Exhibit 10.1

 

 

Published CUSIP Number:

23330UAD81

 

Revolving Loan CUSIP Number:

23330UAE64

 

Term Loan CUSIP Number:

23330UAF30

 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of January 31, 2006

 

by and among

 

DRS TECHNOLOGIES, INC.,

as Borrower,

 

the Lenders referred to herein,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

BEAR STEARNS CORPORATE LENDING INC.,

as Syndication Agent,

 

BANK OF AMERICA, N.A., BNP PARIBAS and CALYON, NEW YORK BRANCH,

each as a Documentation Agent,

 

and

 

WACHOVIA CAPITAL MARKETS, LLC,

as Sole Bookrunner

 

 

 

 

WACHOVIA CAPITAL MARKETS, LLC and BEAR, STEARNS & CO. INC.

as Joint-Lead Arrangers,

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

 

1

SECTION 1.1

Definitions

 

1

SECTION 1.2

General

 

23

SECTION 1.3

Other Definitions and Provisions

 

23

SECTION 1.4

Effectiveness of Euro Provisions

 

23

SECTION 1.5

Currency Equivalents.

 

23

SECTION 1.6

Permitted Senior Unsecured Convertible Debt

 

24

 

 

 

 

ARTICLE II REVOLVING CREDIT FACILITY

 

24

SECTION 2.1

Revolving Credit Loans

 

24

SECTION 2.2

Swingline Loans

 

24

SECTION 2.3

Procedure for Advances of Revolving Credit and Swingline Loans

 

26

SECTION 2.4

Repayment of Loans

 

27

SECTION 2.5

Notes

 

28

SECTION 2.6

Permanent Reduction of the Revolving Credit Commitment

 

29

SECTION 2.7

Termination of Revolving Credit Facility

 

29

SECTION 2.8

Increase of Revolving Credit Commitment

 

29

 

 

 

 

ARTICLE III LETTER OF CREDIT FACILITY

 

31

SECTION 3.1

L/C Commitment

 

31

SECTION 3.2

Procedure for Issuance of Letters of Credit

 

32

SECTION 3.3

Commissions and Other Charges

 

33

SECTION 3.4

L/C Participations

 

33

SECTION 3.5

Reimbursement Obligations

 

35

SECTION 3.6

Obligations Absolute

 

36

SECTION 3.7

Effect of Application

 

36

 

 

 

 

ARTICLE IV TERM LOAN FACILITY

 

36

SECTION 4.1

Initial Term Loans

 

36

SECTION 4.2

Procedure for Advances of Term Loans

 

36

SECTION 4.3

Repayment of Term Loans

 

37

SECTION 4.4

Prepayments of Term Loans

 

38

SECTION 4.5

Term Notes

 

42

SECTION 4.6

Optional Increase In Term Loan Commitment

 

43

 

 

 

 

ARTICLE V GENERAL LOAN PROVISIONS

 

45

SECTION 5.1

Interest

 

45

SECTION 5.2

Notice and Manner of Conversion or Continuation of Loans

 

47

SECTION 5.3

Fees

 

48

SECTION 5.4

Manner of Payment

 

48

SECTION 5.5

Crediting of Payments and Proceeds

 

49

SECTION 5.6

Adjustments

 

50

 

i

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SECTION 5.7

Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent

 

50

SECTION 5.8

Redenomination under EMU.

 

51

SECTION 5.9

Regulatory Limitation

 

51

SECTION 5.10

Changed Circumstances

 

53

SECTION 5.11

Indemnity

 

54

SECTION 5.12

Capital Requirements

 

54

SECTION 5.13

Taxes

 

55

SECTION 5.15

Security

 

57

SECTION 5.16

Mitigation Obligations; Replacement of Lenders

 

57

 

 

 

 

ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING

 

58

SECTION 6.1

Closing

 

58

SECTION 6.2

Conditions to Closing and Initial Extensions of Credit on the Closing Date

 

58

SECTION 6.3

Conditions to All Extensions of Credit

 

65

 

 

 

 

ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER

 

65

SECTION 7.1

Representations and Warranties

 

65

SECTION 7.2

Survival of Representations and Warranties, Etc

 

72

 

 

 

 

ARTICLE VIII FINANCIAL INFORMATION AND NOTICES

 

73

SECTION 8.1

Financial Statements and Projections

 

73

SECTION 8.2

Officer’s Compliance Certificate

 

74

SECTION 8.3

Accountants’ Certificate

 

74

SECTION 8.4

Other Reports

 

75

SECTION 8.5

Notice of Litigation and Other Matters

 

75

SECTION 8.6

Extension of Time

 

76

SECTION 8.7

Accuracy of Information

 

76

 

 

 

 

ARTICLE IX AFFIRMATIVE COVENANTS

 

77

SECTION 9.1

Preservation of Corporate Existence and Related Matters

 

77

SECTION 9.2

Maintenance of Property

 

77

SECTION 9.3

Insurance

 

77

SECTION 9.4

Accounting Methods and Financial Records

 

77

SECTION 9.5

Payment and Performance of Obligations

 

77

SECTION 9.6

Compliance With Laws and Approvals

 

78

SECTION 9.7

Environmental Laws

 

78

SECTION 9.8

Compliance with ERISA

 

78

SECTION 9.9

Compliance With Agreements

 

78

SECTION 9.10

Inspection of Property; Books and Records; Discussions

 

79

SECTION 9.11

Additional Subsidiaries

 

79

SECTION 9.12

Use of Proceeds

 

82

SECTION 9.13

Conduct of Business

 

82

SECTION 9.14

Account Designation

 

82

SECTION 9.15

Debt Rating

 

82

 

ii

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ARTICLE X FINANCIAL COVENANTS

 

82

SECTION 10.1

Maximum Total Leverage Ratio

 

82

SECTION 10.2

Maximum Senior Leverage Ratio

 

83

SECTION 10.3

Minimum Fixed Charge Coverage Ratio

 

83

 

 

 

 

ARTICLE XI NEGATIVE COVENANTS

 

83

SECTION 11.1

Limitations on Debt

 

83

SECTION 11.2

Limitations on Liens

 

86

SECTION 11.3

Limitations on Loans, Advances, Investments and Acquisitions

 

88

SECTION 11.4

Limitations on Mergers and Liquidation

 

90

SECTION 11.5

Limitations on Sale of Assets

 

91

SECTION 11.6

Limitations on Dividends and Distributions

 

92

SECTION 11.7

Limitations on Exchange and Issuance of Capital Stock

 

93

SECTION 11.8

Transactions with Affiliates.

 

93

SECTION 11.9

Certain Accounting Changes; Organizational Documents

 

93

SECTION 11.10

Amendments; Payments and Prepayments of Debt

 

93

SECTION 11.11

Amendments, Consents and Waivers under the ESSI Merger Documents

 

95

SECTION 11.12

Restrictive Agreements

 

95

SECTION 11.13

Nature of Business.

 

95

SECTION 11.14

Limitation on Bonding Obligations

 

95

SECTION 11.15

Impairment of Security Interests

 

96

SECTION 11.16

Foreign Subsidiaries

 

96

 

 

 

 

ARTICLE XII DEFAULT AND REMEDIES

 

96

SECTION 12.1

Events of Default

 

96

SECTION 12.2

Remedies

 

99

SECTION 12.3

Rights and Remedies Cumulative; Non-Waiver; etc

 

100

SECTION 12.4

Judgment Currency

 

100

 

 

 

 

ARTICLE XIII THE ADMINISTRATIVE AGENT

 

101

SECTION 13.1

Appointment

 

101

SECTION 13.2

Delegation of Duties

 

101

SECTION 13.3

Exculpatory Provisions

 

102

SECTION 13.4

Reliance by the Administrative Agent

 

102

SECTION 13.5

Notice of Default

 

102

SECTION 13.6

Non-Reliance on the Administrative Agent and Other Lenders

 

103

SECTION 13.7

Indemnification

 

103

SECTION 13.8

The Administrative Agent in Its Individual Capacity

 

104

SECTION 13.9

Resignation of the Administrative Agent; Successor Administrative Agent

 

104

SECTION 13.10

Trustee Powers

 

104

SECTION 13.11

Documentation Agents and Syndication Agent

 

105

SECTION 13.12

Collateral and Guaranty Matters

 

105

 

 

 

 

ARTICLE XIV MISCELLANEOUS

 

106

SECTION 14.1

Notices

 

106

 

iii

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SECTION 14.2

Expenses; Indemnity

 

107

SECTION 14.3

Set off

 

107

SECTION 14.4

Governing Law

 

108

SECTION 14.5

Jurisdiction and Venue

 

108

SECTION 14.6

Waiver of Jury Trial

 

109

SECTION 14.7

Reversal of Payments

 

109

SECTION 14.8

Injunctive Relief; Punitive Damages

 

110

SECTION 14.9

Accounting Matters

 

110

SECTION 14.10

Successors and Assigns; Participations

 

110

SECTION 14.11

Amendments, Waivers and Consents

 

115

SECTION 14.12

Performance of Duties

 

116

SECTION 14.13

All Powers Coupled with Interest

 

117

SECTION 14.14

Survival of Indemnities

 

117

SECTION 14.15

Titles and Captions

 

117

SECTION 14.16

Severability of Provisions

 

117

SECTION 14.17

Counterparts

 

117

SECTION 14.18

Term of Agreement

 

117

SECTION 14.19

Advice of Counsel

 

117

SECTION 14.20

No Strict Construction

 

117

SECTION 14.21

Inconsistencies with Other Documents; Independent Effect of Covenants

 

118

SECTION 14.22

Continuity of Contract

 

118

SECTION 14.23

USA Patriot Act

 

118

 

iv

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EXHIBITS

 

 

 

 

 

Exhibit A-1

-

Form of Revolving Credit Note

Exhibit A-2

-

Form of Swingline Note

Exhibit A-3

-

Form of Term Note

Exhibit B

-

Form of Notice of Borrowing

Exhibit C

-

Form of Notice of Account Designation

Exhibit D

-

Form of Notice of Prepayment

Exhibit E

-

Form of Notice of Conversion/Continuation

Exhibit F

-

Form of Officer’s Compliance Certificate

Exhibit G

-

Form of Assignment and Acceptance

Exhibit H

-

Subsidiary Guaranty Agreement

Exhibit I

-

Collateral Agreement

Exhibit J

-

Form of Reaffirmation Agreement

Exhibit K

-

Pledge Agreement

 

 

 

SCHEDULES

 

 

 

 

 

Schedule 1

-

Joinder Documents

Schedule 2

-

Unrestricted Subsidiaries

Schedule 7.1(a)

-

Jurisdictions of Organization and Qualification

Schedule 7.1(b)

-

Subsidiaries and Capitalization

Schedule 7.1(i)

-

ERISA Plans

Schedule 7.1(m)

-

Labor and Collective Bargaining Agreements

Schedule 7.1(r)

-

Owned and Leased Real Property

Schedule 7.1(t)

-

Debt, Guaranty and Bonding Obligations

Schedule 7.1(u)

-

Litigation

Schedule 11.1

-

Existing Permitted Debt

Schedule 11.2

-

Existing Liens

Schedule 11.3

-

Existing Loans, Advances and Investments

Schedule 11.8

-

Transactions with Affiliates

 

 

 

ANNEX

 

 

 

 

 

Annex A

 

Form of Lender Authorization

 

v

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 31st day of
January, 2006, by and among DRS TECHNOLOGIES, INC., a Delaware corporation, as
Borrower, the lenders who are party to this Agreement pursuant to an
authorization (in the form attached hereto as Annex A, an “Authorization”) and
the lenders who may become party to this Agreement, WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as Administrative Agent for the
Lenders, BEAR STEARNS CORPORATE LENDING INC., as Syndication Agent and BANK OF
AMERICA, N.A., BNP PARIBAS and CALYON, NEW YORK BRANCH, each as a Documentation
Agent.

 

STATEMENT OF PURPOSE

 

Pursuant to the Credit Agreement, dated as of September 28, 2001, as amended and
restated as of November 26, 2002, and further amended and restated as of
November 4, 2003 (the “Existing Credit Agreement”), among the Borrower and the
lenders party thereto, such existing lenders (the “Existing Lenders”) extended
certain credit facilities to the Borrower.

 

The Borrower has requested, and, subject to the terms and conditions hereof, the
Administrative Agent, the Syndication Agent, the Documentation Agents and the
Lenders have agreed, to amend and restate the Existing Credit Agreement as set
forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, such parties hereby
agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1                                                  Definitions.  The
following terms when used in this Agreement shall have the meanings assigned to
them below:

 

“Additional Term Loan” has the meaning assigned thereto in Section 4.6.

 

“Additional Term Loan Effective Date” means the date, which shall be a Business
Day, on or before the Term Loan Maturity Date, but no earlier than thirty (30)
days after any Increase Notification Date, on which each of the Increasing Term
Lenders make Additional Term Loans to the Borrower pursuant to Section 4.6.

 

“Administrative Agent” means Wachovia, in its capacity as Administrative Agent
hereunder, and any successor thereto appointed pursuant to Section 13.9.

 

“Administrative Agent’s Office” means the office of the Administrative Agent
specified in or determined in accordance with the provisions of Section 14.1(c).

 

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

 

“Affiliate” means, with respect to any Person, any other Person (other than a
Subsidiary of such Person) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries.  The term “control” means (a) the
power to vote ten percent (10%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

 

“Aggregate Commitment” means the aggregate amount of the Lenders’ Commitments
hereunder, as such amount may be increased, reduced or otherwise modified at any
time or from time to time pursuant to the terms hereof.  On the Closing Date,
the Aggregate Commitment shall be Six Hundred Seventy-Five Million Dollars
($675,000,000).

 

“Agreement” means this Third Amended and Restated Credit Agreement, as amended,
restated, supplemented or otherwise modified from time to time.

 

“Agreement Regarding Post-Closing Matters” shall mean the Agreement Regarding
Post-Closing Matters of even date herewith by and among the Borrower and the
Administrative Agent (on behalf of itself and the Lenders).

 

“Alternative Currency” means (i) the euro, (ii) the Pounds Sterling, (iii) the
Canadian Dollar, (iv) the Japanese Yen, (v) the Australian Dollar and (vi) with
the prior written consent of the Administrative Agent and the applicable Issuing
Lender, such consents not to be unreasonably withheld or delayed, any other
lawful currency (other than Dollars); provided that in each case of (i) through
(vi) above, such currency is freely transferable and convertible into Dollars in
the United States currency market and freely available to the applicable Issuing
Lender in the London interbank deposit market.

 

“Alternative Currency Amount” means, with respect to each Alternative Currency
Letter of Credit, the amount of the Alternative Currency in which such
Alternative Currency Letter of Credit is denominated which is equivalent to the
principal amount in Dollars of such Alternative Currency Letter of Credit at the
most favorable spot exchange rate determined by the Administrative Agent to be
available to it at approximately 11:00 a.m. (Charlotte time) two (2) Business
Days before such Alternative Currency Letter of Credit is issued or extended (or
to be issued or extended).  When used with respect to any sum expressed in
Dollars, “Alternative Currency Amount” shall mean the amount of the applicable
Alternative Currency into which Dollars are to be exchanged which is equivalent
to the amount so expressed in Dollars at the most favorable spot exchange rate
determined by the Administrative Agent to be available to it at the relevant
time.

 

“Alternative Currency L/C Commitment” means the lesser of (a) Fifty Million
Dollars ($50,000,000) and (b) the L/C Commitment.

 

“Alternative Currency L/C Obligations” means, at any time, an amount equal to
the sum of (a) the aggregate undrawn and unexpired amount of the then
outstanding Alternative Currency

 

2

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

 

Letters of Credit and (b) the aggregate amount of drawings under Alternative
Currency Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.

 

“Alternative Currency Letter of Credit” means any Letter of Credit denominated
in an Alternative Currency and “Alternative Currency Letters of Credit” means
the collective reference to all Letters of Credit denominated in an Alternative
Currency.

 

“Applicable Law” means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.

 

“Applicable Margin” means the margin calculated and determined in accordance
with Section 5.1(c).

 

“Application” means an application, in the form specified by the applicable
Issuing Lender from time to time, requesting that such Issuing Lender issue a
Letter of Credit.

 

“Approved Fund” means any Person (other than a natural Person), including,
without limitation, any special purpose entity, 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; provided,
that such Approved Fund must be administered, managed or underwritten 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.

 

“Asset Sale Proceeds” has the meaning assigned thereto in Section 4.4(b)(iii).

 

“Assignment and Acceptance” has the meaning assigned thereto in Section 14.10.

 

“Australian Dollar” means, at any time of determination, the then official
currency of Australia.

 

“Authorization” has the meaning assigned to such term in the preamble.

 

“Base Rate” means, at any time, the higher of (a) the Prime Rate and (b) the
Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.

 

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base
Rate as provided in Section 5.1(a).

 

“Benefited Lender” has the meaning assigned thereto in Section 5.6.

 

“Bonding Obligations” means, with respect to the Borrower or any Restricted
Subsidiary, without duplication, the face amount (including, without limitation,
any contingent obligations arising in connection therewith), of any surety,
performance or other bond issued at the request of or delivered by the Borrower
or any Restricted Subsidiary in the ordinary course of business

 

3

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to any other Person owed any contractual or other obligation (other than for
borrowed money or other Debt) by the Borrower or any Restricted Subsidiary to
secure the performance of such contractual or other obligations or to otherwise
benefit such Person to whom such contractual or other obligations are owed.  All
outstanding Bonding Obligations as of the Closing Date are set forth on
Schedule 7.1(t).

 

“Borrower” means DRS Technologies, Inc., a Delaware corporation.

 

“Business Day” means (a) for all purposes other than as set forth in clause
(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Charlotte, North Carolina and New York, New York, are open for the conduct of
their domestic or international commercial banking business, as applicable, and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, any LIBOR Rate Loan, any day that is a
Business Day described in clause (a) and that is also a day for trading by and
between banks in Dollar deposits in the London interbank market. Notwithstanding
the foregoing, with respect to any amount denominated or to be denominated in
the euro, any reference to a “Business Day” shall be construed as a reference to
a day (other than a Saturday or Sunday) on which banks are generally open for
business in New York, New York and prime banks in London generally provide
quotations for deposits denominated in the euro.

 

“Calculation Date” has the meaning assigned thereto in Section 5.1(c).

 

“Canadian Dollar” or “C$” means, at any time of determination, the then official
currency of Canada.

 

“Capital Asset” means, with respect to the Borrower and its Restricted
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the Borrower
and its Restricted Subsidiaries.

 

“Capital Expenditures” means with respect to the Borrower and its Restricted
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrower and its Restricted Subsidiaries during such period, as
determined in accordance with GAAP.

 

“Capital Lease” means any lease of any property by the Borrower or any of its
Restricted Subsidiaries, as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Restricted Subsidiaries.

 

“Cash Equivalents” has the meaning assigned thereto in Section 11.3(b).

 

“Change in Control” has the meaning assigned thereto in Section 12.1(i).

 

“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 6.2 shall be satisfied or waived in
all respects in a manner acceptable to the Administrative Agent, in its sole
discretion.

 

4

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“Code” means the Internal Revenue Code of 1986, and the rules and regulations
thereunder, each as amended or modified from time to time.

 

“Collateral” means the collateral security for the Obligations pledged or
granted pursuant to the Security Documents.

 

“Collateral Agreement” means the collateral agreement dated as of September 28,
2001, entered into by the Borrower and its Domestic Subsidiaries that are
Restricted Subsidiaries in favor of the Administrative Agent for the ratable
benefit of itself and the Lenders, in the form of Exhibit I, as amended,
restated, supplemented or otherwise modified prior to the date hereof, by the
Existing Joinder Documents or otherwise, as reaffirmed pursuant to the
Reaffirmation Agreement and as otherwise amended, restated, supplemented or
otherwise modified from time to time hereafter.

 

“Commitment” means, as to any Lender, the sum of such Lender’s Revolving Credit
Commitment and applicable Term Loan Commitment as set forth in the Register, as
such Commitment may be increased, reduced or otherwise modified at any time or
from time to time pursuant to the terms hereof.

 

“Commitment Percentage” means, as to any Lender at any time, the ratio of
(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment.

 

“Consolidated” means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.

 

“Convertible Note Indenture” means that certain Indenture entered into in
connection with the issuance of the Convertible Notes in the form provided to
the Administrative Agent and the Lenders as of the Closing Date, including such
indenture as subsequently qualified under the Trust Indenture Act of 1939, as
amended, and all exhibits and schedules thereto, as each may be amended,
restated, supplemented or otherwise modified pursuant to the terms and
conditions set forth in this Agreement.

 

“Convertible Notes” means the collective reference to the senior unsecured notes
due 2026 of the Borrower issued pursuant to the Convertible Note Indenture
(including any senior unsecured convertible notes issued pursuant to the
Permitted Debt Add-On) in the initial principal amount of $300,000,000 (as such
amount may be increased pursuant to the Permitted Debt Add-On) which are
convertible into common stock of the Borrower upon the occurrence of certain
terms and conditions as described in the Convertible Note Indenture.

 

“Credit Facility” means, collectively, the Revolving Credit Facility, the Term
Loan Facility, the Swingline Facility and the L/C Facility.

 

“Debt” means, with respect to the Borrower and its Restricted Subsidiaries at
any date and without duplication, the sum of the following calculated in
accordance with GAAP:  (a) all liabilities, obligations and indebtedness for
borrowed money including, but not limited to,

 

5

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

 

obligations evidenced by bonds, debentures, notes or other similar instruments
of any such Person (excluding, in each case, any unamortized premiums associated
therewith), (b) all obligations to pay the deferred purchase price of property
or services of any such Person (including, without limitation, all obligations
under non-competition agreements), except trade payables arising in the ordinary
course of business not more than ninety (90) days past due, (c) all obligations
of any such Person as lessee under Capital Leases to the extent such obligations
are required to be capitalized in accordance with GAAP, (d) all Debt of any
other Person secured by a Lien on any asset of any such Person, (e) all Guaranty
Obligations of any such Person, (f) all obligations, contingent or otherwise, of
any such Person relative to the face amount of letters of credit, whether or not
drawn, including, without limitation, any Reimbursement Obligation, and banker’s
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities or partnership
interests of such Person and, (h) all net payment obligations incurred by any
such Person pursuant to Hedging Agreements; provided, however, that Bonding
Obligations shall not be considered Debt.

 

“Default” means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.

 

“Designated Acquisition” has the meaning assigned thereto in
Section 4.4(b)(i)(B).

 

“Disputes” has the meaning assigned thereto in Section 14.5(b).

 

“Documentation Agent” means each of Bank of America, N.A., BNP Paribas and
Calyon, New York Branch in its capacity hereunder as documentation agent.

 

“Dollar Amount” means (a) with respect to each Letter of Credit issued or
extended (or to be issued or extended), in Dollars, the principal amount thereof
and (b) with respect to each Alternative Currency Letter of Credit, the amount
of Dollars which is equivalent to the face amount of such Letter of Credit, at
the most favorable spot exchange rate determined by the Administrative Agent to
be available to it at approximately 11:00 a.m. (the time of the applicable
Issuing Lender’s Correspondent) two (2) Business Days before such Letter of
Credit is issued or extended (or to be issued or extended).  When used with
respect to any sum expressed in an Alternative Currency, “Dollar Amount” shall
mean the amount of Dollars which is equivalent to the amount so expressed in
such Alternative Currency at the most favorable spot exchange rate determined by
the Administrative Agent to be available to it at the relevant time.

 

“Dollars” or “$” means, unless otherwise qualified, the lawful currency of the
United States.

 

“Domestic Subsidiary” means any direct or indirect Subsidiary organized under
the laws of the United States, the law of any State thereof or the laws of
Puerto Rico.

 

“EBITDA” means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrower and its Restricted
Subsidiaries in accordance with GAAP (but excluding any such amount attributable
to any Unrestricted

 

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Subsidiary or any Subsidiary thereof):  (a) Net Income for such period plus
(b) the sum of the following to the extent deducted in determining Net Income:
(i) income and franchise taxes, (ii) Interest Expense, (iii) amortization and
depreciation, (iv) expenses related to the transactions contemplated under this
Agreement, including, without limitation, any charges resulting from the
acceleration of deferred financing expenses relating to the Existing Credit
Agreement, (v) extraordinary losses, (vi) non-cash minority interest deductions,
(vii) non-cash charges related to the issuance of stock options and
(viii) restricted stock amortization expense, less (c) interest income and any
extraordinary gains, plus (d) to the extent deducted or not included in
determining Net Income, (i) Pro Forma EBITDA, and (ii) non-recurring charges to
the extent that such non-recurring charges are reasonably satisfactory to the
Administrative Agent and such non-recurring charges do not exceed 5.0% of
Consolidated EBITDA (including Pro Forma EBITDA) for the period for which such
charges are to be added back.

 

“Eligible Assignee” means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company, fund or other financial institution which in the ordinary course of
business extends credit of the type extended hereunder and that has total assets
in excess of $500,000,000, (d) already a Lender hereunder (whether as an
original party to this Agreement or as the assignee of another Lender), (e) the
successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Lender,
(f) any Affiliate of the assigning Lender, (g) any Approved Fund or (h) any
other Person that has been approved in writing as an Eligible Assignee by the
Borrower (other than upon the occurrence and during the continuance of any
Default or Event of Default) and the Administrative Agent.

 

“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA which (a) is maintained for employees of the Borrower or
any ERISA Affiliate or (b) has at any time within the preceding six (6) years
been maintained for employees of the Borrower or any current or former ERISA
Affiliate.

 

“EMU” means economic and monetary union as contemplated in the Treaty on
European Union.

 

“EMU Legislation” means legislative measures of the Council of European Union
for the introduction of, change over to or operation of the euro.

 

“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, allegations, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any actual or alleged violation of or liability under any Environmental Law or
any permit issued, or any approval given, under any such Environmental Law,
including,

 

7

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without limitation, any and all claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages,
contribution, indemnification cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or threat of
injury to human health or the environment.

 

“Environmental Laws” means any and all federal, foreign, state, provincial and
local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities,
relating to the protection of human health or the environment, including, but
not limited to, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.

 

“ERISA Affiliate” means any Person who, together with the Borrower, is treated
as a single employer within the meaning of Section 414(b), (c), (m) or (o) of
the Code or Section 4001(b) of ERISA.

 

“ESSI” means Engineered Support Systems, Inc., a Missouri corporation.

 

“ESSI Investigation” means that certain private investigation of ESSI by (a) the
U.S. Attorney’s Office in St. Louis, Missouri and (b) the SEC in the matter
captioned In the Matter of Engineered Support Systems, Inc., in each case as
more particularly described in ESSI’s annual report on Form 10-K filed with the
SEC on January 9, 2006 for the fiscal year ended October 31, 2005.

 

“ESSI Merger” means the merger of Maxco, Inc. with and into ESSI and the other
transactions contemplated by the ESSI Merger Agreement and the other ESSI Merger
Documents.

 

“ESSI Merger Agreement” means the Agreement and Plan of Merger (together with
the disclosure schedules thereto), dated as of September 21, 2005, among the
Borrower, Maxco, Inc. (a Missouri corporation and a Wholly-Owned Subsidiary) and
ESSI, as amended, modified or supplemented from time to time, subject to the
terms and conditions set forth in this Agreement.

 

“ESSI Merger Documents” means the ESSI Merger Agreement and each other material
document, instrument, certificate and agreement executed or delivered by the
Borrower or any Subsidiary in connection with the ESSI Merger Agreement or
otherwise referred to therein or contemplated thereby (other than the Loan
Documents and the Permitted Debt Documents), all as amended, restated,
supplemented or otherwise modified subject to the terms and conditions set forth
in this Agreement.

 

“euro” means the single currency to which the Participating Member States of the
European Union have converted.

 

8

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“Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Federal Reserve Board (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any basic, supplemental or emergency reserves) in respect of
eurocurrency liabilities or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

 

“Event of Default” means any of the events specified in Section 12.1, provided
that any requirement for passage of time, giving of notice, or any other
condition, has been satisfied.

 

“Excess Cash Flow” means, for any period of determination, the sum of (a) EBITDA
for such period, minus (b) each of the following, without duplication,
(i) income and franchise taxes (paid or payable in cash) and Interest Expense
(paid or payable in cash), (ii) all principal payments made in respect of Debt
during such period, to the extent permitted hereunder (excluding Excess Cash
Flow payments pursuant to Section 4.4(b)(v) and payments of principal that can
be re-borrowed (including repayments of Revolving Credit Loans not accompanied
by a permanent reduction in the Revolving Credit Commitment)), (iii) all Capital
Expenditures made in cash during such period, to the extent permitted hereunder,
(iv) non-scheduled principal payments of Term Loans (excluding Excess Cash Flow
payments pursuant to Section 4.4(b)(v), (v) cash payments made in respect of
Permitted Acquisitions and (vi) any increases in working capital plus (c) any
decreases in working capital.

 

“Existing Credit Agreement” has the meaning assigned thereto in the Statement of
Purpose of this Agreement.

 

“Existing Lenders” has the meaning assigned thereto in the Statement of Purpose
of this Agreement.

 

“Existing Joinder Documents” means each agreement and instrument listed on
Schedule 1.

 

“Existing Letters of Credit” means those letters of credit issued by Wachovia or
Bank of America, N.A. existing on the Closing Date and identified on
Schedule 11.1.

 

“Existing Senior Subordinated Note Indenture” means that certain Indenture dated
as of October 30, 2003 entered into in connection with the issuance of the
Existing Senior Subordinated Notes, and all the exhibits and schedules thereto,
as previously amended, restated, supplemented or otherwise modified and as may
be further amended, restated, supplemented or otherwise modified subject to the
terms and conditions of this Agreement.

 

“Existing Senior Subordinated Notes” means the collective reference to the
Borrower’s existing 6 7/8% senior subordinated notes due 2013 in an aggregate
principal amount of $550,000,000 and issued pursuant to the Existing Senior
Subordinated Note Indenture.

 

“Extensions of Credit” means, as to any Lender at any time, (a) an amount equal
to the sum of (i) the aggregate principal amount of all Revolving Credit Loans
made by such Lender

 

9

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then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of
the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit
Commitment Percentage of the Swingline Loans then outstanding and (iv) the
aggregate principal amount of all Term Loans made by such Lender then
outstanding, and (b) the making of any Loan or participation in any Letter of
Credit by such Lender, as the context requires.

 

“FDIC” means the Federal Deposit Insurance Corporation, or any successor
thereto.

 

“Federal Funds Rate” means, the rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) representing the daily effective federal funds
rate as quoted by the Administrative Agent and confirmed in Federal Reserve
Board Statistical Release H.15 (519) or any successor or substitute publication
selected by the Administrative Agent.  If, for any reason, such rate is not
available, then “Federal Funds Rate” means a daily rate which is determined, in
the opinion of the Administrative Agent, to be the rate at which federal funds
are being offered for sale in the national federal funds market at 9:00 a.m.
(Charlotte time).  Rates for weekends or holidays shall be the same as the rate
for the most immediately preceding Business Day.

 

“Fiscal Year” means the fiscal year of the Borrower and its Restricted
Subsidiaries ending on March 31.

 

“Fixed Charges” means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrower and its Restricted
Subsidiaries in accordance with GAAP: (a) Interest Expense (paid in cash),
(b) scheduled principal payments with respect to Debt, and (c) cash taxes.

 

“Foreign Lender” has the meaning assigned thereto in Section 5.13(e).

 

“Foreign Subsidiary” means any direct or indirect Subsidiary that is not a
Domestic Subsidiary.

 

“GAAP” means United States generally accepted accounting principles, as
recognized by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, consistently applied and maintained on a
consistent basis for the Borrower and its Subsidiaries throughout the period
indicated.

 

“Governmental Approvals” means all authorizations, consents, approvals, licenses
and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

 

“Governmental Authority” means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

 

“Guaranty Obligation” means, with respect to the Borrower and its Restricted
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation

 

10

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of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of any such Person
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement condition or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, that the term Guaranty Obligation shall not include (i) endorsements
for collection or deposit in the ordinary course of business or (ii) guarantees
by the Borrower or any Restricted Subsidiary of any non-Debt obligations of the
Borrower or any Restricted Subsidiary.

 

“Hazardous Materials” means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants,
chemical substances or mixtures or toxic substances under any Environmental Law,
(b) which are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise harmful to human health or the environment
and are or become regulated by any Governmental Authority, (c) the presence of
which require investigation or remediation under any Environmental Law or common
law, (d) the discharge or emission or release of which requires a permit or
license under any Environmental Law or other Governmental Approval, (e) which
are deemed to constitute a nuisance or a trespass which pose a health or safety
hazard to Persons or neighboring properties, or (f) which contain, without
limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedging Agreement” means any agreement with respect to any Interest Rate
Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.

 

“Hedging Obligations” has the meaning assigned thereto in the definition of
“Obligations”.

 

“Hold Period” has the meaning assigned thereto in Section 4.4(b)(i)(B).

 

“IDT” means Integrated Defense Technologies, Inc., a Delaware corporation and
Wholly-Owned Subsidiary.

 

“Increase Effective Date” means the date, which shall be a Business Day, on or
before the Revolving Credit Maturity Date, but no earlier than thirty (30) days
after any Increase Notification Date, on which each of the Increasing Revolving
Lenders increase (or, in the case of New Revolving Lenders, provide) their
respective Revolving Credit Commitments to the Borrower pursuant to Section 2.8.

 

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“Increase Notification” means the written notice by the Borrower of its desire
to increase the Revolving Credit Commitment pursuant to Section 2.8 and/or the
Term Loan Commitment pursuant to Section 4.6.

 

“Increase Notification Date” means the date on which the Increase Notification
is received by the Administrative Agent.

 

“Increasing Revolving Lenders” has the meaning assigned thereto in
Section 2.8(b).

 

“Increasing Term Lenders” has the meaning assigned thereto in Section 4.6(b).

 

“Initial Term Loans” means the term loans made, or to be made, to the Borrower
by the Lenders pursuant to Section 4.1 and shall not include any of the
Additional Term Loans made, or to be made, to the Borrower pursuant to
Section 4.6.

 

“Insurance and Condemnation Proceeds” has the meaning assigned thereto in
Section 4.4(b)(iv).

 

“Interest Expense” means, with respect to the Borrower and its Restricted
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements) of the Borrower and its Restricted
Subsidiaries, all determined for such period on a Consolidated basis, without
duplication, in accordance with GAAP.

 

“Interest Period” has the meaning assigned thereto in Section 5.1(b).

 

“Interest Rate Contract” means any interest rate swap agreement, interest rate
cap agreement, interest rate floor agreement, interest rate collar agreement,
interest rate option or any other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.

 

“ISP98” means the International Standby Practices (1998 Revision, effective
January 1, 1999), International Chamber of Commerce Publication No. 590.

 

“Issuing Lender” means (a) with respect to Letters of Credit issued hereunder on
or after the Closing Date, (i) Wachovia, in its capacity as issuer thereof, or
any successor thereto and (ii) any other issuing lender agreed to by the
Borrower and the Administrative Agent and (b) with respect to the Existing
Letters of Credit, Wachovia and Bank of America.

 

“Issuing Lender’s Correspondent” means, Wachovia Bank, National Association,
London Branch or any other financial institution designated by an Issuing Lender
to act as its correspondent hereunder with respect to the issuance and payment
of Alternative Currency Letters of Credit.

 

“Japanese Yen” means, at any time of determination, the then official currency
of Japan.

 

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“Joinder Agreement” means collectively, each joinder agreement executed in favor
of the Administrative Agent for the ratable benefit of itself and the Lenders,
in form and substance satisfactory to the Administrative Agent.

 

“L/C Commitment” means the lesser of (a) Seventy-Five Million Dollars
($75,000,000) and (b) the Revolving Credit Commitment.

 

“L/C Facility” means the letter of credit facility established pursuant to
Article III.

 

“L/C Obligations” means, at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.

 

“L/C Participants” means, with respect to any Letter of Credit, the collective
reference to all the Lenders under the Revolving Credit Facility other than the
applicable Issuing Lender with respect to such Letter of Credit.

 

“L/C Supporting Documentation” has the meaning assigned thereto in Section 3.2.

 

“Lender” means each Person executing the signature pages to this Agreement as a
Lender (including, without limitation, each Issuing Lender and the Swingline
Lender unless the context otherwise requires) or executing this Agreement
pursuant to an Authorization and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 2.8, Section 4.6 or
Section 14.10.

 

“Lender Addition and Acknowledgement Agreement” shall have the meaning assigned
thereto in Section 2.8.

 

“Lending Office” means, with respect to any Lender, the office of such Lender
maintaining such Lender’s Revolving Credit Commitment Percentage or applicable
Term Loan Percentage, as applicable, of the Extensions of Credit.

 

“Letters of Credit” means the collective reference to letters of credit issued
pursuant to Section 3.1 and the Existing Letters of Credit.

 

“LIBOR” means the rate of interest per annum determined on the basis of the rate
for deposits in Dollars in minimum amounts of at least $5,000,000 for a period
equal to the applicable Interest Period which appears on the Telerate Page 3750
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of the applicable Interest Period (rounded upward, if necessary, to
the nearest 1/100th of 1%).  If, for any reason, such rate does not appear on
Telerate Page 3750, the “LIBOR” shall be determined by the Administrative Agent
to be the arithmetic average of the rate per annum at which deposits in Dollars
in minimum amounts of at least $5,000,000 would be offered by first class banks
in the London interbank market to the Administrative Agent at approximately
11:00 a.m. (London time) two (2)

 

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Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period.  Each calculation by the Administrative
Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest
error.

 

“LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the
following formula:

 

LIBOR Rate =

 

LIBOR

 

 

 

1.00 - Eurodollar Reserve Percentage

 

 

“LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR
Rate as provided in Section 5.1(a).

 

“Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien,
pledge, charge, security interest, hypothecation or encumbrance of any kind in
respect of such asset.  For the purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement relating to such asset.

 

“Loan Documents” means, collectively, this Agreement, the Notes, the
Applications, the Security Documents, the Agreement Regarding Post-Closing
Matters, each Joinder Agreement executed pursuant to Section 9.11 and each other
document, instrument, certificate and agreement executed and delivered by the
Borrower or any Subsidiary in connection with this Agreement or otherwise
referred to herein or contemplated hereby (excluding any Hedging Agreement), all
as may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Loans” means the collective reference to the Revolving Credit Loans, the Term
Loans, and the Swingline Loans, and “Loan” means any of such Loans.

 

“Material Adverse Effect”  means, with respect to the Borrower or any of its
Restricted Subsidiaries (or prior to the consummation of the ESSI Merger, ESSI
or any of its Subsidiaries), a material adverse effect on (i) the properties,
business, operations or financial condition of such Persons, taken as a whole,
or (ii) the ability of such Persons, taken as a whole, to perform their
obligations under the Loan Documents in each case to which they are parties.

 

“Material Contract” means any contract or agreement, written or oral, of the
Borrower or any of its Restricted Subsidiaries the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.

 

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

 

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, or has accrued an obligation to
make, contributions within the preceding six (6) years.

 

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“Net Cash Proceeds” means, as applicable, (a) with respect to any sale or other
disposition of assets, the gross cash proceeds received by the Borrower or any
of its Restricted Subsidiaries from such sale less the sum of (i) all income
taxes and other taxes assessed by (or reasonably anticipated to be payable to) a
Governmental Authority as a result of such sale and any other fees and expenses
incurred in connection therewith, (ii) net reserves required in accordance with
GAAP in connection with such sale and (iii) the principal amount of, and
premium, if any, and interest on, any Debt secured by a Lien on the asset (or a
portion thereof) sold, which Debt is required to be repaid in connection with
such sale, (b) with respect to any offering of capital stock or issuance of
Debt, the gross cash proceeds received by the Borrower or any of its Restricted
Subsidiaries therefrom less all reasonable legal, underwriting and other
reasonable fees and expenses incurred in connection therewith and (c) with
respect to any payment under an insurance policy or in connection with a
condemnation proceeding, the amount of cash proceeds received by the Borrower or
its Restricted Subsidiaries from an insurance company or Governmental Authority,
as applicable, net of all reasonable expenses of collection.

 

“Net Income” means, with respect to the Borrower and its Restricted
Subsidiaries, for any period of determination, the net income (or loss) of the
Borrower and its Restricted Subsidiaries for such period, determined on a
Consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income the net income (or loss) of any Person accrued prior to
the date it becomes a Restricted Subsidiary or is merged into or consolidated
with the Borrower or any of its Restricted Subsidiaries or that Person’s assets
are acquired by the Borrower or any of its Restricted Subsidiaries.

 

“New Revolving Lender” has the meaning assigned thereto in Section 2.8(b).

 

“New Term Lender” has the meaning assigned thereto in Section 4.6(b).

 

“Notes” means the collective reference to the Revolving Credit Notes, the Term
Notes and the Swingline Note, and “Note” means any of such Notes.

 

“Notice of Account Designation” has the meaning assigned thereto in
Section 2.3(b).

 

“Notice of Borrowing” has the meaning assigned thereto in Section 2.3(a).

 

“Notice of Conversion/Continuation” has the meaning assigned thereto in
Section 5.2.

 

“Notice of Prepayment” has the meaning assigned thereto in Section 2.4(c).

 

“Obligations” means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all existing or future payment and other obligations owing by
the Borrower under any Hedging Agreement (which Hedging Agreement is permitted
hereunder) with any Person that is a Lender or an Affiliate of a Lender
hereunder at the time such Hedging Agreement is executed (all such obligations
with respect to any such Hedging Agreement, “Hedging Obligations”) and (d) all
other fees and commissions (including

 

15

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attorneys’ fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower or any
of its Restricted Subsidiaries to the Lenders or the Administrative Agent, in
each case under or in respect of this Agreement, any Note, any Letter of Credit
or any of the other Loan Documents of every kind, nature and description, direct
or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any note.

 

“Officer’s Compliance Certificate” has the meaning assigned thereto in
Section 8.2.

 

“Other Taxes” has the meaning assigned thereto in Section 5.13(b).

 

“Participating Member State” means each state so described in any EMU
Legislation.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which (a) is maintained for the employees of the Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any of its current or former
ERISA Affiliates.

 

“Performance Based Letters of Credit” means standby Letters of Credit issued to
ensure the performance of services and/or delivery of goods by or on behalf of
the Borrower.

 

“Permitted Acquisition” means any acquisition permitted by Section 11.3(d).

 

“Permitted Acquisition Consideration” means the aggregate amount of the purchase
price (including, but not limited to, any assumed debt, earn-outs (valued at the
maximum amount payable thereunder), deferred payments, or capital stock of the
Borrower, net of the applicable acquired company’s cash (including Cash
Equivalents) balance as shown on its most recent financial statements delivered
in connection with the applicable Permitted Acquisition) to be paid in
connection with any applicable Permitted Acquisition as set forth in the
applicable Permitted Acquisition Documents executed by the Borrower or any of
its Restricted Subsidiaries in order to consummate the applicable Permitted
Acquisition.

 

“Permitted Acquisition Documents” means the merger, stock and/or asset purchase
documents entered into in connection with any Permitted Acquisition.

 

“Permitted Currency” means Dollars or any Alternative Currency, or each such
currency, as the context requires.

 

“Permitted Debt Add-On” means the issuance pursuant to and in accordance with
the terms of the Permitted Debt Documents of an additional amount of Permitted
Senior Unsecured Convertible Debt to be issued on or after the Closing Date at
the option of the initial purchasers of the Convertible Notes in an aggregate
principal amount not to exceed $45,000,000.

 

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“Permitted Debt Documents” means the collective reference to the Senior
Subordinated Note Indenture, the Convertible Note Indenture and the Senior
Unsecured Note Indenture.

 

“Permitted Debt Issuance” has the meaning assigned thereto in Section 6.2(g).

 

“Permitted Escrow Deposit” means, with respect to any Permitted Subordinated
Debt or senior unsecured Debt incurred in accordance with Section 11.1(m)(ii),
the deposit into escrow with the applicable trustee of the proceeds of such Debt
for a period not to exceed the Hold Period and upon other terms and conditions
reasonably acceptable to the Administrative Agent.

 

“Permitted Escrow Redemption” means any release of a Permitted Escrow Deposit to
the holders of the applicable Permitted Subordinated Debt or senior unsecured
Debt incurred in accordance with Section 11.1(m)(ii), on or prior to the
expiration of the Hold Period solely for the purpose of redeeming in full such
Debt to the extent required as a result of the failure of the applicable
Designated Acquisition to close on or prior to such date.

 

“Permitted Lien” means any Lien permitted pursuant to Section 11.2.

 

“Permitted Senior Unsecured Convertible Debt” means the collective reference to
Convertible Notes and any Debt incurred in accordance with
Section 11.1(m)(ii) in the form of senior unsecured convertible notes.

 

“Permitted Subordinated Debt” means Subordinated Debt which is permitted
pursuant to Section 11.1(j).

 

“Person” means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.

 

“Pledge Agreement” means the collective reference to the pledge agreements
entered into by the Borrower (or applicable Restricted Subsidiary) in favor of
the Administrative Agent for the ratable benefit of itself and the Lenders, in
the form of Exhibit K, as amended, restated, supplemented or otherwise modified
prior to the date hereof, by the Existing Joinder Documents or otherwise, as
reaffirmed pursuant to the Reaffirmation Agreement and as otherwise amended,
restated, supplemented or otherwise modified from time to time hereafter.

 

“Pounds Sterling” means, at any time of determination, the then official
currency of the United Kingdom.

 

“Prime Rate” means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate.  Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs.  The parties hereto acknowledge that the rate
announced publicly by Wachovia as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.

 

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“Pro Forma EBITDA” means, with respect to any Person acquired in connection with
a  Permitted Acquisition consummated during any calculation period, EBITDA of
such acquired Person calculated on a pro forma basis as of the first day of such
calculation period.

 

“Purchasing Lender” has the meaning assigned thereto in Section 14.10.

 

“Reaffirmation Agreement” means the Reaffirmation and Amendment Agreement, of
even date herewith, among the Borrower, its Domestic Subsidiaries that are
Restricted Subsidiaries and the Administrative Agent (for the ratable benefit of
itself and the Lenders), substantially in the form of Exhibit J, as amended,
restated, supplemented or otherwise modified from time to time.

 

“Register” shall have the meaning assigned thereto in Section 14.10(d).

 

“Reimbursement Obligation” means the obligation of the Borrower to reimburse
the  applicable Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.

 

“Required Lenders” means, at any date, any combination of Lenders holding more
than fifty percent (50%) of the sum of (a) the Revolving Credit Commitment (or,
if the Revolving Credit Facility has been terminated, any combination of Lenders
holding more than fifty percent (50%) of the aggregate outstanding Extensions of
Credit thereunder) and (b) the aggregate outstanding Extensions of Credit under
the Term Loan Facility.

 

“Responsible Officer” means any of the following: the chief executive officer,
chief financial officer or corporate controller of the Borrower or any other
officer of the Borrower reasonably acceptable to the Administrative Agent.

 

“Restricted Subsidiaries” means all Subsidiaries other than the Unrestricted
Subsidiaries.

 

“Revolving Credit Commitment” means (a) as to any Lender, the obligation of such
Lender to make Revolving Credit Loans for the account of the Borrower hereunder
in an aggregate principal amount at any time outstanding not to exceed the
amount set forth in the Register, as such Revolving Credit Commitment may be
reduced or modified at any time or from time to time pursuant to the terms
hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Loans, as such amount may be reduced at any time or from
time to time pursuant to the terms hereof.  The Revolving Credit Commitment of
all Lenders on the Closing Date shall be $400,000,000.

 

“Revolving Credit Commitment Percentage” means, as to any Lender at any time,
the ratio of (a) the amount of the Revolving Credit Commitment of such Lender to
(b) the Revolving Credit Commitments of all Lenders.

 

“Revolving Credit Facility” means the revolving credit facility established
pursuant to Article II.

 

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“Revolving Credit Loan” means any revolving loan made to the Borrower pursuant
to Section 2.1 and “Revolving Credit Loans” means the collective reference to
all revolving loans made to the Borrower pursuant to Section 2.1.

 

“Revolving Credit Maturity Date” means the earliest of the dates referred to in
Section 2.7.

 

“Revolving Credit Notes” means the collective reference to the revolving credit
promissory notes made by the Borrower payable to the order of each Lender,
substantially in the form of Exhibit A-1, evidencing the Revolving Credit Loans,
and any amendments, supplements and modifications thereto, any substitutions
therefor, and any replacements, restatements, renewals or extensions thereof, in
whole or in part; “Revolving Credit Note” means any of such Revolving Credit
Notes.

 

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

 

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

 

“Security Documents” means the collective reference to the Subsidiary Guaranty
Agreement, the Collateral Agreement, the Pledge Agreement, the Reaffirmation
Agreement and each other agreement or writing pursuant to which the Borrower or
any Restricted Subsidiary purports to pledge or grant a security interest in any
property or assets securing the Obligations or any such Person purports to
guaranty the payment and/or performance of the Obligations, in each case, as
amended, restated, supplemented or otherwise modified prior to the date hereof,
by the Existing Joinder Documents or otherwise, as reaffirmed pursuant by the
Reaffirmation Agreement and as otherwise amended, restated, supplemented or
otherwise modified from time to time hereafter.

 

“Senior Debt” means, with respect to the Borrower and its Restricted
Subsidiaries on any date, all Debt of such Persons as of such date minus
Subordinated Debt of such Persons as of such date.

 

“Senior Leverage Ratio” means, as of any date, the ratio of (a) the sum of
(i) Senior Debt outstanding as of such date less (ii) the sum of (A) the
outstanding amount of all Performance Based Letters of Credit and (B) so long as
there are no outstanding Revolving Credit Loans, an amount (not to exceed
$150,000,000) equal to the amount of cash and Cash Equivalents of the Borrower
and its Subsidiaries immediately available to repay their obligations, in each
case as of such date to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date.

 

“Senior Subordinated Note Indenture” means the Indenture entered into in
connection with the issuance of the Senior Subordinated Notes in the form
provided to the Administrative Agent and the Lenders as of the Closing Date,
including such indenture as subsequently qualified under the Trust Indenture Act
of 1939, as amended, and all exhibits and schedules thereto as each

 

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may be amended, restated, supplemented or otherwise modified subject to the
terms and conditions set forth in this Agreement.

 

“Senior Subordinated Notes” means the collective reference to the senior
subordinated notes due 2018 of the Borrower issued pursuant to the Senior
Subordinated Note Indenture in the initial aggregate principal amount of
$250,000,000.

 

“Senior Unsecured Note Indenture” means the Indenture entered into in connection
with the issuance of the Senior Unsecured Notes in the form provided to the
Administrative Agent and the Lenders as of the Closing Date, including such
indenture as subsequently qualified under the Trust Indenture Act of 1939, as
amended, and all exhibits and schedules thereto, as each may be amended,
restated, supplemented or otherwise modified pursuant to the terms and
conditions set forth in this Agreement.

 

“Senior Unsecured Notes” means the collective reference to the senior unsecured
fixed rate notes due 2016 of the Borrower issued pursuant to the Senior
Unsecured Note Indenture in the initial principal amount of $350,000,000.

 

“Solvent” means, as to the Borrower and its Restricted Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.

 

“Subordinated Debt” means the collective reference to (a) Permitted Subordinated
Debt, and (b) any other Debt of the Borrower or any Restricted Subsidiary
subordinated in right and time of payment to the Obligations and containing such
other terms and conditions, in each case as are reasonably satisfactory to the
Required Lenders.

 

“Subsidiary” means, as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership
interests of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency).  Unless otherwise qualified,
references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the
Borrower.

 

“Subsidiary Guaranteed Obligations” means the collective reference to the
guaranteed obligations of each of the Restricted Subsidiaries party to the
Subsidiary Guaranty Agreement.

 

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“Subsidiary Guarantors” means the collective reference to the Domestic
Subsidiaries who are Restricted Subsidiaries executing the Subsidiary Guaranty
Agreement and any other Person which, after the Closing Date, becomes a party to
the Subsidiary Guaranty Agreement by executing and delivering a Joinder
Agreement.

 

“Subsidiary Guaranty Agreement” means the unconditional guaranty dated as of
September 28, 2001 entered into by each of the Subsidiary Guarantors in favor of
the Administrative Agent for the ratable benefit of itself and the Lenders, in
the form of Exhibit H, as amended, restated, supplemented or otherwise modified
prior to the date hereof, by the Existing Joinder Documents or otherwise, as
reaffirmed by the Reaffirmation Agreement and as otherwise amended, restated,
supplemented or otherwise modified from time to time hereafter.

 

“Swingline Commitment” means the lesser of (a) Twenty-Five Million Dollars
($25,000,000) and (b) the Revolving Credit Commitment.

 

“Swingline Facility” means the swingline facility established pursuant to
Section 2.2.

 

“Swingline Lender” means Wachovia in its capacity as swingline lender hereunder.

 

“Swingline Loan” means any swingline loan made by the Swingline Lender to the
Borrower pursuant to Section 2.2 and “Swingline Loans” means the collective
reference to all swingline loans made by the Swingline Lender to the Borrower
pursuant to Section 2.2.

 

“Swingline Note” means the swingline promissory note made by the Borrower
payable to the order of the Swingline Lender, substantially in the form of
Exhibit A-2, evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutions therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.

 

“Swingline Termination Date” means the first to occur of (a) the resignation of
Wachovia as Administrative Agent in accordance with Section 13.9 and (b) the
Revolving Credit Maturity Date.

 

“Syndication Agent” means Bear Stearns Corporate Lending Inc. in its capacity as
syndication agent hereunder.

 

“Taxes” has the meaning assigned thereto in Section 5.13(a).

 

“Term Loan Commitment” means (a) as to any Lender, the obligation of such Lender
to make Initial Term Loans and/or Additional Term Loans, as applicable, for the
account of the Borrower hereunder in an aggregate principal amount not to exceed
the amount set forth in the Register, as such applicable Term Loan Commitment
may be increased, reduced or modified at any time or from time to time pursuant
to the terms hereof and (b) as to all Lenders, the aggregate commitment to make
all such Term Loans.  The Term Loan Commitment of all Lenders on the Closing
Date will be $275,000,000.

 

“Term Loan Facility” means the term loan facility established pursuant to
Article IV.

 

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“Term Loan Maturity Date” means the first to occur of (a) January 31, 2013,
(b) the date of termination pursuant to Section 12.2(a), or (c) the date of
repayment in full of the outstanding Term Loans pursuant to Section 4.4.

 

“Term Loan Percentage” means, as to any Lender, as applicable, after the
applicable Term Loans are made, the ratio of (a) the outstanding principal
balance of such Term Loan or Term Loans of such Lender to (b) the aggregate
outstanding principal balance of all such Term Loans of all Lenders.

 

“Term Loans” means the Initial Term Loans and all Additional Term Loans.

 

“Term Notes” means the term promissory notes made by the Borrower payable to the
order of each of the Lenders, substantially in the form of Exhibit A-3,
evidencing the Debt incurred by the Borrower pursuant to the Term Loan Facility,
and any amendments, modifications and supplements thereto, any substitutions
therefor, and any replacement, restatements, renewals or extensions thereof, in
whole or in part.

 

“Termination Event” means except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect: (a) a “Reportable
Event” described in Section 4043 of ERISA for which the notice requirement has
not been waived by the PBGC, or (b) the withdrawal of the Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination, under Section 4041
of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or
(d) the institution of proceedings to terminate, or the appointment of a trustee
with respect to, any Pension Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA, or (g) the partial or complete withdrawal of the Borrower
or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is
asserted by such plan, or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (h) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.

 

“Total Leverage Ratio” means, as of any date, the ratio of (a) the sum of
(i) Debt outstanding as of such date less (ii) the sum of (A) the outstanding
amount of all Performance Based Letters of Credit and (B) so long as there are
no outstanding Revolving Credit Loans, an amount (not to exceed $150,000,000)
equal to the amount of cash and Cash Equivalents of the Borrower and its
Subsidiaries immediately available to repay their obligations, in each case as
of such date to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date.

 

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“Transaction Documents” means the collective reference to the Loan Documents,
the Permitted Debt Documents and the ESSI Merger Documents.

 

“Treaty on European Union” means the Treaty of Rome of March 25, 1957, as
amended by the Single European Act of 1986 and the Maastricht Treaty (signed
February 7, 1992), as amended from time to time.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York,
as amended or modified from time to time.

 

“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.

 

“United States” means the United States of America.

 

“Unrestricted Subsidiary” means any Subsidiary set forth on Schedule 2.

 

“Wachovia” means Wachovia Bank, National Association, a national banking
association, and its successors.

 

“Wholly-Owned” means, with respect to a Subsidiary, that all of the shares of
capital stock or other ownership interests of such Subsidiary are, directly or
indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other
shares required by Applicable Law to be owned by a Person other than the
Borrower).

 

SECTION 1.2                                                  General.  Unless
otherwise specified, a reference in this Agreement to a particular article,
section, subsection, Schedule or Exhibit is a reference to that article,
section, subsection, Schedule or Exhibit of this Agreement.  Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter.  Any reference herein to “Charlotte time” shall refer to the
applicable time of day in Charlotte, North Carolina.

 

SECTION 1.3                                                  Other Definitions
and Provisions.

 

(a)                                  Use of Capitalized Terms.  Unless otherwise
defined therein, all capitalized terms defined in this Agreement shall have the
defined meanings when used in this Agreement, the Notes and the other Loan
Documents or any certificate, report or other document made or delivered
pursuant to this Agreement.

 

(b)                                 Miscellaneous.  The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

 

SECTION 1.4                                                  Effectiveness of
Euro Provisions.  With respect to any state (or the

 

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currency of such state) that is not a Participating Member State on the date of
this Agreement, the provisions of Sections 5.8(a), 5.8(b) and 5.14 shall become
effective in relation to such state (and the currency of such state) at and from
the date on which such state becomes a Participating Member State.

 

SECTION 1.5 Currency Equivalents.

 

(a)                                  For purposes of Articles II, III and IV,
the applicable outstanding amount of Letters of Credit and L/C Obligations
(including, without limitation, all Alternative Currency Letters of Credit and
Alternative Currency L/C Obligations) shall be deemed to refer to the Dollar
Amount thereof.

 

(b)                                 All Loans made under this Agreement,
including, without limitation, Loans made to refund drawings made under
Alternative Currency Letters of Credit, shall be made only in Dollars.

 

SECTION 1.6 Permitted Senior Unsecured Convertible Debt.  The parties hereto
acknowledge that prior to the conversion of any Permitted Senior Unsecured
Convertible Debt into equity securities or capital stock, such Permitted Senior
Unsecured Convertible Debt shall not constitute equity securities or capital
stock.

 

ARTICLE II

 

REVOLVING CREDIT FACILITY

 

SECTION 2.1                                                  Revolving Credit
Loans.  Subject to the terms and conditions of this Agreement, and in reliance
upon the representations and warranties set forth herein, each Lender severally
agrees to make Revolving Credit Loans to the Borrower from time to time from the
Closing Date through, but not including, the Revolving Credit Maturity Date as
requested by the Borrower in accordance with the terms of Section 2.3; provided,
that (a) the sum of the aggregate amount of all outstanding Revolving Credit
Loans (after giving effect to the amount requested and the use of the proceeds
thereof to repay Extensions of Credit hereunder),  Swingline Loans and L/C
Obligations from any Lender to the Borrower shall at no time exceed such
Lender’s Revolving Credit Commitment and (b) the principal amount of outstanding
Revolving Credit Loans from any Lender to the Borrower shall not at any time
exceed such Lender’s Revolving Credit Commitment less such Lender’s Revolving
Credit Commitment Percentage of outstanding Swingline Loans less such Lender’s
Revolving Credit Commitment Percentage of all outstanding L/C Obligations.  Each
Revolving Credit Loan by a Lender shall be in a principal amount equal to such
Lender’s Revolving Credit Commitment Percentage of the aggregate principal
amount of Revolving Credit Loans requested on such occasion.  Subject to the
terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.

 

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SECTION 2.2                                                  Swingline Loans.

 

(a)           Availability.  Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time from the Closing Date through, but not including, the
Swingline Termination Date; provided, that the Swingline Lender shall have no
obligation to make any Swingline Loan, if, after giving effect to any amount
requested and the use of the proceeds thereof to repay Extensions of Credit
hereunder, the aggregate principal amount of all Swingline Loans then
outstanding would exceed the lesser of (i) the Swingline Commitment or (ii) the
Revolving Credit Commitment less the sum of all outstanding Revolving Credit
Loans and L/C Obligations.

 

(b)                                 Refunding.

 

(i)                                     Swingline Loans shall be refunded by the
Lenders (which for such purpose shall include the Swingline Lender in its
capacity as a Lender having a Revolving Credit Commitment) on demand by the
Swingline Lender.  Subject to the proviso to the initial sentence of
Section 2.1, such refundings shall be made by the Lenders in accordance with
their respective Revolving Credit Commitment Percentages and shall thereafter be
reflected as Revolving Credit Loans of the Lenders on the books and records of
the Administrative Agent.  Each Lender shall fund its respective Revolving
Credit Commitment Percentage of Revolving Credit Loans (as Base Rate Loans) as
required to repay Swingline Loans outstanding to the Swingline Lender upon
demand to such Lender  by telecopier (or by telephone promptly confirmed by
telecopier) by the Swingline Lender but in no event later than 3:00 p.m.
(Charlotte time) on the next succeeding Business Day after such demand is made. 
No Lender’s obligation to fund its respective Revolving Credit Commitment
Percentage of a Swingline Loan shall be affected by any other Lender’s failure
to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor
shall any Lender’s Revolving Credit Commitment Percentage be increased as a
result of any such failure of any other Lender to fund its Revolving Credit
Commitment Percentage of a Swingline Loan.

 

(ii)                                  The Borrower shall pay to the Swingline
Lender on demand the amount of such Swingline Loans to the extent amounts
received from the Lenders are not sufficient to repay in full the outstanding
Swingline Loans requested or required to be refunded.  In addition, the Borrower
hereby authorizes the Administrative Agent to charge any account maintained by
the Borrower with the Swingline Lender (up to the amount available therein) in
order to immediately pay the Swingline Lender the amount of such Swingline Loans
to the extent amounts received from the Lenders are not sufficient to repay in
full the outstanding Swingline Loans requested or required to be refunded.  If
any portion of any such amount paid to the Swingline Lender shall be recovered
by or on behalf of the Borrower from the Swingline Lender in bankruptcy or
otherwise, the loss of the amount so recovered shall be ratably shared among all
the Lenders in accordance with their respective Revolving Credit Commitment
Percentages (unless the amounts so recovered by or on behalf of the Borrower
pertain to a Swingline Loan extended after the occurrence and during the
continuance of an Event of Default of which the Administrative Agent has
received notice in the manner required pursuant to Section 13.5

 

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and which Event of Default has not been waived by the Required Lenders or the
Lenders, as applicable); provided that with respect to any Swingline Loan, no
Lender shall be required to fund more than its Revolving Credit Commitment
Percentage of such Swingline Loan.

 

(iii)                               Each Lender acknowledges and agrees that its
obligation to refund Swingline Loans in accordance with the terms of this
Section 2.2 is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Article VI at the time of refunding.  Further, each
Lender agrees and acknowledges that if prior to the refunding of any outstanding
Swingline Loans pursuant to this Section 2.2, one of the events described in
Section 12.1(j) or (k) shall have occurred, each Lender will, in lieu of making
a Revolving Credit Loan under Section 2.2(b)(i) (subject to the proviso to the
initial sentence of Section 2.1), on the date the applicable Revolving Credit
Loans would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit
Commitment Percentage of the aggregate amount of such Swingline Loan.  Each
Lender will immediately transfer to the Swingline Lender, in immediately
available funds at the office of the Swingline Lender, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount.  Whenever, at any time after the Swingline
Lender has received from any Lender such Lender’s participating interest in a
Swingline Loan, the Swingline Lender receives any payment on account thereof,
the Swingline Lender will promptly distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s participating
interest was outstanding and funded).

 

SECTION 2.3                                                  Procedure for
Advances of Revolving Credit and Swingline Loans.

 

(a)                                  Requests for Borrowing.  The Borrower shall
give the Administrative Agent irrevocable prior written notice substantially in
the form attached hereto as Exhibit B (a “Notice of Borrowing”) not later than
12:00 p.m.(Charlotte time) (i) on the same Business Day as each Base Rate Loan
and each Swingline Loan and (ii) at least three (3) Business Days before each
LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such
borrowing, which shall be a Business Day, (B) the amount of such borrowing,
which shall be (x) with respect to Base Rate Loans (other than Swingline Loans)
in an aggregate principal amount of $2,500,000 or a whole multiple of $100,000
in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $5,000,000 or a whole multiple of $100,000 in excess thereof
and (z) with respect to Swingline Loans in an aggregate principal amount of
$50,000 or a whole multiple of $50,000 in excess thereof, (C) whether such Loan
is to be a Revolving Credit Loan or Swingline Loan, (D) whether the Revolving
Credit Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case
of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto.  A
Notice of Borrowing received after 12:00 p.m. (Charlotte time) shall be deemed
received on the next Business Day.  The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing by telecopier (or by telephone
promptly confirmed by telecopier).

 

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(b)                                 Disbursement of Revolving Credit and
Swingline Loans.  Not later than 3:00 p.m. (Charlotte time) on the proposed
borrowing date, subject to the terms and conditions of this Agreement, (i) each
Lender will make available to the Administrative Agent, for the account of the
Borrower, at the Administrative Agent’s Office in funds immediately available to
the Administrative Agent, such Lender’s Revolving Credit Commitment Percentage
of the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the Administrative Agent’s Office in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date; provided that no Lender shall be responsible for
any default by any other Lender in that other Lender’s obligation to make a Loan
requested hereunder nor shall the commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender’s obligation to make a Loan
requested hereunder.  The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent notice substantially in the form of Exhibit C (a “Notice of Account
Designation”) delivered by the Borrower to the Administrative Agent or as may be
otherwise agreed upon by the Borrower and the Administrative Agent from time to
time.  Subject to Section 5.7, the Administrative Agent shall not be obligated
to disburse the portion of the proceeds of any Revolving Credit Loan requested
pursuant to this Section 2.3 to the extent that any Lender has not made
available to the Administrative Agent its Revolving Credit Commitment Percentage
of such Loan.  Revolving Credit Loans to be made for the purpose of refunding
Swingline Loans shall be made by the Lenders as provided in Section 2.2(b).

 

SECTION 2.4                                                  Repayment of Loans.

 

(a)                                  Repayment Date.  The Borrower hereby agrees
to repay the outstanding principal amount of (i) all Revolving Credit Loans in
full on the Revolving Credit Maturity Date, and (ii) all Swingline Loans in
accordance with Section 2.2(b) and otherwise in full on the Swingline
Termination Date, together, in each case, with all accrued but unpaid interest
and fees.

 

(b)                                 Mandatory Repayment of Revolving Credit
Loans.

 

(i)                                     If at any time the outstanding principal
amount of all Revolving Credit Loans plus the sum of all outstanding Swingline
Loans and L/C Obligations exceeds the Revolving Credit Commitment, the Borrower
agrees to repay immediately upon notice from the Administrative Agent, by
payment to the Administrative Agent for the account of the Lenders Extensions of
Credit in an amount equal to such excess with each such repayment applied first
to the principal amount of outstanding Swingline Loans, second to the principal
amount of outstanding Revolving Credit Loans and third, with respect to any
Letters of Credit then outstanding, a payment of cash collateral into a cash
collateral account opened by the Administrative Agent, for the benefit of the
applicable Issuing Lender and the Lenders under the Revolving Credit Facility in
an amount equal to the

 

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aggregate then undrawn and unexpired Dollar Amount of such Letters of Credit
(such cash collateral to be applied in accordance with Section 12.2(b)).

 

(ii)                                  If at any time (as determined by the
Administrative Agent pursuant to this Section 2.4(b)(ii)) and for any reason,
based upon the Dollar Amount of all outstanding Loans and L/C Obligations,
(a) the outstanding amount of all L/C Obligations exceeds the lesser of (i) the
Aggregate Commitment less the sum of the aggregate principal amount of all
outstanding Loans and (ii) the L/C Commitment or (b) the outstanding amount of
all Alternative Currency L/C Obligations exceeds the Alternative Currency L/C
Commitment, then, in each such case, the Borrower shall, at its option, either
(A) repay Loans in an amount equal to such excess (to the extent such repayment
will eliminate such excess) or (B) make a payment of cash collateral into a cash
collateral account opened by the Administrative Agent for the benefit of the
applicable Issuing Lender and the Lenders under the Revolving Credit Facility in
an amount equal to such excess (such cash collateral to be applied in accordance
with Section 12.2(b)).  The Borrower’s compliance with this
Section 2.4(b)(ii) shall be tested from time to time by the Administrative Agent
at its sole discretion, but in any event shall be tested on the date on which
the Borrower requests an Issuing Lender to issue a Letter of Credit under
Section 3.2.  Each such repayment pursuant to this Section 2.4(b)(ii) shall be
accompanied by any amount required to be paid pursuant to Section 5.11.

 

(c)                                  Optional Repayments.  The Borrower may at
any time and from time to time repay the Revolving Credit Loans and Swingline
Loans, in whole or in part, upon at least three (3) Business Days’ irrevocable
notice to the Administrative Agent with respect to LIBOR Rate Loans and one
(1) Business Day’s irrevocable notice with respect to Base Rate Loans and
Swingline Loans, substantially in the form attached hereto as Exhibit D (a
“Notice of Prepayment”) specifying the date and amount of repayment and whether
the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each.  Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender by telecopier (or by telephone promptly confirmed by
telecopier).  If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice.  Partial
repayments shall be in an aggregate amount of $2,500,000 or a whole multiple of
$100,000 in excess thereof with respect to Base Rate Loans (other than Swingline
Loans), $5,000,000 or a whole multiple of $100,000 in excess thereof with
respect to LIBOR Rate Loans and $50,000 or a whole multiple of $50,000 in excess
thereof with respect to Swingline Loans.  Each such repayment shall be
accompanied by an amount required to be paid pursuant to Section 5.11.

 

(d)                                 Limitation on Repayment of LIBOR Rate
Loans.  The Borrower may not repay any LIBOR Rate Loan on any day other than on
the last day of the Interest Period applicable thereto unless such repayment is
accompanied by any amount required to be paid pursuant to Section 5.11.

 

(e)                                  Hedging Agreements.  No repayment or
prepayment pursuant to this Section 2.4 shall affect any of the Borrower’s
obligations under any Hedging Agreement.

 

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(f)                                    Prepayment of Excess Proceeds.  In the
event that excess proceeds remain after the prepayments of the Term Loans
pursuant to Section 4.4(b)(vi)(B), the amount of such excess proceeds shall be
used on the date of the required prepayment under Section 4.4(b)(vi)(B) to
prepay the outstanding principal amount of the Revolving Credit Loans, without a
corresponding reduction of the Revolving Credit Commitment.

 

SECTION 2.5                                                  Notes.

 

(a)                                  Revolving Credit Notes.  Except as
otherwise provided in Section 14.10 (a) - (e), each Lender’s Revolving Credit
Loans and the obligation of the Borrower to repay such Revolving Credit Loans
may, at the election of such Lender, be evidenced by a separate Revolving Credit
Note executed by the Borrower payable to the order of such Lender.

 

(b)                                 Swingline Notes.  The Swingline Loans and
the obligation of the Borrower to repay Swingline Loans may, at the election of
the Swingline Lender, be evidenced by a Swingline Note executed by the Borrower
payable to the order of the Swingline Lender.

 

SECTION 2.6                                                  Permanent Reduction
of the Revolving Credit Commitment.

 

(a)                                  Voluntary Reduction.  The Borrower shall
have the right at any time and from time to time, upon at least five
(5) Business Days’ prior written notice to the Administrative Agent, to
permanently reduce, without premium or penalty, (i) the entire Revolving Credit
Commitment at any time or (ii) portions of the Revolving Credit Commitment, from
time to time, in an aggregate principal amount not less than $5,000,000 or any
whole multiple of $1,000,000 in excess thereof.  Upon receipt of such notice,
the Administrative Agent shall promptly notify each of the Lenders thereof by
telecopier (or by telephone promptly confirmed by telecopier).  The amount of
each partial permanent reduction shall permanently reduce the Lenders’ Revolving
Credit Commitments pro rata in accordance with their respective Revolving Credit
Commitment Percentages.

 

(b)                                 Mandatory Reduction.        In the event
excess proceeds remain after the prepayment of Term Loans pursuant to
Section 4.4(b)(vi)(A), the Revolving Credit Commitment shall be permanently
reduced on the date of the required prepayment under Section 4.4(b)(vi)(A) by an
amount equal to the amount of such excess proceeds.

 

(c)                                  Corresponding Payment.  Each permanent
reduction permitted or required pursuant to this Section 2.6 shall be
accompanied by a payment of principal sufficient to reduce the aggregate
outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as
applicable, after such reduction to the Revolving Credit Commitment as so
reduced and if the Revolving Credit Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrower shall be
required to deposit cash collateral in a cash collateral account opened by the
Administrative Agent in an amount equal to the aggregate then undrawn and
unexpired Dollar Amount of such Letters of Credit.  Such cash collateral shall
be applied in accordance with Section 12.2(b).  Any reduction of the Revolving
Credit Commitment to zero shall be accompanied by payment of all outstanding
Revolving Credit Loans and Swingline Loans (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C

 

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Obligations) and shall result in the termination of the Revolving Credit
Commitment and the Swingline Commitment and the Revolving Credit Facility.  Such
cash collateral shall be applied in accordance with Section 12.2(b).  If any
reduction of the Revolving Credit Commitment requires the repayment of any LIBOR
Rate Loan, such repayment shall be accompanied by any amount required to be paid
pursuant to Section 5.11.

 

SECTION 2.7                                                  Termination of
Revolving Credit Facility.  The Revolving Credit Facility shall terminate on the
earliest of (a) January 31, 2012, (b) the date of termination by the Borrower
pursuant to Section 2.6, or (c) the date of termination pursuant to
Section 12.2(a).

 

SECTION 2.8                                                  Increase of
Revolving Credit Commitment.

 

(a)                                  Subject to the conditions set forth below,
the Borrower shall have the option, at any time prior to the Revolving Credit
Maturity Date and exercisable on no more than two (2) occasions following the
Closing Date, to increase the Revolving Credit Commitment by an aggregate
principal amount of up to (i) $250,000,000 less (ii) the sum of (A) the
aggregate principal amount of any prior or simultaneous increase to the Term
Loan Commitment made pursuant to Section 4.6 and (B) the aggregate principal
amount of any prior increase to the Revolving Credit Commitment made pursuant to
this Section 2.8.  In the event the Borrower desires to exercise the
above-described option, the Borrower shall deliver to the Administrative Agent
an Increase Notification pursuant to which the Borrower may request that
additional Revolving Credit Loans be made on the Increase Effective Date.

 

(b)                                 Increases in the Revolving Credit Commitment
shall be obtained from existing Lenders or from other banks, financial
institutions or investment funds that qualify as Eligible Assignees, in each
case in accordance with this Section 2.8.  Participation in any increase in the
Revolving Credit Commitment shall be offered first to each of the existing
Lenders; provided that no such Lender shall have any obligation to provide any
portion of such increase.  If the amount of the increase requested by the
Borrower shall exceed the commitments which the existing Lenders are willing to
provide with respect to such increase, then the Borrower may invite other banks,
financial institutions and investment funds which meet the requirements of an
Eligible Assignee to join this Agreement as Lenders for the portion of such
increase not committed to by existing Lenders (each such other bank, financial
institution or investment fund, a “New Revolving Lender” and, collectively with
the existing Lenders providing increased Revolving Credit Commitments, the
“Increasing Revolving Lenders”).

 

(c)                                  The following terms and conditions shall
apply to each increase in the Revolving Credit Commitment: (i) such increase in
the Revolving Credit Commitment pursuant to this Section 2.8 (and any Extensions
of Credit made thereunder) shall constitute Obligations of the Borrower and
shall be secured and guaranteed with the other Extensions of Credit on a pari
passu basis; (ii) any New Revolving Lender providing such increase shall be
entitled to the same voting rights as the existing Lenders under the Revolving
Credit Facility and any Extensions of Credit made in connection with such
increase shall receive proceeds of prepayments on the same basis as the other
Revolving Credit Loans made hereunder; (iii) the Borrower shall, upon the
request of any Increasing Revolving Lender, execute such Revolving Credit Notes
as are necessary to reflect such Increasing Revolving Lender’s Revolving Credit
Commitment (as

 

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increased); (iv) the Administrative Agent and the Lenders shall have received
from the Borrower an Officer’s Compliance Certificate in form and substance
reasonably satisfactory to the Administrative Agent, demonstrating that, after
giving effect to any such increase in the Revolving Credit Commitment and any
Extensions of Credit made or to be made in connection therewith (and, if
applicable, any simultaneous Additional Term Loan), the Borrower will be in pro
forma compliance with the financial covenants set forth in Article X; (v) no
Default or Event of Default shall have occurred and be continuing as of the
applicable Increase Effective Date or after giving effect to such increase in
the Revolving Credit Commitment pursuant to this Section 2.8 or any Extensions
of Credit made in connection therewith; (vi) the representations and warranties
contained in Article VII and in the other Loan Documents shall be true and
correct on and as of the Increase Effective Date with the same effect as if made
on and as of such date (other than those representations and warranties that by
their terms speak as of a particular date, which representations and warranties
shall be true and correct as of such particular date); (vii) the amount of such
increase in the Revolving Credit Commitment shall not be less than a minimum
principal amount of $10,000,000 or a whole multiple of $5,000,000 in excess
thereof, or if less, the maximum amount permitted pursuant to clause (a) above;
(viii) the Borrower and each Increasing Revolving Lender shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, a written agreement acknowledged by the Administrative Agent and each
Subsidiary Guarantor, in form and substance satisfactory to the Administrative
Agent (a “Lender Addition and Acknowledgement Agreement”); (ix) the
Administrative Agent shall have received any documents or information, including
any joinder agreements, in connection with such increase in the Revolving Credit
Commitment as it may reasonably request; and (x) the outstanding Revolving
Credit Loans and Revolving Credit Commitment Percentages of L/C Obligations will
be reallocated by the Administrative Agent on the applicable Increase Effective
Date among the Lenders in accordance with their revised Revolving Credit
Commitment Percentages (and the Lenders agree to make all payments and
adjustments necessary to effect such reallocation and the Borrower shall pay any
and all costs required pursuant to Section 5.11 in connection with such
reallocation as if such reallocation were a repayment).

 

(d)                                 Upon the execution, delivery, acceptance and
recording of the applicable Lender Addition and Acknowledgment Agreement, from
and after the applicable Increase Effective Date, each Increasing Revolving
Lender shall have a Revolving Credit Commitment as set forth in the Register and
all the rights and obligations of a Lender with a Revolving Credit Commitment
hereunder.

 

(e)                                  The Administrative Agent shall maintain a
copy of each Lender Addition and Acknowledgment Agreement delivered to it in
accordance with Section 14.10(d).

 

(f)                                    Within five (5) Business Days after
receipt of notice, the Borrower shall execute and deliver to the Administrative
Agent, in exchange for any surrendered Revolving Credit Note or Revolving Credit
Notes of any existing Lender or with respect to New Revolving Lender, a new
Revolving Credit Note or Revolving Credit Notes to the order of the applicable
Lenders in amounts equal to the Revolving Credit Commitment of such Lenders as
set forth in the Register.  Such new Revolving Credit Note or Revolving Credit
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such Revolving Credit Commitments, shall be dated as of the Increase
Effective Date and shall otherwise be in substantially the form of the

 

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existing Revolving Credit Notes.  Each surrendered Revolving Credit Note and/or
Revolving Credit Notes shall be canceled and returned to the Borrower.

 

(g)                                 All Revolving Credit Loans made on account
of any increase in the Revolving Credit Commitment pursuant to this Section 2.8
shall bear interest at the rate applicable to the Revolving Credit Loans
immediately prior to giving effect to such increase in the Revolving Credit
Commitment pursuant to this Section 2.8.

 

ARTICLE III

 

LETTER OF CREDIT FACILITY

 

SECTION 3.1                                                  L/C Commitment. 
Subject to the terms and conditions hereof, the applicable Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue standby Letters of Credit for the account of the Borrower on any
Business Day from the Closing Date through but not including the fifth (5th)
Business Day prior to the Revolving Credit Maturity Date in such form as may be
approved from time to time by the applicable Issuing Lender; provided, that no
Issuing Lender shall have any obligation to issue any Letter of Credit if, after
giving effect to such issuance, (a) the L/C Obligations would exceed the L/C
Commitment, (b) the aggregate principal amount of outstanding Revolving Credit
Loans, plus the aggregate principal amount of outstanding Swingline Loans, plus
the aggregate amount of L/C Obligations would exceed the Revolving Credit
Commitment or (c) the Alternative Currency L/C Obligations would exceed the
Alternative Currency L/C Commitment.  Each Letter of Credit (other than the
Existing Letters of Credit) shall (i) be denominated in a Permitted Currency
(ii) be in a minimum Dollar Amount of $100,000 or in a Dollar Amount less than
$100,000 if approved in writing by the Administrative Agent and the applicable
Issuing Lender in their respective sole discretion (or the Alternative Currency
Amount thereof with respect to Alternative Currency Letters of Credit), (iii) be
a standby letter of credit issued to support obligations of the Borrower or any
of its Restricted Subsidiaries, contingent or otherwise, incurred in the
ordinary course of business, (iv) expire on a date satisfactory to the
applicable Issuing Lender and the Administrative Agent, which date shall be no
later than the earlier of (A) one (1) year after the date of issuance of such
Letter of Credit or (B) five (5) Business Days prior to the Revolving Credit
Maturity Date, provided that any Letter of Credit with a one-year tenor may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the date referred to in clause (B) above), and (v) be
subject to ISP98 and, to the extent not inconsistent therewith, the laws of the
State of North Carolina. As of the Closing Date, each of the Existing Letters of
Credit shall constitute, for all purposes of this Agreement and the other Loan
Documents, a Letter of Credit issued and outstanding hereunder.  No Issuing
Lender shall at any time be obligated to issue any Letter of Credit hereunder if
such issuance would conflict with, or cause such Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law.  References
herein to “issue” and derivations thereof with respect to Letters of Credit
shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.

 

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SECTION 3.2                                                  Procedure for
Issuance of Letters of Credit.  The Borrower may from time to time request that
the applicable Issuing Lender issue a Letter of Credit by delivering to such
Issuing Lender at such Issuing Lender’s Lending Office an Application therefor,
completed to the satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information (the “L/C Supporting
Documentation”) as the applicable Issuing Lender and the Administrative Agent
may request (which information shall include the Permitted Currency in which
such Letter of Credit shall be denominated).  The Borrower will
contemporaneously deliver to the Administrative Agent, at the Administrative
Agent’s Office, a copy of such Application and L/C Supporting Documentation. 
Upon receipt of any Application, the applicable Issuing Lender shall process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall, after approving the same and receiving
confirmation from the Administrative Agent that sufficient availability exists
under the Revolving Credit Facility for the issuance of such Letter of Credit,
subject to Section 3.1 and Article VI, promptly issue the Letter of Credit
requested thereby (but in no event shall any Issuing Lender be required to issue
any Letter of Credit earlier than (a) two (2) Business Days, with respect to a
Letter of Credit denominated in Dollars, and (b) three (3) Business Days, with
respect to an Alternative Currency Letter of Credit, after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the
applicable Issuing Lender and the Borrower.  The applicable Issuing Lender shall
promptly furnish to the Borrower  and the Administrative Agent a copy of such
Letter of Credit and promptly notify each Lender under the Revolving Credit
Facility of the issuance and upon request by any Lender under the Revolving
Credit Facility, furnish to such Lender a copy of such Letter of Credit and the
amount of such Lender’s L/C Participation therein by telecopier (or by telephone
promptly confirmed by telecopier).

 

SECTION 3.3                                                  Commissions and
Other Charges.

 

(a)                                  The Borrower shall pay to the
Administrative Agent, for the account of the applicable Issuing Lender and the
L/C Participants, a letter of credit commission with respect to each Letter of
Credit outstanding during the preceding period in an amount equal to the face
amount of such Letter of Credit (reflected as the Dollar Amount thereof as
determined by the Administrative Agent) multiplied by the Applicable Margin with
respect to Revolving Credit Loans that are LIBOR Rate Loans (determined on a per
annum basis).  Such commission shall be payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Revolving Credit Maturity Date.
The Administrative Agent shall, promptly following its receipt thereof,
distribute to the applicable Issuing Lender and the L/C Participants all
commissions received pursuant to this Section 3.3(a) in accordance with their
respective Revolving Credit Commitment Percentages.

 

(b)                                 In addition to the foregoing commission, the
Borrower shall pay the applicable Issuing Lender for its own account an issuance
fee with respect to each Letter of Credit issued by such Issuing Lender in an
amount equal to the face amount of such Letter of Credit (reflected as the
Dollar Amount thereof as determined by the applicable Issuing Lender) multiplied
by

 

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0.125% per annum.  Such issuance fee shall be payable quarterly in arrears on
the last Business Day of each calendar quarter and on the Revolving Credit
Maturity Date.

 

(c)                                  In addition to the foregoing fees and
commissions, the Borrower shall pay or reimburse each Issuing Lender for its own
account for such normal and customary costs and expenses as are incurred or
charged by such Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit.

 

(d)                                 The commissions, fees, charges, costs and
expenses payable pursuant to this Section 3.3 shall be payable in Dollars.

 

SECTION 3.4                                                  L/C Participations.

 

(a)                                  Each Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees (subject to the proviso to the initial sentence of Section 2.1) to accept
and purchase and hereby accepts and purchases from such Issuing Lender, on the
terms and conditions hereinafter stated, for such L/C Participant’s own account
and risk an undivided interest equal to such L/C Participant’s Revolving Credit
Commitment Percentage in such Issuing Lender’s obligations and rights under and
in respect of each Letter of Credit issued by such Issuing Lender hereunder and
the amount of each draft paid by such Issuing Lender thereunder.  Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit for which such Issuing
Lender is not reimbursed in full by the Borrower through a Revolving Credit Loan
or otherwise in accordance with the terms of this Agreement, such L/C
Participant shall (subject to the proviso to the initial sentence of
Section 2.1) pay to that Issuing Lender upon demand at the Issuing Lender’s
address for notices specified herein an amount equal to the Dollar Amount of
such L/C Participant’s Revolving Credit Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed; provided that with
respect to any draft under any Letter of Credit, no Lender shall be required to
fund more than its Revolving Credit Commitment Percentage of such draft or more
than any amount which would cause the sum of aggregate outstanding principal
amount of all Revolving Credit Loans made by such Lender plus such Lender’s
Revolving Credit Commitment Percentage of all outstanding Swingline Loans plus
such Lender’s Revolving Credit Commitment Percentage of all outstanding L/C
Obligations to exceed such Lender’s Revolving Credit Commitment.

 

(b)                                 Upon becoming aware of any amount required
to be paid by any L/C Participant to the applicable Issuing Lender pursuant to
Section 3.4(a) in respect of any unreimbursed portion of any payment made by
such Issuing Lender under any Letter of Credit, such Issuing Lender shall notify
each L/C Participant by telecopier (or by telephone promptly confirmed by
telecopier) of the amount and due date (which shall not be less than one
(1) Business Day after the giving of such notice) of such required payment and
such L/C Participant shall pay to such Issuing Lender the amount specified on
the applicable due date.  If any such amount is paid to such Issuing Lender
after the date such payment is due, such L/C Participant shall pay to such
Issuing Lender on demand, in addition to such amount, the product of (i) such
amount, times (ii) the daily average Federal Funds Rate as determined by the
Administrative Agent during the

 

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period from and including the date such payment is due to the date on which such
payment is immediately available to such Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360.  A certificate of the applicable Issuing Lender
with respect to any amounts owing under this Section 3.4(b) shall be conclusive
in the absence of manifest error.  With respect to payment to an Issuing Lender
of the unreimbursed amounts described in this Section 3.4(b) and subject to the
second parenthetical of the first sentence of this subsection (b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such payment
shall be due on the following Business Day.

 

(c)                                  Whenever, at any time after any Issuing
Lender has made payment under any Letter of Credit and has received from any L/C
Participant its Revolving Credit Commitment Percentage of such payment in
accordance with this Section 3.4, such Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the Borrower or
otherwise), or any payment of interest on account thereof, such Issuing Lender
will promptly distribute to such L/C Participant its pro rata share thereof;
provided, that in the event that any such payment received by such Issuing
Lender shall be required to be returned by such Issuing Lender, such L/C
Participant shall return to such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.

 

(d)                                 All payments made by any L/C Participant
under this Section 3.4 shall be made in Dollars (based upon the Dollar Amount of
the applicable payment); provided that the Borrower shall be liable for any
currency exchange loss pursuant to the terms of Section 5.10(d).

 

SECTION 3.5                                                  Reimbursement
Obligations.

 

(a)                                  Reimbursement Obligation of the
Borrower.          In the event of any drawing under any Letter of Credit, the
Borrower agrees to reimburse (either with the proceeds of a Revolving Credit
Loan or a Swingline Loan as provided for in this Section 3.5 or with funds from
other sources), in same day funds, in Dollars, the applicable Issuing Lender on
each date on which such Issuing Lender notifies the Borrower of the date and
Dollar Amount of a draft paid under any Letter of Credit for the Dollar Amount
of (i) such draft so paid and (ii) any amounts referred to in
Section 3.3(c) incurred by such Issuing Lender in connection with such payment
(including, without limitation, any and all costs, fees and other expenses
incurred by such Issuing Lender in effecting the payment of any Alternative
Currency Letter of Credit).

 

(b)                                 Reimbursement Obligation of the
Lenders.                Unless the Borrower shall immediately notify the
applicable Issuing Lender that the Borrower intends to reimburse such Issuing
Lender for such drawing from other sources or funds, the Borrower shall be
deemed to have timely given a Notice of Borrowing to the Administrative Agent
requesting that the Lenders make a Revolving Credit Loan or, if less than the
minimum amount for such Loan, a Swingline Loan, in either case funded in Dollars
on such date and bearing interest at the Base Rate plus the Applicable Margin,
in the Dollar Amount of (i) such draft so paid and (ii) any amounts referred to
in Section 3.3(c) incurred by such Issuing Lender in connection with such
payment (including, without limitation, any and all costs, fees and other
expenses incurred by such Issuing Lender in

 

35

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effecting the payment of any Alternative Currency Letter of Credit), and not
later than one (1) Business Day after being given notice thereof by the
Administrative Agent by telecopier (or by telephone promptly confirmed by
telecopier), the Lenders under the Revolving Credit Facility shall make a
Revolving Credit Loan or, if less than the minimum amount for such Loan, the
Swingline Lender shall make a Swingline Loan, in either case, funded in Dollars
and bearing interest at the Base Rate plus the Applicable Margin, in such
amount, the proceeds of which shall be applied to reimburse such Issuing Lender
for the amount of the related drawing and costs and expenses. Each Lender under
the Revolving Credit Facility (or as the case may be, the Swingline Lender)
acknowledges and agrees that its obligation to fund a Revolving Credit Loan or,
if less than the minimum amount for such Loan, a Swingline Loan, in accordance
with this Section 3.5 to reimburse such Issuing Lender for any draft paid under
a Letter of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without limitation, non-satisfaction of
the conditions set forth in Section 2.3(a) or Article VI at the time of funding.
If the Borrower has elected to pay the amount of such drawing with funds from
other sources and shall fail to reimburse such Issuing Lender as provided above,
the unreimbursed amount of such drawing shall bear interest at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue from
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full.

 

SECTION 3.6                                                  Obligations
Absolute.  The Borrower’s obligations under this Article III (including, without
limitation, the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the
applicable Issuing Lender or any beneficiary of a Letter of Credit or any other
Person.  The Borrower also agrees that each Issuing Lender and the L/C
Participants shall not be responsible for, and the Borrower’s Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee.  No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by such Issuing Lender’s gross negligence
or willful misconduct.  The Borrower agrees that any action taken or omitted by
any Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct, shall be binding on the Borrower and shall not result in any
liability of any Issuing Lender or any L/C Participant to the Borrower.  The
responsibility of each Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.

 

36

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SECTION 3.7                                                  Effect of
Application.  To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Article III, the
provisions of this Article III shall apply.

 

ARTICLE IV

 

TERM LOAN FACILITY

 

SECTION 4.1                                                  Initial Term
Loans.  Subject to the terms and conditions of this Agreement, each Lender with
a Term Loan Commitment on the Closing Date severally agrees to make an Initial
Term Loan to the Borrower on the Closing Date.  The Initial Term Loans shall be
funded by each Lender in a principal amount equal to such Lender’s allocated
percentage (as set forth on the Register) of the aggregate principal amount of
the Initial Term Loans requested by the Borrower to be made on the Closing Date,
which aggregate principal amount shall equal the total Term Loan Commitment as
of the Closing Date.  Notwithstanding the foregoing, if the total Term Loan
Commitment as of the Closing Date is not drawn on the Closing Date, the undrawn
amount shall automatically be cancelled.

 

SECTION 4.2                                                  Procedure for
Advances of Term Loans.  The Borrower shall give the Administrative Agent an
irrevocable Notice of Borrowing prior to 12:00 p.m. (Charlotte time) on the
Closing Date requesting that each Lender with a Term Loan Commitment make the
Initial Term Loans as Base Rate Loans on such date (provided that the Borrower
may request, no later than three (3) Business Days prior to the Closing Date,
that the Lenders make the Initial Term Loans as LIBOR Rate Loans if the Borrower
has delivered to the Administrative Agent a letter in form and substance
satisfactory to the Administrative Agent indemnifying the Lenders in the manner
set forth in Section 5.11 of this Agreement).  The Administrative Agent shall
promptly notify the Lenders of such Notice of Borrowing by telecopier (or by
telephone promptly confirmed by telecopier). Not later than 3:00 p.m. (Charlotte
time) on the Closing Date, each such Lender will make available to the
Administrative Agent for the account of the Borrower, at the office of the
Administrative Agent in immediately available funds, the amount of such Initial
Term Loan to be made by such Lender on such borrowing date. The Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of the
Initial Term Loans in immediately available funds by wire transfer to such
Person or Persons as may be designated by the Borrower.

 

SECTION 4.3                                                  Repayment of Term
Loans.

 

(a)                                  Initial Term Loans.  The Borrower shall
repay the aggregate outstanding principal amount of the Initial Term Loans in
consecutive quarterly installments on the last Business Day of each of December,
March, June and September commencing June 30, 2006, as set forth below, except
as the amounts of individual installments may be adjusted pursuant to
Section 4.4:

 

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YEAR

 

PAYMENT DATE

 

PRINCIPAL
INSTALLMENT

 

REMAINING
PRINCIPAL AMOUNT
OF INITIAL TERM
LOAN

 

 

 

 

 

($)

 

($)

 

1

 

June 30, 2006

 

$

687,500

 

$

274,312,500

 

 

 

September 30, 2006

 

$

687,500

 

$

273,625,000

 

 

 

December 31, 2006

 

$

687,500

 

$

272,937,500

 

 

 

March 31, 2007

 

$

687,500

 

$

272,250,000

 

2

 

June 30, 2007

 

$

687,500

 

$

271,562,500

 

 

 

September 30, 2007

 

$

687,500

 

$

270,875,000

 

 

 

December 31, 2007

 

$

687,500

 

$

270,187,500

 

 

 

March 31, 2008

 

$

687,500

 

$

269,500,000

 

3

 

June 30, 2008

 

$

687,500

 

$

268,812,500

 

 

 

September 30, 2008

 

$

687,500

 

$

268,125,000

 

 

 

December 31, 2008

 

$

687,500

 

$

267,437,500

 

 

 

March 31, 2009

 

$

687,500

 

$

266,750,000

 

4

 

June 30, 2009

 

$

687,500

 

$

266,062,500

 

 

 

September 30, 2009

 

$

687,500

 

$

265,375,000

 

 

 

December 31, 2009

 

$

687,500

 

$

264,687,500

 

 

 

March 31, 2010

 

$

687,500

 

$

264,000,000

 

5

 

June 30, 2010

 

$

687,500

 

$

263,312,500

 

 

 

September 30, 2010

 

$

687,500

 

$

262,625,000

 

 

 

December 31, 2010

 

$

687,500

 

$

261,937,500

 

 

 

March 31, 2011

 

$

687,500

 

$

261,250,000

 

6

 

June 30, 2011

 

$

687,500

 

$

260,562,500

 

 

 

September 30, 2011

 

$

687,500

 

$

259,875,000

 

 

 

December 31, 2011

 

$

687,500

 

$

259,187,500

 

 

 

March 31, 2012

 

$

687,500

 

$

258,500,000

 

7

 

June 30, 2012

 

$

64,625,000

 

$

193,875,000

 

 

 

September 30, 2012

 

$

64,625,000

 

$

129,250,000

 

 

 

December 31, 2012

 

$

64,625,000

 

$

64,625,000

 

 

 

Term Loan Maturity Date

 

$

64,625,000

 

$

0

 

 

If not sooner paid, the Initial Term Loans shall be paid in full, together with
accrued interest thereon, on the Term Loan Maturity Date.

 

(b)                                 Additional Term Loans.  The Borrower shall
repay the aggregate outstanding principal amount of the Additional Term Loans
(if any) in consecutive quarterly installments on the last Business Day of each
of March, June, September and December commencing with the first full calendar
quarter ending after the Additional Term Loan Effective Date, in the following
amounts (which amounts shall be calculated on the Additional Term Loan Effective
Date):  (i) as of any fiscal quarter end prior to the fiscal quarter ending
June 30, 2012, an amount equal to one-quarter of one percent (0.25%) of the
original principal amount of the Additional Term Loans, and (ii) as of any
fiscal quarter ending on or after June 30, 2012, an amount equal to twenty-five
percent (25%) of the sum of (X) the original amount of the Additional Term Loans
less (Y) the aggregate amount of all scheduled amortization payments to be made
with respect to the Additional Term Loans (determined as of the Additional Term
Loan Effective Date) prior to June 30, 2012 as provided in clause (i) of this
Section 4.3(b); provided that such amounts of individual installments may be
adjusted pursuant to Section 4.4.  If not sooner paid, the Additional Term Loans
shall be paid in full, together with accrued interest thereon on the Term Loan
Maturity Date.

 

(c)                                  No Reborrowing.  Amounts repaid pursuant to
this Section 4.3 may not be reborrowed and will constitute a permanent reduction
of the Term Loan Commitment.

 

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SECTION 4.4                                                  Prepayments of Term
Loans.

 

(a)                                  Optional Prepayment of Term Loans.  The
Borrower shall have the right at any time and from time to time, upon delivery
to the Administrative Agent of a Notice of Prepayment at least three
(3) Business Days prior to any prepayment, to prepay the Term Loans in whole or
in part without premium or penalty except as provided in Section 5.11.  The
Administrative Agent shall promptly give each of the Lenders notice of any such
proposed prepayment by telecopier (or by telephone promptly confirmed by
telecopier).  Each optional prepayment of the Term Loans hereunder shall be in
an aggregate principal amount of at least $5,000,000 or any whole multiple of
$1,000,000 in excess thereof and shall be applied to the outstanding principal
installments of the Term Loans (with respect to any such outstanding Term Loans,
pro rata on the basis of the original aggregate funded amount thereof, among the
Initial Term Loans, and, if applicable, the Additional Term Loans) in the order
directed by the Borrower.  Each prepayment shall be accompanied by any amount
required to be paid pursuant to Section 5.11.

 

(b)                                 Mandatory Prepayment of Term Loans.

 

(i)                                     Debt Proceeds.  The Borrower shall make
mandatory principal prepayments of the Loans in the manner set forth in
Section 4.4(b)(vi) in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any incurrence by the Borrower or any of its
Restricted Subsidiaries of Debt, excluding:

 

(A)          The Debt issued pursuant to the Permitted Debt Issuance, solely to
the extent the proceeds thereof are used on the Closing Date to consummate the
ESSI Merger and costs associated therewith;

 

(B)           Permitted Subordinated Debt, other than Subordinated Debt issued
pursuant to the Permitted Debt Issuance, solely to the extent the proceeds
thereof are used within ninety (90) days (such ninety (90) day period, the “Hold
Period”) after receipt thereof to consummate a proposed acquisition and costs
associated therewith so long as such proposed acquisition (a “Designated
Acquisition”) (I) constitutes  a Permitted Acquisition at the time of the
closing thereof and (II) is identified in writing to the Administrative Agent on
or prior to the issuance date of such Debt; provided, that any excess proceeds
not so used to consummate a Permitted Acquisition or to fund a Permitted Escrow
Redemption shall be applied as a mandatory prepayment as set forth in this
Section 4.4(b)(i); and

 

(C)           senior unsecured Debt incurred in accordance with
Section 11.1(m)(ii), solely to the extent the proceeds thereof are used within
the Hold Period to consummate a proposed acquisition and costs associated
therewith so long as such proposed acquisition is a Designated Acquisition;
provided, that any excess proceeds not so used to consummate a Permitted
Acquisition or to fund a Permitted Escrow Redemption shall be applied as a
mandatory prepayment as set forth in this Section 4.4(b)(i); and

 

39

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(D)          other Debt permitted pursuant to Section 11.1, other than Debt
permitted by:

 

(1) Section 11.1(j), to the extent that the proceeds are not used (x) in
accordance with Section 4.4(b)(i)(B) above, (y) to refinance existing Permitted
Subordinated Debt or (z) to refinance existing senior unsecured Debt previously
incurred in accordance with Section 11.1(m), or

 

(2) Section 11.1(m), to the extent that the proceeds are not used (x) in
accordance with Section 4.4(b)(i)(C) above or (y) to refinance existing senior
unsecured Debt previously incurred in accordance with Section 11.1(m).

 

Such prepayment shall be made within three (3) Business Days after the date of
receipt of Net Cash Proceeds of any such transaction. (This provision shall not
be deemed to permit the incurrence of Debt not otherwise permitted pursuant to
this Agreement.)

 

(ii)                                  Equity Proceeds.  If at any time the Total
Leverage Ratio exceeds 4.00 to 1.00, the Borrower shall make mandatory principal
prepayments of the Loans in the manner set forth in Section 4.4(b)(vi) in
amounts equal to fifty percent (50%) of the aggregate Net Cash Proceeds from any
offering of equity securities by the Borrower or any of its Restricted
Subsidiaries (excluding (A) offerings of equity securities made in connection
with employee stock option or incentive plans or made in connection with
compensation or incentive plans for directors and officers, in each case entered
into in the ordinary course of business, (B) the exercise of warrants existing
on the Closing Date and set forth on Schedule 7.1(b) and (C) the Net Cash
Proceeds of any offering of equity securities of the Borrower to the extent used
by the Borrower or any Restricted Subsidiary as permitted by Section 11.6(g) to
purchase its capital stock or other ownership interests or options in respect of
its capital stock or other ownership interests).  Such prepayment shall be made
within three (3) Business Days after the date of receipt of Net Cash Proceeds of
any such transaction. (This provision shall not be deemed to permit the issuance
of equity not otherwise permitted pursuant to this Agreement.)

 

(iii)                               Asset Sale Proceeds.  No later than one
hundred eighty (180) days following the Borrower’s or applicable Restricted
Subsidiary’s receipt thereof, the Borrower shall make mandatory principal
prepayments of the Loans in the manner set forth in Section 4.4(b)(vi) in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from the sale or other disposition or series of related sales or other
dispositions of assets (the “Asset Sale Proceeds”) by the Borrower or any of its
Restricted Subsidiaries which have not been reinvested as of such date in
replacement assets; provided that no prepayments shall be required hereunder in
connection with:

 

(A)                              Asset Sale Proceeds received from asset sales
or other dispositions permitted by Section 11.5(a) through and including
Section 11.5(d); or

 

(B)                                So long as no Event of Default has occurred
and is continuing,

 

 

40

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

 

Asset Sale Proceeds received from:

 

(1)                                  subject to clause (2) of this
Section 4.4(b)(iii)(B) asset sales and dispositions (other than asset sales and
dispositions permitted by Section 11.5(a) through and including Section 11.5(d))
in an aggregate amount not to exceed $30,000,000 in any Fiscal Year; or

 

(2)                                  any asset sale or disposition (other than
asset sales and dispositions permitted by Section 11.5(a) through and including
Section 11.5(d)) to the extent the Asset Sale Proceeds from such individual sale
or disposition together with all related sales or dispositions (if any) is equal
to or less than $5,000,000; or

 

(3)           asset sales and dispositions (other than (i) asset sales and
dispositions permitted by Section 11.5(a) through and including
Section 11.5(d) and (ii) asset sales and dispositions covered under clause
(1) or clause (2) of this Section 4.4(b)(iii)(B)) that have been committed to be
reinvested within one hundred eighty (180) days after receipt thereof and are
thereafter actually reinvested within two hundred seventy (270) days after
receipt of such Asset Sale Proceeds.  If such Asset Sale Proceeds are not
actually reinvested in accordance with the terms of this
Section 4.4(b)(iii)(B)(3) by the date which is two hundred seventy (270) days
after the receipt thereof, the Borrower shall make a mandatory prepayment in an
amount equal to such Asset Sale Proceeds as described above on such date.

 

Notwithstanding any of the foregoing to the contrary, upon and during the
continuance of an Event of Default and upon notice from the Administrative
Agent, all Asset Sale Proceeds received by the Borrower and its Restricted
Subsidiaries shall be applied to make prepayments of the Loans pursuant to
Section 4.4(b)(vi), such prepayments to be made within three (3) Business Days
after the Borrower’s receipt of such Asset Sale Proceeds.

 

(This provision shall not be deemed to permit the disposition of assets not
otherwise permitted pursuant to this Agreement.)

 

(iv)                              Insurance and Condemnation Proceeds. No later
than one hundred eighty (180) days following the date of receipt by the Borrower
or any of its Restricted Subsidiaries of any Net Cash Proceeds under any of the
insurance policies maintained pursuant to Section 9.3 or from any condemnation
proceeding (the “Insurance and Condemnation Proceeds”) which have not been
reinvested as of such date in replacement assets, the Borrower shall make
mandatory principal prepayments of the  Loans in the manner set forth in
Section 4.4(b)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate amount of such Insurance and Condemnation Proceeds received by the
Borrower or any of its Restricted Subsidiaries unless such Insurance and
Condemnation Proceeds have been committed to be reinvested within such one
hundred

 

41

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eighty (180) day period and are thereafter actually reinvested within two
hundred seventy (270) days after receipt of such Insurance and Condemnation
Proceeds.  If such Insurance and Condemnation Proceeds are not actually
reinvested in accordance with the terms of this Section 4.4(b)(iv) by the date
which is two hundred seventy (270) days after the receipt thereof, the Borrower
shall make a mandatory prepayment in an amount equal to such Insurance and
Condemnation Proceeds as described above on such date.  Notwithstanding any of
the foregoing to the contrary, upon and during the continuance of an Event of
Default and upon notice from the Administrative Agent, all Insurance and
Condemnation Proceeds received by the Borrower and its Restricted Subsidiaries
shall be applied to make prepayments of the Loans, such prepayments to be made
within three (3) Business Days after the Borrower’s receipt of such Insurance
and Condemnation Proceeds.

 

(v)                                 Excess Cash Flow.  No later than one hundred
twenty (120) days after the end of any Fiscal Year during the term of this
Agreement, commencing with the Fiscal Year ending March 31, 2007, the Borrower
shall make a mandatory principal repayment of the Loans in an amount equal to
fifty  percent (50%) of Excess Cash Flow, if any, for such Fiscal Year; provided
that the amount of such mandatory principal repayment shall be reduced to
twenty-five percent (25%) of Excess Cash Flow, if any, for any Fiscal Year for
which the Total Leverage Ratio is less than 4.00 to 1.00.

 

(VI)                              NOTICE; MANNER OF PAYMENT.  UPON THE
OCCURRENCE OF ANY EVENT TRIGGERING THE PREPAYMENT REQUIREMENT UNDER SECTIONS
4.4(B)(I) THROUGH AND INCLUDING 4.4(B)(V), THE BORROWER SHALL PROMPTLY DELIVER A
NOTICE OF PREPAYMENT TO THE ADMINISTRATIVE AGENT AND UPON RECEIPT OF SUCH
NOTICE, THE ADMINISTRATIVE AGENT SHALL PROMPTLY SO NOTIFY EACH OF THE LENDERS BY
TELECOPIER (OR BY TELEPHONE PROMPTLY CONFIRMED BY TELECOPIER).  EACH PREPAYMENT
OF THE LOANS UNDER THIS SECTION 4.4(B) SHALL BE APPLIED AS FOLLOWS:

 

(A)                              WITH RESPECT TO ANY PREPAYMENT PURSUANT TO
SECTION 4.4(B)(III) OR (IV), (1) FIRST, TO REDUCE, ON A PRO RATA BASIS, THE
REMAINING SCHEDULED PRINCIPAL INSTALLMENTS OF THE TERM LOANS (WITH RESPECT TO
ANY SUCH OUTSTANDING TERM LOANS, PRO RATA ON THE BASIS OF THE ORIGINAL AGGREGATE
FUNDED AMOUNT THEREOF AMONG THE INITIAL TERM LOANS AND, IF APPLICABLE, THE
ADDITIONAL TERM LOANS) PURSUANT TO SECTION 4.3 AND (2) SECOND, TO THE EXTENT OF
ANY EXCESS PROCEEDS, TO REDUCE PERMANENTLY THE REVOLVING CREDIT COMMITMENT,
PURSUANT TO SECTION 2.6(B), AND

 

(B)           WITH RESPECT TO ANY PREPAYMENT PURSUANT TO
SECTION 4.4(B)(I) (OTHER THAN AS PROVIDED BELOW WITH RESPECT TO A PERMITTED DEBT
ADD-ON) AND SECTION 4.4(B)(II) OR (V), (1) FIRST, TO REDUCE, ON A PRO RATA
BASIS, THE REMAINING SCHEDULED PRINCIPAL INSTALLMENTS OF THE TERM LOANS (WITH
RESPECT TO ANY SUCH OUTSTANDING TERM LOANS, PRO RATA ON THE BASIS OF THE
ORIGINAL AGGREGATE FUNDED AMOUNT THEREOF AMONG THE INITIAL TERM LOANS AND, IF
APPLICABLE, THE ADDITIONAL TERM LOANS) PURSUANT TO SECTION 4.3 AND (2) SECOND,
TO THE EXTENT OF ANY EXCESS PROCEEDS, TO REPAY THE REVOLVING CREDIT LOANS
PURSUANT TO SECTION 2.4(F) (WITHOUT A CORRESPONDING PERMANENT REDUCTION IN THE
REVOLVING CREDIT COMMITMENT); PROVIDED THAT, NOTWITHSTANDING THE FOREGOING TO
THE CONTRARY, ANY PREPAYMENT PURSUANT TO SECTION 4.4(B)(I) FROM THE NET CASH
PROCEEDS OF A PERMITTED DEBT

 

42

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ADD-ON SHALL BE APPLIED FIRST TO REPAY THE REVOLVING CREDIT LOANS PURSUANT TO
SECTION 2.4(F) (WITHOUT A CORRESPONDING PERMANENT REDUCTION IN THE REVOLVING
CREDIT COMMITMENT); AND SECOND TO REDUCE, ON A PRO RATA BASIS, THE REMAINING
SCHEDULED PRINCIPAL INSTALLMENTS OF THE TERM LOANS (WITH RESPECT TO ANY SUCH
OUTSTANDING TERM LOANS, PRO RATA ON THE BASIS OF THE ORIGINAL AGGREGATE FUNDED
AMOUNT THEREOF AMONG THE INITIAL TERM LOANS AND, IF APPLICABLE, THE ADDITIONAL
TERM LOANS) PURSUANT TO SECTION 4.3.

 

provided, however that, regardless of whether there are amounts outstanding
under the Revolving Credit Facility, each Lender having a Term Loan Commitment
or outstanding Term Loans shall have the right to refuse its pro rata share
(based on its respective Term Loan Percentage) of any such mandatory prepayment
(excluding prepayments made pursuant to Section 4.4(b)(iii) or (iv)) at which
time the remaining amount shall be applied first to temporarily reduce the
Revolving Credit Loans in accordance with Section 2.4(f), and then, to the
extent of any remaining funds to the Borrower; provided that, if at the time of
such prepayment there are no outstanding Revolving Credit Loans, the Borrower
may (X) elect to have the remaining amount of such mandatory prepayment (if any)
applied as an optional prepayment of Term Loans in accordance with
Section 4.4(a) or (Y) retain such amount. No prepayment or repayment pursuant to
this Section 4.4 shall affect any of the Borrower’s obligations under any
Hedging Agreement.

 

Amounts prepaid in respect of the Term Loans pursuant to this Section 4.4 may
not be reborrowed and will constitute a permanent reduction in such Term Loan
Commitment.  Each prepayment shall be accompanied by any amount required to be
paid pursuant to Section 5.11.

 

SECTION 4.5                                                  Term Notes.  Except
as otherwise provided in Section 14.10 (a) – (e), each Lender’s Term Loan and
the obligation of the Borrower to repay such Term Loan may, at the election of
such Lender, be evidenced by a separate Term Note executed by the Borrower
payable to the order of such Lender.

 

SECTION 4.6                                                  Optional Increase
In Term Loan Commitment.

 

(a)                                  Subject to the conditions set forth below,
the Borrower shall have the option, exercisable on no more than two
(2) occasions following the Closing Date until the Term Loan Maturity Date to
incur additional indebtedness under this Agreement in the form of an increase of
the Term Loan Commitment by an aggregate principal amount of up to
(i) $250,000,000 less (ii) the sum of (A) the aggregate principal amount of any
prior or simultaneous increase to the Revolving Credit Commitment made pursuant
to Section 2.8 and (B) the aggregate principal amount of any prior increase to
the Term Loan Commitment made pursuant to this Section 4.6.  In the event the
Borrower desires to exercise the above-described option, the Borrower shall
deliver to the Administrative Agent an Increase Notification pursuant to which
the Borrower may request that additional Term Loans be made on the Additional
Term Loan Effective Date pursuant to such increase in the Term Loan Commitment
(each such additional Term Loan, an “Additional Term Loan”, and collectively,
the “Additional Term Loans”).

 

43

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(b)                                 Each Additional Term Loan shall be obtained
from existing Lenders or from other banks, financial institutions or investment
funds that qualify as Eligible Assignees, in each case in accordance with this
Section 4.6.  Participation in any Additional Term Loan shall be offered first
to each of the existing Lenders; provided that no Lender shall have any
obligation to provide any portion of such Additional Term Loans.  If the amount
of the Additional Term Loans requested by the Borrower shall exceed the
commitments which the existing Lenders are willing to provide with respect to
such Additional Term Loans, then the Borrower may invite other banks, financial
institutions and investment funds which meet the requirements of an Eligible
Assignee to join this Agreement as Lenders for the portion of such Additional
Term Loans not committed to by existing Lenders (each such other bank, financial
institution or investment fund, a “New Term Lender” and collectively with the
existing Lenders providing increased Term Loan Commitments, the “Increasing Term
Lenders”).  The Administrative Agent is authorized to enter into, on behalf of
the Lenders, any amendment to this Agreement or any other Loan Document as may
be necessary to incorporate the terms of any Additional Term Loan herein or
therein; provided that such amendment shall not modify this Agreement or any
other Loan Document in any manner materially adverse to any Lender and shall
otherwise be in accordance with Section 14.11.

 

(c)                                  The following terms and conditions shall
apply to each Additional Term Loan:  (i) the Additional Term Loans made under
this Section 4.6 shall constitute Obligations of the Borrower and shall be
secured and guaranteed with the other Extensions of Credit on a pari passu
basis; (ii) any New Term Lender making Additional Term Loans shall be entitled
to the same voting rights as the existing Lenders under the Term Loan Facility
and the Additional Term Loans shall receive proceeds of prepayments on the same
basis as the Initial Term Loans; (iii) the Borrower shall, upon the request of
any Increasing Term Lender, execute such Term Loan Notes as are necessary to
reflect such Increasing Term Lender’s Additional Term Loans; (iv) the
Administrative Agent and the Lenders shall have received from the Borrower an
Officer’s Compliance Certificate in form and substance satisfactory to the
Administrative Agent, demonstrating that, after giving effect to any such
Additional Term Loan (and, if applicable, any simultaneous increase in the
Revolving Credit Commitment), the Borrower will be in pro forma compliance with
the financial covenants set forth in Article X; (v) no Default or Event of
Default shall have occurred and be continuing hereunder as of the Additional
Term Loan Effective Date or after giving effect to the making of any such
Additional Term Loans; (vi) the representations and warranties contained in
Article VII and in the other Loan Documents shall be true and correct on and as
of the Additional Term Loan Effective Date with the same effect as if made on
and as of such date (other than those representations and warranties that by
their terms speak as of a particular date, which representations and warranties
shall be true and correct as of such particular date); (vii) the amount of such
increase in the Term Loan Commitment and any Additional Term Loans obtained
thereunder shall not be less than a minimum principal amount of $10,000,000, or
any whole multiple of $5,000,000 in excess thereof, or if less, the maximum
amount permitted pursuant to clause (a) above;  (viii) the Borrower and each
Increasing Term Lender shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, a Lender Addition and
Acknowledgement Agreement; and (ix)  the Administrative Agent shall have
received any documents or information, including any joinder agreements, in
connection with such increase in the Term Loan Commitment as it may reasonably
request.

 

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(d)                                 Upon the execution, delivery, acceptance and
recording of the applicable Lender Addition and Acknowledgement Agreement, from
and after the applicable Additional Term Loan Effective Date, each Increasing
Term Lender shall have a Term Loan Commitment as set forth in the Register and
all the rights and obligations of a Lender with such a Term Loan Commitment
hereunder.  The Increasing Term Lenders shall make the Additional Term Loans to
the Borrower on the Additional Term Loan Effective Date in an amount equal to
each such Increasing Term Lender’s commitment in respect of Additional Term
Loans as agreed upon pursuant to subsection (b) above.

 

(e)                                  The Administrative Agent shall maintain a
copy of each Lender Addition and Acknowledgment Agreement delivered to it in
accordance with Section 14.10(d).

 

(f)                                   
                                                Within five (5) Business Days
after receipt of notice, the Borrower shall execute and deliver to the
Administrative Agent, in exchange for any surrendered Term Loan Note or Term
Loan Notes of any existing Lender or with respect to any New Term Lender, a new
Term Loan Note or Term Loan Notes to the order of the applicable Lenders in
amounts equal to the Term Loan Commitment of such Lenders as set forth in the
Register.  Such new Term Loan Note or Term Loan Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such Term Loan
Commitments, shall be dated as of the Additional Term Loan Effective Date and
shall otherwise be in substantially the form of the existing Term Loan Notes. 
Each surrendered Term Loan Note and/or Term Loan Notes shall be canceled and
returned to the Borrower.

 

(g)                                 The Applicable Margin and pricing grid, if
applicable, for the Additional Term Loans shall be determined on the applicable
Additional Term Loan Effective Date.

 

ARTICLE V

 

GENERAL LOAN PROVISIONS

 

SECTION 5.1                                                  Interest.

 

(a)                                  Interest Rate Options.  Subject to the
provisions of this Section 5.1, at the election of the Borrower, (i) Revolving
Credit Loans and Term Loans shall bear interest at (A) the Base Rate plus the
Applicable Margin as set forth in Section 5.1(c) or (B) the LIBOR Rate plus the
Applicable Margin as set forth in Section 5.1(c) (provided that the LIBOR Rate
shall not be available until three (3) Business Days after the Closing Date
unless the Borrower has delivered to the Administrative Agent a letter in form
and substance satisfactory to the Administrative Agent indemnifying the Lenders
in the manner set forth in Section 5.11 of this Agreement) and (ii) any
Swingline Loan shall bear interest at the Base Rate plus the Applicable Margin
as set forth in Section 5.1(c)(i).  The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given or at the time a Notice of Conversion/Continuation
is given pursuant to Section 5.2.  Each Loan or portion thereof bearing interest
based on the Base Rate shall be a “Base Rate Loan”, and each Loan or portion
thereof bearing interest based on the LIBOR Rate shall be a “LIBOR Rate Loan.”
Any Loan or any

 

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portion thereof as to which the Borrower has not duly specified an interest rate
as provided herein shall be deemed a Base Rate Loan.

 

(b)                                 Interest Periods.  In connection with each
LIBOR Rate Loan, the Borrower, by giving notice at the times described in
Section 5.1(a), shall elect an interest period (each, an “Interest Period”) to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months; provided that:

 

(i)                                     the Interest Period shall commence on
the date of advance of or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest Period shall
commence on the date on which the immediately preceding Interest Period expires;

 

(ii)                                  if any Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided, that if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the immediately preceding Business Day;

 

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

 

(iv)                              no Interest Period shall extend beyond the
Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable,
and Interest Periods shall be selected by the Borrower so as to permit the
Borrower to make mandatory reductions of the Revolving Credit Commitment
pursuant to Section 2.6(b) and the quarterly principal installment payments
pursuant to Section 4.3 without payment of any amounts pursuant to Section 5.11;
and

 

(v)                                 there shall be no more than ten
(10) Interest Periods in effect at any time.

 

(c)                                  Applicable Margin.

 

(i)                                     The Applicable Margin provided for in
Section 5.1(a) with respect to any Revolving Credit Loans shall be based upon
the table set forth below and shall be determined and adjusted quarterly on the
date (each a “Calculation Date”) ten (10) Business Days after the date by which
the Borrower is required to provide an Officer’s Compliance Certificate for the
most recently ended fiscal quarter of the Borrower.  The Pricing Level shall be
determined by reference to the Total Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Borrower preceding the applicable
Calculation Date, provided, however, that (A) the initial Applicable Margin for
the Revolving Credit Loans shall not be less than Pricing Level II (as shown
below) until the Calculation Date for the fiscal quarter ending September 30,
2006 and (B) if the

 

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Borrower fails to provide the Officer’s Compliance Certificate as required by
Article VIII for the most recently ended fiscal quarter of the Borrower
preceding the applicable Calculation Date, the Applicable Margin for the Loans
from such Calculation Date shall be based on Pricing Level I (as shown below)
until such time as an appropriate Officer’s Compliance Certificate is provided,
at which time the Pricing Level shall be determined by reference to the Total
Leverage Ratio as of the last day of the most recently ended fiscal quarter of
the Borrower preceding such Calculation Date.  The Applicable Margin for the
Loans shall be effective from one Calculation Date until the next Calculation
Date.  Any adjustment in the Applicable Margin shall be applicable to all
Extensions of Credit then existing or subsequently made or issued.

 

Pricing Level

 

Total Leverage Ratio

 

Applicable
LIBOR Margin
(Revolver)

 

Applicable Base
Rate Margin
(Revolver)

 

Commitment
Fee

 

I

 

> 6.0 to 1.0

 

1.75

%

0.50

%

0.500

%

II

 

> 5.0 to 1.0 but < 6.0 to 1.0

 

1.50

%

0.25

%

0.375

%

III

 

> 4.0 to 1.0 but < 5.0 to 1.0

 

1.25

%

0.00

%

0.375

%

IV

 

< 4.0 to 1.0

 

1.00

%

0.00

%

0.375

%

 

(ii)                                  The Applicable Margin provided for in
Section 5.1(a) with respect to any Term Loans shall be (A) 1.50% for LIBOR Loans
and (B) 0.25% for Base Rate Loans.

 

(d)                                 Default Rate.  Subject to Section 12.3, at
the discretion of the Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (A) the Borrower shall no longer have the
option to request LIBOR Rate Loans or Swingline Loans, (B) all outstanding LIBOR
Rate Loans shall bear interest at a rate per annum of two percent (2%) plus the
rate then applicable to LIBOR Rate Loans until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) plus the rate
then applicable to Base Rate Loans, and (C) all outstanding Base Rate Loans and
other Obligations arising hereunder or under any other Loan Document shall bear
interest at a rate per annum equal to two percent (2%) plus the rate then
applicable to Base Rate Loans or such other Obligations arising hereunder or
under any other Loan Document.  Interest shall continue to accrue on the
Obligations after the filing by or against the Borrower of any petition seeking
any relief in bankruptcy or under any act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign.

 

(e)                                  Interest Payment and Computation.  Interest
on each Base Rate Loan shall be payable in arrears on the last Business Day of
each calendar quarter commencing with the quarter ending March 31, 2006; and
interest on each LIBOR Rate Loan shall be payable on the last day of each
Interest Period applicable thereto, and if such Interest Period extends over
three (3) months, at the end of each three (3) month interval during such
Interest Period. Interest on LIBOR Rate Loans and all fees payable hereunder
shall be computed on the basis of a 360-day year and assessed for the actual
number of days elapsed and interest on Base Rate Loans shall be computed on the
basis of a 365/66-day year and assessed for the actual number of days elapsed.

 

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(f)                                    Maximum Rate.  In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder or under
or in respect of any of the Obligations charged or collected pursuant to the
terms of this Agreement or pursuant to any of the Obligations exceed the highest
rate permissible under any Applicable Law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto.  In the
event that such a court determines that the Lenders have charged or received
interest hereunder in excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law and the Lenders shall at the Administrative Agent’s option
(i) promptly refund to the Borrower any interest received by the Lenders in
excess of the maximum lawful rate or (ii) apply such excess to the principal
balance of the Obligations on a pro rata basis.  It is the intent hereof that
the Borrower not pay or contract to pay, and that neither the Administrative
Agent nor any Lender receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by the
Borrower under Applicable Law.

 

SECTION 5.2                                                  Notice and Manner
of Conversion or Continuation of Loans.  Provided that no Default or Event of
Default has occurred and is then continuing, the Borrower shall have the option
to (a) convert at any time following the third Business Day after the Closing
Date all or any portion of any outstanding Base Rate Loans (other than Swingline
Loans) in a principal amount equal to $5,000,000 or any whole multiple of
$100,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the
expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $2,500,000 or a
whole multiple of $100,000 in excess thereof into Base Rate Loans (other than
Swingline Loans) or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans. 
Whenever the Borrower desires to convert or continue Loans as provided above,
the Borrower shall give the Administrative Agent irrevocable prior written
notice substantially in the form attached hereto as Exhibit E (a “Notice of
Conversion/Continuation”) not later than 12:00 p.m. (Charlotte time) three
(3) Business Days before the day on which a proposed conversion or continuation
of such Loan is to be effective specifying (A) the Loans to be converted or
continued, and, in the case of any LIBOR Rate Loan to be converted or continued,
the last day of the Interest Period therefor, (B) the effective date of such
conversion or continuation (which shall be a Business Day), (C) the principal
amount of such Loans to be converted or continued, and (D) the Interest Period
to be applicable to such converted or continued LIBOR Rate Loan.  The
Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation by telecopier (or by telephone promptly confirmed by
telecopier).

 

SECTION 5.3                                                  Fees.

 

(a)                                  Commitment Fee.  Commencing on the Closing
Date, the Borrower shall pay to the Administrative Agent, for the account of the
Lenders, a non-refundable commitment fee at a rate per annum determined by
reference to the pricing grid set forth in Section 5.1(c) on the average daily
unused portion of the Revolving Credit Commitment; provided, that the amount of
outstanding Swingline Loans shall not be considered usage of the Revolving
Credit Commitment for the purpose of calculating such commitment fee.  The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement with the first payment due on
March 31, 2006, and on the Revolving Credit Maturity Date.  Such commitment fee
shall be promptly distributed by the Administrative Agent to the Lenders pro

 

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rata in accordance with the Lenders’ respective Revolving Credit Commitment
Percentages.  The commitment fee shall be determined by reference to the Total
Leverage Ratio as of the end of the fiscal quarter immediately preceding the
delivery of the applicable Officer’s Compliance Certificate and adjusted
quarterly on the Calculation Date for the most recently ended fiscal quarter of
the Borrower, provided, however, that (A) the initial commitment fee shall not
be less than that set forth in Pricing Level II as shown in the pricing grid set
forth in Section 5.1(c) until the Calculation Date for the fiscal quarter ending
September 30, 2006 and (B) in the event the Borrower fails to deliver the
Officer’s Compliance Certificate as required by Article VIII for the most
recently ended fiscal quarter of the Borrower preceding the applicable
Calculation Date, the commitment fee shall be the highest commitment fee set
forth in the above-described pricing grid until the delivery of an appropriate
Officer’s Compliance Certificate at which time the Commitment Fee shall be
determined by reference to the Total Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Borrower preceding such Calculation
Date.

 

(b)                                 Administrative Agent’s and Other Fees.  In
order to compensate the Administrative Agent for structuring and syndicating the
Loans and for its obligations hereunder, the Borrower agrees to pay to the
Administrative Agent, for its account, the fees set forth in the separate fee
letter agreement executed by the Borrower and the Administrative Agent dated
October 6, 2005.

 

SECTION 5.4                                                  Manner of Payment.

 

(a)                                  Loans and Letters of Credit Denominated in
Dollars.  Each payment by the Borrower on account of the principal of or
interest on any Loan or Letter of Credit denominated in Dollars or of any fee,
commission or other amounts (including the Reimbursement Obligation with respect
to any Letter of Credit denominated in Dollars) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent’s Office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
respective Revolving Credit Commitment Percentages or applicable Term Loan
Percentages, as applicable (except as specified below), in Dollars and in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever.  Any payment received after such time but before
2:00 p.m. (Charlotte time) on such day shall be deemed a payment on such date
for the purposes of Section 12.1, but for all other purposes shall be deemed to
have been made on the next succeeding Business Day.  Any payment received after
2:00 p.m. (Charlotte time) shall be deemed to have been made on the next
succeeding Business Day for all purposes.

 

(b)                                 Alternative Currency Letters of Credit. 
Each payment by the Borrower on account of any Alternative Currency Letter of
Credit (including the Reimbursement Obligation with respect to any Alternative
Currency Letter of Credit) shall be made in Dollars not later than 1:00 p.m.
(the time of the applicable Issuing Lender’s Correspondent) on the date
specified for payment under this Agreement to the Administrative Agent’s account
with the applicable Issuing Lender’s Correspondent for the account of the
applicable Issuing Lender in immediately available funds, and shall be made
without any set-off, counterclaim or deduction whatsoever.  Any payment received
after such time but before 2:00 p.m. (the time of the applicable Issuing

 

49

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Lender’s Correspondent) on such day shall be deemed a payment on such date for
the purposes of Section 12.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after
2:00 p.m. (the time of the applicable Issuing Lender’s Correspondent) shall be
deemed to have been made on the next succeeding Business Day for all purposes.

 

(c)                                  Treatment of Payments.  Upon receipt by the
Administrative Agent of each such payment, the Administrative Agent shall
promptly distribute to each Lender at its address for notices set forth herein
its pro rata share of such payment in accordance with such Lender’s Revolving
Credit Commitment Percentage or applicable Term Loan Percentage, as applicable
(except as specified below), and shall wire advice of the amount of such credit
to each Lender. Except as set forth in Section 5.4(b), each payment to the
Administrative Agent of an Issuing Lender’s fees or L/C Participants’
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be.  Each payment to the
Administrative Agent of Administrative Agent’s fees or expenses shall be made
for the account of the Administrative Agent and any amount payable to any Lender
under Sections 5.10, 5.11, 5.12, 5.13 or 14.2 shall be promptly paid to the
Administrative Agent for the account of the applicable Lender.  Subject to
Section 5.1(b)(ii) if any payment under this Agreement or any Note shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day and such extension of time shall
in such case be included in computing any interest if payable along with such
payment.

 

SECTION 5.5                                                  Crediting of
Payments and Proceeds.  In the event that the Borrower shall fail to pay any of
the Obligations when due and the Obligations have been accelerated pursuant to
Section 12.2, all payments received by the Lenders upon the Notes and the other
Obligations and all net proceeds from the enforcement of the Obligations shall
be applied:  (a) first, to all expenses then due and payable by the Borrower
hereunder and under the other Loan Documents, (b) then to all indemnity
obligations then due and payable by the Borrower hereunder and under the other
Loan Documents, (c) then to all Administrative Agent’s and Issuing Lender’s fees
then due and payable, (d) then to all commitment and other fees and commissions
then due and payable, (e) then to accrued and unpaid interest on the Loans,
accrued and unpaid interest on the Reimbursement Obligation and any payments
(including any termination payments and any accrued and unpaid interest thereon)
due in respect of a Hedging Agreement with the Person serving as the
Administrative Agent or any Lender (which Hedging Agreement is permitted or
required hereunder) (pro rata in accordance with all such amounts due), (f) then
to the principal amount of the Loans and Reimbursement Obligation (pro rata in
accordance with all such amounts due) and (g) then to the cash collateral
account described in Section 12.2(b) to the extent of any L/C Obligations then
outstanding, in that order.

 

SECTION 5.6                                                  Adjustments.  If
any Lender (a “Benefited Lender”) shall at any time receive any payment of all
or part of the Obligations owing to it, or interest thereon, or if any Lender
shall at any time receive any collateral in respect to the Obligations owing to
it (whether voluntarily or involuntarily, by set-off or otherwise) (other than
as a result of the operation of the proviso to Section 4.4(b)(vi) or pursuant to
Sections 5.10, 5.11, 5.12, 5.13 or 14.2) in a greater proportion than any such
payment to and collateral received by any other Lender, if any, in respect of
the similar Obligations owing to such other Lender, or interest

 

50

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thereon, such Benefited Lender shall purchase for cash from the other Lenders
such portion of each such other Lender’s Extensions of Credit, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest.  The Borrower agrees that each Lender so
purchasing a portion of another Lender’s Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.

 

SECTION 5.7                                                  Nature of
Obligations of Lenders Regarding Extensions of Credit; Assumption by the
Administrative Agent.  The obligations of the Lenders under this Agreement to
make the Loans and issue or participate in Letters of Credit are several and are
not joint or joint and several.  Unless the Administrative Agent shall have
received written notice from a Lender prior to a proposed borrowing date that
such Lender will not make available to the Administrative Agent such Lender’s
ratable portion of the amount to be borrowed on such date (which notice shall
not release such Lender of its obligations hereunder), the Administrative Agent
may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with Sections
2.3(b) and 4.2, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount. 
If such amount is made available to the Administrative Agent on a date after
such borrowing date, such Lender shall pay to the Administrative Agent on demand
an amount, until paid, equal to the product of (a) the amount not made available
by such Lender in accordance with the terms hereof, times (b) the daily average
Federal Funds Rate during such period as determined by the Administrative Agent,
times (c) a fraction the numerator of which is the number of days that elapse
from and including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360.  A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest error.  If
such Lender’s Revolving Credit Commitment Percentage or applicable Term Loan
Percentage, as applicable, of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to such borrowing hereunder, on demand, from the
Borrower.  The failure of any Lender to make available its Revolving Credit
Commitment Percentage or Term Loan Percentage, as applicable, of any Loan
requested by the Borrower shall not relieve it or any other Lender of its
obligation, if any, hereunder to make its Revolving Credit Commitment Percentage
or Term Loan Percentage, as applicable, of such Loan available on the borrowing
date, but no Lender shall be responsible for the failure of any other Lender to
make its Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of such Loan available on the borrowing date.  Notwithstanding
anything set forth herein to the contrary, any Lender that fails to make
available its Revolving Credit Commitment Percentage or applicable Term Loan
Percentage, as applicable, shall not (a) have any voting or consent rights under
or with respect to any Loan Document or (b) constitute a “Lender” for purposes
of the calculation of Required

 

51

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Lenders hereunder for any voting or consent rights under or with respect to any
Loan Document; so long as such Lender fails to make available such Revolving
Credit Commitment Percentage or applicable Term Loan Percentage. 
Notwithstanding the foregoing, in no event shall any of the amendments, changes
or modifications specifically enumerated in Sections 14.11(a)-(c) be effective
with respect to any Lender directly affected thereby that has not consented
thereto.

 

SECTION 5.8                                                  Redenomination
under EMU.

 

(a)                                  Redenomination of Letters of Credit. 
Subject to Section 1.4, any Letter of Credit to be denominated in the currency
of any Participating Member State shall be made in the euro.

 

(b)                                 Redenomination of Obligations.  Subject to
Section 1.4, any obligation of any party under this Agreement or any other Loan
Document which has been denominated in the currency of a Participating Member
State shall be redenominated into the euro.

 

(c)                                  Further Assurances.  The terms and
provisions of this Agreement will be subject to such reasonable changes of
construction as determined by the Administrative Agent to reflect the
implementation of the EMU in any Participating Member State or any market
conventions relating to the fixing and/or calculation of interest being changed
or replaced and to reflect market practice at that time, and subject thereto, to
put the Administrative Agent, the Lenders and the Borrower in the same position,
so far as possible, that they would have been if such implementation had not
occurred.  In connection therewith, the Borrower agrees, at the request of the
Administrative Agent, at the time of or at any time following the implementation
of the EMU in any Participating Member State or any market conventions relating
to the fixing and/or calculation of interest being changed or replaced, to enter
into an agreement amending this Agreement in such manner as the Administrative
Agent shall reasonably request.

 

SECTION 5.9                                                  Regulatory
Limitation.  In the event, as a result of increases in the value of any
Alternative Currency against the Dollar or for any other reason, the obligation
of any Issuing Lender to issue Alternative Currency Letters of Credit (taking
into account the Dollar Amount of the Obligations and all other indebtedness
required to be aggregated under 12 U.S.C.A. §84, as amended, the regulations
promulgated thereunder and any other Applicable Law) is determined by such
Issuing Lender to exceed its then applicable legal lending limit under 12
U.S.C.A. §84, as amended, and the regulations promulgated thereunder, or any
other Applicable Law, the amount of additional Alternative Currency Letters of
Credit such Issuing Lender shall be obligated to issue hereunder shall
immediately be reduced to the maximum amount which such Issuing Lender may
legally issue (as determined by such Issuing Lender) and, to the extent
necessary under such laws and regulations (as determined by such Issuing Lender,
with respect to the applicability of such laws and regulations to itself), the
Borrower shall reduce, or cause to be reduced, complying to the extent
practicable with the remaining provisions hereof, the Obligations outstanding
hereunder by an amount sufficient to comply with such maximum amounts.

 

 

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SECTION 5.10                                            Changed Circumstances.

 

(a)                                  Circumstances Affecting LIBOR Rate
Availability.  If with respect to any Interest Period the Administrative Agent
or any Lender (after consultation with the Administrative Agent) shall determine
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not
being quoted via the Telerate Page 3750 or offered to the Administrative Agent
or such Lender for such Interest Period, then the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Lenders by telecopier (or
by telephone promptly confirmed by telecopier).  Thereafter, until the
Administrative Agent notifies the Borrower and the Lenders by telecopier (or by
telephone promptly confirmed by telecopier) that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such LIBOR Rate Loan
together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.

 

(b)                                 Laws Affecting LIBOR Rate Availability.  If,
after the date hereof, the introduction of, or any change in, any Applicable Law
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any of the Lenders
(or any of their respective Lending Offices) with any request or directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, shall make it unlawful or impossible for any
of the Lenders (or any of their respective Lending Offices) to honor their
obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall
promptly give notice thereof to the Administrative Agent and the Administrative
Agent shall promptly give notice to the Borrower and the other Lenders by
telecopier (or by telephone promptly confirmed by telecopier).  Thereafter,
until the Administrative Agent notifies the Borrower and the other Lenders by
telecopier (or by telephone promptly confirmed by telecopier) that such
circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Loan to or continue any
Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may
select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current
Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR
Rate Loan shall immediately be converted to a Base Rate Loan for the remainder
of such Interest Period and the Borrower shall pay any amount required to be
paid under Section 5.11.

 

(c)                                  Increased Costs.  If, after the date
hereof, the introduction of, or any change in, any Applicable Law, or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of such Governmental Authority, central bank or comparable agency:

 

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(i)                                     shall (except as provided in
Section 5.13(e)) subject any of the Lenders (or any of their respective Lending
Offices) to any tax, duty or other charge with respect to any Loan, Letter of
Credit or Application or shall change the basis of taxation of payments to any
of the Lenders (or any of their respective Lending Offices) of the principal of
or interest on any Loan, L/C Obligation or any other amounts due under this
Agreement in respect thereof (except for changes in the rate of franchise tax or
tax on the overall net income of any of the Lenders or any of their respective
Lending Offices imposed by the jurisdiction in which such Lender is organized or
is or should be qualified to do business or such Lending Office is located);
provided that the Borrower shall not be obligated to pay any amounts pursuant to
this Section 5.10(c)(i) to the extent that such amounts are duplicative of any
amounts paid by the Borrower pursuant to Section 5.13; or

 

(ii)                                  shall impose, modify or deem applicable
any reserve (including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit, insurance or capital
or similar requirement against assets of, deposits with or for the account of,
or credit extended by any of the Lenders (or any of their respective Lending
Offices) or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any Loan;

 

and the result of any of the foregoing events described in clause (i) or
(ii) above is to increase the costs to any of the Lenders of maintaining any
LIBOR Rate Loan or issuing or participating in Letters of Credit or to reduce
the yield or amount of any sum received or receivable by any of the Lenders
under this Agreement or under the Loans in respect of a LIBOR Rate Loan or
Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. The Administrative Agent, or the
applicable Lender (with a copy to the Administrative Agent) will promptly notify
the Borrower of any event of which it has knowledge which will entitle such
Lender to compensation pursuant to this Section 5.10(c); provided, that the
Administrative Agent shall incur no liability whatsoever to the Lenders or the
Borrower in the event it fails to do so.  The amount of such compensation shall
be determined, in the applicable Lender’s sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage or
applicable Term Loan Percentage, as applicable, of the LIBOR Rate Loans in the
London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical.  A certificate of
such Lender setting forth the basis for determining such amount or amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.

 

(d)                                 Exchange Indemnification and Increased
Costs.  The Borrower shall, upon demand from any Issuing Lender or L/C
Participant, pay to such Issuing Lender or L/C

 

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Participant, the amount of  (i) any loss or cost or increased cost incurred by
such Issuing Lender or L/C Participant, (ii) any reduction in any amount payable
to or in the effective return on the capital to such Issuing Lender or L/C
Participant, (iii) any interest or any other return foregone by such Issuing
Lender or L/C Participant as a result of the introduction of, change over to or
operation of the euro and (iv) any currency exchange loss, in each case that
such Issuing Lender or L/C Participant sustains as a result of the Borrower’s or
any L/C Participant’s repayment in Dollars of any Alternative Currency Letter of
Credit.  A certificate of such Issuing Lender or L/C Participant setting forth
in reasonable detail the basis for determining such additional amount or amounts
necessary to compensate such Issuing Lender or such L/C Participant shall be
conclusively presumed to be correct save for manifest error.

 

SECTION 5.11                                            Indemnity.  The Borrower
hereby indemnifies each of the Lenders against any loss or expense which may
arise or be attributable to such Lender’s obtaining, liquidating or employing
deposits or other funds acquired to effect, fund or maintain any Loan (a) as a
consequence of any failure by the Borrower to make any payment when due of any
amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any
failure of the Borrower to borrow, continue or convert on a date specified
therefor in a Notice of Borrowing or Notice of Continuation/Conversion or
(c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a
date other than the last day of the Interest Period therefor.  The amount of
such loss or expense shall be determined, in the applicable Lender’s sole
discretion, based upon the assumption that such Lender funded its Revolving
Credit Commitment Percentage or applicable Term Loan Percentage, as applicable,
of the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical.  A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.

 

SECTION 5.12                                            Capital Requirements. 
If either (a) the introduction of, or any change in, or any change in the
interpretation of, any Applicable Law or (b) compliance with any guideline or
request from any central bank or comparable agency or other Governmental
Authority (whether or not having the force of law), has or would have the effect
of reducing the rate of return on the capital of, or has affected or would
affect the amount of capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with reference to
the Commitments and other commitments of this type, below the rate which such
Lender or such other corporation could have achieved but for such introduction,
change or compliance, then within five (5) Business Days after written demand by
any such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such Lender
or other corporation for such reduction.  A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender, shall, in
the absence of manifest error, be presumed to be correct and binding for all
purposes.

 

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SECTION 5.13                                            Taxes.

 

(a)                                  Payments Free and Clear.  Except as
otherwise provided in Section 5.13(e), any and all payments by the Borrower
hereunder or under or in the respect of the Loans or in respect of the Letters
of Credit shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of each
Lender and the Administrative Agent, income and franchise taxes imposed by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as
the case may be) is organized or is or should be qualified to do business or any
political subdivision thereof and (ii) in the case of each Lender, income and
franchise taxes imposed by the jurisdiction of such Lender’s Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as “Taxes”).  If the Borrower shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder or under or in respect of
any Loan or in respect of any Letter of Credit to any Lender or the
Administrative Agent, (A) except as otherwise provided in Section 5.13(e), the
sum payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 5.13) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions or withholdings
been made, (B) the Borrower shall make such deductions or withholdings, (C) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (D) the Borrower shall
deliver to the Administrative Agent and such Lender evidence of such payment to
the relevant taxing authority or other Governmental Authority in the manner
provided in Section 5.13(d).

 

(b)                                 Stamp and Other Taxes.  In addition, the
Borrower shall pay any present or future stamp, registration, recordation or
documentary taxes or any other similar fees or charges or excise or property
taxes, levies of the United States or any state or political subdivision thereof
or any applicable foreign jurisdiction which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement, the Loans, the Letters of Credit or the other Loan
Documents, or the perfection of any rights or security interest in respect
thereof (hereinafter referred to as “Other Taxes”).

 

(c)                                  Indemnity.  Except as otherwise provided in
Section 5.13(e), the Borrower shall indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5.13) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted.  Such indemnification shall
be made within thirty (30) days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.

 

(d)                                 Evidence of Payment.  Within thirty (30)
days after the date of any payment of Taxes or Other Taxes, the Borrower shall
furnish to the Administrative Agent and the applicable Lender, at its address
referred to in Section 14.1, the original or a certified copy of a receipt

 

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evidencing payment thereof or other evidence of payment satisfactory to the
Administrative Agent.

 

(e)                                  Delivery of Tax Forms.  To the extent
required by Applicable Law to reduce or eliminate withholding or payment of
taxes, each Lender organized under the laws of any jurisdiction other than the
United States or any state thereof (a “Foreign Lender”) and the Administrative
Agent shall deliver to the Borrower, with a copy to the Administrative Agent, on
the Closing Date or concurrently with the delivery of the relevant Assignment
and Acceptance, as applicable, (i) two United States Internal Revenue Service
Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable (or successor forms)
properly completed and certifying in each case that such Foreign Lender is
entitled to a complete exemption from withholding or deduction for or on account
of any United States federal income taxes, and (ii) an Internal Revenue Service
Form W-8BEN or W-8ECI or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding taxes.  Each such
Foreign Lender further agrees to deliver to the Borrower, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, certifying in the case of a Form W-9,
Form W-8BEN or W-8ECI (or successor forms) that such Foreign Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Foreign Lender notifies the Borrower and the Administrative Agent that
it is not entitled to receive payments without deduction or withholding of
United States federal income taxes) and, in the case of a Form W-9, Form W-8BEN
or W-8ECI, establishing an exemption from United States backup withholding tax. 
Notwithstanding anything in any Loan Document to the contrary, the Borrower
shall not be required to pay additional amounts to any Lender or the
Administrative Agent under this Section 5.13 or under Section 5.10(c), (i) if
such Foreign Lender or the Administrative Agent fails to comply with the
requirements of this Section 5.13(e), other than to the extent (i) that such
failure is due to a change in law occurring after the date on which such Foreign
Lender or the Administrative Agent became a party to this Agreement or (ii) that
such additional amounts are the result of such Foreign Lender’s or the
Administrative Agent’s gross negligence or willful misconduct, as applicable.

 

(f)                                    Survival.  Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 5.13 shall survive the
payment in full of the Obligations and the termination of the Commitments until
the expiration of the applicable statute of limitations.

 

SECTION 5.14                                            Rounding and Other
Consequential Changes.  Subject to Section 1.4, without prejudice and in
addition to any method of conversion or rounding prescribed by any EMU
Legislation and without prejudice to the respective obligations of the Borrower
to the Administrative Agent and the Lenders and the Administrative Agent and the
Lenders to the Borrower under or pursuant to this Agreement, except as expressly
provided in this Agreement,

 

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each provision of this Agreement, including, without limitation, the right to
combine currencies to effect a set-off, shall be subject to such reasonable
changes of interpretation as the Administrative Agent may from time to time
specify to be necessary or appropriate to reflect the introduction of or change
over to the euro in Participating Member States.

 

SECTION 5.15                                            Security.  The
Obligations of the Borrower and the Subsidiary Guaranteed Obligations shall be
secured as provided in the Security Documents.

 

SECTION 5.16                                            Mitigation Obligations;
Replacement of Lenders.

 

(a)                                  If any Lender requests compensation under
Section 5.10(c), or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 5.13, then such Lender shall use its reasonable efforts to designate
a different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the reasonable judgment of such Lender, such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 5.10(c) or 5.13, 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.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)                                 If any Lender requests compensation under
Section 5.10(c), or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 5.13, or if any Lender defaults in its obligations to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 14.10), all its interests, rights and obligations under
this Agreement (other than any indemnification rights pursuant to Sections 5.10,
5.12, 5.13 or 14.2 for the period prior to such assignment) to an Eligible
Assignee that shall assume such obligations (which Eligible Assignee may be
another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in L/C Obligations and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts
(including, without limitation, any amounts then payable to such Lender under
Section 5.10(c) or under Section 5.13)) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 5.10(c) or
payments required to be made pursuant to Section 5.13, such assignment will
result in a material reduction in such compensation or payments.  A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.

 

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ARTICLE VI

 

CLOSING; CONDITIONS OF CLOSING AND BORROWING

 

SECTION 6.1                                                  Closing.  The
closing shall take place at the offices of Kennedy Covington Lobdell & Hickman,
L.L.P. at 10:00 a.m. on January 31, 2006, or on such other place, date and time
as the parties hereto shall mutually agree.

 

SECTION 6.2                                                  Conditions to
Closing and Initial Extensions of Credit on the Closing Date.  The obligation of
the Lenders to close this Agreement and to make the Loans or issue or
participate in the Letters of Credit, if any, to be made or issued on the
Closing Date is subject to the satisfaction of each of the following conditions:

 

(a)                                  Executed Loan Documents.  This Agreement,
the Revolving Credit Notes, the Term Notes, the Swingline Note, and the Security
Documents, together with any other applicable Loan Documents, shall have been
duly authorized, executed and delivered to the Administrative Agent by the
Administrative Agent, on behalf of itself and the Lenders, the Borrower and its
Subsidiaries party thereto, and the other parties thereto, shall be in full
force and effect and no Default or Event of Default shall exist, and the
Borrower shall have delivered original counterparts thereof to the
Administrative Agent.

 

(b)                                 Closing Certificates; etc.

 

(i)                                     Officer’s Certificate of the Borrower. 
The Administrative Agent shall have received a certificate from a Responsible
Officer, in form and substance satisfactory to the Administrative Agent, to the
effect that all representations and warranties contained in this Agreement and
the other Loan Documents are true, correct and complete; that the Borrower and
its Subsidiaries are not in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; and that the Borrower has satisfied each of the
closing conditions.

 

(ii)                                  Certificate of Secretary of the Borrower
and Subsidiary Guarantors. The Administrative Agent shall have received a
certificate of the secretary or assistant secretary of each of the Borrower and
the Subsidiary Guarantors certifying as to the incumbency and genuineness of the
signature of each officer of the Borrower or such Subsidiary Guarantor executing
the Loan Documents to which it is a party and certifying that attached thereto
is a true, correct and complete copy of (A) the certificate of limited
partnership, articles of incorporation or other organizational document of the
Borrower or such Subsidiary Guarantor and all amendments thereto, certified as
of a recent date by the appropriate Governmental Authority in its jurisdiction
of incorporation, (B) the bylaws, partnership agreement, operating agreement or
other operative document of the Borrower or such Subsidiary Guarantor as in
effect on the date of such certifications, (C) resolutions duly adopted by the
Board of Directors, partners or members of the Borrower or such Subsidiary
Guarantor authorizing the borrowings and other credit extensions

 

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contemplated hereunder and the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 6.2(b)(iii).

 

(iii)                               Certificates of Good Standing.  The
Administrative Agent shall have received certificates as of a recent date of the
good standing of the Borrower and each Subsidiary Guarantor under the laws of
its jurisdiction of organization and, to the extent requested by the
Administrative Agent in its reasonable judgment, each other jurisdiction where
the Borrower and each Subsidiary Guarantor is qualified to do business and a
certificate of the relevant taxing authorities of such jurisdictions certifying
that such Person has filed required tax returns and owes no delinquent taxes.

 

(iv)                              Opinions of Counsel.  The Administrative Agent
shall have received favorable opinions of counsel to the Borrower and Subsidiary
Guarantors addressed to the Administrative Agent and the Lenders with respect to
the Borrower and Subsidiary Guarantors, the Loan Documents and such other
matters as the Administrative Agent shall reasonably request.

 

(v)                                 Tax Forms.  The Administrative Agent shall
have received copies of the United States Internal Revenue Service forms
required by Section 5.13(e).

 

(c)                                  Collateral.

 

(i)                                     Filings and Recordings.  All filings and
recordations that are necessary to perfect the security interests of the Lenders
in the collateral described in the Security Documents shall have been received
by the Administrative Agent and the Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that upon such filings and
recordations such security interests constitute valid and perfected first
priority Liens therein.

 

(ii)                                  Pledged Collateral.  The Administrative
Agent shall have received (A) original stock certificates or other certificates
evidencing the capital stock or other ownership interests pledged pursuant to
the Collateral Agreement or the Pledge Agreements together with an undated stock
power for each such certificate duly executed in blank by the registered owner
thereof and (B) each original promissory note pledged pursuant to the Collateral
Agreement or any Pledge Agreement together with an endorsement for each such
promissory note duly executed in blank by the holder thereof.

 

(iii)                               Lien Search. The Administrative Agent shall
have received the results of a Lien search (including a search as to judgments
and tax matters) made against the Borrower, its Restricted Subsidiaries
(including, without limitation, ESSI and each of its Subsidiaries that are
Restricted Subsidiaries) under the Uniform Commercial Code as in effect in any
state in which any of its assets are located, to the extent requested by the
Administrative Agent, indicating among other things that its assets are free and
clear of any Lien except for Liens permitted hereunder.

 

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(iv)                              Hazard and Liability Insurance.  The
Administrative Agent shall have received certificates of insurance, evidence of
payment of all insurance premiums for the current policy year of each, and, if
requested by the Administrative Agent, copies (certified by a Responsible
Officer) of insurance policies in the form required under the Security Documents
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.

 

(d)                                 Consents; Defaults.

 

(i)                                     Governmental and Third Party Approvals. 
The Borrower shall have obtained all necessary approvals, authorizations and
consents of any Person and of all Governmental Authorities and courts having
jurisdiction with respect to the transactions contemplated by the Transaction
Documents.

 

(ii)                                  No Injunction, Etc.  No action,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before any Governmental Authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is related to
or arises out of (a) the Transaction Documents or the consummation of the
transactions contemplated thereby, which, in the Administrative Agent’s sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents or (b) the ESSI
Merger, which prohibits or imposes materially adverse conditions upon, or makes
it economically unfeasible to consummate, the transactions contemplated by this
Agreement and such other Loan Documents.

 

(iii)                               No Event of Default.  No Default or Event of
Default shall have occurred and be continuing.

 

(e)                                  Financial Matters.

 

(i)                                     Financial Statements.  Each of the
Lenders shall have received (A) audited consolidated financial statements of
each of the Borrower, ESSI and their respective Subsidiaries for the three
(3) most recent fiscal years ended for which audited consolidated financial
statements are available, including balance sheets and income and cash flow
statements and related notes thereto, (B) to the extent available, unaudited
interim consolidated balance sheets and income and cash flow statements of the
Borrower, ESSI and their respective Subsidiaries for each quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (A) of this paragraph, and (C) such other financial statements of the
Borrower as may be required, or in the reasonable opinion of the Administrative
Agent, reasonably desirable in connection with the Facilities, prepared in
accordance with GAAP and Regulation S-X for a registration statement on Form S-1
under the Securities Act of 1933, as amended.

 

(ii)                                  Balance Sheets and Income Statements. 
Each of the Lenders shall have received consolidating pro forma balance sheets
and income statements (as of the date of the most recent consolidated quarterly
balance sheet of the Borrower delivered pursuant

 

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to clause (B) of subsection (i) above) and income statements (for the most
recent fiscal year, the most recent fiscal quarter, and the most recent
twelve-month period for which quarterly income statements have been delivered
pursuant to clause (B) of subsection (i) above subject to adjustments required
by SEC rules) of the Borrower and its Subsidiaries, giving effect to the ESSI
Merger, the Permitted Debt Issuance and the financings contemplated hereby
(including the payment of premiums, fees and expenses related to the ESSI
Merger, the Permitted Debt Issuance or the financings contemplated hereby) as if
each such transaction had occurred (x) on such date, in the case of the balance
sheets, and (y) at the beginning of such period, in the case of the income
statements, in each case prepared in accordance with Regulation S-X for a
registration statement on Form S-1, in each case, reasonably satisfactory in
form to the Administrative Agent.

 

(iii)                               No Material Adverse Change.  There shall
have occurred no material adverse change in the business, prospects, operations
or financial condition of (A) the Borrower and its Subsidiaries, taken as a
whole, since March 31, 2005, or (B) ESSI and its Subsidiaries, taken as a whole,
since October 31, 2005.

 

(iv)                              Financial Condition Certificate.  The Borrower
shall have delivered to the Administrative Agent a certificate, in form and
substance reasonably satisfactory to the Administrative Agent and certified as
accurate by a Responsible Officer, that (A) after giving effect to the
transactions contemplated by the Transaction Documents, the Borrower and its
Restricted Subsidiaries taken as a whole are Solvent, (B) after giving effect to
the transactions contemplated by the Transaction Documents, the payables of the
Borrower and its Restricted Subsidiaries are not past due beyond customary trade
terms, (C) attached thereto are calculations evidencing compliance with the
covenants contained in Article X, determined on a pro forma basis, as of the
Closing Date and after giving effect to the transactions contemplated by the
Transaction Documents and the initial Extensions of Credit under the Loan
Documents, and (D) the financial projections previously delivered to the
Administrative Agent represent the good faith estimates (utilizing assumptions
believed by the Borrower’s management to be reasonable) of the financial
condition and operations of the Borrower and its Restricted Subsidiaries.

 

(v)                                 Financial Projections.  The Administrative
Agent shall have received management approved five (5) year projected financial
statements of the Borrower and its Subsidiaries (it being acknowledged that the
projections provided to the Administrative Agent on June, 2005 shall satisfy
this condition).

 

(vi)                              Payment at Closing; Fee Letters. The Borrower
shall have paid to the Administrative Agent and the Lenders the fees set forth
or referenced in Section 5.3 and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses) and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes, fees
and other charges in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents.

 

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(f)                                    ESSI Merger.

 

(i)                                     ESSI Merger Documents.  The
Administrative Agent shall have received the ESSI Merger Documents and such ESSI
Merger Documents shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Syndication Agent (including, but not limited to, a
total purchase price not to exceed $1,978,900,000 and a cash purchase price not
to exceed $1,410,900,000 (it being acknowledged that the ESSI Merger Agreement
filed on Form 8-K on September 23, 2005 is satisfactory to the Administrative
Agent and the Syndication Agent)).

 

(ii)                                  Conditions to the ESSI Merger.  All
conditions to the ESSI Merger shall be satisfied or waived (any such waiver to
be with the consent of the Administrative Agent and the Syndication Agent, not
to be unreasonably withheld) on or before the Closing Date such that the ESSI
Merger shall occur contemporaneously with the initial funding under this
Agreement on the Closing Date.

 

(iii)                               Governmental and Third Party Approvals.  The
Administrative Agent shall have received evidence satisfactory thereto that all
material governmental, shareholder and third party consents and approvals
necessary in connection with the ESSI Merger (including, without limitation,
approvals required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, landlord consents and consents under customer supply
agreements), shall have been obtained and remain in effect.

 

(iv)                              Tax, Accounting, Corporate and Capital
Structure.  The Administrative Agent shall be satisfied that the proposed tax
and accounting treatment of the ESSI Merger and the proposed corporate and
capital structure of the Borrower and its Subsidiaries (including ESSI and its
Subsidiaries, if any) after giving effect to the transactions contemplated by
the Transaction Documents, (A) does not differ materially from the treatment and
structure previously disclosed in writing by the Borrower to the Administrative
Agent or (B) is otherwise reasonably satisfactory to the Administrative Agent.

 

(v)                                 Joinder of ESSI and its Subsidiaries.  The
Administrative Agent shall have received (A) a duly executed Joinder Agreement
joining ESSI and each Domestic Subsidiary of ESSI (to the extent such Subsidiary
is a Restricted Subsidiary) to the Subsidiary Guaranty Agreement, the Collateral
Agreement and any other applicable Security Documents, (B) updated Schedules
7.1(a) and 7.1(b) reflecting the creation or acquisition of each Subsidiary of
ESSI, (C) favorable legal opinions covering such matters consistent with
opinions for this Agreement and addressed to the Administrative Agent and
Lenders in form and substance reasonably satisfactory thereto with respect to
such Joinder Agreement, (D) original stock or other certificates and stock or
other transfer powers evidencing the ownership interests of the Borrower or such
Restricted Subsidiary, as applicable, in ESSI or such Subsidiary of ESSI, and
(E) any other documents and certificates as may be reasonably requested by the
Administrative Agent.

 

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(vi)                              Other Documents.  The Administrative Agent
shall have received copies of all other documents, certificates and instruments
reasonably requested thereby, with respect to the transactions contemplated by
the ESSI Merger, and each such document, certificate and instrument shall be in
form and substance reasonably satisfactory to the Administrative Agent.

 

(g)                                 Permitted Debt Issuance.

 

(i)                                     Permitted Debt Documents.  The
Administrative Agent shall have received copies of all of the Permitted Debt
Documents and such Permitted Debt Documents shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Syndication Agent.

 

(ii)                                  Permitted Debt Issuance.  The Borrower
shall have received, on or prior to the Closing Date, net cash proceeds from the
issuance of a combination of the Senior Subordinated Notes, the Convertible
Notes and/or the Senior Unsecured Notes in an aggregate amount of $900,000,000
(collectively, the “Permitted Debt Issuance”), such Permitted Debt Issuance to
be on terms and conditions reasonably satisfactory to the Administrative Agent.

 

(iii)                               Other Documents.  The Administrative Agent
shall have received copies of all other documents, certificates and instruments
reasonably requested thereby, with respect to the transactions contemplated by
the Permitted Debt Documents, and each such document, certificate and instrument
shall be in form and substance reasonably satisfactory to the Administrative
Agent.

 

(h)                                 Repayment of Certain Amounts Outstanding
under Existing Credit Agreement. On the Closing Date, (i) all outstanding loans
under the Existing Credit Agreement (the “Existing Loans”) made by any Existing
Lender which is not a Lender hereunder shall be repaid in full and the
commitments and other obligations and rights (except as expressly set forth in
the Existing Credit Agreement) of such Existing Lender shall be terminated,
(ii) all outstanding Existing Loans not being repaid under clause (i) above
shall be deemed Revolving Credit Loans or Term Loans, as applicable, hereunder
and the Administrative Agent shall make such transfers of funds as are necessary
in order that the outstanding balance of such Revolving Credit Loans or Term
Loans, as applicable, together with any Revolving Credit Loans and any Term
Loans funded on the Closing Date, are in accordance with the Revolving Credit
Commitment Percentages or Term Loan Percentages, as applicable, of the Lenders
hereunder, (iii) there shall have been paid in cash in full all accrued but
unpaid interest due on the Existing Loans to the Closing Date, (iv) there shall
have been paid in cash in full all accrued but unpaid fees under the Existing
Credit Agreement due to the Closing Date and all other amounts, costs and
expenses then owing to any of the Existing Lenders and/or Wachovia, as
administrative agent under the Existing Credit Agreement, (v) all outstanding
Letters of Credit under the Existing Credit Agreement shall be Letters of Credit
hereunder and (vi) all outstanding promissory notes issued by the Borrower to
the Existing Lenders under the Existing Credit Agreement shall be promptly
returned to the Administrative Agent which shall forward such notes to the
Borrower for cancellation.

 

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(i)                                     Other Existing Debt.  All Debt
(including , without limitation, all Debt of ESSI and its Subsidiaries) except
(i) Debt of the Borrower under the Existing Credit Agreement permitted pursuant
to Section 6.2(h), and (ii) other existing Debt of the Borrower and its
Subsidiaries permitted by Section 11.1, shall have been repaid in connection
with the closing of transactions contemplated by the Transaction Documents and
all Liens securing such other existing Debt shall have been terminated.

 

(j)                                     Transaction Documents.  The transactions
described in the Transaction Documents, including, without limitation, the
Borrower’s issuance of at least $568,000,000 of certain common equity
securities, shall have been consummated in accordance with all requirements of
Applicable Law for an aggregate consideration (including the refinancing of debt
of the Borrower and ESSI and the payment of fees and expenses) not exceeding
$2,198,800,000, including the assumption of ESSI’s indebtedness, and (x) no
material provision of any of the Transaction Documents (other than the Loan
Documents, which may be amended, waived or modified only as provided in
Section 14.11) shall have been amended, waived or otherwise modified without the
prior written consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed) and (y) the Borrower and its Affiliates and
Subsidiaries shall not be in material breach or violation of any of its
obligations under the Transaction Documents or any documentation relating to the
financing transactions contemplated by the Transaction Documents.

 

(k)                                  Miscellaneous.

 

(i)                                     Notice of Borrowing.  The Administrative
Agent shall have received a Notice of Borrowing, as applicable, from the
Borrower in accordance with Section 2.3(a) and Section 4.2, and a Notice of
Account Designation specifying the account or accounts to which the proceeds of
any Loans made after the Closing Date are to be disbursed.

 

(ii)                                  Other Documents.  All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be in form and substance
reasonably satisfactory to the Administrative Agent.  The Administrative Agent
shall have received copies of all other documents, certificates and instruments
reasonably requested thereby, with respect to the transactions contemplated by
this Agreement, the ESSI Merger or the Permitted Debt Issuance.

 

SECTION 6.3                                                  Conditions to All
Extensions of Credit.  The obligations of the Lenders to make any Extensions of
Credit (including the initial Extension of Credit), or convert or continue any
Loan and/or any Issuing Lender to issue or extend any Letter of Credit are
subject to the satisfaction  or waiver in accordance with Section 14.11 of the
following conditions precedent on the relevant borrowing, continuation,
conversion, issuance or extension date:

 

(a)                                  Continuation of Representations and
Warranties.  The representations and warranties contained in Article VII and in
the other Loan Documents shall be true and correct on and as of such borrowing
or issuance date or such date of continuation or conversion with the same effect
as if made on and as of such date; except for any representation and warranty
made

 

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as of an earlier date, which representation and warranty shall remain true and
correct as of such earlier date.

 

(b)                                 No Existing Default.  No Default or Event of
Default shall have occurred and be continuing (i) on the borrowing date with
respect to such Loan or after giving effect to the Loans to be made on such date
or (ii) on the issue date with respect to such Letter of Credit or after giving
effect to the issuance of such Letter of Credit on such date or on such
continuation or conversion date after giving effect to such continuation or
conversion.

 

(c)                                  Notices.  The Administrative Agent shall
have received a Notice of Borrowing or Notice of Conversion/Continuation, as
applicable, from the Borrower in accordance with Section 2.3(a) and Section 5.2.

 

(d)                                 Additional Documents.  The Administrative
Agent shall have received each additional document, instrument, legal opinion or
other item reasonably requested by it.

 

SECTION 6.4                                                  Post-Closing
Conditions. The Borrower and each of its Subsidiaries shall comply with all
terms and conditions of the Agreement Regarding Post-Closing Matters within the
required time periods set forth therein.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

 

SECTION 7.1                                                  Representations and
Warranties.  To induce the Administrative Agent and Lenders to enter into this
Agreement and to induce the Lenders to make Extensions of Credit, the Borrower
hereby represents and warrants to the Administrative Agent and Lenders both
before and after giving effect to the transactions contemplated hereunder that:

 

(a)                                  Organization; Power; Qualification.  Each
of the Borrower and its Restricted Subsidiaries (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and (ii) except to the extent as could not reasonably
be expected to have a Material Adverse Effect, has the power and authority to
own its properties and to carry on its business as now being and hereafter
proposed to be conducted and is duly qualified and authorized to do business in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization.  The jurisdictions in
which the Borrower and its Restricted Subsidiaries are organized and qualified
to do business as of the Closing Date are described on Schedule 7.1(a).

 

(b)                                 Ownership.  Each Subsidiary as of the
Closing Date is listed on Schedule 7.1(b).  As of the Closing Date, the
capitalization of the Borrower and its Subsidiaries consists of the number of
shares, authorized, issued and outstanding, of such classes and series, with or
without par value, described on Schedule 7.1(b).  All outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable,
with no personal liability attaching to the ownership thereof, and not subject
to any preemptive or similar rights.  The shareholders of the

 

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Subsidiaries and the number of shares owned by each as of the Closing Date are
described on Schedule 7.1(b).  As of the Closing Date, there are no outstanding
stock purchase warrants, subscriptions, options, securities, instruments or
other rights of any type or nature whatsoever, which are convertible into,
exchangeable for or otherwise provide for or permit the issuance of capital
stock or other ownership interests of the Borrower or its Restricted
Subsidiaries, except as described on Schedule 7.1(b).

 

(c)                                  Authorization of Agreement, Loan Documents
and Borrowing. Each of the Borrower and its Restricted Subsidiaries has the
right, power and authority and has taken all necessary corporate and other
action to authorize the execution, delivery and performance of this Agreement
and each of the other Loan Documents to which it is a party in accordance with
their respective terms, in the case of the Borrower, the Extensions of Credit
hereunder, and the transactions contemplated hereby.  This Agreement and each of
the other Loan Documents have been duly executed and delivered by the duly
authorized officers of the Borrower and each of its Restricted Subsidiaries
party thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or the Restricted Subsidiary party thereto,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors’ rights in general and the availability of equitable
remedies.

 

(d)                                 Compliance of Agreement, Loan Documents and
Borrowing with Laws, Etc.  The execution, delivery and performance by the
Borrower and its Restricted Subsidiaries of the Loan Documents to which each
such Person is a party, in accordance with their respective terms, the
Extensions of Credit hereunder and the transactions contemplated hereby do not
and will not, by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any Applicable Law relating to
the Borrower or any of its Restricted Subsidiaries, (ii) conflict with, result
in a breach of or constitute a default under the articles of incorporation,
bylaws or other organizational documents of the Borrower or any of its
Restricted Subsidiaries or any indenture, agreement or other instrument to which
such Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents or (iv) require any consent or authorization of, filing with, or
other act in respect of, an arbitrator or Governmental Authority and no consent
of any other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.

 

(e)                                  Compliance with Law; Governmental
Approvals.  Except (i) as publicly disclosed in a filing with the SEC prior to
the Closing Date or (ii) where the failure to do so could not reasonably be
expected to create a Material Adverse Effect, each of the Borrower and its
Restricted Subsidiaries (A) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, (B) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties and (C) has timely filed all material
reports,

 

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documents and other materials required to be filed by it under all Applicable
Laws with any Governmental Authority and has retained all material records and
documents required to be retained by it under Applicable Law.

 

(f)                                    Tax Returns and Payments.  Each of the
Borrower and its Restricted Subsidiaries has duly filed or caused to be filed
all federal, state, local and other tax returns required by Applicable Law to be
filed, and has paid, or made adequate provision for the payment of, all federal,
state, local and other taxes, assessments and governmental charges or levies
upon it and its property, income, profits and assets which are due and payable,
except (a) any taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Restricted Subsidiary, as
applicable, has set aside on its books adequate reserves in conformity with GAAP
or (b) to the extent that the failure to do so could not reasonably be expected
to result in a Material Adverse Effect.   Such returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby.  There is no ongoing audit or examination or,
to the knowledge of the Borrower, other investigation by any Governmental
Authority of the tax liability of the Borrower and its Restricted Subsidiaries. 
No Governmental Authority has asserted any Lien or other claim against the
Borrower or any Restricted Subsidiary with respect to unpaid taxes which has not
been discharged or resolved other than Liens for taxes not yet due and payable. 
The charges, accruals and reserves on the books of the Borrower and any of its
Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof for all open years of the Borrower and any of its
Restricted Subsidiaries are in the judgment of the Borrower adequate, and the
Borrower does not anticipate any additional material taxes or assessments for
any of such years.

 

(g)                                 Intellectual Property Matters.  Except where
the failure to do so could not reasonably be expected to create a Material
Adverse Effect, each of the Borrower and its Restricted Subsidiaries owns or
possesses rights to use all franchises, licenses, copyright registrations,
copyright applications, issued patents, patent applications, trademarks,
trademark applications, trademark registrations, trademark rights, service
marks, service mark applications, service mark rights, trade names, trade name
rights, copyrights and rights with respect to the foregoing which are required
to conduct its business.  To the knowledge of the Borrower and its Restricted
Subsidiaries, no event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such rights
(except for the expiration of patents in the ordinary course), and neither the
Borrower nor any Restricted Subsidiary is liable to any Person for infringement
under Applicable Law with respect to any such rights as a result of its business
operations except to the extent any such revocation, termination, or
infringement could not reasonably be expected to have a Material Adverse Effect.

 

(h)                                 Environmental Matters.  Except for
(i) matters publicly disclosed in a filing with the SEC prior to the Closing
Date or (ii) any other matter that could not reasonably be expected to create a
Material Adverse Effect,

 

(A)                              The properties presently owned, leased or
operated by the Borrower and its Restricted Subsidiaries do not contain, and to
their knowledge have not previously contained, any Hazardous Materials in
amounts or concentrations which (1) constitute or

 

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constituted a violation of applicable Environmental Laws or (2) could reasonably
be expected to give rise to liability under applicable Environmental Laws;

 

(B)                                The Borrower, each Restricted Subsidiary and
such properties and all operations conducted in connection therewith are in
compliance, and have been in compliance, with all applicable Environmental Laws,
and there is no contamination at, under or about such properties or such
operations which could interfere with the continued operation of such
properties;

 

(C)                                Neither the Borrower nor any Restricted
Subsidiary has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters, Hazardous Materials, or compliance with Environmental Laws, nor does
the Borrower or any Restricted Subsidiary have knowledge or reason to believe
that any such notice will be received or is being threatened;

 

(D)                               Hazardous Materials have not been transported
or disposed of to or from the properties owned, leased or operated by the
Borrower and its Restricted Subsidiaries in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws; and

 

(E)                                 No judicial proceedings or governmental or
administrative action is pending under any Environmental Law to which the
Borrower or any Restricted Subsidiary has been named as a potentially
responsible party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
Borrower or any Restricted Subsidiary.

 

(i)                                     ERISA.

 

(i)                                     As of the Closing Date, neither the
Borrower nor any ERISA Affiliate maintains or contributes to, or has any
obligation under, any Employee Benefit Plans other than those identified on
Schedule 7.1(i);

 

(ii)                                  Each of the Borrower and each ERISA
Affiliate is in material compliance with all applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired
and except where a failure to so comply could not reasonably be expected to have
a Material Adverse Effect.  Each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such plan has

 

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been determined to be exempt under Section 501(a) of the Code except for such
plans that have not yet received determination letters but for which the
remedial amendment period for submitting a determination letter has not yet
expired.  No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan except for a liability that
could not reasonably be expected to have a Material Adverse Effect;

 

(iii)                               Except for any such matter that could not
reasonably be expected to create a Material Adverse Effect, as of the Closing
Date, no Pension Plan has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred (without regard
to any waiver granted under Section 412 of the Code), nor has any funding waiver
from the Internal Revenue Service been received or requested with respect to any
Pension Plan, nor has the Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by Section 412 of
the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the due
dates of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

 

(iv)                              Except where the failure of any of the
following representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, neither the Borrower
nor any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code, (B) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid, (C) failed
to make a required contribution or payment to a Multiemployer Plan, or
(D) failed to make a required installment or other required payment under
Section 412 of the Code;

 

(v)                                 No Termination Event has occurred or is
reasonably expected to occur; and

 

(vi)                              Except where the failure of any of the
following representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, no proceeding, claim
(other than a benefits claim in the ordinary course of business), lawsuit and/or
investigation is existing or, to the best knowledge of the Borrower after due
inquiry, threatened concerning or involving any (A) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by the Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer
Plan.

 

(j)                                     Margin Stock.  Neither the Borrower nor
any Restricted Subsidiary is engaged principally or as one of its activities in
the business of extending credit for the purpose of “purchasing” or “carrying”
any “margin stock” (as each such term is defined or used, directly or
indirectly, in Regulation U of the Board of Governors of the Federal Reserve
System).  No part of the proceeds of any of the Loans or Letters of Credit will
be used for purchasing or carrying

 

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margin stock in violation of, or for any other purpose which violates, or which
would be inconsistent with, the provisions of Regulation T, U or X of such Board
of Governors.

 

(k)                                  Government Regulation.  Neither the
Borrower nor any Restricted Subsidiary is an “investment company” or a company
“controlled” by an “investment company” (as each such term is defined or used in
the Investment Company Act of 1940, as amended) and neither the Borrower nor any
Restricted Subsidiary is, or after giving effect to any Extension of Credit will
be, subject to regulation under the Interstate Commerce Act, each as amended, or
any other Applicable Law which limits its ability to incur or consummate the
transactions contemplated hereby.

 

(l)                                     Material Contracts. Each Material
Contract of the Borrower and each Restricted Subsidiary in effect as of the
Closing Date is, and after giving effect to the consummation of the transactions
contemplated by the Loan Documents will be, in full force and effect in
accordance with the terms thereof as of the Closing Date except as could not
reasonably be expected to have a Material Adverse Effect.

 

(m)                               Employee Relations. Neither the Borrower nor
any of its Restricted Subsidiaries is, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 7.1(m).  The
Borrower knows of no pending, threatened or contemplated strikes, work
stoppage or other collective labor disputes involving its employees or those of
its Restricted Subsidiaries.

 

(n)                                 Burdensome Provisions.  Neither the Borrower
nor any Restricted Subsidiary is a party to any indenture, agreement, lease or
other instrument, or subject to any corporate or partnership restriction,
Governmental Approval or Applicable Law which is so unusual or burdensome as in
the foreseeable future could be reasonably expected to have a Material Adverse
Effect.  The Borrower and its Restricted Subsidiaries do not presently
anticipate that future expenditures needed to meet the provisions of any
statutes, orders, rules or regulations of a Governmental Authority will be so
burdensome as could reasonably be expected to have a Material Adverse Effect. 
No Restricted Subsidiary is party to any agreement or instrument or otherwise
subject to any restriction or encumbrance that restricts or limits its ability
to make dividend payments or other distributions in respect of its capital stock
or other ownership interests to the Borrower or any Restricted Subsidiary or to
transfer any of its assets or properties to the Borrower or any other Restricted
Subsidiary in each case other than those existing under or by reason of the Loan
Documents or Applicable Law.

 

(o)                                 Financial Statements.  The financial
statements required pursuant to Section 6.2(e) (including pro forma financial
statements) and related unaudited interim statements of income and retained
earnings, copies of which have been furnished to the Administrative Agent and
each Lender, are complete and correct and fairly present on a Consolidated basis
the assets, liabilities and financial position of the Borrower and its
Restricted Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended (other than customary
year-end adjustments for unaudited financial statements).  All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP.

 

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(p)                                 No Material Adverse Change.  Since March 31,
2005, there has been no material adverse change in the properties, business,
operations or financial condition of the Borrower and its Restricted
Subsidiaries, taken as a whole.  Since October 31, 2005 there has been no
material adverse change (i) in the properties, business, operations, or
financial condition of ESSI and its Subsidiaries, taken as a whole, and no event
has occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect or (ii) in the ESSI Investigation.

 

(q)                                 Solvency.  As of the Closing Date and after
giving effect to the transactions contemplated by the Transaction Documents and
each Extension of Credit made hereunder, the Borrower and its Restricted
Subsidiaries taken as a whole will be Solvent.

 

(r)                                    Titles to Properties.  Each of the
Borrower and its Restricted Subsidiaries has such title to the real property
owned or leased by it as is necessary or desirable to the conduct of its
business and valid and legal title to all of its personal property and assets,
including, but not limited to, those reflected on the balance sheets of the
Borrower and its Restricted Subsidiaries referred to in Section 7.1(o), except
those which have been disposed of by the Borrower or its Restricted Subsidiaries
subsequent to such date which dispositions have been in the ordinary course of
business or as otherwise expressly permitted hereunder.  As of the Closing Date,
all real property owned or leased by the Borrower or any Restricted Subsidiary
is set forth on Schedule 7.1(r).

 

(s)                                  Liens.  None of the properties and assets
of the Borrower or any Restricted Subsidiary is subject to any Lien, except
Permitted Liens.  No financing statement under the Uniform Commercial Code of
any state which names the Borrower or any Restricted Subsidiary or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Restricted Subsidiary has signed any such financing statement or any
security agreement authorizing any secured party thereunder to file any such
financing statement, except to perfect those Liens permitted by Section 11.2.

 

(t)                                    Debt and Guaranty Obligations. 
Schedule 7.1(t) is a complete and correct listing of all Debt, Guaranty
Obligations and Bonding Obligations of the Borrower and its Restricted
Subsidiaries in excess of $10,000,000, in each case, as of the date set forth on
such Schedule 7.1(t) .

 

(u)                                 Litigation.  Except for (i) the ESSI
Investigation, (ii) any such matter that could not reasonably be expected to
create a Material Adverse Effect, and (iii) to the extent not covered by clauses
(i) and (ii) above, any other matters existing on the Closing Date and set forth
on Schedule 7.1(u), there are no actions, suits or proceedings pending nor, to
the knowledge of the Borrower, threatened against or in any other way relating
adversely to or affecting the Borrower, any Restricted Subsidiary or ESSI or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority.

 

(v)                                 Absence of Defaults.  No event has occurred
or is continuing (i) which constitutes a Default or an Event of Default, or
(ii) which constitutes, or which with the passage of time or

 

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giving of notice or both would constitute, a default or which would require the
Borrower or any of its Restricted Subsidiaries to make any payment under a
Material Contract prior to the scheduled maturity date therefor that, in any
case under this clause (ii), could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(w)                               Senior Debt Status.  The Obligations of the
Borrower and each of its Restricted Subsidiaries under this Agreement, the
Subsidiary Guaranteed Obligations and each of the other Loan Documents ranks and
shall continue to rank at least senior in priority of payment to all
Subordinated Debt and the Obligations of the Borrower and each Restricted
Subsidiary under this Agreement are hereby designated as “Senior Indebtedness”
(or by a term with substantially equivalent meaning) under all instruments and
documents, now or in the future, relating to all Subordinated Debt.

 

(x)                                   Accuracy and Completeness of Information. 
All written information, reports and other papers and data, when taken as a
whole, produced by or on behalf of the Borrower or any Restricted Subsidiary
(other than financial projections, which shall be subject to the standard set
forth in Section 8.1(c)) and furnished to the Lenders were, at the time the same
were so furnished, complete and correct in all material respects to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter.  No document furnished or written statement made to the Administrative
Agent or the Lenders by the Borrower or any Restricted Subsidiary in connection
with the negotiation, preparation or execution of, or pursuant to, this
Agreement or any of the other Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Borrower or its
Restricted Subsidiaries or omits or will omit to state a fact necessary in order
to make the statements contained therein not misleading.  The Borrower is not
aware of any facts which it has not disclosed in writing to the Administrative
Agent having a Material Adverse Effect, or insofar as the Borrower can now
foresee, which could reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.2                                                  Survival of
Representations and Warranties, Etc.  All representations and warranties set
forth in this Article VII and all representations and warranties contained in
any certificate, or any of the Loan Documents (including, but not limited to,
any such representation or warranty made in or in connection with any amendment
thereto) shall constitute representations and warranties made under this
Agreement.  All representations and warranties made under this Agreement shall
be made or deemed to be made at and as of the Closing Date (except those that
are expressly made as of a specific date), shall survive the Closing Date and
shall not be waived by the execution and delivery of this Agreement, any
investigation made by or on behalf of the Lenders or any Extensions of Credit
hereunder.

 

ARTICLE VIII

 

FINANCIAL INFORMATION AND NOTICES

 

Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to (a) S&P,
(b) Moody’s and (c) the

 

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Administrative Agent at the Administrative Agent’s Office at the address set
forth in Section 14.1 and to each Lender at the respective address as set forth
in Section 14.1, or at such other office as may be designated by the
Administrative Agent and Lenders from time to time:

 

SECTION 8.1                                                  Financial
Statements and Projections.

 

(a)                                  Quarterly Financial Statements.  As soon as
practicable and in any event within forty-five (45) days after the end of each
of the first three (3) fiscal quarters of each Fiscal Year (or, if the date of
any required public filing is earlier, no later than the Business Day
immediately following the date of any required public filing thereof after
giving effect to any extensions granted with respect to such date), an unaudited
Consolidated and consolidating balance sheet of the Borrower and its Restricted
Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated
and consolidating statements of income, retained earnings and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
corresponding period in the preceding Fiscal Year and prepared by the Borrower
in accordance with GAAP and, if applicable, containing disclosure of the effect
on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its Restricted
Subsidiaries on a Consolidated and consolidating basis as of their respective
dates and the results of operations of the Borrower and its Restricted
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments.  Delivery by the Borrower to the Administrative Agent of the
Borrower’s quarterly report to the SEC on Form 10-Q with respect to any fiscal
quarter, within the period specified above shall be deemed to be compliance by
the Borrower with this Section 8.1(a).

 

(b)                                 Annual Financial Statements.  As soon as
practicable and in any event within ninety (90) days after the end of each
Fiscal Year (or, if the date of any required public filing is earlier, no later
than the Business Day immediately following the date of any required public
filing thereof after giving effect to any extensions granted with respect to
such date), an audited Consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of the close of such Fiscal Year and audited
Consolidated statements of income, retained earnings and cash flows for the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures as of the end of and
for the preceding Fiscal Year and prepared by an independent certified public
accounting firm acceptable to the Administrative Agent in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Restricted Subsidiaries or
with respect to accounting principles followed by the Borrower or any of its
Restricted Subsidiaries not in accordance with GAAP. Delivery by the Borrower to
the Administrative Agent of the Borrower’s annual report to the SEC on Form 10-K
with respect to any fiscal quarter, within the period specified above shall be
deemed to be compliance by the Borrower with this Section 8.1(b).

 

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(c)                                  Annual Business Plan and Financial
Projections.  As soon as practicable and in any event within ninety (90) days
following the beginning of each Fiscal Year, a business plan of the Borrower and
its Restricted Subsidiaries for the ensuing twenty (20) fiscal quarters, such
plan to be prepared in accordance with GAAP and to include, on a quarterly
basis, the following:  a quarterly operating and capital budget, a projected
income statement, statement of cash flows and balance sheet and a report
containing management’s discussion and analysis of such projections, accompanied
by a certificate from the chief financial officer of the Borrower to the effect
that, to the best of such officer’s knowledge, such projections are good faith
estimates (utilizing assumptions believed by Borrower’s management to be
reasonable) of the financial condition and operations of the Borrower and its
Restricted Subsidiaries for such twenty (20) quarter period.

 

SECTION 8.2                                                  Officer’s
Compliance Certificate.  At each time financial statements are delivered
pursuant to Sections 8.1 (a) or (b) and at such other times as the
Administrative Agent shall reasonably request (including, without limitation, in
connection with any Permitted Acquisition), a certificate of a Responsible
Officer of the Borrower in the form of Exhibit F (an “Officer’s Compliance
Certificate”).

 

SECTION 8.3                                                  Accountants’
Certificate.  At each time financial statements are delivered pursuant to
Section 8.1(b), a certificate of the independent public accountants certifying
such financial statements addressed to the Administrative Agent for the benefit
of the Lenders:

 

(a)                                  stating that in making the examination
necessary for the certification of such financial statements, they obtained no
knowledge of any Default or Event of Default or, if such is not the case,
specifying such Default or Event of Default and its nature and period of
existence; and

 

(b)                                 including the calculations prepared by such
accountants required to establish whether or not the Borrower and its Restricted
Subsidiaries are in compliance with the financial covenants set forth in
Article X as at the end of each respective period.

 

SECTION 8.4                                                  Other Reports.

 

(a)                                  Auditor’s Management Letters.  Promptly
upon receipt thereof, copies of all reports, if any, submitted to the Borrower
or its Board of Directors by its independent public accountants in connection
with their auditing function, including, without limitation, any management
report and any management responses thereto.

 

(b)                                 SEC Reports.  All current, quarterly and
annual reports that would be required to be filed with the Securities and
Exchange Commission on Forms 8-K, 10-Q or 10-K if the Borrower were required to
file such reports.

 

(c)                                  Other Information.  Such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Restricted Subsidiaries, including

 

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any reports delivered to the Securities and Exchange Commission as the
Administrative Agent may reasonably request.

 

SECTION 8.5                                                  Notice of
Litigation and Other Matters.  Prompt (but in no event later than ten (10) days
after an officer of the Borrower obtains knowledge thereof) telephonic and
written notice of:

 

(a)                                  except for any such matter that could not
reasonably be expected to create a Material Adverse Effect, the commencement of
all proceedings and investigations by or before any Governmental Authority and
all actions and proceedings in any court or before any arbitrator against or
involving the Borrower or any Restricted Subsidiary or any of their respective
properties, assets or businesses;

 

(b)                                 except for any such matter that could not
reasonably be expected to create a Material Adverse Effect, any notice of any
violation received by the Borrower or any Restricted Subsidiary from any
Governmental Authority including, without limitation, any notice of violation of
Environmental Laws;

 

(c)                                  except for any such matter that could not
reasonably be expected to create a Material Adverse Effect, any labor
controversy that has resulted in, or threatens to result in, a strike or other
work action against the Borrower or any Restricted Subsidiary;

 

(d)                                 any attachment, judgment, lien, levy or
order exceeding $5,000,000 that may be assessed against or threatened in writing
against the Borrower or any Restricted Subsidiary;

 

(e)                                  (i) any Default or Event of Default,
(ii) the occurrence or existence of any event or circumstance that foreseeably
will become a Default or Event of Default or (iii) any event which constitutes
or which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which the Borrower or
any of its Restricted Subsidiaries is a party or by which the Borrower or any
Restricted Subsidiary or any of their respective properties may be bound;

 

(f)                                    (i) any unfavorable determination letter
from the Internal Revenue Service regarding the qualification of an Employee
Benefit Plan under Section 401(a) of the Code (along with a copy thereof),
(ii) all notices received by the Borrower or any ERISA Affiliate of the PBGC’s
intent to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan, (iii) all notices received by the Borrower or any
ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA and (iv) the
Borrower obtaining knowledge or reason to know that the Borrower or any ERISA
Affiliate has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA;

 

(g)                                 any event which makes any of the
representations set forth in Section 7.1 or in any other Loan Document that is
subject to materiality or Material Adverse Effect qualifications inaccurate in
any respect or any event which makes any of the representations set forth in
Section

 

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7.1 or in any other Loan Document that is not subject to materiality or Material
Adverse Effect qualifications inaccurate in any material respect;

 

(h)                                 any change in the government contracting
status of the Borrower or its Restricted Subsidiaries with respect to the
government of the United States or any department or agency thereof that could
reasonably be expected to have a Material Adverse Effect;

 

(i)                                     the designation of any Subsidiary as a
“Restricted Subsidiary” (or any similar designation) under any Permitted
Subordinated Debt or any other Debt issued pursuant to the Permitted Debt
Issuance or Section 11.1(m) or the joinder of any Subsidiary as a guarantor of
any Permitted Subordinated Debt or any other Debt issued pursuant to the
Permitted Debt Issuance or Section 11.1(m); and

 

(j)                                     any material adverse development in the
ESSI Investigation since the Closing Date.

 

SECTION 8.6                                                  Extension of
Time.   Notwithstanding anything in this Agreement to the contrary, the
Administrative Agent may, in its sole discretion, extend the delivery deadline
applicable to any notice, certificate or other information required to be
delivered under this Article VIII for a period of time not to exceed five
(5) Business Days.

 

SECTION 8.7                                                  Accuracy of
Information.  All written information, reports, statements and other papers and
data furnished by or on behalf of the Borrower to the Administrative Agent or
any Lender whether pursuant to this Article VIII or any other provision of this
Agreement, or any of the Security Documents, shall, at the time the same is so
furnished, comply with the representations and warranties set forth in
Section 7.1.

 

ARTICLE IX

 

AFFIRMATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 14.11, the Borrower will, and will cause each of its Restricted
Subsidiaries to:

 

SECTION 9.1                                                  Preservation of
Corporate Existence and Related Matters.  Except as permitted by Section 11.4,
preserve and maintain (a) its separate corporate existence and (b) all rights,
franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified as a foreign corporation and authorized to do
business in each jurisdiction where the nature and scope of its activities
require it to so qualify under Applicable Law except (with respect to this
clause (b) only) to the extent such failure to preserve or maintain could not
reasonably be expected to have a Materially Adverse Effect.

 

SECTION 9.2                                                  Maintenance of
Property.  In addition to the requirements of any of the Security Documents,
protect and preserve all properties useful in and material to its business,

 

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including copyrights, patents, trade names, service marks and trademarks;
maintain in good working order and condition all buildings, equipment and other
tangible real and personal property; and from time to time make or cause to be
made all renewals, replacements and additions to such property necessary for the
conduct of its business, so that the business carried on in connection therewith
may be conducted in a commercially reasonable manner.

 

SECTION 9.3                                                  Insurance. 
Maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as are customarily maintained by similar
businesses and as may be required by Applicable Law and as are required by any
Security Documents, and on the Closing Date and from time to time thereafter
deliver to the Administrative Agent upon its request a reasonably detailed list
of the insurance then in effect, stating the names of the insurance companies,
the amounts and rates of the insurance, the dates of the expiration thereof and
the properties and risks covered thereby.

 

SECTION 9.4                                                  Accounting Methods
and Financial Records.  Maintain a system of accounting, and keep such books,
records and accounts (which shall be true and complete in all material respects)
as may be required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction over it or any of its properties.

 

SECTION 9.5                                                  Payment and
Performance of Obligations.  Pay and perform all Obligations under this
Agreement and the other Loan Documents, and pay or perform (a) except where the
failure to do so could not reasonably be expected to create a Material Adverse
Effect, all taxes, assessments and other governmental charges that may be levied
or assessed upon it or any of its property, and (b) except where the failure to
do so could not reasonably be expected to create a Material Adverse Effect, all
other indebtedness, obligations and liabilities in accordance with customary
trade practices; provided, that the Borrower or such Restricted Subsidiary may
contest any item described in clauses (a) or (b) of this Section 9.5 in good
faith so long as adequate reserves are maintained with respect thereto in
accordance with GAAP.

 

SECTION 9.6                                                  Compliance With
Laws and Approvals.  Except where the failure to do so could not reasonably be
expected to create a Material Adverse Effect, observe and remain in compliance
in all respects with all Applicable Laws and maintain in full force and effect
all Governmental Approvals, in each case applicable to the conduct of its
business.

 

SECTION 9.7                                                  Environmental
Laws.  Except where the failure to do so could not reasonably be expected to
create a Material Adverse Effect, in addition to and without limiting the
generality of Section 9.6, (a) comply with, and make commercially reasonable
efforts to ensure compliance by all tenants and subtenants with, all applicable
Environmental Laws and obtain and comply with and maintain, and make
commercially reasonable efforts to ensure that all tenants and subtenants, if
any, obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives of
any Governmental Authority regarding Environmental Laws, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their

 

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respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Borrower or any such Restricted Subsidiary, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney’s and consultant’s fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor.

 

SECTION 9.8                                                  Compliance with
ERISA. In addition to and without limiting the generality of Section 9.6,
(a) except where the failure to so comply could not, individually or in the
aggregate, reasonably be expected to create a Material Adverse Effect,
(i) comply with all material applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all Employee Benefit
Plans, (ii) not take any action or fail to take action the result of which could
be a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in
any prohibited transaction that could result in any civil penalty under ERISA or
tax under the Code and (iv) operate each Employee Benefit Plan in such a manner
that will not incur any tax liability under Section 4980B of the Code or any
liability to any qualified beneficiary as defined in Section 4980B of the Code
and (b) furnish to the Administrative Agent upon the Administrative Agent’s
request such additional information about any Employee Benefit Plan as may be
reasonably requested by the Administrative Agent.

 

SECTION 9.9                                                  Compliance With
Agreements.  Except where the failure to do so could not reasonably be expected
to create a Material Adverse Effect, comply in all respects with each term,
condition and provision of any Material Contract; provided, that the Borrower or
any Restricted Subsidiary may contest any such Material Contract in good faith
through applicable proceedings so long as adequate reserves are maintained in
accordance with GAAP.

 

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SECTION 9.10                                            Inspection of Property;
Books and Records; Discussions. Except for information and records which the
Borrower may not under Applicable Law disseminate or disclose to the
Administrative Agent and/or the Lenders, permit, and cause its Affiliates to
permit, any authorized representative(s) designated by the Administrative Agent
and/or any of the Lenders to visit, to conduct a field audit or to otherwise
inspect any of the Borrower’s, its Restricted Subsidiaries’ and/or its
Affiliates’ respective properties, including their financial and accounting
records, and to make copies and take extracts therefrom, and to discuss the
Borrower’s, its Restricted Subsidiaries’ and/or Affiliates’ respective affairs,
finances and accounts with the Administrative Agent’s and the Lenders’ officers,
employees, representatives or independent certified public accountants, upon
reasonable notice and during normal business hours.  All information furnished
to the Administrative Agent and/or the Lenders shall be received and maintained
by the Administrative Agent and the Lenders in strict confidence and in
accordance with Applicable Law, and they shall not disseminate said information
to any Person for so long as said information has or retains a confidential or
proprietary nature, except where required by and in accordance with Applicable
Law, or pursuant to subpoena or other legal process or where contemplated by the
Loan Documents (including, without limitation, in connection with the
enforcement of any rights or remedies thereunder).  Each of the Administrative
Agent and the Lenders agrees that during any such visit it shall not take any
action or omit to take any action which would cause or result in the violation
of Applicable Law (including without limitation, any export control law) by the
Borrower, its Restricted Subsidiaries and its Affiliates.  Each such visitation
and inspection by or on behalf of the Administrative Agent and/or the Lenders
after the occurrence and during the continuance of an Event of Default shall be
at the Borrower’s own reasonable cost and expense.  The Borrower shall, and
shall cause its Restricted Subsidiaries and its Affiliates, to keep proper books
and records and accounts in accordance with GAAP and Applicable Law.

 

SECTION 9.11                                            Additional Subsidiaries.

 

(a)                                  Within forty-five (45) days after (i) the
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary in
accordance with Section 9.11(c) or (ii) the creation or acquisition of any
Domestic Subsidiary (any such Subsidiary, a “New Subsidiary”) (including in
connection with any Permitted Acquisition), cause to be executed and delivered
to the Administrative Agent (A) a duly executed Joinder Agreement in form and
substance reasonably satisfactory to the Administrative Agent joining such New
Subsidiary (to the extent such New Subsidiary is a Restricted Subsidiary) to the
Subsidiary Guaranty Agreement, the Collateral Agreement and any other applicable
Security Documents, (B) updated Schedules 7.1(a) and 7.1(b) reflecting the
creation or acquisition of such Subsidiary, (C) favorable legal opinions
covering such matters consistent with opinions for this Agreement and addressed
to the Administrative Agent and Lenders in form and substance reasonably
satisfactory to the Administrative Agent with respect to such Joinder Agreement,
(D) original stock or other certificates and stock or other transfer powers
evidencing the ownership interests of the Borrower or such Restricted
Subsidiary, as applicable, in such New Subsidiary, and (E) any other documents
and certificates as may be reasonably requested by the Administrative Agent or
the Required Lenders (through the Administrative Agent).

 

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(b)                                 Within forty-five (45) days after the
creation of any first tier Foreign Subsidiary of the Borrower or any Restricted
Subsidiary (including in connection with a Permitted Acquisition), cause to be
executed and delivered to the Administrative Agent, (A) a supplement to the
applicable Security Documents previously executed and delivery by the Borrower
or such Restricted Subsidiary, as applicable, to provide for the pledge of
sixty-five percent (65%) of the capital stock or other ownership interests of
such Foreign Subsidiary, (B) updated Schedules 7.1(a) and 7.1(b) reflecting the
creation or acquisition of such Subsidiary, (C) favorable legal opinions
addressed to the Administrative Agent and Lenders and in form and substance
reasonably satisfactory thereto with respect to such supplement, (D) original
stock or other certificates and stock or other transfer powers evidencing the
ownership interests of the Borrower or such Restricted Subsidiary in such
Foreign Subsidiary, and (E) any other documents and certificates as may be
reasonably requested by the Administrative Agent or the Required Lenders
(through the Administrative Agent).

 

(c)                                  The Borrower may, at any time and upon
written notice to the Administrative Agent, redesignate an Unrestricted
Subsidiary as a Restricted Subsidiary.  Further, promptly after the date on
which the Borrower or the Administrative Agent determines that:

 

(i)                                     any individual Unrestricted Subsidiary
and its respective Subsidiaries (A) represent five percent (5%) or more of (I)
the Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal quarter prior to such date or (II) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) of the Borrower and its Subsidiaries for the four (4) consecutive
fiscal quarters most recently ended prior to such date or (B) are or become the
obligor on any Debt (notwithstanding the definition thereof, determined by
reference to such Unrestricted Subsidiary) which is guaranteed by, credit
supported by, or recourse to the Borrower or any Restricted Subsidiary; or

 

(ii)                                  any individual Unrestricted Subsidiary
provides a guarantee of, or is designated as a “restricted subsidiary” (or
equivalent term) under, any Permitted Subordinated Debt or any other Debt issued
pursuant to the Permitted Debt Issuance or Section 11.1(m); or

 

(iii)                               all Unrestricted Subsidiaries and their
respective Subsidiaries represent ten percent (10%) or more of (A) the
Consolidated assets of the Borrower and its Subsidiaries as of the most recently
ended fiscal quarter prior to such date or (B) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four consecutive fiscal quarters most recently ended prior
to such date,

 

then, in the case of clauses (i) and (ii), such Unrestricted Subsidiary shall be
redesignated as a Restricted Subsidiary and in the case of clause (iii), the
Borrower shall promptly identify in writing to the Administrative Agent such
Unrestricted Subsidiaries to be redesignated as Restricted Subsidiaries to cause
such remaining Unrestricted Subsidiaries and their Subsidiaries (after giving
effect to such redesignation) to represent less than ten percent (10%) of
(A) the Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal

 

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quarter prior to such date and (B) Consolidated EBITDA (notwithstanding the
definition thereof, calculated to include all Unrestricted Subsidiaries) for the
four consecutive fiscal quarters most recently ended prior to such date.

 

(d)                                 So long as no Default or Event of Default
has occurred and is continuing, the Borrower shall be permitted, on prior
written notice to the Administrative Agent, to redesignate any Restricted
Subsidiary as an Unrestricted Subsidiary (or designate any newly formed or
acquired Subsidiary as an Unrestricted Subsidiary; provided that such formation
or acquisition is otherwise permitted hereunder), so long as the following
conditions have been satisfied as reasonably determined by the Administrative
Agent:

 

(i)                                     any such individual Subsidiary and its
respective Subsidiaries to be designated (or redesignated, as applicable) as an
Unrestricted Subsidiary (A) represent less than five percent (5%) of (I) the
Consolidated assets of the Borrower and its Subsidiaries as of the most recently
ended fiscal quarter prior to such date and (II) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) of the Borrower and its Subsidiaries for the four (4) consecutive
fiscal quarters most recently ended prior to such date and (B) are not the
obligors on any Debt (notwithstanding the definition thereof, determined by
reference to such Unrestricted Subsidiary) which is guaranteed by, credit
supported by, or recourse to the Borrower or any Restricted Subsidiary; and

 

(ii)                                  any such individual Subsidiary is not a
guarantor of, or a “restricted subsidiary” (or equivalent term) under, any
Permitted Subordinated Debt or any other Debt issued pursuant to the Permitted
Debt Issuance or Section 11.1(m); and

 

(iii)                               at the time of such proposed designation (or
redesignation, as applicable), and after giving effect thereto, all Unrestricted
Subsidiaries and their respective Subsidiaries (including the Subsidiary and its
respective Subsidiaries to be designated (or redesignated, as applicable) as an
Unrestricted Subsidiary) represent less than ten percent (10%) of (A) the
Consolidated assets of the Borrower and its Subsidiaries as of the most recently
ended fiscal quarter prior to such date and (B) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four consecutive fiscal quarters most recently ended prior
to such date.

 

Such designation (or redesignation, as applicable) shall have an effective date
mutually acceptable to the Administrative Agent and Borrower, but in no event
earlier than fifteen (15) Business Days following receipt by the Administrative
Agent of such written notice unless agreed to by the Administrative Agent in its
sole discretion.

 

(e)                                  Notwithstanding anything to the contrary
contained herein, in the event that any Subsidiary shall guaranty the payment or
performance of any Permitted Subordinated Debt or any Debt issued pursuant to
the Permitted Debt Issuance or Section 11.1(m), the Borrower shall cause such
Subsidiary to, as promptly as practicable, be designated as a Restricted
Subsidiary and execute a Joinder Agreement in respect of the Subsidiary Guaranty
Agreement and the

 

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Security Documents described in Section 9.11(a) and deliver all of the other
instruments, documents, certificates and opinions required pursuant to
Section 9.11(a).

 

SECTION 9.12                                            Use of Proceeds.  The
Borrower shall use the proceeds of the Extensions of Credit (a) to finance the
ESSI Merger (including the refinancing of certain existing Debt of ESSI) (b) to
finance Permitted Acquisitions, (c) to refinance existing indebtedness of the
Borrower under the Existing Credit Agreement, (d) to finance Capital
Expenditures of the Borrower, and (e) for working capital and general corporate
requirements of the Borrower and its Restricted Subsidiaries, including the
payment of certain fees and expenses incurred in connection with the ESSI Merger
and the other transactions contemplated hereby.

 

SECTION 9.13                                            Conduct of Business. 
Engage only in businesses in substantially the same fields as the business
conducted on the Closing Date and in lines of business reasonably related
thereto.

 

SECTION 9.14                                            Account Designation. 
Designate only accounts with the Administrative Agent as the location for all
deposits and payments required to be made to the Borrower as buyer pursuant to
the terms of the ESSI Merger Agreement.

 

SECTION 9.15                                            Debt Rating.  Maintain
an up to date debt rating with both S&P and Moody’s or, in the event one or both
such entities cease to provide any such rating, such other rating agency or
agencies that are reasonably acceptable to the Administrative Agent.

 

ARTICLE X

 

FINANCIAL COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower and its Restricted Subsidiaries on a Consolidated
basis will not:

 

SECTION 10.1                                            Maximum Total Leverage
Ratio:  As of any fiscal quarter end commencing with the fiscal quarter ending
June 30, 2006, during any period set forth below, permit the Total Leverage
Ratio to be greater than the corresponding ratio set forth below:

 

Period

 

Ratio

April 1, 2006 through December 31, 2006

 

6.00 to 1.00

January 1, 2007 through December 31, 2007

 

5.75 to 1.00

January 1, 2008 through December 31, 2008

 

5.50 to 1.00

January 1, 2009 through December 31, 2009

 

5.00 to 1.00

 

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January 1, 2010 through December 31, 2010

 

4.75 to 1.00

Thereafter

 

4.50 to 1.00

 

SECTION 10.2                                            Maximum Senior Leverage
Ratio:  As of the end of any fiscal quarter end, commencing with the fiscal
quarter ending June 30, 2006, permit the Senior Leverage Ratio to be greater
than 3.50 to 1.00.

 

SECTION 10.3                                            Minimum Fixed Charge
Coverage Ratio:  As of any fiscal quarter end, commencing with the fiscal
quarter ending June 30, 2006, during any period set forth below, permit the
ratio of (a) the sum of (i) EBITDA for the period of four (4) consecutive fiscal
quarters ending on such date minus (ii) Capital Expenditures for such period to
(b) Fixed Charges for the period of four (4) consecutive fiscal quarters ending
on such date to be less than the corresponding ratio set forth below:

 

Period

 

Ratio

Closing Date through December 31, 2008

 

1.25 to 1.00

Thereafter

 

1.30 to 1.00

 

ARTICLE XI

 

NEGATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower has not and will not and will not permit any of
its Restricted Subsidiaries to:

 

SECTION 11.1                                            Limitations on Debt. 
Create, incur, assume or suffer to exist any Debt except:

 

(a)                                  the Obligations (excluding Hedging
Obligations permitted pursuant to Section 11.1(b));

 

(b)                                 Debt incurred in connection with a Hedging
Agreement with a counterparty and upon terms and conditions (including interest
rate) reasonably satisfactory to the Administrative Agent; provided, that any
counterparty that is a Lender or an affiliate of a Lender shall be deemed
satisfactory to the Administrative Agent.

 

(c)                                  Debt existing on the Closing Date and not
otherwise permitted under this Section 11.1, as set forth on Schedule 11.1 and
the renewal, refinancing, extensions and replacements (but not the increase in
the aggregate principal amount) thereof;

 

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(d)                                 Debt of the Borrower and its Restricted
Subsidiaries incurred in connection with Capital Leases in an aggregate amount
not to exceed $50,000,000 on any date of determination;

 

(e)                                  purchase money Debt of the Borrower and its
Restricted Subsidiaries in an aggregate amount not to exceed $25,000,000 on any
date of determination;

 

(f)                                    Guaranty Obligations in favor of the
Administrative Agent for the benefit of the Administrative Agent and the
Lenders;

 

(g)                                 other Debt in an aggregate principal amount
not exceeding $50,000,000 at any time outstanding; provided that not more that
$25,000,000 of any Debt incurred in accordance with this subsection (g) may be
secured Debt;

 

(h)                                 Debt of the Borrower to any Restricted
Subsidiary and of any Subsidiary Guarantor to the Borrower or any other
Restricted Subsidiary; provided that if requested by the Administrative Agent
any such loans and advances made by a Borrower or any Restricted Subsidiary that
are evidenced by a promissory note or other instrument shall be pledged pursuant
to the Collateral Agreement;

 

(i)                                     Guaranty Obligations with respect to
Debt permitted pursuant to subsections (a) through (e) and subsection (j), (k)
or (m) of this Section 11.1 (provided that any Guaranty Obligation with respect
to subsection (j) or (k) is subordinated at least to the same extent as the
obligation guaranteed);

 

(j)                                     Subordinated Debt of the Borrower and
its Restricted Subsidiaries:

 

(i)                                     under the Existing Senior Subordinated
Notes and the Senior Subordinated Notes; and

 

(ii)                                  consisting of high-yield notes or
convertible notes (including, without limitation, any additional Subordinated
Debt issued under, or by a supplement to, the Senior Subordinated Note Indenture
or the Existing Senior Subordinated Note Indenture) (A) containing subordination
terms that are, taken as a whole, no less favorable to the Lenders and the
Borrower than the related terms of the Existing Senior Subordinated Notes or the
Senior Subordinated Notes (as reasonably determined by the Administrative Agent
in consultation with the Borrower and with such determination not to be
unreasonably withheld or delayed and, if requested by the Borrower, evidenced by
a certificate addressed to the Borrower) and (B) issued on terms and conditions
that are, taken as a whole, consistent with the then-current market terms and
conditions of such tenor of subordinated debt (as reasonably determined in good
faith by a Responsible Officer of the Borrower); provided that (1) no Default or
Event of Default exists and is continuing or would be caused by the issuance
thereof, (2) the Administrative Agent shall have received satisfactory written
evidence that the Borrower would be in compliance with all covenants in this
Agreement on a pro forma basis after giving effect to the issuance thereof,
(3) the maturity date of such Subordinated Debt shall be no earlier than the
Debt (if any) being refinanced and in any event shall be at least six (6) months
after

 

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the Term Loan Maturity Date, and (4) to the extent not used to refinance the
Existing Senior Subordinated Notes and/or the Senior Subordinated Notes and/or
the Senior Unsecured Notes and/or the Convertible Notes (including an amount
equal to a reasonable premium or other reasonable amount paid (as reasonably
determined by the Administrative Agent in consultation with the Borrower and
with such determination not to be unreasonably withheld or delayed and, if
requested by the Borrower, evidenced by a certificate addressed to the
Borrower), and fees and expenses reasonably incurred, in connection with such
refinancing), the Net Cash Proceeds of such Subordinated Debt are applied to
repay outstanding Obligations to the extent required pursuant to
Section 4.4(b)(i) and Section 4.4(b)(vi);

 

(k)                                  Unsecured Debt of DRS Technologies Canada
Company in an aggregate amount not to exceed $25,000,000 on any date of
determination;

 

(l)                                     Debt consisting of existing letters of
credit issued prior to the date hereof for the account of (i) IDT and/or its
Subsidiaries, in an aggregate face amount not to exceed $5,000,000 and (ii) ESSI
and/or its Subsidiaries, in an aggregate face amount not to exceed $5,000,000;

 

(m)                               senior unsecured Debt of the Borrower and its
Restricted Subsidiaries:

 

(i)                                     under the Senior Unsecured Notes and the
Convertible Notes; and

 

(ii)                                  consisting of high-yield notes or
convertible notes (including, without limitation, any additional senior
unsecured Debt issued under, or by a supplement to, the Convertible Note
Indenture or the Senior Unsecured Note Indenture) issued on terms and conditions
that are, taken as a whole, consistent with the then-current market terms and
conditions of such tenor of senior unsecured debt (as reasonably determined in
good faith by a Responsible Officer of the Borrower); provided that (A) no
Default or Event of Default exists and is continuing or would be caused by the
issuance thereof, (B) the Administrative Agent shall have received satisfactory
written evidence that the Borrower would be in compliance with all covenants in
this Agreement on a pro forma basis after giving effect to the issuance thereof,
(C) the maturity date of such senior unsecured Debt shall be no earlier than the
Debt (if any) being refinanced and in any event shall be at least six (6) months
after the Term Loan Maturity Date, and (D) to the extent not used to refinance
the Senior Unsecured Notes and/or the Convertible Notes (including an amount
equal to a reasonable premium or other reasonable amount paid (as reasonably
determined by the Administrative Agent in consultation with the Borrower and
with such determination not to be unreasonably withheld or delayed and, if
requested by the Borrower, evidenced by a certificate addressed to the
Borrower), and fees and expenses reasonably incurred, in connection with such
refinancing), the Net Cash Proceeds of such senior unsecured Debt are applied to
repay outstanding Obligations to the extent required pursuant to
Section 4.4(b)(i) and Section 4.4(b)(vi); and

 

(n)                                 Debt (i) of any Person that becomes a
Restricted Subsidiary after the Closing Date in connection with any Permitted
Acquisition or (ii) assumed in connection with any assets acquired in connection
with any Permitted Acquisition, and the refinancing, refunding, renewal

 

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and extension (but not the increase in the aggregate principal amount) thereof;
provided that (A) such Debt exists at the time such Person becomes a Restricted
Subsidiary or such assets are acquired and is not created in contemplation of,
or in connection with, such Person becoming a Restricted Subsidiary or such
assets being acquired, (B) notwithstanding anything to the contrary contained in
this Agreement, neither the Borrower nor any other Restricted Subsidiary (other
than such Person) shall have any liability or other obligation with respect to
such Debt (other than any liability or other obligation of the Borrower or any
Restricted Subsidiary permitted  hereunder which existed prior to the time that
such Person became a Restricted Subsidiary or such asset was acquired) and
(C) the aggregate amount of such Debt incurred in accordance with this
Section 11.1(n) shall not exceed $25,000,000 at any time outstanding;

 

provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section 11.1 shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Restricted Subsidiary to make any
payment to the Borrower or any of its Restricted Subsidiaries (in the form of
dividends, intercompany advances or otherwise) for the purpose of enabling the
Borrower to pay the Obligations.

 

SECTION 11.2                                            Limitations on Liens. 
Create, incur, assume or suffer to exist any Lien on or with respect to any of
its assets or properties (including, without limitation, shares of capital stock
or other ownership interests), real or personal, whether now owned or hereafter
acquired, except:

 

(a)                                  Liens for taxes, assessments and other
governmental charges or levies (excluding any Lien imposed pursuant to any of
the provisions of ERISA or Environmental Laws) not yet due or as to which the
period of grace (not to exceed thirty (30) days), if any, related thereto has
not expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;

 

(b)                                 the claims of materialmen, mechanics,
carriers, warehousemen, processors or landlords for labor, materials, supplies
or rentals incurred in the ordinary course of business, (i) which are not
overdue for a period of more than thirty (30) days or (ii) which are being
contested in good faith and by appropriate proceedings;

 

(c)                                  Liens consisting of deposits or pledges
made in the ordinary course of business in connection with, or to secure payment
of, obligations under workers’ compensation, unemployment insurance or similar
legislation;

 

(d)                                 Liens constituting encumbrances in the
nature of zoning restrictions, easements and rights or restrictions of record on
the use of real property, which in the aggregate are not substantial in amount
and which do not, in any case, detract from the value of such property or impair
the use thereof in the ordinary conduct of business;

 

(e)                                  Liens of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders and any affiliate of a
Lender that is party to a Hedging Agreement permitted by this Agreement;

 

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(f)                                    Liens not otherwise permitted by this
Section 11.2 and in existence on the  Closing Date and described on
Schedule 11.2;

 

(g)                                 Liens securing Debt permitted under Sections
11.1(d) and (e); provided that (i) such Liens shall be created substantially
simultaneously with the acquisition or lease of the related asset, (ii) such
Liens do not at any time encumber any property other than the property financed
by such Debt, (iii) the amount of Debt secured thereby is not increased and
(iv) the principal amount of Debt secured by any such Lien shall at no time
exceed one hundred percent (100%) of the original purchase price or lease
payment amount of such property at the time it was acquired;

 

(h)                                 any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Restricted Subsidiary or
existing on any property or asset of any Person that becomes a Restricted
Subsidiary after the date of consummation of such acquisition prior to the time
such Person becomes a Restricted Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Restricted Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or any
Restricted Subsidiary and (iii) such Lien shall secure only those obligations
that it secures on the date of such acquisition or the date such Person becomes
a Restricted Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

 

(i)                                     deposits to secure the performance of
bids, trade contracts, obligations for utilities, leases, Bonding Obligations
permitted pursuant to Section 11.14 and other obligations of a like nature
(other than obligations for borrowed money or other Debt), in each case in the
ordinary course of business;

 

(j)                                     Liens on the proceeds of any Permitted
Subordinated Debt or senior unsecured Debt incurred in accordance with
Section 11.1(m)(ii) (and the escrow account, if any, in which such proceeds are
held) for the benefit of the holders thereof; provided that (i) the
Administrative Agent shall have approved the terms and conditions of such Lien,
(ii) such proceeds are held in an escrow account by the trustee with respect to
such Debt, (iii) such Lien is terminated and released upon the earlier to occur
of the expiration of the Hold Period and the consummation of the applicable
Designated Acquisition, (iv) such Lien does not extend to any other assets or
property of the Borrower or any Subsidiary and (v) no Default or Event of
Default shall have occurred and be continuing at the time of, or would result
from, issuance of such Debt;

 

(k)                                  (i) Liens of a collecting bank arising in
the ordinary course of business under Section 4-208 of the Uniform Commercial
Code in effect in the relevant jurisdiction and (ii) Liens of any depositary
bank in connection with statutory, common law and contractual rights of set-off
and recoupment for customary account fees or charges with respect to any deposit
account of the Borrower or any Restricted Subsidiary;

 

(l)                                     other Liens encumbering only real
property (excluding any real property now or hereafter mortgaged in favor of the
Administrative Agent, for the benefit of itself and the

 

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Lenders), securing Debt permitted pursuant to Section 11.1(g) in an aggregate
amount outstanding at any time not to exceed $10,000,000; and

 

(m)                               other Liens securing obligations in an
aggregate amount not to exceed $25,000,000 at any time.

 

SECTION 11.3                                            Limitations on Loans,
Advances, Investments and Acquisitions.  Purchase, own, invest in or otherwise
acquire, directly or indirectly, any capital stock, interests in any partnership
or joint venture (including, without limitation, the creation or capitalization
of any Restricted Subsidiary), evidence of Debt or other obligation or security,
substantially all or a portion of the business or assets of any other Person or
any other investment or interest whatsoever in any other Person, or make or
permit to exist, directly or indirectly, any loans, advances or extensions of
credit to, or any investment in cash or by delivery of property in, any Person
except:

 

(a)                                  (i) investments existing on the Closing
Date in Restricted Subsidiaries existing on the Closing Date, (ii) investments
in Restricted Subsidiaries or Unrestricted Subsidiaries formed or acquired after
the Closing Date so long as the Borrower and its Restricted Subsidiaries comply
with the applicable provisions of Section 9.11 and Section 11.3(d), and
(iii) the other loans, advances and investments existing on the Closing Date
which are described on Schedule 11.3;

 

(b)                                 investments in (i) United States Dollars,
(ii) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than one
(1) year from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of one (1) year or less from the date
of acquisition, bankers’ acceptances with maturities not exceeding six
(6) months and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500,000,000 and a
Thomson Bank Watch Rating of “B” or better, (iv) repurchase obligations with a
term of not more than one (1) year for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above,
(v) commercial paper having one of the two highest ratings obtainable from
Moody’s or S&P and in each case maturing within one (1) year after the date of
acquisition, (vi) marketable direct obligations issued by the United States or
any political subdivision of any state or any public instrumentality thereof
having one of the two highest ratings obtainable from Moody’s or S&P and in each
case maturing within one (1) year after the date of acquisition; and (vii) money
market funds at least ninety-five percent (95%) of the assets of which
constitute investments described in clauses (i) through (vi) of this
Section 11.3(b) (such investments described in items (i) through (vii) above,
“Cash Equivalents”);

 

(c)                                  the ESSI Merger; provided that the ESSI
Merger shall be subject to the conditions set forth in Section 11.4(d);

 

(d)                                 investments by the Borrower or any
Restricted Subsidiary in the form of acquisitions of all or substantially all of
the business or a line of business (whether by the

 

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acquisition of capital stock or other ownership interests, assets or any
combination thereof) of any other Person if each such acquisition meets all of
the following requirements (such acquisitions being, “Permitted Acquisitions”):

 

(i)                                     the Person to be acquired shall be in a
substantially similar line of business as the Borrower,

 

(ii)                                  evidence of approval of the acquisition by
the acquiree’s board of directors or equivalent governing body or a copy of the
opinion of counsel delivered by legal counsel to the acquiree in connection with
the acquisition which evidences such approval shall be delivered to the
Administrative Agent at the time the documents referred to in clause (vi) of
this Section 11.3(d) are required to be delivered;

 

(iii)                               a description of the acquisition in the form
customarily prepared by the Borrower shall have been delivered to the
Administrative Agent and the Lenders prior to the consummation of the
acquisition;

 

(iv)                              the Borrower or any Restricted Subsidiary
shall be the surviving Person and no Change in Control shall have been effected
thereby;

 

(v)                                 the Borrower shall have demonstrated to the
Administrative Agent (A) pro forma compliance (as of the date of the proposed
acquisition and after giving effect thereto and any Extensions of Credit made or
to be made in connection therewith) with each covenant contained in and in the
manner set forth in, Article X, (B) maintenance of at least $30,000,000 of
availability under the Revolving Credit Facility both before and after giving
effect to the proposed acquisition; and (C) a pro forma Total Leverage Ratio and
Senior Leverage Ratio (as of the date of the proposed acquisition and after
giving effect thereto and any Extensions of Credit made or to be made in
connection therewith) at least 0.25 below the applicable ratio set forth in
Section 10.1 and Section 10.2, respectively, and no Default or Event of Default
shall have occurred and be continuing both before and after giving effect to the
acquisition;

 

(vi)                              the Borrower shall have delivered to the
Administrative Agent such documents reasonably requested by the Administrative
Agent or the Required Lenders (through the Administrative Agent) pursuant to
Section 9.11 to be delivered at the time required pursuant to Section 9.11
confirming that such Person is or will be a Subsidiary Guarantor hereunder, and
its Subsidiary Guaranteed Obligations incurred in such capacity are secured by
the Security Documents, said documents to include a favorable opinion of counsel
to the Borrower acceptable to the Administrative Agent addressed to the
Administrative Agent and the Lenders with respect to the Borrower, the Person to
be acquired and the acquisition in form and substance reasonably acceptable to
the Administrative Agent; and

 

(vii)                           the Borrower shall provide such other documents
and other information as may be reasonably requested by the Administrative Agent
or the Required Lenders (through the Administrative Agent) in connection with
the proposed acquisition;

 

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(e)                                  Hedging Agreements permitted pursuant to
Section 11.1;

 

(f)                                    loans or advances made by the Borrower to
any Subsidiary Guarantor and made by any Subsidiary to the Borrower or any
Subsidiary Guarantor; provided that if requested by the Administrative Agent any
such loans and advances permitted hereunder that are evidenced by a promissory
note or other instrument shall be pledged pursuant to the Collateral Agreement;

 

(g)                                 investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;

 

(h)                                 investments made after the Closing Date in
joint ventures and other business entities (in each case that are not
Subsidiaries) that are engaged in the same line or lines of business as the
Borrower and its Restricted Subsidiaries in an aggregate amount not to exceed
$50,000,000; provided that the original amount of any such investment shall be
deemed reduced by any permanent return of principal or equity thereon up to but
not exceeding the original amount of such investment;

 

(i)                                     loans to employees of the Borrower and
the Restricted Subsidiaries in their capacity as such, in an aggregate principal
amount not to exceed $1,000,000 at any time outstanding;

 

(j)                                     any investment received as
consideration, in whole or in part, for any asset sale otherwise permitted
hereunder in an aggregate principal amount not to exceed $25,000,000; and

 

(k)                                  purchases of assets in the ordinary course
of business.

 

SECTION 11.4                                            Limitations on Mergers
and Liquidation.  Merge, consolidate or enter into any similar combination with
any other Person or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution) except:

 

(a)                                  any Subsidiary may merge with the Borrower
or any Restricted Subsidiary; provided that (i) in any merger involving the
Borrower, the Borrower shall be the surviving entity, (ii) in any merger
involving a Subsidiary Guarantor (and not involving the Borrower), a Subsidiary
Guarantor shall be the surviving entity and (iii) in any merger involving a
Restricted Subsidiary (and not involving the Borrower or a Subsidiary
Guarantor), a Restricted Subsidiary shall be the surviving entity;

 

(b)                                 any Wholly-Owned Subsidiary may merge into
the Person such Wholly-Owned Subsidiary was formed to acquire in connection with
a Permitted Acquisition (and, in the case of any merger involving a Restricted
Subsidiary, such Person is or becomes a Restricted Subsidiary);

 

(c)                                  any Subsidiary may wind-up into the
Borrower or any Subsidiary Guarantor; and

 

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(d)                                 the ESSI Merger; provided, that prior to or
upon the consummation thereof:

 

(i)                                     each of the conditions to the
consummation of the ESSI Merger shall have been satisfied or waived (with the
consent of the Administrative Agent, such consent not to be unreasonably
withheld);

 

(ii)                                  no Default or Event of Default shall have
occurred and be continuing or would be in existence after giving effect to the
consummation of the ESSI Merger;

 

(iii)                               the Administrative Agent shall be satisfied
that no material adverse change has occurred in the business, properties,
prospects, operations or condition (financial or otherwise) of (A) the Borrower
and its Subsidiaries, taken as a whole, or (B) ESSI and its Subsidiaries, taken
as a whole; and

 

(iv)                              the representations and warranties contained
in Article VII and in the other Loan Documents shall be true and correct on and
as of the date of consummation of the ESSI Merger and after giving effect to the
ESSI Merger, in each case with the same effect as if made on and as of such
date.

 

SECTION 11.5                                            Limitations on Sale of
Assets.  Convey, sell, lease, assign, transfer or otherwise dispose of any of
its property, business or assets (including, without limitation, the sale of any
receivables and leasehold interests and any sale-leaseback or similar
transaction), whether now owned or hereafter acquired except:

 

(a)                                  the sale of inventory in the ordinary
course of business;

 

(b)                                 the sale of obsolete assets no longer used
or usable in the business of the Borrower or any of its Subsidiaries;

 

(c)                                  the transfer of assets to the Borrower or
any Subsidiary Guarantor not prohibited by  Section 11.4; provided that the
Borrower or such Subsidiary Guarantor shall not pay more than the fair market
value of such assets as determined at the time of such transfer unless such
payment is made to the Borrower or a Subsidiary Guarantor;

 

(d)                                 the sale or discount without recourse of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof; and

 

(e)                                  the sale, transfer and other disposition of
assets of the Borrower or its Restricted Subsidiaries (excluding the sale,
transfer or disposition of less than 100% of the equity ownership interest in a
Subsidiary) that are not permitted by any other clause of this Section 11.5;
provided that (i) the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (e) in the
aggregate shall not exceed $100,000,000 in a Fiscal Year; provided, that such
fair market value shall be determined without regard to any earnout or other
contingent payments based on the financial performance or other results of the
assets sold and (ii) the Borrower or applicable Restricted Subsidiary complies
with the provisions of Section 4.4(b).

 

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SECTION 11.6                                            Limitations on Dividends
and Distributions.  Declare or pay any dividends upon any of its capital stock
or other ownership interests; purchase, redeem, retire or otherwise acquire,
directly or indirectly, any shares of its capital stock or other ownership
interests, or make any distribution of cash, property or assets among the
holders of shares of its capital stock or other ownership interests, or make any
change in its capital structure which change in its capital structure could
reasonably be expected to have a Material Adverse Effect; provided that:

 

(a)                                  the Borrower or any Restricted Subsidiary
may pay dividends in shares of its own capital stock or other ownership
interests;

 

(b)                                 any Restricted Subsidiary may make dividends
or distributions to any Subsidiary Guarantor or to the Borrower;

 

(c)                                  the Borrower or any Restricted Subsidiary
may make any distribution (whether direct or indirect and whether in the form of
cash, property, securities or otherwise) to shareholders, employees or other
permitted distributees under Borrower’s 1996 Omnibus Plan and other benefit or
retirement plans maintained and created by the Borrower, its Restricted
Subsidiaries and its Affiliates;

 

(d)                                 the Borrower and its Subsidiaries may pay
the cash consideration payable in the ESSI Merger (including any payments in
respect of appraisal rights);

 

(e)                                  the Borrower may declare and pay cash
dividends to its shareholders in an aggregate amount in any Fiscal Year not to
exceed $25,000,000;

 

(f)                                    the Borrower may make cash redemption of
Permitted Senior Unsecured Convertible Debt to the extent permitted pursuant to
Section 11.10(e)(iv);

 

(g)                                 the Borrower or any Restricted Subsidiary
may purchase its capital stock or other ownership interests or options in
respect of its capital stock or other ownership interests to the extent that
such purchase is made with the Net Cash Proceeds of any offering of equity
securities of the Borrower;

 

(h)                                 the Borrower or any Restricted Subsidiary
may purchase, redeem, retire or otherwise acquire for value any capital stock or
other ownership interests of the Borrower or any Restricted Subsidiary held by
any current or former officer, director, employee or consultant of the Borrower
or any Restricted Subsidiary (or any permitted transferees of such persons)
pursuant to any equity subscription agreement, stock option agreement,
shareholders’ agreement or similar agreement; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired capital stock or
other ownership interests may not exceed $5,000,000 in any twelve-month period,
provided, that the Borrower may carry forward and make in a subsequent
twelve-month period, in addition to the amounts permitted for such twelve-month
period, the amount of such repurchase, redemptions or other acquisitions or
retirements for value permitted

 

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to have been made but not made in any preceding twelve-month period up to a
maximum of $10,000,000 in any twelve-month period;

 

(i)                                     the Borrower or any Restricted
Subsidiary may make cash payments in lieu of the issuance of fractional shares
in an amount not to exceed $10,000,000 in any twelve-month period; and

 

(j)                                     the repurchase of capital stock or other
ownership interests deemed to occur upon the exercise of stock options to the
extent such capital stock or other ownership interest represents a portion of
the exercise price of those stock options.

 

SECTION 11.7                                            Limitations on Exchange
and Issuance of Capital Stock.  Issue, sell or otherwise dispose of any class or
series of capital stock or other ownership interest that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or passage of time would be, (a) convertible or
exchangeable into Debt or (b) required to be redeemed or repurchased, including
at the option of the holder, in whole or in part, or has, or upon the happening
of an event or passage of time would have, a redemption or similar payment due,
except for any class or series of capital stock or other ownership interest that
is not required to be redeemed or repurchased prior to the date which is one
(1) year and one (1) day following the Term Loan Maturity Date.

 

SECTION 11.8                                            Transactions with
Affiliates.  Except for transactions permitted by Sections 11.3, 11.6 and 11.7
and those listed on Schedule 11.8, directly or indirectly (a) make any loan or
advance to, or purchase or assume any note or other obligation to or from, any
of its officers, directors, shareholders or other Affiliates, or to or from any
member of the immediate family of any of its officers, directors, shareholders
or other Affiliates, or subcontract any operations to any of its Affiliates or
(b) enter into, or be a party to, any other transaction not described in clause
(a) above with any of its Affiliates, except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are
(i) fully disclosed to and approved in writing by (A) the Administrative Agent;
provided, that the aggregate of all such transactions approved by the
Administrative Agent does not exceed $10,000,000, or (B) the Required Lenders,
if the aggregate of all such transactions exceeds $10,000,000, prior to the
consummation thereof and (ii) no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not its Affiliate.

 

SECTION 11.9                                            Certain Accounting
Changes; Organizational Documents.  (a) Change its Fiscal Year end, or make any
change in its accounting treatment and reporting practices except as required by
GAAP or (b) amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational documents) or amend, modify or change
its bylaws (or other similar documents) in any manner materially adverse in any
respect to the rights or interests of the Lenders.

 

SECTION 11.10                                      Amendments; Payments and
Prepayments of Debt.

 

(a)                                  Amend or modify (or permit the modification
or amendment of) any of the material terms or provisions of any Subordinated
Debt (including, without limitation, any

 

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Permitted Subordinated Debt) including, without limitation, any amendment or
modification to (i) increase the interest rate applicable thereto, (ii) change
any date upon which payments of principal or interest on any Subordinated Debt
or other obligations thereunder are due to an earlier date, (iii) add or make
more restrictive any event of default or any covenant with respect to any
Subordinated Debt or any other obligations thereunder (other than proportional
amendments to the covenants thereunder corresponding to and made in connection
with an amendment to the covenants set forth herein), (iv) change any redemption
or prepayment provision of any Subordinated Debt or any other payment
obligations thereunder to an earlier date or add any additional events requiring
such redemption, payment or prepayment, (v) alter the subordination provisions
with respect to obligations under any Subordinated Debt, (vi) other than as
permitted pursuant to Section 11.2(j),  grant or suffer any holder of any
Subordinated Debt to acquire any Lien or security interest in any assets of the
Borrower or any Subsidiary or any other assets securing the Obligations, or
(vii) change or amend any other term of any Subordinated Debt or any other
obligations thereunder if such change or amendment would result in a Default or
Event of Default under this Agreement or the other Loan Documents.

 

(b)                                 Cancel, forgive, make any payment or
prepayment on, or redeem or acquire for value (including, without limitation,
(i) by way of depositing with any trustee with respect thereto money or
securities before due for the purpose of paying when due or (ii) at the maturity
thereof except for a Permitted Escrow Deposit made during the applicable Hold
Period) any Subordinated Debt, other than (A) refinancing of the Existing Senior
Subordinated Notes and/or Senior Subordinated Notes to the extent permitted by
Section 11.1(j), (B) regularly scheduled payments of accrued interest on any
Permitted Subordinated Debt, to the extent such payments are permitted under the
subordination provisions applicable to such Permitted Subordinated Debt and
(C) a Permitted Escrow Redemption.

 

(c)                                  Deliver any “payment blockage notice” (or
substantially equivalent notice) under any instruments and documents, now or in
the future, relating to any Subordinated Debt without the prior written consent
of the Administrative Agent and the Required Lenders.

 

(d)                                 Amend or modify (or permit the modification
or amendment of) any of the terms or provisions of any Senior Unsecured Notes,
the Convertible Notes, or any other Debt permitted to be incurred in accordance
with Section 11.1(m) in any respect which would materially adversely affect the
rights or interests of the Administrative Agent and Lenders hereunder.

 

(e)                                  Cancel, forgive, make any payment or
prepayment on (including, without limitation, any sinking fund payment), or
redeem or acquire for value (including, without limitation, by way of depositing
with any trustee with respect thereto money or securities before due for the
purpose of paying when due except for a Permitted Escrow Deposit made during the
applicable Hold Period), the Senior Unsecured Notes, the Convertible Notes or
any other Debt permitted to be incurred in accordance with Section 11.1(m)
(including making any offer to do any of the foregoing), other than
(i) refinancing of the Senior Unsecured Notes, the Convertible Notes or any
other Debt permitted to be incurred in accordance with Section 11.1(m) to the
extent permitted by Section 11.1(m), (ii) regularly scheduled payments of
accrued interest on the Senior Unsecured Notes, the Convertible Notes or any
other Debt permitted to be incurred in accordance with Section 11.1(m),
(iii) conversion of any Permitted Senior Unsecured

 

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Convertible Debt into the applicable capital stock or equity instrument into
which such Debt is to be converted pursuant to the Convertible Note Indenture or
any other documentation governing such Debt, (iv) cash redemptions or
conversions into cash of Permitted Senior Unsecured Convertible Debt (including,
without limitation, any cash redemptions or conversions into cash in lieu of a
conversion of such Debt to the applicable capital stock or other equity
instrument); provided that (A) such redemption or conversion into cash is
pursuant to the terms and conditions of the indenture governing such Debt,
(B) the Administrative Agent shall have received satisfactory written evidence
that the Borrower would be in compliance with all covenants in this Agreement on
a pro forma basis after giving effect to such redemption or conversion into cash
and (C) no Default or Event of Default shall have occurred and be continuing at
the time thereof or would result therefrom and (v) a Permitted Escrow
Redemption.

 

SECTION 11.11                                      Amendments, Consents and
Waivers under the ESSI Merger Documents.  Materially amend, modify, waive (or
permit the material amendment, modification of or waiver of) any of the terms or
provisions of any of the ESSI Merger Documents without the prior approval of the
Administrative Agent and Required Lenders, which shall not be unreasonably
withheld.

 

SECTION 11.12                                      Restrictive Agreements.

 

(a)                                  Enter into any Debt which (i) contains any
negative pledge on assets or any covenants more restrictive than the provisions
of Articles IX, X, or XI, or (ii) restricts, limits or otherwise encumbers its
ability to incur Liens on or with respect to any of its assets or properties
other than the assets or properties securing such Debt (excluding, solely for
the purposes of this Section 11.12(a), any Permitted Subordinated Debt or any
other Debt issued pursuant to the Permitted Debt Issuance or Section 11.1(m), in
each case, so long as such Debt does not restrict, limit or otherwise encumber
the ability of the Borrower or any Restricted Subsidiary to incur Liens in favor
of the Administrative Agent or any Lender).

 

(b)                                 Enter into or permit to exist any agreement
which impairs or limits the ability of any Restricted Subsidiary to pay
dividends to the Borrower.

 

SECTION 11.13                                      Nature of Business.  Alter in
any material respect the character or conduct of the business conducted by the
Borrower and its Restricted Subsidiaries as of the Closing Date.

 

SECTION 11.14                                      Limitation on Bonding
Obligations. Create, incur, assume or suffer to exist Bonding Obligations in an
aggregate amount in excess of $20,000,000 outstanding at any time during the
term hereof.

 

SECTION 11.15                                      Impairment of Security
Interests. Take or omit to take any action, which might or would have the result
of materially impairing the security interests in favor of the Administrative
Agent for the ratable benefit of itself and the Lenders with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Lenders pursuant to the Security Documents) any
interest whatsoever in the Collateral, except for Liens permitted under
Section 11.2 and asset sales permitted under Section 11.5.

 

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SECTION 11.16                                      Foreign Subsidiaries. Permit
Laurel Technologies Partnership (d/b/a DRS Laurel Technologies) or MSSC Company
LP or any of their respective Subsidiaries to become Foreign Subsidiaries.

 

ARTICLE XII

 

DEFAULT AND REMEDIES

 

SECTION 12.1                                            Events of Default.  Each
of the following shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any Governmental Authority or otherwise:

 

(a)                                  Default in Payment of Principal of Loans
and Reimbursement Obligations.  The Borrower shall default in any payment of
principal of any Loan, Note or Reimbursement Obligation when and as due (whether
at maturity, by reason of acceleration or otherwise).

 

(b)                                 Other Payment Default.  The Borrower shall
default in the payment when and as due (whether at maturity, by reason of
acceleration or otherwise) of interest on any Loan, Note or Reimbursement
Obligation or the payment of any other Obligation and such default shall
continue for a period of three (3) Business Days.

 

(c)                                  Misrepresentation.  Any representation or
warranty made or deemed to be made by the Borrower or any of its Restricted
Subsidiaries under this Agreement, any other Loan Document or any amendment
hereto or thereto, shall at any time prove to have been incorrect or misleading
in any material respect when made or deemed made.

 

(d)                                 Default in Performance of Certain
Covenants.  The Borrower shall default in the performance or observance of any
covenant or agreement contained in Sections 6.4, 8.1, 8.2, or 8.5(e)(i) or
Articles X or XI.

 

(e)                                  Default in Performance of Other Covenants
and Conditions.  The Borrower or any Restricted Subsidiary shall default in the
performance or observance of any term, covenant, condition or agreement
contained in this Agreement (other than as specifically provided for otherwise
in this Section 12.1) or any other Loan Document and such default shall continue
for a period of thirty (30) days after written notice thereof has been given to
the Borrower by the Administrative Agent.

 

(f)                                    Hedging Agreement.  The Borrower or any
of its Restricted Subsidiaries shall default in the performance or observance of
any terms, covenant, condition or agreement (after giving effect to any
applicable grace or cure period) under any Hedging Agreement and such default
causes the termination of such Hedging Agreement or permits any counterparty to
such Hedging Agreement to terminate any such Hedging Agreement.

 

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(g)                                 Debt Cross-Default.  The Borrower or any of
its Restricted Subsidiaries shall (i) default in the payment of any Debt (other
than the Loans or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of $35,000,000 beyond the period of grace if any,
provided in the instrument or agreement under which such Debt was created, or
(ii) default in the observance or performance of any other agreement or
condition relating to any Debt (other than the Loans or any Reimbursement
Obligation) the aggregate outstanding amount of which Debt is in excess of
$35,000,000 or contained in any instrument or agreement evidencing, securing or
relating thereto or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Debt (or a trustee or agent on behalf of such holder
or holders) to cause, with the giving of notice if required, any such Debt to
become due prior to its stated maturity (any applicable grace period having
expired).

 

(h)                                 Other Cross-Defaults.  The Borrower or any
of its Restricted Subsidiaries shall default in the payment when due, or in the
performance or observance, of any obligation or condition of any Material
Contract (including, without limitation, the ESSI Merger Agreement), which such
default, either individually, or in the aggregate with all other outstanding
defaults under other Material Contracts (including, for purposes hereof, the
effect of termination of any other Material Contracts that could reasonably be
expected to be terminated as a result of such existing default or defaults),
could reasonably be expected to have a Material Adverse Effect.

 

(i)                                     Change in Control.  (i) Any person or
group of persons (within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended) shall obtain ownership or control in one or more series
of transactions of more than thirty percent (30%) of the common stock or thirty
percent (30%) of the voting power of the Borrower entitled to vote in the
election of members of the board of directors of the Borrower, (ii) there shall
have occurred under any indenture or other instrument evidencing any Debt in
excess of $35,000,000 any “change in control” (as defined in such indenture or
other evidence of Debt) obligating the Borrower to repurchase, redeem or repay
all or any part of the Debt or capital stock or other ownership interest
provided for therein, (iii) there shall have occurred any “Change of Control”
(or equivalent term) under and/or as defined in any Permitted Subordinated Debt,
including, without limitation, the Existing Senior Subordinated Notes, the
Senior Subordinated Notes, the Senior Subordinated Note Indenture or any
document executed in connection therewith or (iv) there shall have occurred any
“Change of Control” (or equivalent term as used in the Senior Unsecured Note
Indenture or the Convertible Note Indenture or any other indenture entered into
in connection with an issuance of Debt under Section 11.1(m)) or “Fundamental
Change” (or equivalent term as used in the Senior Unsecured Note Indenture or
the Convertible Note Indenture or any other indenture entered into in connection
with an issuance of Debt under Section 11.1(m)) under and/or as defined in the
Senior Unsecured Notes, the Convertible Notes, the Senior Unsecured Note
Indenture, the Convertible Note Indenture, any notes or indentures entered into
in connection with an issuance of Debt under Section 11.1(m) or any document
executed in connection therewith (any such event, a “Change in Control”).

 

(j)                                     Voluntary Bankruptcy Proceeding.  The
Borrower or any Restricted Subsidiary shall (i) commence a voluntary case under
the federal bankruptcy laws (as now or hereafter in

 

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effect), (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts, (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (v) be generally unable to, or admit in writing its inability to, pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.

 

(k)                                  Involuntary Bankruptcy Proceeding.  A case
or other proceeding shall be commenced against the Borrower or any Restricted
Subsidiary in any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for the Borrower or any Restricted Subsidiary
or for all or any substantial part of their respective assets, domestic or
foreign, and such case or proceeding shall continue without dismissal or stay
for a period of sixty (60) consecutive days, or an order granting the relief
requested in such case or proceeding (including, but not limited to, an order
for relief under such federal bankruptcy laws) shall be entered.

 

(l)                                     Failure of Agreements.  Any provision of
this Agreement or any provision of any other Loan Document shall for any reason
cease to be valid and binding on the Borrower or any Restricted Subsidiary party
thereto or any such Person shall so state in writing, or any Loan Document shall
for any reason cease to create a valid and perfected first priority Lien on, or
security interest in, any of the collateral purported to be covered thereby, in
each case other than in accordance with the express terms hereof or thereof.

 

(m)                               Termination Event.  Except where the failure
to do so could not reasonably be expected to create a Material Adverse Effect,
the occurrence of any of the following events:  (i) the Borrower or any ERISA
Affiliate fails to make full payment when due of all amounts which, under the
provisions of any Pension Plan or Section 412 of the Code, the Borrower or any
ERISA Affiliate is required to pay as contributions thereto, (ii) an accumulated
funding deficiency occurs or exists, whether or not waived, with respect to any
Pension Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA
Affiliate as employers under one or more Multiemployer Plans makes a complete or
partial withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability.

 

(n)                                 Judgment.  A judgment or order for the
payment of money which causes the aggregate amount of all such judgments to
exceed $15,000,000 in any Fiscal Year (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), shall
be entered against the Borrower or any of its Restricted Subsidiaries by any
court and such judgment or order shall continue for a period of thirty (30) days
without having been bonded pending appeal, discharged or stayed.

 

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(o)                                 Environmental.  Any one or more
Environmental Claims shall have been asserted against the Borrower or any of its
Restricted Subsidiaries; the Borrower and its Restricted Subsidiaries would be
reasonably likely to incur liability as a result thereof; and such liability
would be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect.

 

(p)                                 Government Contracts. Any of the Borrower,
its Restricted Subsidiaries or its Affiliates, (i) is debarred or suspended by
any Governmental Authority, or has been issued a notice of proposed debarment or
notice of proposed suspension by any Governmental Authority; (ii) is the subject
of an investigation by any Governmental Authority (other than a normal and
customary review) involving or possibly involving fraud or willful misconduct
which could reasonably be expected to result in criminal liability, civil
liability or expense in excess of $10,000,000, suspension, debarment or any
other adverse administrative action; or (iii) is a party to any Material
Contract with any Governmental Authority which has been actually terminated due
to the Borrower’s, such Restricted Subsidiary’s or such Affiliate’s alleged
fraud or willful misconduct.

 

SECTION 12.2                                            Remedies.  Upon the
occurrence of an Event of Default (which Event of Default has not previously
been cured or waived in accordance with Section 14.11), with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower:

 

(a)                                  Acceleration; Termination of Facilities. 
Declare the principal of and interest on the Loans, the Notes and the
Reimbursement Obligations at the time outstanding, and all other amounts owed to
the Lenders and to the Administrative Agent under this Agreement or any of the
other Loan Documents (including, without limitation, all L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented or shall be entitled to present the documents required
thereunder) and all other Obligations (other than Hedging Obligations), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any right of the Borrower to request borrowings or Letters of Credit thereunder;
provided, that upon the occurrence of an Event of Default specified in
Section 12.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than Hedging Obligations) shall automatically become
due and payable without presentment, demand, protest or other notice of any
kind, all of which are expressly waived, anything in this Agreement or in any
other Loan Document to the contrary notwithstanding.

 

(b)                                 Letters of Credit.  With respect to all
Letters of Credit with respect to which presentment for honor shall not have
occurred at the time of an acceleration pursuant to the preceding paragraph, the
Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit (which cash collateral shall be deposited in
the applicable Permitted Currency in which each such Letter of Credit is
denominated).  Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit

 

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shall have expired or been fully drawn upon, if any, shall be applied to repay
the other Obligations on a pro rata basis.  After all such Letters of Credit
shall have expired or been fully drawn upon, the Reimbursement Obligation shall
have been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.

 

(c)                                  Rights of Collection.  Exercise on behalf
of the Lenders all of its other rights and remedies under this Agreement, the
other Loan Documents and Applicable Law, in order to satisfy all of the
Borrower’s Obligations.

 

SECTION 12.3                                            Rights and Remedies
Cumulative; Non-Waiver; etc

 

.  The enumeration of the rights and remedies of the Administrative Agent and
the Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise.  No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default.  No course of
dealing between the  Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.

 

SECTION 12.4                                            Judgment Currency.

 

(a)                                  The obligation of the Borrower to make
payments of any amounts payable hereunder or pursuant to any other Loan Document
in the currency specified for such payment shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment, which is expressed in
or converted into any other currency, except to the extent that such tender or
recovery shall result in the actual receipt by each of the Administrative Agent
and Lenders of the full amount of the particular Permitted Currency expressed to
be payable pursuant to the applicable Loan Document.  The Administrative Agent
shall, using all amounts obtained or received from the Borrower pursuant to any
such tender or recovery in payment of principal of and interest on the
Obligations, promptly purchase the applicable currency at the most favorable
spot exchange rate determined by the Administrative Agent to be available to
it.  The obligation of the Borrower to make payments in the applicable currency
shall be enforceable as an alternative or additional cause of action solely for
the purpose of recovering in the applicable currency the amount, if any, by
which such actual receipt shall fall short of the full amount of the currency
expressed to be payable pursuant to the applicable Loan Document.

 

(b)                                 Without limiting Section 12.4(a), the
Borrower shall indemnify and hold harmless the Administrative Agent, the Lenders
and each Issuing Lender, as applicable, against any loss incurred by the
Administrative Agent, any Lender or any Issuing Lender as a result of any
payment or recovery described in Section 12.4(a) and as a result of any
variation having occurred

 

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in rates of exchange between the date of any such amount becoming due under this
Agreement or any other Loan Document and the date of actual payment thereof. 
The foregoing indemnity shall constitute a separate and independent obligation
of the Borrower and shall continue in full force and effect notwithstanding any
such payment or recovery.

 

ARTICLE XIII

 

THE ADMINISTRATIVE AGENT

 

SECTION 13.1                                            Appointment.  Each of
the Lenders hereby irrevocably designates and appoints Wachovia as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each Lender irrevocably authorizes Wachovia,
as Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto.  Notwithstanding any provision to the contrary elsewhere in this
Agreement or the other Loan Documents, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent.  Any reference to the Administrative Agent in
this Article XIII shall be deemed to refer to the Administrative Agent solely in
its capacity as Administrative Agent and not to the Person serving as the
Administrative Agent in such Person’s capacity as a Lender.  In performing its
functions and duties under this Agreement and each of the other Loan Documents
or in connection with them and in respect of anything relating to them, the
Administrative Agent shall act solely as the administrative agent of (but not as
trustee for (except to the extent specifically required pursuant to the Security
Documents)) the Lenders, and the Administrative Agent shall not have any
fiduciary duty towards any Person (except as expressly referred to above) or be
under any obligation other than those expressly provided for in this Agreement
and any of the other Loan Documents.

 

The Administrative Agent shall not in any way whatsoever assume, nor shall it be
deemed to have assumed, any obligation as agent of or trustee for, or any
relationship of agency or trust with or for, the Borrower or any Subsidiary.

 

SECTION 13.2                                            Delegation of Duties. 
The Administrative Agent may execute any of its respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care.

 

SECTION 13.3                                            Exculpatory Provisions. 
Neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Agreement or the other Loan Documents (except for
actions occasioned

 

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solely by its or such Person’s own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any of its
Subsidiaries or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or the other Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents or for any failure of the Borrower or any
of its Subsidiaries to perform its obligations hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.

 

SECTION 13.4                                            Reliance by the
Administrative Agent.  The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent.  The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless
such Note shall have been transferred in accordance with Section 14.10.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Documents, all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Lenders (or, when
expressly required hereby, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.

 

SECTION 13.5                                            Notice of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless it has received notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”.  In the
event that the Administrative Agent receives such a notice, it shall promptly
give notice thereof to the Lenders.  The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, when expressly required hereby, all the
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders, except to the extent that other provisions of this
Agreement expressly require that any such action be taken or not be taken only

 

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with the consent and authorization or the request of the Lenders or Required
Lenders, as applicable.

 

SECTION 13.6                                            Non-Reliance on the
Administrative Agent and Other Lenders.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its respective officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of the  Borrower or any of
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender.  Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries and made its
own decision to make its Loans and issue or participate in Letters of Credit
hereunder and enter into this Agreement.  Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower and its Subsidiaries.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of the Administrative
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates.

 

SECTION 13.7                                            Indemnification.  The
Lenders severally agree to indemnify the Administrative Agent in its capacity as
such and (to the extent that the Administrative Agent shall be entitled to be,
and shall not have been, reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Revolving Credit Commitment Percentages and/or applicable Term
Loan Percentages, as applicable, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or the other Loan Documents, or any documents, reports or other information
provided to the Administrative Agent or any Lender or contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent’s bad faith, gross negligence or
willful misconduct.  The agreements in this Section 13.7 shall survive the
payment of the Loans,

 

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any Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.

 

SECTION 13.8                                            The Administrative Agent
in Its Individual Capacity.  The Person serving as the Administrative Agent and
its respective Subsidiaries and Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower as though
the Person serving as Administrative Agent were not the Administrative Agent
hereunder.  With respect to any Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued by it or participated in
by it, the Person serving as the Administrative Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not the Administrative Agent, and the
terms “Lender” and “Lenders” shall include the Person serving as the
Administrative Agent in its individual capacity.

 

SECTION 13.9                                            Resignation of the
Administrative Agent; Successor Administrative Agent.  Subject to the
appointment and acceptance of a successor as provided below, the Administrative
Agent may resign at any time by giving thirty (30) days notice thereof to the
Lenders and the Borrower.  Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent, which successor
shall have minimum capital and surplus of at least $500,000,000 and, so long as
no Default or Event of Default has occurred and is continuing, be reasonably
acceptable to the Borrower.  If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Administrative Agent’s giving of
notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000 and, so long as no Default
or Event of Default has occurred and is continuing, be reasonably acceptable to
the Borrower.  Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Section 13.9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.

 

SECTION 13.10                                      Trustee Powers.  Except as
otherwise expressly provided in this Agreement and any of the other Loan
Documents, in its capacity as trustee under certain of the Security Documents
the Administrative Agent shall have:

 

(a)                                  the benefit of all the provisions in this
Article XIII and all other agency, indemnification and exculpatory provisions
set forth in any other Loan Documents;

 

(b)                                 all the powers of an absolute owner of the
Lien constituted by such Security Documents;

 

(c)                                  the power of appointing new and/or
additional trustees; and

 

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(d)                                 all the powers and discretions conferred on
trustees by the Trustee Act 1925 of the laws of England (to the extent not
inconsistent with this Agreement and the other Loan Documents) and on the
Administrative Agent by this Agreement and the other Loan Documents (including
without limitation the power to invest all monies which are received by the
Administrative Agent under the trusts contained in such Security Documents in
its name or under its control in any investment for the time being authorized by
United States, English or other applicable law for the investment by trustees of
trust money or in any other investments which may be selected by the
Administrative Agent).  Additionally, the Administrative Agent shall have the
power to place such monies on deposit in its name or under its control at such
bank or institution (including at the Administrative Agent) and on such terms as
the Administrative Agent may determine.

 

SECTION 13.11                                      Documentation Agents and
Syndication Agent.  Other than as expressly provided herein, the Documentation
and Syndication Agents, in their respective capacities as documentation and
syndication agents, shall have no duties or responsibilities under this
Agreement or any other Loan Document.

 

SECTION 13.12                                      Collateral and Guaranty
Matters.  The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion, to:

 

(a)                                  release any Lien on any Collateral granted
to or held by the Administrative Agent, for the ratable benefit of itself and
the Lenders, under any Loan Document (i) upon repayment of the outstanding
principal of and all accrued interest on the Loans and the Reimbursement
Obligations, payment of all outstanding fees and expenses hereunder, the
termination of the Lenders’ Commitments and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or
(iii) subject to Section 14.11, if approved, authorized or ratified in writing
by the Required Lenders;

 

(b)                                 to subordinate or release any Lien on any
Collateral granted to or held by the Administrative Agent under any Loan
Document to the holder of any Permitted Lien; and

 

(c)                                  to release any Subsidiary Guarantor from
its obligations under the Subsidiary Guaranty Agreement if such Person ceases to
be a Subsidiary as a result of a transaction permitted hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty
Agreement pursuant to this Section 13.12.

 

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ARTICLE XIV

 

MISCELLANEOUS

 

SECTION 14.1                                            Notices.

 

(a)                                  Method of Communication.  Except as
otherwise provided in this Agreement, all notices and communications hereunder
shall be in writing, or by telephone subsequently confirmed in writing.  Any
notice shall be effective if delivered by hand delivery or sent via telecopy,
recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) on the
third Business Day following the date sent by certified mail, return receipt
requested.  A telephonic notice to the Administrative Agent as understood by the
Administrative Agent will be deemed to be the controlling and proper notice in
the event of a discrepancy with or failure to receive a confirming written
notice.

 

(b)                                 Addresses for Notices.  Notices to any party
shall be sent to it at the following addresses, or any other address as to which
all the other parties are notified in writing.

 

If to the Borrower:

 

DRS Technologies, Inc.

 

 

Corporate Headquarters

 

 

5 Sylvan Way

 

 

Parsippany, New Jersey 07054

 

 

Attention: Richard Schneider, Executive Vice-President Donald Hardman, Treasurer

 

 

Telephone No.: (973) 898-6021

 

 

Telecopy No.: (973) 898-0952

 

 

 

If to Wachovia as

 

Wachovia Bank, National Association

Administrative Agent:

 

Charlotte Plaza, CP-8

 

 

201 South College Street

 

 

Charlotte, North Carolina 28288-0680

 

 

Attention: Syndication Agency Services

 

 

Telephone No.: (704) 374-2698

 

 

Telecopy No.: (704) 383-0288

 

 

 

If to any Lender:

 

To the address set forth in the Register

 

(c)                                  Administrative Agent’s Office.  The
Administrative Agent hereby designates its office located at the address set
forth above, or any subsequent office which shall have been specified for such
purpose by written notice to the Borrower and Lenders, as the Administrative
Agent’s Office referred to herein, to which payments due are to be made and at
which Loans will be disbursed.

 

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SECTION 14.2                                            Expenses; Indemnity. 
The Borrower will (a) pay all reasonable out-of-pocket expenses of the
Administrative Agent in connection with (i) the preparation, execution and
delivery of this Agreement and each other Loan Document, whenever the same shall
be executed and delivered, including, without limitation, all out-of-pocket
syndication and due diligence expenses and reasonable fees and disbursements of
counsel for the Administrative Agent and (ii) the preparation, execution and
delivery of any waiver, amendment or consent by the Administrative Agent or the
Lenders relating to this Agreement or any other Loan Document, including,
without limitation, reasonable fees and disbursements of counsel for the
Administrative Agent, (b) after the occurrence and during the continuance of an
Event of Default, pay all reasonable out-of-pocket expenses of the
Administrative Agent, and each Lender actually incurred in connection with the
administration and enforcement of any rights and remedies of the Administrative
Agent and Lenders under the Credit Facility including, without limitation, in
connection with any workout, restructuring, bankruptcy or other similar
proceeding, creating and perfecting Liens in favor of Administrative Agent on
behalf of Lenders pursuant to any Security Document, enforcing any Obligations
of or collecting any payments due from the Borrower or any Subsidiary Guarantor
by reason of an Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty Agreement, consulting with appraisers,
accountants, engineers, attorneys and other Persons concerning the nature, scope
or value of any right or remedy of the Administrative Agent or any Lender
hereunder or under any other Loan Document or any factual matters in connection
therewith, which expenses shall include without limitation the reasonable fees
and disbursements of such Persons), and (c) defend, indemnify and hold harmless
the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, attorneys, advisors, agents, officers and
directors, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans or any Reimbursement Obligations) be
suffered by any such Person in connection with any claim (including, without
limitation, any Environmental Claims), investigation, litigation or other
proceeding (whether brought by any third party, the Borrower or any Subsidiary
Guarantor and whether or not the Administrative Agent or any Lender is a party
thereto) and the prosecution and defense thereof, arising out of or in any way
connected with the Loans, this Agreement, any other Loan Document, or any
documents, reports or other information provided to the Administrative Agent or
any Lender or contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby, including, without limitation,
reasonable attorney’s and consultant’s fees, except to the extent that any of
the foregoing directly result from the gross negligence or willful misconduct of
the party seeking indemnification therefor.

 

SECTION 14.3                                            Set off.

 

(a)                                  In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 14.10, and the Affiliates of each of them, are hereby authorized by
the Borrower at any time or from time to time, without notice to the Borrower or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply

 

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any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant or Affiliate to or for the credit
or the account of the Borrower against and on account of the Obligations
irrespective of whether or not (i) the Lenders shall have made any demand under
this Agreement or any of the other Loan Documents or (ii) the Administrative
Agent shall have declared any or all of the Obligations to be due and payable as
permitted by Section 12.2 and although such Obligations shall be contingent or
unmatured.  Notwithstanding the preceding sentence, each Lender agrees to notify
within three (3) Business Days the Borrower and the Administrative Agent after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application.

 

(b)                                 Any amount to be set off pursuant to
Section 14.3(a) shall be denominated in Dollars and any amount denominated in an
Alternative Currency shall be in an amount equal to the Dollar Amount of such
amount at the most favorable spot exchange rate determined by the Administrative
Agent to be available to it; provided that if at the time of any such
determination no such spot exchange rate can reasonably be determined, the
Administrative Agent may use any reasonable method as it deems applicable to
determine such rate, any such determination to be conclusive absent manifest
error.

 

(c)                                  Each Lender and any assignee or participant
of such Lender in accordance with Section 14.10 are hereby authorized by the
Borrower to combine currencies, as deemed necessary by such Person, in order to
effect any set-off pursuant to Section 14.3(a).

 

SECTION 14.4                                            Governing Law.  This
Agreement, the Notes and the other Loan Documents, unless otherwise expressly
set forth therein, shall be governed by, construed and enforced in accordance
with, the laws of the State of New York (including Section 5-1401 and
Section 5-1402 of the General Obligations Law of the State of New York), without
regard to the conflicts of law provisions of such state.

 

SECTION 14.5                                            Jurisdiction and Venue.

 

(a)                                  Jurisdiction.  The Borrower hereby
irrevocably consents to the personal jurisdiction of the state and federal
courts located in New York, New York (and any courts from which an appeal from
any of such courts must or may be taken), in any action, claim or other
proceeding arising out of any dispute in connection with this Agreement, the
Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations.  The Borrower
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Administrative Agent
or any Lender in connection with this Agreement, the Notes or the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations, on behalf of itself or its property, in the
manner specified in Section 14.1.  Nothing in this Section 14.5 shall affect the
right of the Administrative Agent or any Lender to serve legal process in any
other manner permitted by Applicable Law or affect the right of the
Administrative Agent or any Lender to bring any action or proceeding against the
Borrower or its properties in the courts of any other jurisdictions.

 

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(b)                                 Venue.  The Borrower hereby irrevocably
waives any objection it may have now or in the future to the laying of venue in
the aforesaid jurisdiction in any action, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any other Loan
Document (“Disputes”) or the rights and obligations of the parties hereunder or
thereunder.  The Borrower irrevocably waives, in connection with such action,
claim or proceeding, any plea or claim that the action, claim or other
proceeding has been brought in an inconvenient forum.

 

SECTION 14.6                                            Waiver of Jury Trial.

 

(a)                                  Jury Trial.  THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.

 

(b)                                 Preservation of Certain Remedies.  The
parties hereto and the other Loan Documents preserve, without diminution,
certain remedies that such Persons may employ or exercise freely, either alone,
in conjunction with or during a Dispute.  Each such Person shall have and hereby
reserves the right to proceed in any court of proper jurisdiction or by self
help to exercise or prosecute the following remedies, as applicable: (i) all
rights to foreclose against any real or personal property or other security by
exercising a power of sale granted in the Loan Documents or under Applicable Law
or by judicial foreclosure and sale, including a proceeding to confirm the sale,
(ii) all rights of self help including peaceful occupation of property and
collection of rents, set off, and peaceful possession of property,
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and in filing an
involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment.  Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.

 

SECTION 14.7                                            Reversal of Payments. 
To the extent the Borrower makes a payment or payments to the Administrative
Agent for the ratable benefit of the Lenders or the Administrative Agent
receives any payment or proceeds of the Collateral which payments or proceeds or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or otherwise required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause (whether by demand, settlement, litigation or
otherwise), then, to the extent of such payment or proceeds repaid, the
Obligations or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or proceeds had not been
received by the Administrative Agent.

 

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SECTION 14.8                                            Injunctive Relief;
Punitive Damages.

 

(a)                                  The Borrower recognizes that, in the event
the Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Lenders. Therefore, the Borrower agrees that the Lenders, at the
Lenders’ option, shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.

 

(b)                                 The Administrative Agent, the Lenders and
the Borrower (on behalf of itself and its Subsidiaries) hereby agree that no
such Person shall have a remedy of punitive, exemplary or consequential damages
against any other party to a Loan Document and each such Person hereby waives
any right or claim to punitive, exemplary or consequential damages that they may
now have or may arise in the future in connection with any Dispute.

 

SECTION 14.9                                            Accounting Matters. 
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time, provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
therewith.

 

SECTION 14.10                                      Successors and Assigns;
Participations.

 

(a)                                  Benefit of Agreement.  This Agreement shall
be binding upon and inure to the benefit of the Borrower, the Administrative
Agent and the Lenders, all future holders of the Notes, and their respective
successors and assigns, except that the Borrower shall not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of each Lender (and any attempted such assignment or transfer without
such consent shall be null and void).

 

(b)                                 Assignment by Lenders.  Each Lender may, in
the ordinary course of its business and in accordance with Applicable Law, sell
or assign to any Lender, any Affiliate of a Lender or in the case of the Term
Loans any Approved Fund and with the consent of the Administrative Agent and, so
long as no Default or Event of Default has occurred and is continuing, the
Borrower, which consents shall not be unreasonably withheld or delayed, assign
to one or more other Eligible Assignees (any of the forgoing assignees or
purchasers, a “Purchasing Lender”) all or a portion of its interests, rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of the Extensions of Credit at the time
owing to it and the Notes held by it); provided that:

 

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(i)                                     each such assignment shall be of a
constant, and not a varying, percentage of the Revolving Credit Commitment
and/or the Term Loan Commitment, as applicable, of the assigning Lender’s rights
and obligations under this Agreement;

 

(ii)                                  if less than all of the assigning Lender’s
Revolving Credit Commitment or Term Loan Commitment, as applicable, is to be
assigned, the Commitment so assigned shall not be less than $5,000,000 with
respect to the Revolving Credit Facility and $1,000,000 with respect to the Term
Loan Facility (or otherwise agreed by the Administrative Agent and, so long as
no Default or Event of Default has occurred and is continuing, consented to by
the Borrower, which consent by the Borrower will not be unreasonably withheld or
delayed), unless such sale or assignment is made to an existing Lender, to an
Affiliate thereof, or (with respect to any Term Loan) to an Approved Fund, in
which case no minimum amount shall apply; provided further that all simultaneous
assignments to any proposed assignee and any Approved Funds that are Affiliates
of such assignee shall be aggregated and treated as a single assignment for
purposes of determining compliance with the minimum assignment amount specified
in this paragraph;

 

(iii)                               the Purchasing Lender shall have delivered
to the Administrative Agent all United States Internal Revenue Service Forms
required pursuant to Section 5.13(e) and all of the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance
substantially in the form of Exhibit G (an “Assignment and Acceptance”),
together with (to the extent requested by any Purchasing Lender) any Note or
Notes subject to such assignment;

 

(iv)                              no assignment of a Revolving Credit
Commitment, or participation in L/C Obligations or Swingline Loans shall be made
without the prior written consent of the Administrative Agent, the Swingline
Lender, each Issuing Lender and (so long as no Default or Event of Default has
occurred and is continuing) the Borrower (which consents shall not be
unreasonably withheld);

 

(v)                                 where consent of the Borrower to an
assignment to a Purchasing Lender is required hereunder (including consent to an
assignment to an Approved Fund), the Borrower shall be deemed to have given its
consent five (5) Business Days after the date written notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth (5th) Business
Day;

 

(vi)                              such assignment shall not, without the consent
of the Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and

 

(vii)                           the assigning Lender shall pay to the
Administrative Agent an assignment fee of $2,500 upon the execution by such
Lender of the Assignment and Acceptance;

 

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provided that no such fee shall be payable upon any assignment by a Lender to an
Affiliate thereof; and provided further that, in any case of contemporaneous
assignments by a Lender (including a group of affiliated Lenders that are funds
managed by the same investment advisor) to a single assignee or more than one
fund managed by the same investment advisor (which funds are not then Lenders
hereunder), only a single $2,500 fee shall be payable for all such
contemporaneous assignments.

 

Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof (unless
otherwise agreed to by the Administrative Agent), (A) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.  Notwithstanding the
foregoing, in the case of an assignment to a Purchasing Lender, which is,
immediately prior to such assignment, an Affiliate of the assigning Lender, such
assignment shall be effective between such Lender and its Affiliate immediately
without compliance with the conditions for assignment under this
Section 14.10(b), but shall not be effective with respect to the Borrower, the
Administrative Agent, each Issuing Lender, the Swingline Lender or any Lender,
and the Borrower, the Administrative Agent, each Issuing Lender, the Swingline
Lender and each Lender shall be entitled to deal solely with such assigning
Lender under any such assignment, in each case, until the conditions for
assignment under this Section 14.10(b) have been complied with.

 

(c)                                  Rights and Duties Upon Assignment.  By
executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the Purchasing Lender thereunder confirm to and agree with each
other and the other parties hereto as set forth in such Assignment and
Acceptance.

 

(d)                                 Register.  The Administrative Agent shall
maintain a copy of each Assignment and Acceptance and each Lender Addition and
Acknowledgement Agreement delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the “Register”).  The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement.  The entries in the Register applicable to any Lender shall be
available for inspection by the Borrower or such Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

(e)                                  Issuance of New Notes.  Upon its receipt of
an Assignment and Acceptance executed by an assigning Lender and a Purchasing
Lender together with any Note or Notes (if applicable) subject to such
assignment and (if applicable) the written consent to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is substantially in the form of Exhibit G:

 

(i)                                     accept such Assignment and Acceptance;

 

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(ii)                                  record the information contained therein
in the Register;

 

(iii)                               give prompt notice thereof to the Lenders
and the Borrower; and

 

(iv)                              promptly deliver a copy of such Assignment and
Acceptance to the Borrower.

 

Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Purchasing Lender (to
the extent requested thereby) in amounts equal to the Revolving Credit
Commitment and/or Term Loan Commitment assumed by it pursuant to such Assignment
and Acceptance and a new Note or Notes to the order of the assigning Lender (to
the extent requested thereby) in an amount equal to the Revolving Credit
Commitment and/or Term Loan Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes delivered to the assigning Lender.  Each
surrendered Note or Notes shall be canceled and returned to the Borrower. 
Notwithstanding anything in this Agreement to the contrary, any Lender which has
not been issued a Note or Notes hereunder may at any time deliver a written
request for a Note or Notes to the Administrative Agent and Borrower.  Within
five (5) Business Days after receipt of notice, the Borrower shall execute and
deliver to the Administrative Agent, a Note or Notes (as applicable) to the
order of such Lender in amounts equal to the Revolving Credit Commitment and/or
Term Loan Commitment of such Lender.  Upon receipt thereby, the Administrative
Agent shall promptly deliver such Note or Notes to such Lender.

 

(f)                                    Participations.  Each Lender may, without
notice to or the consent of the Borrower or the Administrative Agent, in the
ordinary course of its commercial banking business and in accordance with
Applicable Law, sell participations to one or more banks or other entities (any
such bank or other entity, a “Participant”) in all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Extensions of Credit and the Notes held by it); provided that:

 

(i)                                     such Lender’s obligations under this
Agreement (including, without limitation, its Revolving Credit Commitment and/or
Term Loan Commitment, as applicable) shall remain unchanged;

 

(ii)                                  such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations;

 

(iii)                               such Lender shall remain the holder of the
Notes held by it for all purposes of this Agreement;

 

(iv)                              the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement;

 

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(v)                                 such Lender shall not permit such
Participant the right to approve any waivers, amendments or other modifications
to this Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate on any
Loan or Reimbursement Obligation, extend the term or increase the amount of the
Revolving Credit Commitment and/or Term Loan Commitment of such Lender, reduce
the amount of any fees to which such Participant is entitled, extend any
scheduled payment date for principal of or interest on any Loan or any fee or
Reimbursement Obligation or, except as expressly contemplated hereby or thereby,
release substantially all of the Collateral or release any Subsidiary Guarantor
(except as expressly contemplated hereby); and

 

(vi)                              any such disposition shall not, without the
consent of the Borrower, require the Borrower to file a registration statement
with the Securities and Exchange Commission or apply to qualify the Loans or the
Notes under the blue sky law of any state.

 

The Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.7, Section 5.10, Section 5.11, Section 5.12, Section 5.13 and
Section 14.3 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 14.10; provided
that a Participant shall not be entitled to receive any greater payment under
Section 5.7, Section 5.10, Section 5.11, Section 5.12, and Section 5.13 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent and such
Participant shall have delivered to the Administrative Agent all United States
Internal Revenue Service Forms required pursuant to Section 5.13(e).

 

(g)                                 Disclosure of Information; Confidentiality. 
The Administrative Agent and the Lenders shall hold all non-public information
with respect to the Borrower obtained pursuant to the Loan Documents (or any
Hedging Agreement with a Lender or the Person serving as the Administrative
Agent) in accordance with their customary procedures for handling confidential
information; provided, that the Administrative Agent may disclose information
relating to this Agreement to Gold Sheets and other similar bank trade
publications, such information to consist of deal terms and other information
customarily found in such publications and provided further, that the
Administrative Agent or any Lender may disclose any such information to the
extent such disclosure is (i) to its Affiliates and its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors on a need-to-know basis (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),
(ii) required by law or requested or required pursuant to any legal process,
(iii) requested by, or required to be disclosed to, any rating agency, or
regulatory or similar authority (including, without limitation, the National
Association of Insurance Commissioners), or (iv) used in any suit, action or
proceeding for the purpose of defending itself, reducing its liability or
protecting any of its claims, rights, remedies or interests under or in
connection with the Loan Documents (or any Hedging Agreement with a Lender or
the Administrative Agent).  Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation

 

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pursuant to this Section 14.10, disclose to any pledgee referred to in
Section 14.10(h) or to the Purchasing Lender, proposed Purchasing Lender,
Participant, proposed Participant, or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty’s professional
advisor any information relating to the Borrower furnished to such Lender by or
on behalf of the Borrower; provided, that prior to any such disclosure, each
such Purchasing Lender, proposed pledgee, Purchasing Lender, Participant,
proposed Participant, contractual counterparty or professional advisor shall
agree to be bound by the provisions of this Section 14.10(g).

 

(h)                                 Certain Pledges or Assignments.  Any Lender
may at any time pledge or assign, or grant a security interest in, all or any
portion of its rights under this Agreement or any other Loan Document to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment or grant of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.

 

SECTION 14.11                                      Amendments, Waivers and
Consents.  Except as specifically provided in any Loan Document, any term,
covenant, agreement or condition of this Agreement or any of the other Loan
Documents may be amended or waived by the Lenders, and any consent given by the
Lenders, if, but only if, such amendment, waiver or consent is in writing signed
by the requisite Lenders specified below (or by the Administrative Agent with
the consent of such requisite Lenders) and delivered to the Administrative Agent
and, in the case of an amendment, signed by the Borrower.

 

(a)                                  Any consent, waiver or amendment purporting
to: (i) increase the Revolving Credit Commitment of any Lender, (ii) reduce the
rate of, or forgive any, interest payable on any Revolving Credit Loans or
Reimbursement Obligation, or any fees, (iii) reduce or forgive the principal
amount of any Revolving Credit Loans or Reimbursement Obligation, (iv) extend
the originally scheduled time or times of payment of the principal of any
Revolving Credit Loans or Reimbursement Obligation or the time or times of
payment of interest on any Revolving Credit Loan or Reimbursement Obligation or
any fee or commission with respect to the Revolving Credit Facility, (v) permit
any subordination of the principal or interest on, or any Lien securing, any
Revolving Credit Loans or Reimbursement Obligation, (vi) waive any of the
conditions contained in Section 6.3 or (vii) extend the time of the obligation
of the Lenders that have a Revolving Credit Commitment to make or issue or
participate in Letters of Credit or Swingline Loans (including, without
limitation, any consent, waiver or amendment under Section 3.1 to permit the
expiry date of Letters of Credit to extend beyond a date which is five (5) days
prior to the Revolving Credit Maturity Date), shall, in each case, require the
written consent of each Lender having a Revolving Credit Commitment, which
Lender is directly affected thereby;

 

(b)                                 Any consent, waiver or amendment purporting
to: (i) increase the Term Loan Commitment of any Lender (except as otherwise
provided in Section 4.6), (ii) reduce the rate of, or forgive any, interest
payable on any Term Loan or any fees, (iii) reduce or forgive the principal
amount of any Term Loan, (iv) extend the originally scheduled time or times of
payment of the principal of any Term Loan or the time or times of payment of
interest on any Term Loan or any fee or commission with respect to the Term Loan
Facility, or (v) permit any subordination of the principal or interest on, or
any Lien securing any Term Loan, shall, in each

 

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case, require the written consent of each Lender that has a Term Loan Commitment
or has made Term Loans, which such Lender is directly affected thereby;

 

(c)                                  Any consent, waiver or amendment purporting
to: (i) release any material portion of the Collateral or release any Security
Document or release any Subsidiary Guarantor (other than in connection with the
redesignation of a Restricted Subsidiary as an Unrestricted Subsidiary in
accordance with Section 9.11, with a sale of assets permitted pursuant to
Section 11.5, or as otherwise specifically permitted in this Agreement or the
applicable Security Document), (ii) amend the provisions of this Section 14.11,
(iii) amend the definition or percentage of Required Lenders, (iv) change
Section 4.4(b)(vi) in a manner that would alter the order of application of
amounts prepaid pursuant to Section 4.4(b), or (v) release the Borrower from all
or any material portion of the Obligations (other than Hedging Obligations)
hereunder or under any other Loan Document or permit any assignment (other than
as specifically permitted or contemplated in this Agreement or any other Loan
Document) of the Borrower’s rights and obligations hereunder or under any other
Loan Document, shall, in each case, require the written consent of each Lender;
and

 

(d)                                 All other amendments, waivers or consents
not set forth in paragraphs (a), (b) and (c) above, shall require the written
consent of the Required Lenders provided, that for purposes of Section 6.3, no
waiver of a Default or Event of Default, or of the inaccuracy of, or failure to
make any representation or warranty, shall be effective without the written
consent of the Lenders holding more than fifty percent (50%) of the Revolving
Credit Commitments (or, if the Revolving Credit Facility has been terminated,
Lenders holding more than fifty percent (50%) of the aggregate outstanding
Extensions of Credit thereunder).

 

In addition, no amendment, waiver or consent to the provisions of
(a) Article XIII shall be made without the written consent of the Administrative
Agent and (b) Article III without the written consent of each Issuing Lender.

 

Notwithstanding anything in this Agreement to the contrary, each Lender hereby
irrevocably authorizes the Administrative Agent on its behalf, and without
further consent, to enter into amendments or modifications to this Agreement
(including, without limitation, amendments to this Section 14.11) or any of the
other Loan Documents or to enter into additional Loan Documents as the
Administrative Agent reasonably deems appropriate in order to effectuate the
terms of Sections 2.8 and/or 4.6 (including, without limitation, as applicable,
(1) to permit the increased Revolving Credit Commitments and Additional Term
Loans to share ratably in the benefits of this Agreement and the other Loan
Documents, and (2) to include the Increasing Revolving Lenders’ Revolving Credit
Commitments or the Increasing Term Lender’s Commitments or outstanding
Additional Term Loans in any determination of Required Lenders); provided that
no amendment or modification shall result in any increase in the amount of any
Lender’s Commitment or any increase in any Lender’s Commitment Percentage, in
each case, without the written consent of such affected Lender.

 

SECTION 14.12                                      Performance of Duties.  The
Borrower’s obligations under this Agreement and each of the other Loan Documents
shall be performed by the Borrower at its sole cost and expense.

 

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SECTION 14.13                                      All Powers Coupled with
Interest.  All powers of attorney and other authorizations granted to the
Lenders, the Administrative Agent and any Persons designated by the
Administrative Agent or any Lender pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the Obligations remain unpaid or
unsatisfied, any of the Commitments remain in effect or the Credit Facility has
not been terminated.

 

SECTION 14.14                                      Survival of Indemnities. 
Notwithstanding any termination of this Agreement, the indemnities to which the
Administrative Agent and the Lenders are entitled under the provisions of this
Article XIV and any other provision of this Agreement (including, without
limitation, Sections 5.10, 5.11, 5.12, 9.7, 12.4 and 14.2) and the other Loan
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.

 

SECTION 14.15                                      Titles and Captions.  Titles
and captions of Articles, Sections and subsections in, and the table of contents
of, this Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.

 

SECTION 14.16                                      Severability of Provisions. 
Any provision of this Agreement or any other Loan Document which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining provisions hereof
or thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

SECTION 14.17                                      Counterparts.  This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts (including by virtue of an Authorization), each of which
when so executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement, an Authorization or any document or instrument
delivered in connection herewith by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement, an Authorization or such other
document or instrument, as applicable.

 

SECTION 14.18                                      Term of Agreement.  This
Agreement shall remain in effect from the Closing Date through and including the
date upon which all Obligations arising hereunder or under any other Loan
Document shall have been indefeasibly and irrevocably paid and satisfied in full
and all Commitments have been terminated.  No termination of this Agreement
shall affect the rights and obligations of the parties hereto arising prior to
such termination or in respect of any provision of this Agreement which survives
such termination.

 

SECTION 14.19                                      Advice of Counsel.  Each of
the parties represents to each other party hereto that it has discussed this
Agreement with its counsel.

 

SECTION 14.20                                      No Strict Construction.  The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent

 

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or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.

 

SECTION 14.21                                      Inconsistencies with Other
Documents; Independent Effect of Covenants.

 

(a)                                  In the event there is a conflict or
inconsistency between this Agreement and any other Loan Document, the terms of
this Agreement shall control; provided, that any provision of the Security
Documents which imposes additional burdens on the Borrower or its Subsidiaries
or further restricts the rights of the Borrower or its Subsidiaries or gives the
Administrative Agent or Lenders additional rights shall not be deemed to be in
conflict or inconsistent with this Agreement and shall be given full force and
effect.

 

(b)                                 This Agreement constitutes an amendment and
restatement of the Existing Credit Agreement, as amended, effective from and
after the Closing Date.  The execution and delivery of this Agreement shall not
constitute a novation of any Debt or other obligations owing to the Lenders or
the Administrative Agent under the Existing Credit Agreement based on facts or
events occurring or existing prior to the execution and delivery of this
Agreement.  On the Closing Date, the credit facilities described in the Existing
Credit Agreement, as amended, shall be amended, supplemented, modified and
restated in their entirety by the facilities described herein, and all loans and
other obligations of the Borrower outstanding as of such date under the Existing
Credit Agreement, as amended, shall be deemed to be loans and obligations
outstanding under the corresponding facilities described herein, without any
further action by any Person, except that the Administrative Agent shall make
such transfers of funds as are necessary in order that the outstanding balance
of such Loans, together with any Loans funded on the Closing Date, reflect the
Commitments of the Lenders hereunder.

 

(c)                                  The Borrower expressly acknowledges and
agrees that each covenant contained in Articles IX, X and XI shall be given
independent effect.  Accordingly, the Borrower shall not engage in any
transaction or other act otherwise permitted under any covenant contained in
Articles IX, X or XI if, before or after giving effect to such transaction or
act, the Borrower shall or would be in breach of any other covenant contained in
Articles IX, X, or XI.

 

SECTION 14.22                                      Continuity of Contract.  The
parties hereto agree that the occurrence or non-occurrence of EMU, any event or
events associated with EMU and/or the introduction of the euro in all or any
part of the European Union (a) will not result in the discharge, cancellation,
rescission or termination in whole or in part of this Agreement or any other
Loan Document, (b) will not give any party the right to cancel, rescind,
terminate or vary this Agreement or any other Loan Document and (c) will not
give rise to an Event of Default, in each case other than as specifically
provided in this Agreement.

 

SECTION 14.23                                      USA Patriot Act.  The
Administrative Agent and each Lender hereby notifies the Borrower that, pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrower and Subsidiary Guarantors, which
information includes the name and address of the Borrower and each Subsidiary
Guarantor and

 

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other information that will allow such Lender to identify the Borrower or such
Subsidiary Guarantor in accordance with the Act.

 

[Signature pages to follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers, all as of the day and year first
written above.

 

 

[CORPORATE SEAL]

DRS TECHNOLOGIES, INC., as Borrower

 

 

 

 

 

By:

/s/ Richard H. Schneider

 

 

 

 Name:

Richard H. Schneider

 

 

 

 Title:

  Executive Vice President
   and Chief Financial Officer

 

 

 

[Signature Pages Continue]

 

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WACHOVIA BANK, NATIONAL

 

ASSOCIATION, as Administrative Agent

 

on behalf of itself and the Lenders who have

 

executed an Authorization and as an Issuing Lender

 

Swingline Lender and Lender

 

 

 

 

 

By:

/s/ William F. Fox

 

 

 

 Name:

William F. Fox

 

 

 

 Title:

  Director

 

 

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

 

 

BEAR STEARNS CORPORATE LENDING, INC.,

 

as a Lender

 

 

 

 

 

By:

/s/ Victor Bulzacchelli

 

 

 

 Name:

Victor Bulzacchelli

 

 

 

 Title:

  Vice President

 

 

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

 

 

BANK OF AMERICA, N.A., as a Lender and an

 

Issuing Lender

 

 

 

 

 

By:

/s/ David J. Bardwil

 

 

 

 Name:

David J. Bardwil

 

 

 

 Title:

  Senior Vice President

 

 

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

 

 

BNP PARIBAS, as a Lender

 

 

 

 

 

By:

 

 

 

 

 Name:

 

 

 

 

 Title:

 

 

 

 

 

 

 

By:

 

 

 

 

 Name:

 

 

 

 

 Title:

 

 

 

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

 

LENDER AUTHORIZATION

 

DRS Technologies, Inc.

Third Amended and Restated Credit Agreement

 

 

January 31, 2006

 

Wachovia Bank, National Association

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention:  Syndication Agency Services

 

 

Re:                               Third Amended and Restated Credit Agreement
dated as of January 31, 2006 (as amended, the “Credit Agreement”) by and among
DRS Technologies, Inc. (the “Borrower”), the banks and financial institutions
party thereto, as lenders, and Wachovia Bank, National Association, as
administrative agent (the “Administrative Agent”)

 

This Authorization acknowledges our receipt and review of the Credit Agreement
in the form posted on SyndTrak Online.  By executing this Authorization, we
hereby approve the Credit Agreement and authorize the Administrative Agent to
execute and deliver the Credit Agreement on our behalf.

 

Each financial institution executing this Authorization agrees or reaffirms that
it shall be a party to the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement) to which Lenders are parties and shall have the
rights and obligations of a Lender (as defined in the Credit Agreement), and
agrees to be bound by the terms and provisions applicable to a “Lender”, under
each such agreement.  In furtherance of the foregoing, each financial
institution executing this Authorization agrees to execute any additional
documents reasonably requested by the Administrative Agent to evidence such
financial institution’s rights and obligations under the Credit Agreement.

 

 

BNP Paribas

 

 

 

 

 

 

 

 

 

By:

/s/ Brooks Tanner

 

 

 

Name:

Brooks Tanner

 

 

 

Title:

Managing Director

 

 

 

 

By:

/s/ Angela B. Arnold

 

 

 

Name:

Angela B. Arnold

 

 

 

Title:

Vice President

 

 

 

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

 

 

CALYON, NEW YORK BRANCH, as a Lender

 

 

 

 

 

By:

/s/ Philip Schubert

 

 

 

 Name:

Philip Schubert

 

 

 

 Title:

Director

 

 

 

By:

/s/ Yuri Muzichenko

 

 

 

 Name:

Yuri Muzichenko

 

 

 

 Title:

Vice President

 

 

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