [4.02(b), (c), (d) and
(e)]33 of the Credit Agreement are satisfied as of the date hereof.

(2) After giving effect to the request herein, the LC Exposure will not exceed
the LC Commitment and the total Revolving Exposures will not exceed the total
Revolving Commitments.

Copies of all relevant documentation with respect to the supported transaction
are attached hereto.

 

[                                         ] By:       Name:   Title:

 

30  Insert name and address of beneficiary.

31  Insert description of the obligation to which it relates in the case of
Standby Letters of Credit and a description of the commercial transaction which
is being supported in the case of Commercial Letters of Credit.

32  Insert last date upon which drafts may be presented which may not be later
than (x) the date which is one year after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (y) the Letter of Credit Expiration Date,
in each case subject to the auto-renewal provisions set forth in
Section 2.18(c)(ii) of the Credit Agreement to the extent such Letter of Credit
is an Auto-Renewal Letter of Credit.

33  Modify to include only Section 4.02(c) solely in respect of issuances to be
made on the Closing Date.

 

H-2

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EXHIBIT I

[Form of]

LENDER ADDENDUM

Reference is made to the Credit Agreement dated as of June 28, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES
(USA) LLC, as joint lead arrangers (in such capacity, “Arrangers”), UBS LOAN
FINANCE LLC, as swingline lender (in such capacity, “Swingline Lender”), UBS AG,
STAMFORD BRANCH, as an Issuing Bank, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such
capacity, “Collateral Agent”) for the Secured Parties and the Issuing Bank,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in such
capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit.

Upon execution and delivery of this Lender Addendum by the parties hereto as
provided in Section 10.15 of the Credit Agreement, the undersigned hereby
becomes a Lender thereunder having the Commitment set forth in Schedule 1
hereto, effective as of the Closing Date.

THIS LENDER ADDENDUM SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

This Lender Addendum may be executed by one or more of the parties hereto 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 hereof by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.

 

I-1

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IN WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to be
duly executed and delivered by their proper and duly authorized officers as of
this __ day of [            ], 201[    ].

 

,

as a Lender

[Please type legal name of Lender above]

By:       Name:   Title:

 

[If second signature is necessary:] By:       Name:   Title:

 

I-3

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Accepted and agreed:

 

DUCOMMUN INCORPORATED

By:       Name:   Title:

 

UBS AG, STAMFORD BRANCH,

as Administrative Agent

By:       Name:   Title:

 

By:       Name:   Title:

 

I-3

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Schedule 1

COMMITMENTS AND NOTICE ADDRESS

 

1.      Name of Lender:        

Notice Address:

                           

Attention:

       

Telephone:

       

Facsimile:

       

2.      Commitment:

        

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EXHIBIT J

[Form of]

MORTGAGE

WHEN EXECUTED MAIL TO:

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attn: Tamara Katz

Re: [TENANT NAME]

LANDLORD WAIVER AND CONSENT AGREEMENT

This LANDLORD WAIVER AND CONSENT AGREEMENT (this “Agreement”), dated as of
[________, _____], is entered into by [NAME OF LANDLORD] (“Landlord”), for the
benefit of Agent (as defined below).

RECITALS:

WHEREAS, [NAME OF GRANTOR], a [TYPE OF PERSON] (“Tenant”), has possession of and
occupies all or a portion of the property described on Exhibit A annexed hereto
(the “Premises”);

WHEREAS, Tenant’s interest in the Premises arises under the [lease agreement]
(the “Lease”) more particularly described on Exhibit B annexed hereto, pursuant
to which Landlord has rights, upon the terms and conditions set forth therein,
to take possession of, and otherwise assert control over, the Premises;

WHEREAS, reference is made to that certain Credit Agreement, dated as of
June 28, 2011 (as it may be amended, supplemented, restated or otherwise
modified, the “Credit Agreement”; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among DUCOMMUN
INCORPORATED, a Delaware corporation (“Borrower”), the Subsidiary Guarantors,
the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES (USA) LLC, as joint
lead arrangers, UBS LOAN FINANCE LLC, as swingline lender, UBS AG, STAMFORD
BRANCH, as an issuing bank, as administrative agent for the Lenders and as
collateral agent (in such capacity, “Agent”) for the Secured Parties and the
Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent,
CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent, and BANK OF AMERICA,
N.A., as an issuing bank;

WHEREAS, Borrower’s repayment of the extensions of credit made by Lenders under
the Credit Agreement and the loans made by Lenders thereunder will be secured,
in part, by all inventory of Borrower (including all inventory of Borrower now
or hereafter located on the Premises (the “Subject Inventory”)) and all
equipment used in Borrower’s business (including all equipment of Borrower now
or hereafter located on the Premises (the “Subject Equipment”; and, together
with the Subject Inventory, the “Collateral”)); and

WHEREAS, Agent has requested that Landlord execute this Agreement as a condition
to the extension of credit to Tenant under the Credit Agreement.

 

J-1

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NOW, THEREFORE, in consideration of the Premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby represents and warrants to, and covenants and agrees with, Agent
as follows:

1. Landlord hereby (a) waives and releases unto Agent and its successors and
assigns any and all rights granted by or under any present or future laws to
levy or distraint for rent or any other charges which may be due to Landlord
against the Collateral, and any and all other claims, liens and demands of every
kind which it now has or may hereafter have against the Collateral, and
(b) agrees that any rights it may have in or to the Collateral, no matter how
arising (to the extent not effectively waived pursuant to clause (a) of this
paragraph 2), shall be subordinate to the rights of Agent in respect thereof.
Landlord acknowledges that the Collateral is and will remain personal property
and not fixtures even though it may be affixed to or placed on the Premises.

2. Landlord certifies that (a) Landlord is the landlord under the Lease, (b) the
Lease is in full force and effect and has not been amended, modified, or
supplemented except as set forth on Exhibit B annexed hereto, (c) to the
knowledge of Landlord, there is no defense, offset, claim or counterclaim by or
in favor of Landlord against Tenant under the Lease or against the obligations
of Landlord under the Lease, (d) no notice of default has been given under or in
connection with the Lease which has not been cured, and Landlord has no
knowledge of the occurrence of any other default under or in connection with the
Lease, and (e) except as disclosed to Agent on Schedule 1 attached hereto and
made a part hereof, no portion of the Premises is encumbered in any way by any
deed of trust or mortgage lien or ground or superior lease.

3. Landlord consents to the installation or placement of the Collateral on the
Premises, and Landlord grants to Agent a license to enter upon and into the
Premises to do any or all of the following with respect to the Collateral:
assemble, have appraised, display, remove, maintain, prepare for sale or lease,
repair, transfer, or sell (at public or private sale). Any entry upon or into
the Premises, shall be subject to an indemnity from the lenders under the Credit
Agreement reasonably satisfactory to Landlord pursuant to which such lenders and
holders agree to indemnify, defend and hold Landlord harmless from and against
any and all claims, judgments, liabilities, costs and expenses incurred by
Landlord caused solely by Agent entering upon or into the Premises and taking
any of the foregoing actions with respect to the Collateral. Such costs shall
include any damage to the Premises made by Agent in severing and/or removing the
Collateral therefrom.

4. Landlord agrees that it will not prevent Agent or their designees from
entering upon the Premises at all reasonable times to inspect or remove the
Collateral. In the event that Landlord has the right to, and desires to, obtain
possession of the Premises (either through expiration of the Lease or
termination thereof due to the default of Tenant thereunder), Landlord will
deliver notice (the “Landlord’s Notice”) to Agent to that effect. Within the 120
day period after Agent receives the Landlord’s Notice, Agent shall have the
right, but not the obligation, to cause the Collateral to be removed from the
Premises. During such 120 day period, Landlord will not remove the Collateral
from the Premises nor interfere with Agent’s actions in removing the Collateral
from the Premises or Agent’s actions in otherwise enforcing their security
interest in the Collateral. Notwithstanding anything to the contrary in this
paragraph, Agent shall at no time have any obligation to remove the Collateral
from the Premises.

 

J-2

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5. Landlord shall send to Agent a copy of any notice of default under the Lease
sent by Landlord to Tenant. In addition, Landlord shall send to Agent a copy of
any notice received by Landlord of a breach or default under any other lease,
mortgage, deed of trust, security agreement or other instrument to which
Landlord is a party which may affect Landlord’s rights in, or possession of, the
Premises.

6. All notices to Agent under this Agreement shall be in writing and sent to
Agent at its address set forth on the signature page hereof by telefacsimile, by
United States mail, or by overnight delivery service.

7. The provisions of this Agreement shall continue in effect until Landlord
shall have received Agent’s written certification that all amounts advanced
under the Credit Agreement have been paid in full.

8. This Agreement and the rights and obligations of the parties hereunder shall
be governed by, and shall be construed and enforced in accordance with, the
internal laws of the State of New York, without regard to conflicts of laws
principles.

[Remainder of page intentionally left blank]

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

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and delivered as of the day and year first set forth above.

 

[NAME OF LANDLORD] By:     Name: Title:       Attention: Telecopier:

By its acceptance hereof, as of the day and year first set forth above, Agent
agrees to be bound by the provisions hereof.

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

STATE OF _______________)

      ) ss.:

COUNTY OF _____________)

  

On the ____ day of _____________ in the year 20___ before me, the undersigned,
personally appeared _______________________, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

         [SEAL]     NOTARY PUBLIC     State of _________________     My
Commission Expires:

 

STATE OF _______________)

      ) ss.:

COUNTY OF _____________)

  

On the ____ day of _____________ in the year 20___ before me, the undersigned,
personally appeared _______________________, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

         [SEAL]     NOTARY PUBLIC     State of _________________     My
Commission Expires:

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

EXHIBIT A TO

LANDLORD WAIVER AND CONSENT

Legal Description of Premises:

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

EXHIBIT B TO

LANDLORD WAIVER AND CONSENT

Description of Lease:

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

SCHEDULE 1 TO

LANDLORD WAIVER AND CONSENT

Landlord Mortgages

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

EXHIBIT K-1

[Form of]

TERM NOTE

 

$_______________    New York, New York    [Date]

FOR VALUE RECEIVED, the undersigned, DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), hereby promises to pay to the order of [UBS AG,
STAMFORD BRANCH] (the “Lender”) on the Term Loan Maturity Date (as defined in
the Credit Agreement referred to below) in lawful money of the United States and
in immediately available funds, the principal amount of ____________ DOLLARS
($____________), or, if less, the aggregate unpaid principal amount of all Term
Loans of the Lender outstanding under the Credit Agreement referred to below,
which sum shall be due and payable in such amounts and on such dates as are set
forth in the Credit Agreement. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of such Credit Agreement.

The holder of this Note may endorse and attach a schedule to reflect the date,
Type and amount of each Term Loan of the Lender outstanding under the Credit
Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.08 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement dated as of
June 28, 2011 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Borrower, the
Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC and CREDIT SUISSE
SECURITIES (USA) LLC, as joint lead arrangers, UBS LOAN FINANCE LLC, as
swingline lender, UBS AG, STAMFORD BRANCH, as an issuing bank, as administrative
agent for the Lenders and as collateral agent for the Secured Parties and the
Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent,
CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent, and BANK OF AMERICA,
N.A., as an issuing bank, is subject to the provisions thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.

This Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents. Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable all as provided therein.

 

K-1-1

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All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[Signature Page Follows]

 

K-1-3

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

DUCOMMUN INCORPORATED,
as Borrower

By:       Name:     Title:  

 

K-1-3

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EXHIBIT K-2

[Form of]

REVOLVING NOTE

 

$______________

   New York, New York    [Date]

FOR VALUE RECEIVED, the undersigned, DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), hereby promises to pay to the order of [UBS AG,
STAMFORD BRANCH] (the “Lender”) on the Revolving Maturity Date (as defined in
the Credit Agreement referred to below), in lawful money of the United States
and in immediately available funds, the principal amount of the lesser of
(a) ____________ DOLLARS ($____________) and (b) the aggregate unpaid principal
amount of all Revolving Loans of the Lender outstanding under the Credit
Agreement referred to below. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of such Credit Agreement.

The holder of this Note may endorse and attach a schedule to reflect the date,
Type and amount of each Revolving Loan of the Lender outstanding under the
Credit Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.08 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement dated as of
June 28, 2011 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Borrower, the
Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC and CREDIT SUISSE
SECURITIES (USA) LLC, as joint lead arrangers, UBS LOAN FINANCE LLC, as
swingline lender, UBS AG, STAMFORD BRANCH, as an issuing bank, as administrative
agent for the Lenders and as collateral agent for the Secured Parties and the
Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent,
CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent, and BANK OF AMERICA,
N.A., as an issuing bank, is subject to the provisions thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.

This Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents. Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.

 

K-2-1

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All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[Signature Page Follows]

 

K-2-3

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

DUCOMMUN INCORPORATED,
as Borrower

By:       Name:     Title:  

 

K-2-3

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EXHIBIT K-3

[Form of]

SWINGLINE NOTE

 

$____________    New York, New York    [Date]

FOR VALUE RECEIVED, the undersigned, DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), hereby promises to pay to the order of [UBS AG,
STAMFORD BRANCH] (the “Lender”) on the Revolving Maturity Date (as defined in
the Credit Agreement referred to below), in lawful money of the United States
and in immediately available funds, the principal amount of the lesser of
(a) ____________ DOLLARS ($____________) and (b) the aggregate unpaid principal
amount of all Swingline Loans made by Lender to the undersigned pursuant to
Section 2.17 of the Credit Agreement referred to below. Borrower further agrees
to pay interest on the unpaid principal amount hereof in like money at such
office specified in the Credit Agreement from time to time from the date hereof
at the rates and on the dates specified in Section 2.06 of the Credit Agreement.

The holder of this Note may endorse and attach a schedule to reflect the date,
the amount of each Swingline Loan and the date and amount of each payment or
prepayment of principal thereof; provided that the failure of Lender to make
such recordation (or any error in such recordation) shall not affect the
obligations of Borrower hereunder or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, dated as of
June 28, 2011 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Borrower, the
Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC and CREDIT SUISSE
SECURITIES (USA) LLC, as joint lead arrangers, UBS LOAN FINANCE LLC, as
swingline lender, UBS AG, STAMFORD BRANCH, as an issuing bank, as administrative
agent for the Lenders and as collateral agent for the Secured Parties and the
Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent,
CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent, and BANK OF AMERICA,
N.A., as an issuing bank, is subject to the provisions thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.

This Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents. Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note may become, or
may be declared to be, immediately due and payable as provided in the Credit
Agreement.

 

K-3-1

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All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[Signature Page Follows]

 

K-3-3

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

DUCOMMUN INCORPORATED,
as Borrower

By:       Name:     Title:  

 

K-3-3

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EXHIBIT L-1

[Form of]

PERFECTION CERTIFICATE

___________, 2011

Reference is hereby made to (i) that certain Security Agreement dated as of
June 28, 2011 (the “Security Agreement”), between Ducommun Incorporated, a
Delaware corporation (“Borrower”), the Guarantors party thereto (collectively,
the “Guarantors”) and the Collateral Agent (as hereinafter defined) and
(ii) that certain Credit Agreement dated as of June 28, 2011 (the “Credit
Agreement”) among the Borrower, the Guarantors, the lenders party thereto, UBS
Securities LLC and Credit Suisse Securities (USA) LLC, as joint lead arrangers,
UBS Loan Finance LLC, as swingline lender, UBS AG, Stamford Branch, as an
issuing bank, as administrative agent and as collateral agent (in its capacity
as the collateral agent, the “Collateral Agent”), Wells Fargo Bank, National
Association, as documentation agent, Credit Suisse Securities (USA) LLC, as
syndication agent, and Bank of America, N.A., as an issuing bank. Capitalized
terms used but not defined herein have the meanings assigned in the Credit
Agreement.

As used herein, the term “Companies” means Borrower and each of its Domestic
Subsidiaries; and “Company” shall mean any one of them.

The undersigned hereby certify to the Collateral Agent as follows, in each case,
as of the Closing Date:

1. Names.

(a) The exact legal name of each Company, as such name appears in its respective
certificate of incorporation or any other organizational document, is set forth
in Schedule 1(a). Each Company is (i) the type of entity disclosed next to its
name in Schedule 1(a) and (ii) a registered organization except to the extent
disclosed in Schedule 1(a). Also set forth in Schedule 1(a) is the
organizational identification number, if any, of each Company that is a
registered organization, the Federal Taxpayer Identification Number of each
Company and the jurisdiction of formation of each Company.

(b) Set forth in Schedule 1(b) hereto is any other corporate or organizational
names each Company has had in the past five years.

(c) Set forth in Schedule 1(c) is a list of all other names used by each
Company, or any other business or organization to which each Company became the
successor by merger, consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, on any filings with the Internal
Revenue Service at any time between June 1, 2006 and the date hereof. Except as
set forth in Schedule 1(c), no Company has changed its jurisdiction of
organization at any time during the past four months.

2. Current Locations.

(a) The chief executive office of each Company is located at the address set
forth in Schedule 2(a) hereto.

 

L-1-1

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

(b) Set forth in Schedule 2(b) are all locations where each Company maintains
any books or records relating to any Collateral.

(c) Set forth in Schedule 2(c) hereto are the names and addresses of all persons
or entities other than each Company, such as lessees, consignees, warehousemen
or purchasers of chattel paper, which have possession of any of the Collateral
consisting of instruments, chattel paper, inventory or equipment, in each case
with a fair market value in excess of $100,000.

3. Extraordinary Transactions. No Company has been the subject of any merger (or
acquired any assets constituting all or substantially all of the assets of a
person or line of business of a person) or other corporate reorganization in the
past five years, except as described in Schedule 3 attached hereto.

4. File Search Reports. Attached hereto as Schedule 4 is a true and accurate
summary of file search reports from (A) the Uniform Commercial Code filing
offices (i) in each jurisdiction identified in Section 1(a) with respect to each
legal name set forth in Section 1 and (ii) in each jurisdiction described in
Schedule 1(c) or Schedule 3 relating to any of the transactions described in
Schedule 1(c) or Schedule 3 with respect to each legal name of the person or
entity from which each Company purchased or otherwise acquired any of the
Collateral and (B) each filing officer in each real estate recording office
identified on Schedule 7 with respect to real estate on which Collateral
consisting of fixtures is or is to be located.

5. Reserved.

6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule of (i) the
appropriate filing offices for the UCC “all assets” financing statements of each
of the Companies relating to the Security Agreement and (ii) the appropriate
filing offices for mortgages and fixture filings relating to the Mortgaged
Properties.

7. Real Property. (a) Attached hereto as Schedule 7(a) is a list of all (i) real
property owned, leased or otherwise held by each Company as of the Closing Date,
(ii) addresses and uses of each real property and (iii) other information
relating thereto required by such Schedule (including whether such property is
to be subject to a mortgage in favor of the Collateral Agent on behalf of the
Secured Parties (any such property, a “Mortgaged Property”)). Except as
described on Schedule 7(b) attached hereto, no Company has entered into any
leases, subleases, tenancies, franchise agreements, licenses or other occupancy
arrangements as owner, lessor, sublessor, licensor, franchisor or grantor with
respect to any of the real property described on Schedule 7(a).

8. Reserved.

9. Stock Ownership and Other Equity Interests. Attached hereto as Schedule 9(a)
is a true and correct list of each of all of the authorized, and the issued and
outstanding, stock, partnership interests, limited liability company membership
interests or other equity interest of each Company and its Subsidiaries, with
the exception of Borrower, and the record and beneficial owners of such stock,
partnership interests, membership interests or other equity interests. Also set
forth on Schedule 9(b) is each equity investment of each Company that represents
50% or less of the equity of the entity in which such investment was made.
Attached hereto as Schedule 9(c) is an accurate organizational chart showing the
ownership structure of each Company (other than the stockholders of the
Borrower) and its Subsidiaries on the Closing Date and after giving effect to
the Transactions.

 

L-1-5

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

10. Instruments and Tangible Chattel Paper. Attached hereto as Schedule 10 is a
true and correct list of all promissory notes, instruments (other than checks to
be deposited in the ordinary course of business), tangible chattel paper,
electronic chattel paper and other evidence of indebtedness held by each
Company, in each case, evidenced in writing and with a face value in excess of
$100,000, including all intercompany notes between or among any two or more
Companies or any of their Subsidiaries evidenced in writing.

11. Intellectual Property. Attached hereto as Schedule 11(a) is a schedule
setting forth all of each Company’s Patents and Trademarks (each as defined in
the Security Agreement) registered or applied for with the United States Patent
and Trademark Office, and all material Patent Licenses and material Trademark
Licenses (each as defined in the Security Agreement), including the name of the
registered owner and the registration number of each such Patent, Patent
License, Trademark and Trademark License owned by each Company. Attached hereto
as Schedule 11(b) is a schedule setting forth all of each Company’s United
States Copyrights (as defined in the Security Agreement) registered or applied
for with the United States Copyright Office, and all material Copyright Licenses
(as defined in the Security Agreement), including the name of the registered
owner and the registration number of each such Copyright or Copyright License
owned by each Company.

12. Commercial Tort Claims. Attached hereto as Schedule 12 is a true and correct
list of all Commercial Tort Claims (as defined in the Security Agreement) in
excess of $100,000 held by any Company, including a brief description thereof.

13. Deposit Accounts, Securities Accounts and Commodity Accounts. Attached
hereto as Schedule 13 is a true and complete list of all Deposit Accounts,
Securities Accounts and Commodity Accounts (each as defined in the Security
Agreement) maintained by each Company, including the name of each institution
where each such account is held, the name of each such account and the name of
each entity that holds each account.

14. Letter-of-Credit Rights. Attached hereto as Schedule 14 is a true and
correct list of all Letters of Credit evidenced in writing, with a face amount
of at least $100,000 and issued in favor of each Company, as beneficiary
thereunder.

15. Motor Vehicles, Key Man Life Insurance Policies and Other Collateral. The
value of all (a) motor vehicles and other goods (covered by certificates of
title or ownership) owned by any Company, (b) key man life insurance policies
held by any Company, (c) barges or other vessels owned or held by any Company,
(d) aircraft and airplanes owned or held by any Company, (e) oil, gas, minerals
and as extracted collateral owned or held by any Company and (g) rolling stock
and trains owned or held by any Company, does not exceed $5,000,000 in the
aggregate for all such Collateral.

16. Material Permits. Attached hereto as Schedule 16 is a true and correct list
of any permits of any Company with any Governmental Authority with respect to
which the consent of such Governmental Authority would be required in connection
with the Transactions, the execution, delivery and performance of the Loan
Documents or in connection with any acceleration or exercise of remedies under
the Credit Agreement or the Security Agreement.

17. Government Contracts. Attached hereto as Schedule 17 is a true and correct
list (to the extent possible without violating the confidentiality provisions
thereof) of all agreements and contracts any Company has with any Governmental
Authority under which the annual revenue reasonably expected by such Company is
more than $500,000.

 

L-1-5

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

[The Remainder of this Page has been intentionally left blank]

 

L-1-5

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

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
the date first set forth above.

 

DUCOMMUN INCORPORATED By:       Name:     Title:  

CMP DISPLAY SYSTEMS, INC.

DUCOMMUN AEROSTRUCTURES, INC.

DUCOMMUN TECHNOLOGIES, INC.

MILTEC CORPORATION

DUCOMMUN AEROSTRUCTURES NEW YORK, INC.

DUCOMMUN LABARGE TECHNOLOGIES, INC.

LABARGE/STC, INC.

LABARGE ELECTRONICS, INC.

LABARGE ACQUISITION COMPANY, INC.

By:       Name:     Title:  

COMPOSITE STRUCTURES, LLC

DUCOMMUN AEROSTRUCTURES MEXICO, LLC

By:  

Ducommun AeroStructures, Inc.,

its Sole Member

By:       Name:     Title:  

 

L-1-5

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

Schedule 1(a)

Legal Names, Etc.

 

Legal Name

 

Type of Entity

 

Registered Organization
(Yes/No)

   Organizational
Number34    Federal Taxpayer
Identification
Number    State of Formation

 

 

 

34  If none, so state.

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

Schedule 1(b)

Prior Organizational Names

 

Company/Subsidiary

 

Prior Name

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

Schedule 1(c)

Changes in Corporate Identity; Other Names

 

Company/Subsidiary

 

Corporate Name
of Entity

 

Action

   State of Formation    List of All Other
Names Used on
Any Filings with
the  Internal
Revenue Service
During Past Five
Years    Changes in
Jurisdiction of
Organization
during past four
months

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

Schedule 2(a)

Chief Executive Offices

 

Company/Subsidiary

 

Address

 

County

 

State

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

Schedule 2(b)

Location of Books and Records

 

Company/Subsidiary

 

Address

 

County

 

State

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

Schedule 2(c)

Locations of Collateral in Possession of Persons Other Than Company or Any
Subsidiary

 

Company/Subsidiary

 

Name of Entity in
Possession of
Collateral/Capacity of such
Entity

 

Address/Location of
Collateral

   County    State

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

Schedule 3

Extraordinary Transactions

 

Company/Subsidiary

 

Description of Transaction Including Parties Thereto

 

Date of Transaction

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

Schedule 4

File Search Reports

See attached.

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

Schedule 6

Filings/Filing Offices

 

Type of Filing35

 

Entity

 

Applicable Collateral
Document
[Mortgage or Security
Agreement]

 

Jurisdictions

 

 

 

35  UCC-1 financing statement, fixture filing or mortgage.

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

Schedule 7(a)

Real Property

 

Entity of Record

   Address      Owned,
Leased
or
Other
Interest      Landlord /
Owner if
Leased or
Other
Interest      Description of
Lease or
Other
Documents
Evidencing
Interest      Purpose/Use      Legal
Description
if a
Mortgaged
Property   To be
Encumbered
by Mortgage   Filing Office
for Mortgage                     [SEE
EXHIBIT
A-[    ]
ATTACHED
HERETO]   [YES/NO]  

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

Schedule 7(b)

Required Consents; Company Held Landlord’s/ Grantor’s Interests

Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other Occupancy
Agreements Pursuant to which any Company holds Landlord’s / Grantor’s Interest

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

Schedule 9

(a) Equity Interests of Companies and Subsidiaries

 

Current Legal
Entities Owned

 

Record Owner

 

Certificate No.

 

No. Shares/Interest

 

Percent Pledged

(b) Other Equity Interests

(c) Organizational Chart

See attached.

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

Schedule 10

Instruments and Tangible Chattel Paper

 

1. Promissory Notes:

 

Entity

 

Principal Amount

 

Date of Issuance

 

Interest Rate

 

Maturity Date

 

2. Chattel Paper:

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

Schedule 11(a)

Patents and Trademarks

UNITED STATES PATENTS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

DESCRIPTION

   

Applications:

 

OWNER

 

APPLICATION NUMBER

 

DESCRIPTION

   

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/
APPLI CATION NUMBER

 

DESCRIPTION

   

OTHER PATENTS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

   

Applications:

 

OWNER

 

APPLICATION NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

   

 

-2-

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

Licenses:

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION NUMBER

  

DESCRIPTION

    

UNITED STATES TRADEMARKS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

TRADEMARK

   

Applications:

 

OWNER

 

APPLICATION NUMBER

 

TRADEMARK

   

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/
APPLICATION NUMBER

 

TRADEMARK

   

OTHER TRADEMARKS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

COUNTRY/STATE

 

TRADEMARK

   

Applications:

 

OWNER

 

APPLICATION NUMBER

 

COUNTRY/STATE

 

TRADEMARK

   

 

-2-

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

Licenses:

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION NUMBER

  

TRADEMARK

    

 

-2-

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

Schedule 11(b)

Copyrights

UNITED STATES COPYRIGHTS

Registrations:

 

OWNER

 

TITLE

 

REGISTRATION NUMBER

   

Applications:

 

OWNER

 

APPLICATION NUMBER

   

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/
APPLICATION NUMBER

 

DESCRIPTION

   

OTHER COPYRIGHTS

Registrations:

 

OWNER

 

COUNTRY/STATE

 

TITLE

 

REGISTRATION NUMBER

   

Applications:

 

OWNER

 

COUNTRY/STATE

 

APPLICATION NUMBER

   

Licenses:

 

LICENSEE

  

LICENSOR

  

COUNTRY/STATE

  

REGISTRATION/
APPLICATION NUMBER

  

DESCRIPTION

    

 

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

Schedule 12

Commercial Tort Claims

 

-2-

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

Schedule 13

Deposit Accounts, Securities Accounts and Commodity Accounts

 

OWNER

 

TYPE OF ACCOUNT

 

BANK OR
INTERMEDIARY

 

ACCOUNT NUMBERS

 

-2-

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

Schedule 14

Letter of Credit Rights

 

-2-

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

Schedule 16

Material Permits

 

-2-

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

Schedule 17

Government Contracts

 

-2-

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

EXHIBIT L-2

[Form of]

PERFECTION CERTIFICATE SUPPLEMENT

This Perfection Certificate Supplement, dated as of [            ], 201[_] is
delivered pursuant to Section 5.01(e) of that Certain Credit Agreement dated as
of June 28, 2011 (the “Credit Agreement”) among Ducommun Incorporated, a
Delaware corporation (the “Borrower”), the Subsidiary Guarantors party thereto,
the lenders party thereto, UBS Securities LLC and Credit Suisse Securities (USA)
LLC, as joint lead arrangers, UBS Loan Finance LLC, as swingline lender, UBS AG,
Stamford Branch, as an issuing bank, as administrative agent and as collateral
agent (in its capacity as the collateral agent, the “Collateral Agent”), Wells
Fargo Bank, National Association, as documentation agent, Credit Suisse
Securities (USA) LLC, as syndication agent, and Bank of America, N.A., as an
issuing bank. Capitalized terms used but not defined herein have the meanings
assigned in the Credit Agreement. As used herein, the term “Companies” means
Borrower and each of its Domestic Subsidiaries; and “Company” shall mean any one
of them.

The undersigned, the [            ] of the Borrower, hereby certify (in my
capacity as [            ] and not in my individual capacity) to the Collateral
Agent and each of the other Secured Parties that, as of the date hereof, there
has been no change in the information described in the Perfection Certificate
delivered on the Closing Date (as supplemented by any perfection certificate
supplements delivered prior to the date hereof, the “Prior Perfection
Certificate”), other than as follows:

1. Names.

(a) Except as listed on Schedule 1(a) attached hereto and made a part hereof,
(x) Schedule 1(a) to the Prior Perfection Certificate sets forth the exact legal
name of each Company, as such name appears in its respective certificate of
incorporation or any other organizational document, (y) each Company is (i) the
type of entity disclosed next to its name in Schedule 1(a) to the Prior
Perfection Certificate and (ii) a registered organization except to the extent
disclosed in Schedule 1(a) to the Prior Perfection Certificate and (z) set forth
in Schedule 1(a) to the Prior Perfection Certificate is the organizational
identification number, if any, of each Company that is a registered
organization, the Federal Taxpayer Identification Number of each Company and the
jurisdiction of formation of each Company.

(b) Except as listed on Schedule 1(b) attached hereto and made a part hereof,
set forth in Schedule 1(b) of the Prior Perfection Certificate is any other
corporate or organizational names each Company has had in the past five years.

2. Current Locations.

(a) Except as listed on Schedule 2(a) attached hereto and made a part hereof,
the chief executive office of each Company is located at the address set forth
in Schedule 2(a) of the Prior Perfection Certificate.

(b) Except as listed on Schedule 2(b) attached hereto and made a part hereof,
the locations where each Company maintains any books or records relating to any
Collateral are as set forth in Schedule 2(b) of the Prior Perfection
Certificate.

(c) Except as listed on Schedule 2(c) attached hereto and made a part hereof,
the names and addresses of all persons or entities other than each Company, such
as lessees, consignees, warehousemen or purchasers of chattel paper, which have
possession of any of the Collateral consisting of instruments, chattel paper,
inventory or equipment, in each case with a fair market value in excess of
$100,000, are as set forth in Schedule 2(c) of the Prior Perfection Certificate.

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

3. Extraordinary Transactions. No Company has been the subject of any merger (or
acquired any assets constituting all or substantially all of the assets of a
person or line of business of a person) or other corporate reorganization in the
past five years, except as described in Schedule 3 attached hereto and made a
part hereof and in Schedule 3 of the Prior Perfection Certificate.

4. Reserved.

5. Reserved.

6. Schedule of Filings. Except as listed on Schedule 6 attached hereto and made
a part hereof, attached to the Prior Perfection Certificate as Schedule 6 is a
schedule of (i) the appropriate filing offices for the UCC “all assets”
financing statements of each of the Companies relating to the Security Agreement
and (ii) the appropriate filing offices for mortgages and fixture filings
relating to the Mortgaged Properties.

7. Real Property. Except as listed on Schedule 7(a) attached hereto and made a
part hereof, Schedule 7(a) to the Prior Perfection Certificate is a list of all
(i) real property owned, leased or otherwise held by each Company as of the
Closing Date, (ii) addresses and uses of each real property and (iii) other
information relating thereto required by such Schedule (including whether such
property is to be subject to a mortgage in favor of the Collateral Agent on
behalf of the Secured Parties (any such property, a “Mortgaged Property”)).
Except as described on Schedule 7(b) attached hereto and made a part hereof and
Schedule 7(b) of the Prior Perfection Certificate, no Company has entered into
any leases, subleases, tenancies, franchise agreements, licenses or other
occupancy arrangements as owner, lessor, sublessor, licensor, franchisor or
grantor with respect to any of the real property described on Schedule 7(a).

8. Reserved.

9. Stock Ownership and Other Equity Interests. Except as listed on Schedule 9(a)
attached hereto and made a part hereof, Schedule 9(a) to the Prior Perfection
Certificate is a true and correct list of each of all of the authorized, and the
issued and outstanding, stock, partnership interests, limited liability company
membership interests or other equity interest of each Company and its
Subsidiaries, with the exception of Borrower, and the record and beneficial
owners of such stock, partnership interests, membership interests or other
equity interests. Except as set forth on Schedule 9(b) attached hereto and made
a part hereof, Schedule 9(b) to the Prior Perfection Certificate sets forth each
equity investment of each Company that represents 50% or less of the equity of
the entity in which such investment was made. Except as set forth on Schedule
9(c) attached hereto and made a part hereof, Schedule 9(c) to the Prior
Perfection Certificate is an accurate organizational chart showing the ownership
structure of each Company (other than the stockholders of the Borrower) and its
Subsidiaries as of the date hereof.

10. Instruments and Tangible Chattel Paper. Except as listed on Schedule 10
attached hereto and made a part hereof, Schedule 10 to the Prior Perfection
Certificate is a true and correct list of all promissory notes, instruments
(other than checks to be deposited in the ordinary course of business), tangible
chattel paper, electronic chattel paper and other evidence of indebtedness held
by each Company, in each case, evidenced in writing and with a face value in
excess of $100,000, including all intercompany notes between or among any two or
more Companies or any of their Subsidiaries evidenced in writing.

11. Intellectual Property. Except as listed on Schedule 11(a) attached hereto
and made a part hereof, Schedule 11(a) to the Prior Perfection Certificate is a
schedule setting forth all of each Company’s Patents and Trademarks (each as
defined in the Security Agreement) registered or applied for with the United
States Patent and Trademark Office, and all material Patent Licenses and
material Trademark

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

Licenses (each as defined in the Security Agreement), including the name of the
registered owner and the registration number of each such Patent, Patent
License, Trademark and Trademark License owned by each Company. Except as listed
on Schedule 11(b) attached hereto and made a part hereof, Schedule 11(b) to the
Prior Perfection Certificate is a schedule setting forth all of each Company’s
United States Copyrights (as defined in the Security Agreement) registered or
applied for with the United States Copyright Office, and all material Copyright
Licenses (as defined in the Security Agreement), including the name of the
registered owner and the registration number of each such Copyright or Copyright
License owned by each Company.

12. Commercial Tort Claims. Except as listed on Schedule 12 attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule 12
is a true and correct list of all Commercial Tort Claims (as defined in the
Security Agreement) in excess of $100,000 held by any Company, including a brief
description thereof.

13. Deposit Accounts, Securities Accounts and Commodity Accounts. Except as
listed on Schedule 13 attached hereto and made a part hereof, attached to the
Prior Perfection Certificate as Schedule 13 is a true and complete list of all
Deposit Accounts, Securities Accounts and Commodity Accounts (each as defined in
the Security Agreement) maintained by each Company, including the name of each
institution where each such account is held, the name of each such account and
the name of each entity that holds each account.

14. Letter-of-Credit Rights. Except as listed on Schedule 14 attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule 14
is a true and correct list of all Letters of Credit evidenced in writing, with a
face amount of at least $100,000 and issued in favor of each Company, as
beneficiary thereunder.

15. Motor Vehicles, Life Insurance Policies and Other Collateral. The value of
all (a) motor vehicles and other goods (covered by certificates of title or
ownership) owned by any Company, (b) key man life insurance policies held by any
Company, (c) barges or other vessels owned or held by any Company, (d) aircraft
and airplanes owned or held by any Company, (e) oil, gas, minerals and as
extracted collateral owned or held by any Company and (g) rolling stock and
trains owned or held by any Company, does not exceed $5,000,000 in the aggregate
for all such Collateral.

16. Material Permits. Except as listed on Schedule 16 attached hereto and made a
part hereof, attached to the Prior Perfection Certificate as Schedule 16 is a
true and correct list of any permits of any Company with any Governmental
Authority with respect to which the consent of such Governmental Authority would
be required in connection with the Transactions, the execution, delivery and
performance of the Loan Documents or in connection with any acceleration or
exercise of remedies under the Credit Agreement or the Security Agreement.

17. Government Contracts. Except as listed on Schedule 17 attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule 17
is a true and correct list (to the extent possible without violating the
confidentiality provisions thereof) of all agreements and contracts any Company
has with any Governmental Authority under which the annual revenue reasonably
expected by such Company is more than $500,000.

[The Remainder of this Page has been intentionally left blank]

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

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
this ____ day of ________________, 201_.

 

DUCOMMUN INCORPORATED By:       Name:   Title:

CMP DISPLAY SYSTEMS, INC.

DUCOMMUN AEROSTRUCTURES, INC.

DUCOMMUN TECHNOLOGIES, INC.

MILTEC CORPORATION

DUCOMMUN AEROSTRUCTURES NEW YORK, INC.

DUCOMMUN LABARGE TECHNOLOGIES, INC.

LABARGE/STC, INC.

LABARGE ELECTRONICS, INC.

LABARGE ACQUISITION COMPANY, INC.

By:       Name:   Title:

COMPOSITE STRUCTURES, LLC

DUCOMMUN AEROSTRUCTURES MEXICO, LLC

By:   Ducommun AeroStructures, Inc., its Sole Member   By:       Name:   Title:

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

Schedule 1(a)

Legal Names, Etc.

 

Legal Name

   Type of Entity    Registered
Organization
(Yes/No)    Organizational Numbera    Federal Taxpayer
Identification Number    State of
Formation

 

 

a 

If none, so state.

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

Schedule 1(b)

Prior Organizational Names

 

Company/Subsidiary

 

Prior Name

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

Schedule 2(a)

Chief Executive Offices

 

Company/Subsidiary

 

Address

 

County

 

State

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

Schedule 2(b)

Location of Books and Records

 

Company/Subsidiary

 

Address

 

County

 

State

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

Schedule 2(c)

Locations of Collateral in Possession of Persons Other Than Company or Any
Subsidiary

 

Company/Subsidiary

 

Name of Entity in
Possession of
Collateral/Capacity of such
Entity

 

Address/Location of
Collateral

 

County

 

State

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

Schedule 3

Extraordinary Transactions

 

Company/Subsidiary

 

Description of Transaction Including Parties Thereto

 

Date of Transaction

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

Schedule 6

Filings/Filing Offices

 

Type of Filing37

 

Entity

 

Applicable Collateral

Document
[Mortgage or Security

Agreement]

   Jurisdictions         

 

37 

UCC-1 financing statement, fixture filing or mortgage.

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

Schedule 7(a)

Real Property

 

Entity of

Record

 

Address

 

Owned, Leased
or Other Interest

 

Landlord /
Owner if
Leased or
Other Interest

 

Description of
Lease or Other
Documents
Evidencing
Interest

 

Purpose/Use

 

Legal
Description if a
Mortgaged
Property

 

To be
Encumbered by
Mortgage

 

Filing Office for
Mortgage

            [SEE EXHIBIT A-[ ] ATTACHED HERETO]   [YES/NO]  

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

Schedule 7(b)

Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other Occupancy
Arrangements Pursuant to which any Company holds Landlord’s / Grantor’s Interest

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

Schedule 9

(a) Equity Interests of Companies and Subsidiaries

 

Current Legal

Entities Owned

 

Record Owner

 

Certificate No.

   No. Shares/Interest      Percent Pledged            

(b) Other Equity Interests

(c) Organizational Chart

See attached.

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

Schedule 10

Instruments and Tangible Chattel Paper

 

1. Promissory Notes:

 

Entity

 

Principal Amount

 

Date of Issuance

   Interest Rate      Maturity Date            

 

2. Chattel Paper:

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

Schedule 11(a)

Patents and Trademarks

UNITED STATES PATENTS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

DESCRIPTION

   

Applications:

 

OWNER

 

APPLICATION NUMBER

 

DESCRIPTION

   

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/

APPLICATION

NUMBER

 

DESCRIPTION

OTHER PATENTS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

Applications:

 

OWNER

 

APPLICATION NUMBER

 

COUNTRY/STATE

 

DESCRIPTION

 

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

Licenses:

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

REGISTRATION/
APPLICATION NUMBER

 

DESCRIPTION

UNITED STATES TRADEMARKS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

TRADEMARK

       

Applications:

 

OWNER

 

APPLICATION NUMBER

 

TRADEMARK

       

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/
APPLICATION NUMBER

 

TRADEMARK

   

OTHER TRADEMARKS:

Registrations:

 

OWNER

 

REGISTRATION NUMBER

 

COUNTRY/STATE

 

TRADEMARK

   

 

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

Applications:

 

OWNER

 

APPLICATION NUMBER

 

COUNTRY/STATE

 

TRADEMARK

   

Licenses:

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

REGISTRATION/
APPLICATION NUMBER

 

TRADEMARK

 

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

Schedule 11(b)

Copyrights

UNITED STATES COPYRIGHTS

Registrations:

 

OWNER

 

TITLE

 

REGISTRATION NUMBER

   

Applications:

 

OWNER

 

APPLICATION NUMBER

       

Licenses:

 

LICENSEE

 

LICENSOR

 

REGISTRATION/

APPLICATION NUMBER

 

DESCRIPTION

OTHER COPYRIGHTS

Registrations:

 

OWNER

 

COUNTRY/STATE

 

TITLE

 

REGISTRATION NUMBER

Applications:

 

OWNER

 

COUNTRY/STATE

 

APPLICATION NUMBER

   

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

Licenses:

 

LICENSEE

 

LICENSOR

 

COUNTRY/STATE

 

REGISTRATION/
APPLICATION NUMBER

 

DESCRIPTION

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

Schedule 12

Commercial Tort Claims

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

Schedule 13

Deposit Accounts, Securities Accounts and Commodity Accounts

 

OWNER

 

TYPE OF ACCOUNT

 

BANK OR INTERMEDIARY

 

ACCOUNT NUMBERS

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

Schedule 14

Letter of Credit Rights

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

Schedule 16

Material Permits

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

Schedule 17

Government Contracts

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

EXHIBIT O

[Form of]

SOLVENCY CERTIFICATE

June 28, 2011

Pursuant to Section 4.01(h) of the Credit Agreement, dated as of June 28, 2011
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC and
CREDIT SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such capacity,
“Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
“Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A., as an Issuing Bank in respect of the Existing
Letters of Credit, the undersigned hereby certifies, solely in its capacity as
chief financial officer of Borrower, and not individually, as follows:

 

  1. Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement.

 

  2. In reaching the conclusions set forth in this certificate, I have conducted
such reviews, analyses and inquiries reasonably deemed necessary or appropriate
under the circumstances. In conducting my review and analysis, and as a basis
for arriving at the conclusions in this certificate, I utilized methodologies,
procedures, and considerations deemed relevant and customary under the
circumstances. I also assessed general economic, industry, market, financial and
other conditions and my experience in general.

 

  3. As of the Closing Date, immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and issuance of each Letter of Credit and after giving effect to
the application of the proceeds of each Loan and each Letter of Credit:

 

  a. The fair value of the assets of each Loan Party, at a fair valuation,
exceeds its debts and liabilities, subordinated, contingent or otherwise;

 

  b. The present fair saleable value of the property of each Loan Party is
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured;

 

  c. Each Loan Party is able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such liabilities become absolute and matured; and

 

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  d. Each Loan Party does not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.

For purposes of this certificate, the amount of any contingent liability at
anytime shall be computed as the amount that would reasonably be expected to
become an actual and matured liability, and any subrogation and/or contribution
rights will be considered in determining the amount of such liability.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
capacity as chief financial officer of Borrower, on behalf of Borrower, as of
the date first stated above.

 

DUCOMMUN INCORPORATED By:       Name:   Title: Chief Financial Officer

 

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EXHIBIT P

[Form of]

INTERCOMPANY NOTE

New York, New York

[date]

FOR VALUE RECEIVED, each of the undersigned, to the extent a borrower from time
to time from any other entity listed on the signature page hereto (each, in such
capacity, a “Payor”), hereby promises to pay on demand to the order of such
other entity listed below (each, in such capacity, a “Payee”), in lawful money
of the United States of America in immediately available funds, at such location
in the United States of America as a Payee shall from time to time designate,
the unpaid principal amount of all loans and advances (including trade payables)
made by such Payee to such Payor. Each Payor promises also to pay interest on
the unpaid principal amount of all such loans and advances in like money at said
location from the date of such loans and advances until paid at such rate per
annum as shall be agreed upon from time to time by such Payor and such Payee.

This note (“Note”) is an Intercompany Note referred to in the Credit Agreement
dated as of June 28, 2011 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among DUCOMMUN
INCORPORATED, a Delaware corporation, the Subsidiary Guarantors (such term and
each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC and
CREDIT SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such capacity,
“Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
“Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A., as an Issuing Bank in respect of the Existing
Letters of Credit, and is subject to the terms thereof, and shall be pledged by
each Payee pursuant to the Security Agreement, to the extent required pursuant
to the terms thereof. Each Payee hereby acknowledges and agrees that the
Administrative Agent may exercise all rights provided in the Credit Agreement
and the Security Agreement with respect to this Note.

Anything in this Note to the contrary notwithstanding, the indebtedness
evidenced by this Note owed by any Payor that is Borrower or a Guarantor to any
Payee other than Borrower shall be subordinate and junior in right of payment,
to the extent and in the manner hereinafter set forth, to all Obligations of
such Payor under the Credit Agreement, including, without limitation, where
applicable, under such Payor’s guarantee of the Obligations under the Credit
Agreement (such Obligations and other indebtedness and obligations in connection
with any renewal, refunding, restructuring or refinancing thereof, including
interest thereon accruing after the commencement of any proceedings referred to
in clause (i) below, whether or not such interest is an allowed claim in such
proceeding, being hereinafter collectively referred to as “Senior
Indebtedness”):

 

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(i) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to any Payor or to its creditors, as such, or to
its property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of such Payor, whether or not involving
insolvency or bankruptcy, then (x) the holders of Senior Indebtedness shall be
paid in full in cash in respect of all amounts constituting Senior Indebtedness
before any Payee is entitled to receive (whether directly or indirectly), or
make any demands for, any payment on account of this Note and (y) until the
holders of Senior Indebtedness are paid in full in cash in respect of all
amounts constituting Senior Indebtedness, any payment or distribution to which
such Payee would otherwise be entitled (other than debt securities of such Payor
that are subordinated, to at least the same extent as this Note, to the payment
of all Senior Indebtedness then outstanding (such securities being hereinafter
referred to as “Restructured Debt Securities”)) shall be made to the holders of
Senior Indebtedness;

(ii) if any default occurs and is continuing with respect to any Senior
Indebtedness (including any Default under the Credit Agreement), then no payment
or distribution of any kind or character shall be made by or on behalf of the
Payor or any other Person on its behalf with respect to this Note; and

(iii) if any payment or distribution of any character, whether in cash,
securities or other property (other than Restructured Debt Securities), in
respect of this Note shall (despite these subordination provisions) be received
by any Payee in violation of clause (i) or (ii) before all Senior Indebtedness
shall have been paid in full in cash, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness (or their representatives), ratably according to the
respective aggregate amounts remaining unpaid thereon, to the extent necessary
to pay all Senior Indebtedness in full in cash.

To the fullest extent permitted by law, no present or future holder of Senior
Indebtedness shall be prejudiced in its right to enforce the subordination of
this Note by any act or failure to act on the part of any Payor or by any act or
failure to act on the part of such holder or any trustee or agent for such
holder. Each Payee and each Payor hereby agree that the subordination of this
Note is for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders and the Administrative Agent, the Issuing Bank and the Lenders are
obligees under this Note to the same extent as if their names were written
herein as such and the Administrative Agent may, on behalf of the itself, the
Issuing Bank and the Lenders, proceed to enforce the subordination provisions
herein.

The indebtedness evidenced by this Note owed by any Payor that is not Borrower
or a Guarantor shall not be subordinated to, and shall rank pari passu in right
of payment with, any other obligation of such Payor.

Nothing contained in the subordination provisions set forth above is intended to
or will impair, as between each Payor and each Payee, the obligations of such
Payor, which are absolute and unconditional, to pay to such Payee the principal
of and interest on this Note as and when due and payable in accordance with its
terms, or is intended to or will affect the relative rights of such Payee and
other creditors of such Payor other than the holders of Senior Indebtedness.

Each Payee is hereby authorized to record all loans and advances made by it to
any Payor (all of which shall be evidenced by this Note), and all repayments or
prepayments thereof, in its books and records, such books and records
constituting prima facie evidence of the accuracy of the information contained
therein.

 

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Each Payor hereby waives presentment, demand, protest or notice of any kind in
connection with this Note. All payments under this Note shall be made without
offset, counterclaim or deduction of any kind.

 

P-6

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.

PAYORS:

 

DUCOMMUN INCORPORATED By:       Name:   Title:

CMP DISPLAY SYSTEMS, INC.

DUCOMMUN AEROSTRUCTURES, INC.

DUCOMMUN TECHNOLOGIES, INC.

MILTEC CORPORATION

DUCOMMUN AEROSTRUCTURES NEW YORK, INC.

DUCOMMUN LABARGE TECHNOLOGIES, INC.

LABARGE/STC, INC.

LABARGE ELECTRONICS, INC.

LABARGE ACQUISITION COMPANY, INC.

By:       Name:   Title:

COMPOSITE STRUCTURES, LLC

DUCOMMUN AEROSTRUCTURES MEXICO, LLC

By: Ducommun AeroStructures, Inc.,

its Sole Member

By:       Name:   Title: DUCOMMUN TECHNOLOGIES (THAILAND) LTD. By:       Name:  
Title: By:       Name:   Title:

 

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By:       Name:   Title:

 

P-6

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

PAYEES:

 

DUCOMMUN INCORPORATED By:       Name:   Title:

CMP DISPLAY SYSTEMS, INC.

DUCOMMUN AEROSTRUCTURES, INC.

DUCOMMUN TECHNOLOGIES, INC.

MILTEC CORPORATION

DUCOMMUN AEROSTRUCTURES NEW YORK, INC.

DUCOMMUN LABARGE TECHNOLOGIES, INC.

LABARGE/STC, INC.

LABARGE ELECTRONICS, INC.

LABARGE ACQUISITION COMPANY, INC.

By:       Name:   Title:

COMPOSITE STRUCTURES, LLC

DUCOMMUN AEROSTRUCTURES MEXICO, LLC

By: Ducommun AeroStructures, Inc.,

its Sole Member

By:       Name:   Title: DUCOMMUN TECHNOLOGIES (THAILAND) LTD. By:       Name:  
Title: By:       Name:   Title: By:       Name:   Title:

 

P-6

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EXHIBIT Q

[Form of]

NON-BANK CERTIFICATE

Reference is made to the Credit Agreement dated as of June 28, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware corporation
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT SUISSE SECURITIES
(USA) LLC, as joint lead arrangers (in such capacity, “Arrangers”), UBS LOAN
FINANCE LLC, as swingline lender (in such capacity, “Swingline Lender”), UBS AG,
STAMFORD BRANCH, as an Issuing Bank, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such
capacity, “Collateral Agent”) for the Secured Parties and the Issuing Bank,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agent (in such
capacity, “Documentation Agent”), CREDIT SUISSE SECURITIES (USA) LLC, as
syndication agent (in such capacity, “Syndication Agent”) and BANK OF AMERICA,
N.A., as an Issuing Bank in respect of the Existing Letters of Credit.

The undersigned is not (i) a bank (as such term is used in Section 881(c)(3)(A)
of the Internal Revenue Code of 1986, as amended (the “Code”)), (ii) a “10
percent shareholder” of Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code.

 

[NAME OF LENDER] By:       Name:   Title: [ADDRESS]

Dated:                     , 201  

 

Q-1

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EXHIBIT R

[Form of]

DISCOUNTED PREPAYMENT OPTION NOTICE

Dated:                     , 201[  ]

To: UBS AG, STAMFORD BRANCH, as Administrative Agent

Ladies and Gentlemen:

This Discounted Prepayment Option Notice is delivered to you pursuant to
Section 2.21(b) of that certain Credit Agreement, dated as of June 28, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT
SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such capacity,
“Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
“Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A., as an Issuing Bank in respect of the Existing
Letters of Credit.

The Borrower hereby notifies you that, effective as of [            ], 201[  ],
pursuant to Section 2.21(b) of the Credit Agreement, Borrower is seeking:

1. to prepay Term Loans at a discount in an aggregate principal amount of
[$                    ]38 (the “Proposed Discounted Prepayment Amount”);

2. a percentage discount to the par value of the principal amount of Term Loans
greater than or equal to [            ]% of par value but less than or equal to
[            ]% of par value (the “Discount Range”)39; and

3. a Lender Participation Notice on or before [                    , 201  ]40
(the “Acceptance Date”).

 

38 

Insert amount that is minimum of $15.0 million.

39 

The percentages inserted in clause (2) may be the same.

40 

Insert date (a Business Day) that is at least five Business Days after date of
the Discounted Prepayment Option Notice.

 

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Borrower expressly agrees that this Discounted Prepayment Option Notice is
subject to the provisions of Section 2.21 of the Credit Agreement.

Borrower hereby represents and warrants to the Administrative Agent on behalf of
the Administrative Agent and the Lenders, that (i) no Default or Event of
Default has occurred and is continuing, or would result from Borrower making the
Discounted Voluntary Prepayment, (ii) no proceeds from Revolving Loans or
Swingline Loans will be used to make such Discounted Voluntary Prepayment and
(iii) at the time of and after giving effect to such Discounted Voluntary
Prepayment, the sum of undrawn Revolving Commitments and unrestricted cash and
Cash Equivalents of the Borrower and the Guarantors will not be less than $40.0
million.

Borrower respectfully requests that the Administrative Agent promptly notify
each of the Lenders party to the Credit Agreement of this Discounted Prepayment
Option Notice.

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned has executed this Discounted Prepayment
Option Notice as of the date first above written.

 

DUCOMMUN INCORPORATED By:       Name:   Title: Financial Officer

 

R-3

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EXHIBIT S

[Form of]

LENDER PARTICIPATION NOTICE

Dated:                     , 201[  ]

To:

   UBS AG, Stamford Branch    [                                           ]   
[                                           ]    Attention:
[                        ]    Electronic Mail: [             ]

Ladies and Gentlemen:

Reference is made to (a) that certain Credit Agreement, dated as of June 28,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT
SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such capacity,
“Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
“Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A., as an Issuing Bank in respect of the Existing
Letters of Credit, and (b) that certain Discounted Prepayment Option Notice,
dated [                    ], 201[  ], from the Borrower (the “Discounted
Prepayment Option Notice”).

The undersigned Lender hereby gives you notice, pursuant to Section 2.21(c) of
the Credit Agreement, that it is willing to accept a Discounted Voluntary
Prepayment on Term Loans held by such Lender:

1. at a minimum price of [            ]% (the “Acceptable Price”)41; and

2. in a maximum aggregate principal amount of $[            ] of Term Loans (the
“Offered Loans”).

 

41 

Insert value within the Discount Range. Lender may specify different Acceptable
Prices for different amounts of Offered Loans.

 

S-1

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The undersigned Lender expressly agrees that this offer is subject to the
provisions of Section 2.21 of the Credit Agreement.

[Signature page follows]

 

S-3

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IN WITNESS WHEREOF, the undersigned has executed this Lender Participation
Notice as of the date first above written.

 

[NAME OF LENDER] By:       Name:     Title:42  

 

42 

Include a second signature if required.

 

S-3

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EXHIBIT T

[Form of]

DISCOUNTED VOLUNTARY PREPAYMENT NOTICE

Date:             , 201  

To: UBS AG, STAMFORD BRANCH, as Administrative Agent

Ladies and Gentlemen:

This Discounted Voluntary Prepayment Notice is delivered to you pursuant to
Section 2.21(e) of that certain Credit Agreement, dated as of June 28, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among DUCOMMUN INCORPORATED, a Delaware
corporation (“Borrower”), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC and CREDIT
SUISSE SECURITIES (USA) LLC, as joint lead arrangers (in such capacity,
“Arrangers”), UBS LOAN FINANCE LLC, as swingline lender (in such capacity,
“Swingline Lender”), UBS AG, STAMFORD BRANCH, as an Issuing Bank, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank, WELLS FARGO BANK, NATIONAL ASSOCIATION, as
documentation agent (in such capacity, “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC, as syndication agent (in such capacity, “Syndication
Agent”) and BANK OF AMERICA, N.A., as an Issuing Bank in respect of the Existing
Letters of Credit.

The Borrower hereby irrevocably notifies you that, pursuant to Section 2.21(e)
of the Credit Agreement, the Borrower will make a Discounted Voluntary
Prepayment to each Term Loan Lender with Qualifying Loans, which shall be made:

1. on or before [            , 201[  ]43, as determined pursuant to
Section 2.21(b) of the Credit Agreement,

2. in the aggregate principal amount of $[            ] of Term Loans, and

3. at a percentage discount to the par value of the principal amount of the Term
Loans equal to [            ]% of par value (the “Applicable Discount”).

 

43 

Insert date (a Business Day) that is no later than four Business Days after the
Acceptance Date (or such later date as the Administrative Agent shall reasonably
agree, given the time required to calculate the Applicable Discount and
determine the amount and holders of Qualifying Loans).

 

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The Borrower expressly agrees that this Discounted Voluntary Prepayment Notice
is irrevocable and is subject to the provisions of Section 2.21 of the Credit
Agreement.

Borrower hereby represents and warrants to the Administrative Agent on behalf of
the Administrative Agent and the Lenders as follows:

1. No Default or Event of Default has occurred and is continuing or would result
from the Borrower making the Discounted Voluntary Prepayment (after giving
effect to any related waivers or amendments obtained in connection with such
Discounted Voluntary Prepayment).

2. No proceeds from Revolving Loans or Swingline Loans will be used to make the
Discounted Voluntary Prepayment.

3. At the time of and after giving effect to the Discounted Voluntary
Prepayment, the sum of undrawn Revolving Commitments and unrestricted cash and
Cash Equivalents of the Borrower and the Guarantors will not be less than $40.0
million.

4. Borrower and its Subsidiaries have no MNPI at the time of the making of the
Discounted Voluntary Prepayment that could reasonably be expected to affect a
Term Loan Lender’s decision as to whether to participate in the Discounted
Voluntary Prepayment.

The Borrower respectfully requests that Administrative Agent promptly notify
each of the Lenders party to the Agreement of this Discounted Voluntary
Prepayment Notice.

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned has executed this Discounted Voluntary
Prepayment Notice as of the date first above written.

 

DUCOMMUN INCORPORATED By:       Name:     Title: Financial Officer

 

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