EX-10.2





Exhibit
10.2



AMENDED AND RESTATED




CREDIT AGREEMENT




Dated as of April 23, 2007,




Effective as of October 31, 2006




among




MISTRAS GROUP, INC.,




as Borrower,




BANK OF AMERICA, N.A.,




as Agent, Co-Lead Bookrunner




and




L/C Issuer,




JPMORGAN CHASE BANK, N.A.




as Co-Lead Bookrunner




and




Any Other Lenders Party Hereto




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 
	 	 	 	 	 	 
	1.01
	 	Defined Terms	 	 	1	 
	1.02
	 	Other Interpretive Provisions	 	 	20	 
	1.03
	 	Accounting Terms	 	 	21	 
	1.04
	 	Rounding	 	 	21	 
	1.05
	 	Times of Day	 	 	21	 
	1.06
	 	Letter of Credit Amounts	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	22	 
	2.01
	 	Loans	 	 	22	 
	2.02
	 	Borrowings, Conversions and Continuations of Committed Loans	 	 	22	 
	2.03
	 	Letters of Credit	 	 	24	 
	2.04
	 	Repayment of Loans	 	 	33	 
	2.05
	 	Prepayments	 	 	34	 
	2.06
	 	Termination or Reduction of Commitments	 	 	35	 
	2.07
	 	Interest	 	 	36	 
	2.08
	 	Fees	 	 	37	 
	2.09
	 	Computation of Interest and Fees	 	 	37	 
	2.10
	 	Evidence of Debt	 	 	37	 
	2.11
	 	Payments Generally; Agent’s Clawback	 	 	38	 
	2.12
	 	Sharing of Payments	 	 	40	 






2









 






	 	 	 	 	 	 	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	41	 
	 
	 	 	 	 	 	 
	3.01
	 	Taxes	 	 	41	 
	3.02
	 	Illegality	 	 	42	 
	3.03
	 	Inability to Determine Rates	 	 	43	 
	3.04
	 	Increased Costs	 	 	43	 
	3.05
	 	Compensation for Losses	 	 	44	 
	3.06
	 	Mitigation Obligations	 	 	45	 
	3.07
	 	Survival	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	 	45	 
	 
	 	 	 	 	 	 
	4.01
	 	Conditions of Initial Credit Extension	 	 	45	 
	4.02
	 	Conditions to all Credit Extensions	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES	 	 	48	 
	 
	 	 	 	 	 	 
	5.01
	 	Existence, Qualification and Power	 	 	48	 
	5.02
	 	Authorization; No Contravention	 	 	48	 
	5.03
	 	Governmental Authorization; Other Consents	 	 	49	 
	5.04
	 	Binding Effect	 	 	49	 
	5.05
	 	Financial Statements; No Material Adverse Effect	 	 	49	 
	5.06
	 	Litigation	 	 	50	 
	5.07
	 	No Default	 	 	50	 
	5.08
	 	Ownership of Property; Liens	 	 	50	 
	5.09
	 	Environmental Compliance	 	 	51	 
	5.10
	 	Insurance	 	 	51	 
	5.11
	 	Taxes	 	 	51	 
	5.12
	 	ERISA Compliance	 	 	51	 






3









 






	 	 	 	 	 	 	 
	5.13
	 	Subsidiaries	 	 	52	 
	5.14
	 	Margin Regulations; Investment Company Act; Public Utility Holding Company Act	 	 	52	 
	5.15
	 	Disclosure	 	 	53	 
	5.16
	 	Compliance with Laws	 	 	53	 
	5.17
	 	Taxpayer Identification Number	 	 	53	 
	5.18
	 	Intellectual Property; Licenses, Etc.	 	 	53	 
	5.19
	 	Rights in Collateral; Priority of Liens	 	 	53	 
	 
	 	 	 	 	 	 
	ARTICLE VI. AFFIRMATIVE COVENANTS	 	 	53	 
	 
	 	 	 	 	 	 
	6.01
	 	Financial Statements	 	 	54	 
	6.02
	 	Certificates; Other Information	 	 	54	 
	6.03
	 	Notices	 	 	56	 
	6.04
	 	Payment of Obligations	 	 	56	 
	6.05
	 	Preservation of Existence, Etc	 	 	56	 
	6.06
	 	Maintenance of Properties	 	 	57	 
	6.07
	 	Maintenance of Insurance	 	 	57	 
	6.08
	 	Compliance with Laws	 	 	57	 
	6.09
	 	Books and Records	 	 	57	 
	6.10
	 	Inspection Rights	 	 	58	 
	6.11
	 	Use of Proceeds	 	 	58	 
	6.12
	 	Financial Covenants	 	 	58	 
	6.13
	 	Additional Guarantors	 	 	59	 
	6.14
	 	Collateral Records	 	 	59	 
	6.15
	 	Security Interests	 	 	59	 
	6.16
	 	Deposits	 	 	60	 






4









 






	 	 	 	 	 	 	 
	ARTICLE VII. NEGATIVE COVENANTS	 	 	60	 
	 
	 	 	 	 	 	 
	7.01
	 	Liens	 	 	60	 
	7.02
	 	Investments	 	 	61	 
	7.03
	 	Indebtedness	 	 	62	 
	7.04
	 	Fundamental Changes	 	 	63	 
	7.05
	 	Dispositions	 	 	64	 
	7.06
	 	Restricted Payments	 	 	64	 
	7.07
	 	Change in Nature of Business	 	 	65	 
	7.08
	 	Transactions with Affiliates	 	 	65	 
	7.09
	 	Burdensome Agreements	 	 	65	 
	7.10
	 	Use of Proceeds	 	 	65	 
	 
	 	 	 	 	 	 
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES	 	 	65	 
	 
	 	 	 	 	 	 
	8.01
	 	Events of Default	 	 	65	 
	8.02
	 	Remedies Upon Event of Default	 	 	68	 
	8.03
	 	Application of Funds	 	 	68	 
	 
	 	 	 	 	 	 
	ARTICLE IX. ADMINISTRATIVE AGENT	 	 	69	 
	 
	 	 	 	 	 	 
	9.01
	 	Appointment and Authorization of Administrative Agent	 	 	70	 
	9.02
	 	Rights as a Lender	 	 	70	 
	9.03
	 	Exculpatory Provisions	 	 	70	 
	9.04
	 	Reliance by Administrative Agent	 	 	71	 
	9.05
	 	Delegation of Duties	 	 	72	 
	9.06
	 	Resignation of Agent	 	 	72	 
	9.07
	 	Non-Reliance on Agent and Other Lenders	 	 	73	 
	9.08
	 	No Other Duties, Etc	 	 	73	 






5









 






	 	 	 	 	 	 	 
	9.09
	 	Administrative Agent May File Proofs of Claim	 	 	73	 
	9.10
	 	Guaranty Matters	 	 	74	 
	9.11
	 	Collateral Matters	 	 	74	 
	 
	 	 	 	 	 	 
	ARTICLE X. MISCELLANEOUS	 	 	76	 
	 
	 	 	 	 	 	 
	10.01
	 	Amendments, Etc	 	 	76	 
	10.02
	 	Notices; Effectiveness; Electronic Communications	 	 	77	 
	10.03
	 	No Waiver; Cumulative Remedies	 	 	79	 
	10.04
	 	Expenses; Indemnity; Damage Waiver	 	 	79	 
	10.05
	 	Payments Set Aside	 	 	81	 
	10.06
	 	Successors and Assigns	 	 	81	 
	10.07
	 	Treatment of Certain Information; Confidentiality	 	 	86	 
	10.08
	 	Right of Setoff	 	 	87	 
	10.09
	 	Interest Rate Limitation	 	 	87	 
	10.10
	 	Counterparts; Integration; Effectiveness	 	 	87	 
	10.11
	 	Survival of Representations and Warranties	 	 	88	 
	10.12
	 	Severability	 	 	88	 
	10.13
	 	Governing Law; Jurisdiction; Etc	 	 	88	 
	10.14
	 	Waiver of Jury Trial	 	 	89	 
	10.15
	 	No Advisory or Fiduciary Responsibility	 	 	89	 
	10.16
	 	USA PATRIOT Act Notice	 	 	90	 
	10.17
	 	Time of the Essence	 	 	90	 






6









 






	 	 	 	 	 	 	 
	SCHEDULES	 	 	 	 
	2.01
	 	Commitments and Applicable Percentages	 	 	 	 
	5.06
	 	Litigation	 	 	 	 
	5.09
	 	Environmental Matters	 	 	 	 
	5.13
	 	Subsidiaries and Other Equity Investments	 	 	 	 
	7.01
	 	Existing Liens	 	 	 	 
	7.03
	 	Existing Indebtedness	 	 	 	 
	10.02
	 	Administrative Agent’s Office, Certain Addresses for Notices	 	 	 	 
	10.06
	 	Processing and Recordation Fees	 	 	 	 
	 
	 	 	 	 	 	 
	EXHIBITS	 	 	 	 
	Form of
	 	 	 	 	 	 
	A
	 	Committed Loan Notice	 	 	 	 
	B
	 	Revolving Note	 	 	 	 
	C
	 	Term Note	 	 	 	 
	D
	 	Compliance Certificate	 	 	 	 
	E
	 	Assignment and Assumption	 	 	 	 
	F
	 	Legal Opinion of Counsel to Borrower	 	 	 	 







7












 





AMENDED AND RESTATED CREDIT AGREEMENT



THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of April 23, 2007,
effective as of October 31, 2006, among MISTRAS GROUP, INC. (formerly known as Mistras Holdings
Corp.), a Delaware corporation (the “Borrower”), BANK OF AMERICA, N.A., as Agent, Co-Lead
Bookrunner and L/C Issuer, JPMORGAN CHASE BANK, N.A., as Co-Lead Bookrunner and each lender from
time to time party hereto (collectively, “Lenders” and individually, a “Lender”).



Borrower has requested that Lenders provide a revolving credit facility and a term loan, and
Lenders are willing to do so on the terms and conditions set forth herein. In consideration of the
mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:




     ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS



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


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



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



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



“Agent Fee Letter” has the meaning specified in Section 2.08(b).



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



“Aggregate Commitments” means, collectively, the Aggregate Revolving Loan Commitments and
the Aggregate Term Loan Commitments.



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



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



“Agreement” means this Amended and Restated Credit Agreement.




 









 




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



“Applicable Rate” means, from time to time, the following percentages per annum, based upon
the ratio of Funded Debt to EBITDA (the “Financial Covenant”) as set forth in the most
recent Compliance Certificate received by Agent pursuant to Section 6.02(b):




Applicable Rate




	 	 	 	 	 	 	 
	Pricing	 	 	 	Base Rate	 	Eurodollar
	Level	 	Funded Debt : EBITDA	 	+/-	 	Rate +/-
	 
	 	 	 	 	 	 
	1

	 	£1.75:1
	 	-.75%
	 	+1.50%
	 
	 	 	 	 	 	 
	2

	 	>1.75:1 but <2.50:1
	 	-.25%
	 	+2.00%
	 
	 	 	 	 	 	 
	3

	 	>2.50:1 but <3.00:1
	 	+.00%
	 	+2.25%
	 
	 	 	 	 	 	 
	4

	 	>3.00:1
	 	+.50%
	 	+2.50%





Any increase or decrease in the Applicable Rate resulting from a change in the Financial Covenant
shall become effective as of the first Business Day of the month immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such Section, then Pricing
Level 3 shall apply as of the first Business Day of the month following the date such Compliance
Certificate was required to have been delivered until the first Business Day of the month
immediately following the delivery of such Compliance Certificate. The Applicable Rate in effect
from the Closing
Date until receipt of the Compliance Certificate for the period ended November 30, 2006 shall be
determined based upon Pricing Level 3.




2









 




“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another.



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



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



“Audited Financial Statements” means the audited consolidated balance sheet of Borrower and
its Consolidated Subsidiaries for the fiscal year ended May 31, 2006 and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such fiscal year of
Borrower and its Consolidated Subsidiaries, including the notes thereto.



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



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



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



“Base Rate Loan” means a Committed Loan that bears interest at a rate based on the Base
Rate.



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



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




3









 




“Borrowing” means a Committed Borrowing.



“Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the state where the
Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day
on which dealings in Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.



“Cash Collateralize” has the meaning specified in Section 2.03(g).



“Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.



“Change of Control” means, with respect to any Person, an event or series of events by
which:



(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time (such right, an
“option right”)), directly or indirectly, of more than 50% of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such securities that such person or
group has the right to acquire pursuant to any option right);



(b) during any period of 24 consecutive months, a majority of the members of the board of directors
or other equivalent governing body of such Person cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a majority of that
board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii),
any individual whose initial nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more directors by


4









 






any
person or group other than a solicitation for the election of one or more directors by or on behalf
of the board of directors);



(c) any individual(s) or entity(s) acting in concert shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon consummation thereof, will result
in its or their acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of such Person, or control over the equity securities of
such Person entitled to vote for members of the board of directors or equivalent governing body of
such Person on a fully-diluted basis (and taking into account all such securities that such
individual(s) or entity(s) or group has the right to acquire pursuant to any option right)
representing more than 50% of the combined voting power of such securities; or



(d) In the case of Mistras Group, Inc., Sotirios Vahaviolos ceases to own and control, directly and
indirectly, at least fifty-one (51%) percent of its capital stock entitled to vote for the election
of directors.



“Closing Date” means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.



“Code” means the Internal Revenue Code of 1986.



“Co-Lead Bookrunner” means either JPMorgan Chase Bank, N.A. or Bank of America, N.A. in its
capacity as co-lead bookrunner under any of the Loan Documents, or any successor co-lead
bookrunner.



“Collateral” shall mean any and all assets and rights and interests in or to property of
Borrower and each of the other Loan Parties, whether real or personal, tangible or intangible, in
which a Lien is granted or purported to be granted pursuant to the Collateral Documents.



“Collateral Documents” means all agreements, instruments and documents now or hereafter
executed and delivered in connection with this Agreement pursuant to which Liens are granted or
purported to be granted to Agent in Collateral securing all or part of the Obligations each in form
and substance satisfactory to Agent.



“Commitment” means, as to each Lender, its Revolving Loan Commitment and its Term Loan
Commitment.



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



“Committed Loan” means the Term Loan (or any portion thereof made by a Lender) or a
Revolving Loan (or any portion thereof made by a Lender).




5









 




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



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



“Consolidated Subsidiary” means each of Quality Services Laboratories, Inc., CONAM
Inspection & Engineering Services, Inc., Physical Acoustics Ltd., Euro Physical Acoustics, S.A.,
Anru Physical ALC TLP Beheer B.V., Physical Acoustics India Private Ltd., Nippon Physical Acoustics
Limited, Diapac, Physical Acoustics South America Ltda. and any other Subsidiary of Borrower now or
hereafter included in the Audited Financial Statements.



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



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



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



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



“Debt Service Coverage Ratio” means the ratio of Fixed Charge Cash Flow to the sum of the
current portion of long-term liabilities and the current portion of capitalized lease obligations,
plus interest expense on all obligations.



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



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




6









 




“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Committed Loans or participations in L/C Obligations required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder unless such failure has been
cured, (b) has otherwise failed to pay over to Agent or any other Lender any other amount required
to be paid by it hereunder within one Business Day of the date when due, unless the subject of a
good faith dispute or unless such failure has been cured, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.



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



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



“EBITDA” means net income, less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion, and
amortization (including non-cash loss on retirement of assets), plus stock option expense, less
cash expense related to stock options and adjusted for certain historical expenses, accounting
adjustments, and other non-cash charges, all in the Required Lenders’ sole discretion. With
respect to each company acquired by the Borrower in accordance with Section 7.02(f), (i) for
purposes of determining compliance by the Borrower with Section 6.12 of this Agreement, EBITDA
shall not include the EBITDA of such acquired company to the extent attributable to periods prior
to the date of such acquisition and (ii) for purposes of determining the Applicable Rate, EBITDA
shall include the historical EBITDA of such acquired company during the applicable 12-month
reporting period, whether or not the acquired company was owned by the Borrower during the entire
period in question.



“Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(v) and (vi) (subject to such consents, if any, as may be required under
Section 10.06(b)(iii)).



“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.



“Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of
Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of




7









 




any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened
release of any Hazardous Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the
foregoing.



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



“ERISA” means the Employee Retirement Income Security Act of 1974.



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



“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal
by Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer
Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.



“Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar Rate.



“Eurodollar Rate” means for any Interest Period with respect to a Eurodollar Rate Loan, a
rate per annum determined by Agent pursuant to the following formula:




	 	 	 
	Eurodollar Rate =
	 	Eurodollar Base Rate
	 
	 	 
	 
	 	1.00 — Eurodollar Reserve Percentage





Where,




8









 




“Eurodollar Base Rate” means, for such Interest Period the rate per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period. If such rate is not available at such time for any
reason, then the “Eurodollar Base Rate” for such Interest Period shall be the rate per annum
determined by Agent to be the rate at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period.



“Eurodollar Reserve Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five decimal places) in effect on such day,
whether or not applicable to any Lender, under regulations issued from time to time by the Board of
Governors of the Federal Reserve System of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The
Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.



“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on the
Eurodollar Rate.



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



“Excluded Taxes” means, with respect to Agent, any Lender, the L/C Issuer or any other
recipient of any payment to be made by or on account of any obligation of Borrower hereunder, (a)
taxes imposed on or measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is located, and (b)
any branch profits taxes imposed by the United States or any similar tax imposed by any other
jurisdiction in which Borrower is located.



“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day




9









 




as so published on the next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by Agent.



“Fixed Charge Cash Flow” means (a) net income, after income tax, (b) less income or plus
loss from discontinued operations and extraordinary items, (c) plus depreciation, depletion and
amortization and other non-cash charges, (d) plus interest expense on all obligations, and (e)
minus unfunded capital expenditures, dividends, cash distributions, withdrawals and other
distributions.



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



“Free Cash Flow” means the sum of EBITDA minus all taxes paid or payable in cash, minus
cash interest paid, minus all capital expenditures made in cash, minus all scheduled and
non-scheduled principal payments on Funded Debt made during the period (excluding free cash flow
payments pursuant to Section 2.05(c) of this Agreement), minus acquisition costs and plus or minus
changes in working capital.



“Funded Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term liabilities.



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



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



“Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital,




10









 




equity capital or any other financial statement condition or liquidity or level of income or cash
flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.



“Guarantor” means each of Quality Services Laboratories, Inc., CONAM Inspection &
Engineering Services, Inc., Physical Acoustics Corporation and CISMIS Springfield Corp.



“Guaranty” means the Guaranty made by each Guarantor in favor of Agent and for the
benefit of the Lenders, in form and substance satisfactory to Agent.



“Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



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




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



     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;



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



     (d) all obligations of such Person to pay the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business and, in each case, not past
due for more than 60 days or such longer period as permitted in the ordinary course of business);



11









 





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



     (f) capital leases and Synthetic Lease Obligations;



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



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


For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.



“Indemnified Taxes” means Taxes other than Excluded Taxes.



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



“Information” has the meaning specified in Section 10.07.



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



“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date
such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and
ending on the date one, two or three months thereafter, as selected by Borrower in its Committed
Loan Notice; provided that:




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



12









 





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



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


“Internal Control Event” means a material weakness in, or fraud that involves management or
other employees who have a significant role in Borrower’s internal controls over financial
reporting.



“Investment” means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.



“IRS” means the United States Internal Revenue Service.



“ISP” means, with respect to any Letter of Credit, the “International Standby Practices
ISP98” published by the Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance).



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



“Laws” means, collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.



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



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




13









 




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



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



“L/C Expiration Date” means the day that is thirty days prior to the Maturity Date then in
effect (or, if such day is not a Business Day, the next preceding Business Day).



“L/C Fee” has the meaning specified in Section 2.03(i).



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



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



“L/C Sublimit” means an amount equal to $1,000,000. The L/C Sublimit is part of, and not
in addition to, the Aggregate Revolving Loan Commitments.



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



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



“Letter of Credit” means any letter of credit issued hereunder. A Letter of Credit may be
a commercial letter of credit or a standby letter of credit.



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



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




14









 




“Loan Documents” means this Agreement, each Note, each Issuer Document, the Agent Fee
Letter, each Collateral Document, the Guaranty, the Subordination Agreement and the Post-Closing
Undertaking Agreement.



“Loan Parties” means, collectively, Borrower and each Person (other than Agent, the L/C
Issuer, or any Lender) executing a Loan Document including, without limitation, each Guarantor and
such each Person executing a Collateral Document.



“Majority-Owned Subsidiary” of the Borrower means a Subsidiary of which the Borrower owns,
directly or indirectly through another Subsidiary, more than 50% of the issued and outstanding
capital stock or other equity interests.



“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of Borrower or Borrower and its Subsidiaries taken
as a whole; (b) a material impairment of the ability of the Borrower to perform its obligations
under this Agreement; or (c) a material adverse effect upon the legality, validity, binding effect
or enforceability against any Loan Party of any Loan Document to which it is a party which could
reasonably be expected to have a material adverse effect upon the rights of the Lenders hereunder.



“Maturity Date” means October 31, 2012.



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



“Note” means a Revolving Note or a Term Note.



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



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


15









 






Authority in the jurisdiction of its formation or organization and, if applicable, any certificate
or articles of formation or organization of such entity.



“Other Taxes” means all present or future stamp or documentary taxes imposed by any taxing
authority (i) which may arise from the registration, filing, recording, or perfection of any
security interest in connection with this Agreement or any other Loan Document (other than Taxes
attributable to a voluntary transfer of a Loan or Note by a Lender or Participant) or (ii) from the
enforcement of this Agreement or any other Loan Document in connection with an Event of Default.



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



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



“PBGC” means the Pension Benefit Guaranty Corporation.



“PCAOB” means the Public Company Accounting Oversight Board.



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



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



“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by Borrower or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, any ERISA Affiliate.



“Platform” has the meaning specified in Section 6.02.



“Post-Closing Undertaking Agreement” means the post-closing undertaking agreement as of the
date hereof by and between the Borrower and the Agent.



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




16









 




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



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



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



“Required Lenders” means, as of any date of determination, Lenders having more than 50% of
the sum of the Revolving Loan Commitments and the outstanding principal balance of the Term Loans
(taken as a whole) or, if the commitment of each Lender to make Loans and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding
in the aggregate more than 50% of the total outstanding Loans (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such
Lender for purposes of this definition); provided that the Commitment of, and the portion of the
total outstanding Loans held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.



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



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



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



“Revolving Loan Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to Borrower pursuant to Section 2.01(a) and (b) purchase participations in L/C Obligations,
in an aggregate principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender’s name on the portion of Schedule 2.01 describing the Revolving Loans
or in the Assignment and


17









 






Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement.



“Revolving Note” means a promissory note made by Borrower in favor of a Lender evidencing a
Revolving Loan made by such Lender, substantially in the form of Exhibit B.



“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.



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



“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the PCAOB.



“Subordination Agreement” means the subordination agreement by and among the Borrower, the
Agent and TC NDT Holdings LLC, Altus Capital Partners SBIC, L.P., Altus Mistras Co-Investment, LLC
and Sotirios J. Vahaviolos.



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



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




18









 




“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).



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



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



“Term Loan” has the meaning specified in Section 2.01(a).



“Term Loan Commitment” means, as to each Lender, the amount set forth opposite such
Lender’s name on the portion of Schedule 2.01 describing the Term Loan or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as applicable.



“Term Note” means a promissory note made by Borrower in favor of a Lender evidencing the
Lender’s Applicable Percentage of the Term Loan, substantially in the form of Exhibit C.



“Threshold Amount” means $500,000.



“Total Liabilities” means the sum of current liabilities plus long term liabilities.



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



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



“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.




19









 




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



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



“Wholly-Owned Subsidiary” of the Borrower means a Subsidiary of which the Borrower owns,
directly or indirectly through another Subsidiary, 95% or more of the issued and outstanding
capital stock or other equity interests.




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



     (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar
import when used in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference
to any law shall include all statutory and regulatory provisions consolidating, amending, replacing
or interpreting such law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.



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



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



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     1.03 Accounting Terms



     (a) Generally. All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.



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



     (c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of Borrower and its Consolidated Subsidiaries or to the
determination of any amount for Borrower and its Subsidiaries on a consolidated basis or any
similar reference shall, in each case, be deemed to include each variable interest entity that
Borrower is required to consolidate pursuant to FASB Interpretation No. 46 — Consolidation of
Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable
interest entity were a Subsidiary as defined herein.



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



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



     1.06 Letter of Credit Amounts. Unless otherwise specified herein the amount of a Letter of Credit at any time shall be
deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however,
that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated amount thereof, the
amount of such Letter of Credit shall be deemed to be the maximum stated amount of such



21









 







Letter of
Credit after giving effect to all such increases, whether or not such maximum stated amount is in
effect at such time.



     ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS



     2.01 Loans.



     (a) Term Loan. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make a term loan (each such loan, a “Term Loan”) to Borrower on the
Closing Date in an amount equal to the amount of such Lender’s Term Loan Commitment, and to execute
and deliver to each such Lender a Term Note. Term Loans may be Base Rate Loans or Eurodollar Rate
Loans, as further provided herein. Once repaid or prepaid, the Term Loan may not be re-borrowed.



     (b) Revolving Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make certain revolving loans (each such revolving loan, a “Revolving
Loan”) to Borrower from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Loan
Commitment; provided, however, that after giving effect to any Borrowing of a Revolving Loan, (i)
the Total Revolving Loan Outstandings shall not exceed the Aggregate Revolving Loan Commitments,
and (ii) the aggregate Outstanding Revolving Loan Amount of all Revolving Loans of any Lender, plus
such Lender’s Applicable Percentage of the Outstanding Revolving Loan Amount of all L/C Obligations
shall not exceed such Lender’s Revolving Loan Commitment. Within the limits of each Lender’s
Revolving Loan Commitment, and subject to the other terms and conditions hereof, Borrower may
borrow under this Section 2.01(b), prepay under Section 2.04, and reborrow under this Section
2.01(b). The Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein and the Borrower shall execute and deliver a Revolving Note to each Lender.



     2.02 Borrowings, Conversions and Continuations of Committed Loans.



     (a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon Borrower’s irrevocable notice to
Agent, which may be given by telephone. Each such notice must be received by Agent not later than
11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to
or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each telephonic notice
by Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to Agent of a
written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Except as provided
in Sections 2.03(c), each conversion to Base Rate Loans shall be in a principal amount of



22









 







$500,000
or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic
or written) shall specify (i) whether Borrower is requesting a Committed Borrowing, a conversion of
Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or
continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are
to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.
If Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if Borrower
fails to give a timely notice requesting a conversion or continuation, then the applicable
Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion
to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with
respect to the applicable Eurodollar Rate Loans. If Borrower requests a Borrowing of, conversion
to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest Period of one month.



     (b) Following receipt of a Committed Loan Notice, Agent shall promptly notify each Lender of
the amount of its Applicable Percentage of the applicable Committed Loans, and if no timely notice
of a conversion or continuation is provided by Borrower, Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans described in the preceding subsection. In
the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to Agent in immediately available funds at the Agent’s Office not later than 2:00 p.m. on
the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), Agent shall make all funds so received available to Borrower in like
funds as received by Agent either by (i) crediting the account of Borrower on the books of Bank of
America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) Agent by Borrower; provided, however, that if, on the date the Committed Loan Notice
with respect to such Borrowing is given by Borrower, there are L/C Borrowings outstanding, then the
proceeds of such Borrowing first, shall be applied, to the payment in full of any such L/C
Borrowings, and second, shall be made available to Borrower as provided above.



     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of
a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders, and the Required Lenders may demand that any or all of the
then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans and Borrower
agrees to pay all amounts due under Section 3.05 in accordance with the terms thereof due to any
such conversion.



23









 





     (d) Agent shall promptly notify Borrower and Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest rate.



     (e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from
one Type to the other, and all continuations of Committed Loans as the same Type, there shall not
be more than four Interest Periods in effect with respect to Committed Loans.



     2.03 Letters of Credit.



     (a) The Letter of Credit Commitment.



          (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to
time on any Business Day during the period from the Closing Date until the L/C Expiration Date, to
issue Letters of Credit for the account of Borrower, and to amend or extend Letters of Credit
previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under
the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit
issued for the account of Borrower and any drawings thereunder; provided that the Lenders shall
have no obligation to issue a Letter of Credit unless after giving effect to any L/C Credit
Extension with respect to any Letter of Credit, (x) the Total Revolving Loan Outstandings shall not
exceed the Aggregate Revolving Loan Commitments, (y) the aggregate Outstanding Revolving Loan
Amount of all Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Revolving Loan Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the Term Loan shall not
exceed such Lender’s Commitment, and (z) the Outstanding Revolving Loan Amount of the L/C
Obligations shall not exceed the L/C Sublimit. Each request by Borrower for the issuance or
amendment of a Letter of Credit shall be deemed to be a representation by Borrower that the L/C
Credit Extension so requested complies with the conditions set forth in the proviso to the
preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof,
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.




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




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



24









 





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



          (iii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:




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



               (B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer
applicable to letters of credit generally, a copy of which policies has previously been provided to
the Borrower or is provided in connection with the Borrower’s L/C Application



               (C) except as otherwise agreed by Agent and the L/C Issuer, such Letter of Credit is in an
initial stated amount less than $10,000, in the case of a commercial Letter of Credit, or $100,000,
in the case of a standby Letter of Credit;



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



               (E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender
is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such
Lender; or



               (F) unless specifically provided for in this Agreement, such Letter of Credit contains any
provisions for automatic reinstatement of the stated amount after any drawing thereunder.



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




25









 





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




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




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



          (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of
Borrower delivered to the L/C Issuer (with a copy to Agent) in the form of a L/C Application,
appropriately completed and signed by a Responsible Officer of Borrower. Such L/C Application must
be received by the L/C Issuer and Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as Agent and the L/C Issuer may agree in a particular instance in their
sole discretion)
prior to the proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such L/C Application shall specify in form
and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D)
the name and address of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented
by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer
reasonably may require. In the case of a request for an amendment of any outstanding Letter of
Credit, such L/C Application shall specify in form and detail satisfactory to the L/C Issuer (A)
the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C
Issuer reasonably may require. Additionally, Borrower shall furnish to the L/C Issuer and Agent
such other documents and information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or Agent reasonably may require.




          (ii) Promptly after receipt of any L/C Application at the address set forth in Section 10.02,
the L/C Issuer will confirm with Agent (by telephone or in writing) that Agent has received a copy
of such L/C Application from Borrower and, if not, the L/C Issuer will provide Agent with a copy
thereof. Unless the L/C Issuer has received




26









 




written notice from any Lender, Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions in Article IV shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of Borrower or enter into the applicable amendment,
as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of such Lender’s
Applicable Percentage times the amount of such Letter of Credit.




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




          (iv) If Borrower so requests in any applicable L/C Application, the L/C Issuer may, in its
sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension
provisions (each, an “Auto-Extension Letter of Credit”); provided that any such
Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice
Date”) in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the
L/C Issuer, Borrower shall not be required to make a specific request to the L/C Issuer for any
such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such
Letter of Credit at any time to an expiry date not later than the L/C Expiration Date; provided,
however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has
determined that it would not be permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the
provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is five Business Days before
the Non-Extension Notice Date (1) from Agent that the Required Lenders have elected not to permit
such extension or (2) from Agent, any Lender or Borrower that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C
Issuer not to permit such extension.




          (v) If Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer
may, in its sole and absolute discretion, agree to issue a Letter of Credit that permits the
automatic reinstatement of all or a portion of the stated amount thereof after any drawing
thereunder (each, an “Auto-Reinstatement Letter of Credit”). Unless otherwise directed by the L/C
Issuer, Borrower shall not be required to




27









 




make a specific request to the L/C Issuer to permit such
reinstatement. Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in
the following sentence, the Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to reinstate all or a portion of the stated amount thereof in accordance with the
provisions of such Letter of Credit. Notwithstanding the foregoing, if such Auto-Reinstatement
Letter of Credit permits the L/C Issuer to decline to reinstate all or any portion of the stated
amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a
specified number of days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer
shall not permit such reinstatement if it has received a notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the Non-Reinstatement Deadline (A)
from Agent that the Required Lenders have elected not to permit such reinstatement or (B) from
Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section
4.02 is not then satisfied (treating such reinstatement as an L/C Credit Extension for purposes of
this clause) and, in each case, directing the L/C Issuer not to permit such reinstatement.




     (c) Drawings and Reimbursements; Funding of Participations.



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




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




28









 





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




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




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




          (vi) If any Lender fails to make available to Agent for the account of the L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing provisions of this Section
2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and
a rate determined by the L/C issuer in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily charged by the LC/
Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees
as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the
relevant Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case
may be. A certificate of the L/C Issuer submitted to any Lender (through Agent) with respect to
any amounts owing under this clause (vi) shall be conclusive absent manifest error.




29









 





     (d) Repayment of Participations.



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




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




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



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




          (ii) the existence of any claim, counterclaim, setoff, defense or other right that Borrower
may have at any time against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions contemplated hereby or by
such Letter of Credit or any agreement or instrument relating thereto, or any unrelated
transaction;




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




          (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft
or certificate that does not strictly comply with the terms of such Letter of Credit; or any
payment made by the L/C Issuer under such Letter of Credit to




30









 




any Person purporting to be a trustee
in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor Relief Law; or




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



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




     (f) Role of L/C Issuer. Each Lender and Borrower agree that, in paying any drawing
under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such
document. None of the L/C Issuer, Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the approval of Lenders or
the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or Issuer Document.
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this assumption is not intended
to, and shall not, preclude Borrower’s pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, Agent, any
of their respective Related Parties nor any correspondent, participant or assignee of the L/C
Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v)
of Section 2.03(e); provided, however, that anything in such clauses to the contrary
notwithstanding, Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable
to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by Borrower which Borrower proves were caused by the L/C Issuer’s
willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any notice or information to
the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer



31









 







or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.



     (g) Cash Collateral. Upon the request of Agent, (i) if the L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C
Borrowing, or (ii) if, as of the L/C Expiration Date, any L/C Obligation for any reason remains
outstanding, Borrower shall, in each case, immediately Cash Collateralize the then Outstanding
Revolving Loan Amount of all L/C Obligations. Sections 2.05 and 8.02(c) set forth certain
additional requirements to deliver Cash Collateral hereunder. For purposes hereof, “Cash
Collateralize” means to pledge and deposit with or deliver to Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to Agent and the L/C Issuer (which
documents are hereby consented to by Lenders). Derivatives of such term have corresponding
meanings. Borrower hereby grants to Agent, for the benefit of the L/C Issuer and Lenders, a
security interest in all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing. Cash collateral shall be maintained in blocked, interest bearing deposit accounts
at Bank of America.



     (h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer
and Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce at the time of
issuance shall apply to each commercial Letter of Credit.



     (i) L/C Fees. Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage a L/C fee (the “L/C Fee”) for each standby Letter
of Credit equal to 1% per annum times the daily amount available to be drawn under such Letter of
Credit. For purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.
L/C Fees shall be (i) due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the issuance of such
Letter of Credit, on the L/C Expiration Date and thereafter on demand and (ii) computed on a
quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the
daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by
the Applicable Rate separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the request of the
Required Lenders, while any Event of Default exists, all L/C Fees shall accrue at the Default Rate.



     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee (i)



32









 







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



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



     2.04 Repayment of Loans
(a) Borrower shall repay to Lenders on the Maturity Date the aggregate principal amount of all
Revolving Loans outstanding on such date.



     (b) The Borrower shall repay to the Agent for the ratable account of the Lenders the
percentage of the aggregate principal amount of the Term Loan as follows (with adjustment for any
prepayments made under Section 2.05), each such payment to be made on the last Business Day
of the applicable quarterly period:



	 	 	 	 	 
	Quarter Ending	 	Payment
	 
	 	 	 	 
	January 31, 2007
	 	 	1.25	%
	 
	 	 	 	 
	April 30, 2007
	 	 	1.25	%
	 
	 	 	 	 
	July 31, 2007
	 	 	1.25	%
	 
	 	 	 	 
	October 31, 2007
	 	 	1.25	%
	 
	 	 	 	 
	January 31, 2008
	 	 	2.50	%
	 
	 	 	 	 
	April 30, 2008
	 	 	2.50	%






33









 






	 	 	 	 	 
	Quarter Ending	 	Payment
	 
	 	 	 	 
	July 31, 2008
	 	 	2.50	%
	 
	 	 	 	 
	October 31, 2008
	 	 	2.50	%
	 
	 	 	 	 
	January 31, 2009
	 	 	3.75	%
	 
	 	 	 	 
	April 30, 2009
	 	 	3.75	%
	 
	 	 	 	 
	July 31, 2009
	 	 	3.75	%
	 
	 	 	 	 
	October 31, 2009
	 	 	3.75	%
	 
	 	 	 	 
	January 31, 2010
	 	 	5.00	%
	 
	 	 	 	 
	April 30, 2010
	 	 	5.00	%
	 
	 	 	 	 
	July 31, 2010
	 	 	5.00	%
	 
	 	 	 	 
	October 31, 2010
	 	 	5.00	%
	 
	 	 	 	 
	January 31, 2011
	 	 	5.00	%
	 
	 	 	 	 
	April 30, 2011
	 	 	5.00	%
	 
	 	 	 	 
	July 31, 2011
	 	 	5.00	%
	 
	 	 	 	 
	October 31, 2011
	 	 	5.00	%
	 
	 	 	 	 
	January 31, 2012
	 	 	7.50	%
	 
	 	 	 	 
	April 30, 2012
	 	 	7.50	%
	 
	 	 	 	 
	July 31, 2012
	 	 	7.50	%
	 
	 	 	 	 
	October 31, 2012
	 	 	7.50	%





; provided that on the Maturity Date, all Loans outstanding on such date shall be repaid.




     2.05 Prepayments
(a) Borrower may, upon notice to Agent, at any time or from time to time voluntarily prepay
the Term Loan or Revolving Loans in whole or in part without premium or penalty; provided that such
notice must be received by Agent not later than 11:00 a.m. three Business Days prior to any date of
prepayment of Eurodollar Rate Loans. Each such notice shall specify the date and amount of such



34









 







prepayment and the Type(s) of Committed Loans to be prepaid and, if Eurodollar Rate Loans are to be
prepaid, the Interest Period(s) of such Loans. Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such
prepayment. If such notice is given by Borrower, Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with any additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Committed Loans of Lenders in accordance with their respective
Applicable Percentages.



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



     (c) Until such time as the ratio of Funded Debt to EBITDA is less than 2.0:1.0, on or before
October 1 of each year, beginning in 2008, Borrower shall pay to Agent for the ratable account of
the Lenders an amount equal to twenty-five (25%) percent of Free Cash Flow for the immediately
preceding fiscal year; provided, however, if the financial statements delivered by
the Borrower pursuant to Section 6.01(a) and the Compliance Certificate delivered by the Borrower
pursuant to Section 6.02(a) evidence the Borrower’s satisfaction of the Financial Covenants in
Section 6.12 through the fiscal year ending May 31, 2008, the prepayment required under this
Section 2.05(c) shall be the lesser of twenty-five (25%) percent of Free Cash Flow for the
immediately preceding fiscal year or $1,500,000.



     (d) All prepayments under this Section 2.05 shall be applied to installments due under the
Term Loan in the inverse order of their maturity.



     2.06 Termination or Reduction of Commitments. Borrower may, upon notice to Agent, terminate the Aggregate Revolving Loan Commitments, or
from time to time permanently reduce the Aggregate Revolving Loan Commitments; provided that (i)
any such notice shall be received by Agent not later than 11:00 a.m. five Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate
amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) Borrower shall
not terminate or reduce the Aggregate Revolving
Loan Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Revolving Loan Outstandings would exceed the
Aggregate Revolving Loan Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Revolving Loan Commitments, the L/C Sublimit exceeds the amount of the Aggregate
Revolving



35









 







Loan Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. Agent will promptly notify the Lenders of any such notice of termination or reduction of
the Aggregate Revolving Loan Commitments. Any reduction of the Aggregate Revolving Loan
Commitments shall be applied to the Revolving Loan Commitment of each Lender according to its
Applicable Percentage. All fees accrued until the effective date of any termination of the
Aggregate Revolving Loan Commitments shall be paid on the effective date of such termination.



     2.07 Interest.



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



     (b) (i) If any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.



          (ii) If any amount (other than principal of any Loan) payable by Borrower under any Loan
Document is not paid when due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.




          (iii) Upon the request of the Required Lenders, while any Event of Default exists, Borrower
shall pay interest on the principal amount of all outstanding Obligations hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.




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




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



36









 





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



     (a) Commitment Fee. Borrower shall pay to Agent for the account of each Lender in
accordance with its Applicable Percentage, a commitment fee equal to .375% of the daily amount by
which the Aggregate Revolving Loan Commitments exceed the sum of (i) the Outstanding Revolving Loan
Amount of Revolving Loans and (ii) the Outstanding Revolving Loan Amount of L/C Obligations,
calculated on the basis of a 360-day year and the number of actual days elapsed. The commitment
fee shall accrue at all times during the Availability Period, including at any time during which
one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the last day of
the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there
is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.



     (b) Lenders’ Upfront Fee. On the Closing Date, Borrower shall pay to Agent, for the
account of each Lender in accordance with their respective Applicable Percentages, an upfront fee
in an amount of $200,000. Such upfront fees are for the credit facilities committed by Lenders
under this Agreement and are fully earned on the date paid. The upfront fee paid to each Lender is
solely for its own account and is nonrefundable for any reason whatsoever.



     2.09 Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of
America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of fees and interest shall be made on the basis of
a 360-day year and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for
the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the
same day on which it is made shall, subject to Section 2.11(a), bear interest for one day. Each
determination by Agent of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.



     2.10 Evidence of Debt.



     (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by Agent in the ordinary course of business. The accounts or
records maintained by Agent and each Lender shall be conclusive absent manifest error of the amount
of the Credit Extensions made



37









 







by Lenders to Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or otherwise affect the
obligation of Borrower hereunder to pay any amount owing with respect to the Obligations. In the
event of any conflict between the accounts and records maintained by any Lender and the accounts
and records of Agent in respect of such matters, the accounts and records of Agent shall control in
the absence of manifest error. Upon the request of any Lender made through Agent, Borrower shall
execute and deliver to such Lender (through Agent) a Note, which shall evidence such Lender’s Loans
in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with respect
thereto.



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



     2.11 Payments Generally; Agent’s Clawback.



     (a) (i) General. All payments to be made by Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by Borrower hereunder shall be made to Agent, for the account of the
respective Lenders to which such payment is owed, at the Agent’s Office in Dollars and in
immediately available funds not later than 12:00 noon on the date specified herein. Agent will
promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds by wire transfer to such Lender’s Lending Office. All
payments received by Agent after 12:00 noon shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any payment to be
made by Borrower shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.



          (ii) On each date when the payment of any principal, interest or fees are due hereunder or
under any Note, Borrower agrees to maintain on deposit in an ordinary checking account maintained
by Borrower with Agent (as such account shall be designated by Borrower in a written notice to
Agent from time to time, the “Borrower Account”) an amount sufficient to pay such
principal, interest or fees in full on such date. Borrower hereby authorizes Agent (A) to deduct
automatically all principal, interest or fees when due hereunder or under any Note from the
Borrower Account, and (B) if and to the extent any payment of principal, interest or fees under
this Agreement or any Note is not made when due to deduct any such amount from any or all of the




38









 




accounts of Borrower maintained at Agent. Agent agrees to provide written notice to Borrower of
any automatic deduction made pursuant to this Section 2.11(a)(ii) showing in reasonable detail the
amounts of such deduction. Lenders agree to reimburse Borrower promptly based on their Applicable
Percentage for any amounts deducted from such accounts in excess of amount due hereunder and under
any other Loan Documents.




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



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




39









 




Federal Funds Rate and a rate determined by Agent in
accordance with banking industry rules on interbank compensation. A notice of Agent to any Lender
or Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.




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



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



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



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



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




40









 





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



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




     ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY



     3.01 Taxes.



     (a) Payments Free of Taxes. Any and all payments by Borrower to or on account of any
obligation of Borrower hereunder or under any other Loan Document shall be made free and clear of
and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
Borrower shall be required by any applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section), Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Law.



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



     (c) Indemnification by Borrower. Borrower shall indemnify Agent, each Lender and the
L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by Agent, such Lender or the L/C Issuer, as the case may
be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender or the L/C Issuer (with a copy to Agent), or by



41









 







Agent
on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest
error.



     (d) Status of Lenders. Any Lender, if requested by Borrower or Agent, shall deliver
such documentation prescribed by applicable law or reasonably requested by Borrower or Agent as
will enable Borrower or Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements.



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



     3.02 Illegality. If any Lender determines that any applicable Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Borrower through Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies Agent and Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of such notice,
Borrower shall, upon demand from such Lender (with a copy to Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, Borrower shall also pay accrued
interest on the amount so prepaid or converted and all amounts due under Section 3.05 in accordance
with the terms thereof due to such prepayment or conversion.



42









 





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



     3.04 Increased Costs.



     (a) Increased Costs Generally. If any Change in Law applicable to the
Lender or the L/C Issuer shall:



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




          (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar
Rate Loan made by it, or change the basis of taxation of payments to such Lender or the L/C Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the L/C
Issuer); or




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



and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to
make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in,
issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or
to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or the L/C


43









 






Issuer, Borrower will pay to such Lender or the L/C Issuer, as
the case may be, such additional amount or amounts as will compensate such Lender or the L/C
Issuer, as the case may be, for such additional costs incurred or reduction suffered.




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



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



     (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that
Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies Borrower
of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the
L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the nine-month period referred to
above shall be extended to include the period of retroactive effect thereof).



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



44









 





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



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



including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. Borrower shall also pay any customary administrative
fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts
payable by Borrower to Lenders under this Section 3.05, each Lender shall be deemed to have funded
each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar
Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate
Loan was in fact so funded.



     3.06 Mitigation Obligations. If any Lender requests compensation under Section 3.04, or Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for funding or booking
its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii)
in each case, would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender in connection with any such designation or assignment.



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



     ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS



     4.01 Conditions of Initial Credit Extension. The obligation of the L/C Issuer and each Lender to make its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:



45









 





     (a) Agent’s receipt of the following, each of which shall be originals or telecopies (followed
promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer
of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form and substance
satisfactory to Agent and each of the Lenders:



          (i) executed counterparts of this Agreement, all Collateral Documents and the Guaranty,
sufficient in number for distribution to Agent, each Lender and Borrower;




          (ii) a Note executed by Borrower in favor of each Lender requesting such Note;




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




          (iv) such documents and certifications as Agent may reasonably require to evidence that each
Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;




          (v) a favorable opinion of counsel to the Loan Parties acceptable to Agent addressed to Agent
and each Lender, as to the matters set forth concerning the Loan Parties and the Loan Documents in
the form attached hereto as Exhibit F;




          (vi) a certificate of a Responsible Officer of each Loan Party either (A) attaching copies of
all consents, licenses and approvals required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan Party of the Loan Documents to
which it is a party, and such consents, licenses and approvals shall be in full force and effect,
or (B) stating that no such consents, licenses or approvals are so required;




          (vii) evidence that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect;




46









 





          (viii) a duly completed Compliance Certificate as of the last day of the fiscal quarter of
Borrower most recently ended prior to the Closing Date, signed by a Responsible Officer of
Borrower;




          (ix) evidence that all commitments under the Amended and Restated Revolving Credit, Term Loan
and Security Agreement dated August 8, 2003, as amended, among Borrower and certain of its
Subsidiaries and PNC Bank National Association, as lender and as agent (the “Existing Credit
Agreement”) have been or concurrently with the Closing Date are being terminated, and all
outstanding amounts thereunder paid in full and all Liens securing obligations under the Existing
Credit Agreement have been or concurrently with the Closing Date are being released;




          (x) a forecast for the Borrower’s fiscal year ending May 31, 2007, in the same format as
required for the 2008 fiscal year forecast, all as described in Section 6.01(e); and




          (xi) such other assurances, certificates, documents, consents or opinions as Agent, the L/C
Issuer or the Required Lenders reasonably may require.




     (b) Any fees required to be paid on or before the Closing Date shall have been paid.



     (c) Unless waived by Agent, Borrower shall have paid the reasonable fees, charges and
disbursements of counsel to Agent (directly to such counsel if requested by Agent) to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that the aggregate
amount of such fees, exclusive of disbursements, shall not exceed $65,000 for work performed prior
to the Closing Date and that such estimate shall not thereafter preclude a final settling of
accounts between Borrower and Agent).



     (d) The Closing Date shall have occurred on or before November 30, 2006.


Without limiting the generality of the provisions of Section 9.04, for purposes of determining
compliance with the conditions specified in this Section 4.01, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.




     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension is subject to the
following conditions precedent:



47









 





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



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



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



     (d) Agent shall have received, in form and substance satisfactory to it, such other
assurances, certificates, documents or consents related to the foregoing as Agent or the Required
Lenders reasonably may require.


Each Request for Credit Extension submitted by Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of
the date of the applicable Credit Extension.




     ARTICLE V. REPRESENTATIONS AND WARRANTIES



     Borrower represents and warrants to Agent and the Lenders that:



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



     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which
such Person is party, have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of such Person’s Organization



48









 







Documents; (b) conflict with or result in any breach or contravention of, or the creation of any
Lien under, or require any payment to be made under (i) any Contractual Obligation to which such
Person is a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate any applicable Law
except in the case of subsections (b) and (c) where such breach, contravention or payment could not
reasonably be expected to have a Material Adverse Effect.



     5.03 Governmental Authorization; Other Consents.
No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement
or any other Loan Document except for such filings as may be necessary to perfect the security
interest of the Agent in the Collateral.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have
been, duly executed and delivered by each Loan Party that is party thereto. This Agreement
constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms.



     5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event.



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



     (b) The unaudited consolidated balance sheets of Borrower and its Consolidated Subsidiaries
dated August 31, 2006, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial condition of Borrower and
its Consolidated Subsidiaries as of the date thereof and their results of operations for the period
covered



49









 







thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to
normal year-end audit adjustments.



     (c) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.



     (d) To the best knowledge of Borrower, no Internal Control Event exists or has occurred since
the date of the Audited Financial Statements that has resulted in or could reasonably be expected
to result in a misstatement in any material respect, in any financial information delivered or to
be delivered to Agent or Lenders, of (i) covenant compliance calculations provided hereunder or
(ii) the assets, liabilities, financial condition or results of operations of Borrower and its
Subsidiaries on a consolidated basis.



     (e) The forecasted balance sheet and statements of income and cash flows of Borrower and its
Consolidated Subsidiaries delivered pursuant to Section 6.01(c) were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light of the conditions
existing at the time of delivery of such forecasts, and represented, at the time of delivery,
Borrower’s best estimate of its future financial condition and performance.



     5.06 Litigation.
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of
Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against Borrower or any of its Subsidiaries
or against any of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) except
as specifically disclosed in Schedule 5.06, either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has
been no adverse change in the status, or financial effect on any Loan Party or any Subsidiary
thereof, of the matters described on Schedule 5.06.



     5.07 No Default.
Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other Loan Document.



     5.08 Ownership of Property; Liens. Each of Borrower and each Subsidiary has good record and marketable title in fee simple to,
or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of Borrower and its
Subsidiaries is subject



50









 







to no Liens, other than Liens permitted by Section 7.01, including Liens
listed on Schedule 7.01.



     5.09 Environmental Compliance. Borrower and its Subsidiaries conduct in the ordinary course of business a review of the
effect of existing Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations and properties, and
as a result thereof Borrower has reasonably concluded that, except as specifically disclosed in
Schedule 5.09, such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.



     5.10 Insurance. The properties of Borrower and its Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of Borrower, in such amounts (after giving effect to
any self-insurance compatible with the following standards), with such deductibles and covering
such risks as Borrower reasonably believes appropriate. All insurance with respect to the
Collateral shall (i) contain a breach of warranty clause in favor of the Agent, (ii) provide that
no cancellation, reduction in amount or change in coverage thereof shall be effective until at
least 30 days after receipt by the Agent of written notice thereof and (iii) be reasonably
satisfactory in all material respects to the Agent.



     5.11 Taxes. Borrower and its Subsidiaries have filed all foreign and domestic Federal, state and other
material tax returns and reports required to be filed, and have paid all foreign and domestic
Federal, state and other material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and payable, except those
which are being contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.



     5.12 ERISA Compliance.



     (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other
Federal or state Laws except for any failure to comply which, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Plan that
is intended to qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification. Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any such Plan.



51









 





     (b) There are no pending or, to the best knowledge of Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan that could be
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.



     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability in excess of the Threshold Amount; (iii) neither Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of notice under Section
4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to
a Multiemployer Plan; and (v) neither Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.



     5.13 Subsidiaries. As of the Closing Date, Borrower has no Subsidiaries other than those specifically
disclosed in Part (a) of Schedule 5.13, and the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by a Loan
Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens.
Borrower has no equity investments in any other corporation or entity other than those specifically
disclosed in Part(b) of Schedule 5.13. All of the outstanding Equity Interests in Borrower
have been validly issued and are fully paid and nonassessable and are owned by the parties
specified and in the amounts specified on Part (c) of Schedule 5.13 free and clear of all
Liens.



     5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.



     (a) Neither Borrower nor any Subsidiary is engaged or will engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock.



     (b) None of Borrower, any Person Controlling Borrower, or any Subsidiary (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.



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     5.15 Disclosure. Borrower has disclosed to Agent and Lenders all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.



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



     5.17 Taxpayer Identification Number. Borrower’s true and correct U.S. taxpayer identification number is set forth on
Schedule 10.02.



     5.18 Intellectual Property; Licenses, Etc. Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To the best knowledge of
Borrower, no slogan or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by Borrower or any Subsidiary infringes
upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is
pending or, to the best knowledge of Borrower, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.



     5.19 Rights in Collateral; Priority of Liens. Borrower and each other Loan Party own the property granted by it as Collateral under the
Collateral Documents, free and clear of any and all Liens in favor of third parties, other than
Liens permitted under Section 7.01, including Liens set forth on Schedule 7.01. Upon the
proper filing of UCC financing statements and trademark and patent assignments, the Liens granted
pursuant to the Collateral Documents will constitute valid and enforceable first, prior and
perfected Liens in favor of Agent, for the
ratable benefit of Agent and Lenders on all collateral on which a lien may be perfected by the
filing of such UCC financing statements and trademark and patent assignments, subject only to the
Liens set forth on Schedule 7.01.



     ARTICLE VI. AFFIRMATIVE COVENANTS



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




     6.01 Financial Statements. Deliver to Agent a sufficient number of copies for delivery by Agent to each Lender, in
form and detail satisfactory to Agent and the Required Lenders:



     (a) as soon as available, but in any event within 120 days after the end of each fiscal year
of Borrower, a consolidated balance sheet of Borrower and its Consolidated Subsidiaries as at the
end of such fiscal year, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance
with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of
Amper, Politziner & Mattia P.C. or another independent certified public accounting firm of
recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall
be prepared in accordance with generally accepted auditing standards and applicable Securities Laws
and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to the absence of any
material misstatement.



     (b) as soon as available, but in any event within 45 days after the end of each fiscal quarter
of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the
portion of Borrower’s fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be
certified by the chief executive officer, chief financial officer, treasurer or controller of
Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity
and cash flows of Borrower and its Consolidated Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes; and



     (c) as soon as available, but in any event at least 15 days before the end of each fiscal year
of Borrower, forecasts prepared by management of Borrower, in form satisfactory to Agent and the
Required Lenders, of consolidated balance sheets and statements of income or operations of Borrower
and its Consolidated Subsidiaries for the immediately following fiscal year prepared (i) on a
quarterly basis in the case of the forecast for Borrower’s fiscal year ending May 31, 2008 or (ii)
an annual basis in the case of the forecasts for each subsequent fiscal year of Borrower (including
the fiscal year in which the Maturity Date occurs).



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     6.02 Certificates; Other Information. Deliver to Agent a sufficient number of copies for delivery by Agent to each Lender, in
form and detail satisfactory to Agent and the Required Lenders:



     (a) concurrently with the delivery of the financial statements referred to in Sections 6.01(a)
and (b), a duly completed Compliance Certificate signed by the chief financial officer or president
of Borrower;



     (b) promptly after any request by Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or the audit committee
of the board of directors) of Borrower by independent accountants in connection with the accounts
or books of Borrower or any Subsidiary, or any audit of any of them;



     (c) promptly after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of Borrower, and copies of any
annual, regular, periodic and special reports and registration statements which Borrower may file
or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, and not otherwise required to be delivered to Agent pursuant
hereto;



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



     (e) promptly, and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence received from the
Securities and Exchange Commission (or comparable agency in any applicable non-U.S. jurisdiction)
concerning any investigation or possible investigation or other inquiry by such agency regarding
financial or other operational results of any Loan Party or any Subsidiary thereof; and



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


Borrower hereby acknowledges that (a) Agent will make available to Lenders and the L/C Issuer
materials and/or information provided by or on behalf of Borrower hereunder (collectively,
“Borrower Materials”) by posting Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to
Borrower or its securities) (each, a “Public Lender”).


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Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” Borrower shall
be deemed to have authorized Agent, the L/C Issuer and the Lenders to treat such Borrower Materials
as not containing any material non-public information with respect to Borrower or its securities
for purposes of United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as set forth in
Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor;” and (z) Agent shall be entitled to
treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor”.




     6.03 Notices. Promptly notify Agent and each Lender for which the Agent has provided an address:



     (a) of the occurrence of any Default;



     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect,



     (c) of the occurrence of any ERISA Event;



     (d) of any material change in accounting policies or financial reporting practices by Borrower
or any Subsidiary, and



     (e) of Borrower’s determination at any time of the occurrence or existence of any Internal
Control Event.


Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of Borrower setting forth details of the occurrence referred to therein and stating what action
Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this Agreement and any other
Loan Document that have been breached.




     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and
liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon
it or its properties or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained
by Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and (c) all Indebtedness, as and when due and payable, but



56









 







subject to any
subordination provisions contained in any instrument or agreement evidencing such Indebtedness.



     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization except in a transaction permitted
by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of its business,
except to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) preserve or renew any registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to have a Material
Adverse Effect.



     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary
in the operation of its business in good working order and condition, ordinary wear and tear
excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect.



     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of
Borrower, insurance with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business, of such types and
in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days’ prior notice to Agent
of termination, lapse or cancellation of such insurance. Borrower shall cause its carriers to name
the Agent as additional insured and, in the case of property or casualty insurance for all tangible
Collateral, first loss payee, and shall provide the Agent with a certificate or certificates
evidencing such coverages and the payment of premiums therefore, on or before the Closing Date and
at such times as the insurance in question is modified or renewed.



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



     6.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries
in conformity with GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of



57









 







record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over Borrower or such
Subsidiary, as the case may be. Borrower shall maintain at all times books and records pertaining
to the Collateral in such detail, form and scope as Agent or any Lender shall reasonably require.



     6.10 Inspection Rights. Permit representatives and independent contractors of Agent and each Lender to visit and
inspect any of its properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants, all at the expense of Borrower and at such
reasonable times during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to Borrower; provided, however, that when an Event of Default exists
Agent or any Lender (or any of their respective representatives or independent contractors) may do
any of the foregoing at the expense of Borrower at any time during normal business hours and
without advance notice.



     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to refinance all of the Borrower’s existing
Funded Debt, to support working capital needs (including the issuance of Letters of Credit) and
finance acquisitions as permitted hereunder.



     6.12 Financial Covenants



     (a) EBITDA. Maintain on a consolidated basis EBITDA of not less than the following
amounts calculated for the 12-month periods ending on the following dates:



	 	 	 	 	 
	Fiscal Year	 	Minimum Annual EBITDA
	 
	 	 	 	 
	2007
	 	$	11,000,000	 
	2008
	 	$	13,900,000	 
	2009
	 	$	16,000,000	 
	2010
	 	$	17,000,000	 
	2011
	 	$	17,500,000	 
	2012
	 	$	18,000,000	 






     (b) Debt Service Coverage Ratio. Maintain on a consolidated basis a Debt Service
Coverage Ratio of at least 1.10:1.0.


This ratio will be calculated at the end of each reporting period for which this Agreement requires
Borrower to deliver financial statements, using the results of the twelve-month period ending with
that reporting period. The current portion of long-term liabilities will be measured as of the
last day of the calculation period.



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     (c) Funded Debt to EBITDA Ratio. Maintain on a consolidated basis a ratio of Funded
Debt to EBITDA not exceeding 3.25:1.0 on the Closing Date, and the ratios indicated for each period
specified below:



	 	 	 
	Period	 	Ratio
	 
	 	 
	Through 5/31/08

	 	3.0:1.0
	 
	 	 
	From 6/1/08

through 5/31/09

	 	2.75:1.0
	 
	 	 
	From 6/1/09 and thereafter

	 	2.5:1.0





This ratio will be calculated at the end of each reporting period for which this Agreement requires
Borrower to deliver financial statements, using the results of the twelve-month period ending with
that reporting period.




     6.13 Additional Guarantors. Notify Agent at the time that any Person becomes a Subsidiary, and promptly thereafter (and
in any event within 30 days), cause such Person that is a Majority-Owned Subsidiary to (a) become a
Guarantor by executing and delivering to Agent a counterpart of the Guaranty or such other document
as Agent shall deem appropriate for such purpose and (b) deliver to Agent documents of the types
referred to in clauses (iii) and (iv) of Section 4.01(a), all in form, content and scope reasonably
satisfactory to Agent, provided that such Subsidiary has assets or operating income that represents
5% or more of the assets or operating income of Borrower and/or was formed or incorporated in the
United States.



     6.14 Collateral Records. To execute and deliver promptly, and to cause each other Loan Party to execute and deliver
promptly, to Agent, from time to time, solely for Agent’s convenience in maintaining a record of
the Collateral, such written statements and schedules as Agent may reasonably require designating,
identifying or describing the Collateral. The failure by Borrower or any other Loan Party,
however, to promptly give Agent such statements or schedules shall not affect, diminish, modify or
otherwise limit the Liens on the Collateral granted pursuant to the Collateral Documents.



     6.15 Security Interests. To, and to cause each other Loan Party to, (a) defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein, (b) comply with the
requirements of all United States state and federal laws in order to grant to Agent and Lenders
valid and perfected security interests in the Collateral subject only to Liens set forth on
Schedule 7.01, with perfection, in the case of any investment property, deposit account or
letter of credit, being effected by giving Agent control of such investment property or deposit
account or letter of credit, rather than by the filing of a Uniform Commercial Code (“UCC”)
financing statement with respect to such investment property, and (c) do whatever Agent may
reasonably request, from time to time, to effect the purposes of this Agreement and the



59









 







other Loan
Documents, including filing notices of liens, UCC financing statements, fixture filings and
amendments, renewals and continuations thereof; cooperating with Agent’s representatives; keeping
stock records; using reasonable efforts to obtain waivers from landlords and mortgagees and from
warehousemen and their landlords and mortgages; and paying claims which might, if unpaid, become a
Lien on the Collateral. Agent is hereby authorized by Borrower to file any UCC financing
statements covering the Collateral whether or not Borrower’s signatures appear thereon.



     6.16 Deposits. The Borrower shall maintain its primary deposit relationship, including, without
limitation, operating accounts and cash management services with the Agent, such services to be
provided at reasonable costs to Borrower.



     ARTICLE VII. NEGATIVE COVENANTS


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




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



     (a) Liens pursuant to any Loan Document;



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



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



     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of more than 30 days
or which are being contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the applicable Person;



60









 





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



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



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



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



     (i) Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens
do not at any time encumber any property other than the property financed by such Indebtedness and
(ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition.



     7.02 Investments
Make any Investments, except:



     (a) Investments held by Borrower or such Subsidiary in the form of cash equivalents or
short-term marketable debt securities;



     (b) advances to officers, directors and employees of Borrower and Subsidiaries in an aggregate
amount not to exceed $250,000 at any time outstanding, for travel, entertainment, relocation and
analogous ordinary business purposes;



     (c) Investments of Borrower in any Wholly-Owned Subsidiary; investments of Borrower or any
Wholly-Owned Subsidiary in other Subsidiaries, not to exceed $2,000,000 in any 12-month period; and
Investments of any Wholly-Owned Subsidiary in Borrower or in another Wholly-Owned Subsidiary;



     (d) Investments of Borrower or its Subsidiaries for strategic purposes in non-Subsidiary joint
ventures, not to exceed $2,000,000 individually in any 12-month period; provided,
however, Investments permitted under this Section 7.02(c) shall not be construed to
increase the $5,000,000 limit on new acquisitions described in 7.02(f) below;



61









 





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



     (f) Investments in acquisitions (i) that do not exceed $7,500,000 in any 12-month period, (ii)
of an entity that is in a line of business substantially similar to the business conducted by
Borrower or its Subsidiaries, and (iii) for which pro-forma compliance with the financial covenants
contained in Section 6.12 can be evidenced by Borrower to the reasonable satisfaction of Agent and
Required Lenders; provided, however, that in all such instances notice of such acquisition shall be
delivered to the Agent no later than 15 days prior to the date of the closing of such acquisition,
and all material acquisition documents shall promptly be delivered to the Agent upon the Agent’s
request. Notwithstanding the foregoing, the aggregate consideration paid by Borrower for any one
acquisition shall not exceed $2,000,000, except that Borrower shall have the one-time right to make
an acquisition for an aggregate consideration in excess of $2,000,000, but not exceeding
$2,500,000, provided that all other conditions in this Section 7.2(f) are met; and



     (g) Guarantees permitted by Section 7.03.



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



     (a) Indebtedness under the Loan Documents;



     (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that (i) the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and (ii) the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if any), and other material terms
taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of
any agreement entered into and of any instrument issued in connection therewith, are no less
favorable in any material respect to the Loan Parties or Lenders than the terms of any agreement or
instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the
interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness
does not exceed the then applicable market interest rate;



62









 





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



     (d) obligations (contingent or otherwise) of Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments, investments, assets, or
property held or reasonably anticipated by such Person, or changes in the value of securities
issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such
Swap Contract does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;



     (e) Indebtedness in respect of capital leases, Synthetic Lease Obligations and purchase money
obligations for fixed or capital assets within the limitations set forth in Section 7.01(i);
provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $10,000,000; and



     (f) Assumed indebtedness incurred in connection with acquisitions permitted under this
Agreement or subordinated indebtedness issued in connection with payment for acquisitions permitted
under this Agreement that is subordinated to payment of the Obligations on terms approved by the
Agent in writing, or is otherwise approved by the Agent in writing, provided that the covenants set
forth under Section 6.12 shall at all times continue to be satisfied, as tested on a pro forma
basis.



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



     (a) any Subsidiary may merge with (i) Borrower, provided that Borrower shall be the continuing
or surviving Person, or (ii) any one or more other Subsidiaries, provided that when any
Majority-Owned Subsidiary is merging with another Subsidiary, the Majority-Owned Subsidiary shall
be the continuing or surviving Person, and, provided further that if a Guarantor is merging with
another Subsidiary, the Guarantor shall be the surviving Person; and



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




63












 





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



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



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



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



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



     (e) Dispositions permitted by Section 7.04; and



     (f) Dispositions of up to $500,000 individually or in a series of related Dispositions.



provided, however, that any Disposition pursuant to clauses (a) through (e) shall be for fair
market value.



     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, or issue or sell any Equity Interests, except that, so long as
no Default shall exist at the time of any action described below or would result therefrom:



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



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



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



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     (d) Borrower may make Restricted Payments to the extent permitted under the Subordination
Agreement.



     7.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of
business conducted by Borrower and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto.



     7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of Borrower, whether or not in
the ordinary course of business, other than on fair and reasonable terms substantially as favorable
to Borrower or such Subsidiary as would be obtainable by Borrower or such Subsidiary at the time in
a comparable arm’s length transaction with a Person other than an Affiliate, provided that the
foregoing restriction shall not apply to transactions between or among Borrower and any Guarantor
or between and among Guarantors, so long as the effect of such transactions is not to circumvent
the limitations contained in Section 7.02.



     7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan
Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to Borrower
or any Guarantor or to otherwise transfer property to Borrower or any Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of Borrower or (iii) of Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that
this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any
holder of Indebtedness permitted under Section 7.03(e) solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person.



     7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock (within
the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.



     ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES



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



     (a) Non-Payment. Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii)
within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or
any fee due hereunder, or (iii) within five days after



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the same becomes due, any other amount
payable hereunder or under any other Loan Document; or



     (b) Specific Covenants. Borrower fails to perform or observe any term, covenant or
agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.07, 6.08, 6.10, 6.11, 6.12 or 6.13;
or Borrower fails to perform or observe any term, covenant or agreement contained Article VII, or
any Guarantor fails to perform or observe any term, covenant or agreement contained in Article III
of the Guaranty; or



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



     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of Borrower or any other Loan Party herein,
in any other Loan Document, or in any document delivered in connection herewith or therewith shall
be incorrect or misleading in any material respect when made or deemed made; or



     (e) Cross-Default. (i) Borrower or any Subsidiary (A) fails to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under
Swap Contracts), such failed payment having an aggregate principal amount (including any payments
owing due to acceleration caused by such failed payment) of more than the Threshold Amount, or (B)
fails to observe or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or
any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which Borrower or any Subsidiary is the Defaulting Party (as defined in
such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to
which Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the
Swap Termination Value owed by Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or



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     (f) Insolvency Proceedings, Etc. Any Loan Party institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of
its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief
Law relating to any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or
an order for relief is entered in any such proceeding; or



     (g) Inability to Pay Debts; Attachment. (i) Borrower or any Subsidiary becomes unable
or admits in writing its inability or fails generally to pay its debts as they become due, or (ii)
any writ or warrant of attachment or execution or similar process is issued or levied against all
or any material part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or



     (h) Judgments. There is entered against Borrower or any Subsidiary (i) one or more
final judgments or orders for the payment of money in an aggregate amount (as to all such judgments
or orders) exceeding the Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary
final judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced
by any creditor upon such judgment or order, or (B) there is a period of 10 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in
effect; or



     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC which, either individually or
in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (ii) Borrower
or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under
a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or



     (j) Invalidity of Loan Documents. This Agreement, any Collateral Document or any
Guaranty or any provision thereof, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any Loan Document or any provision thereof; or any
Loan Party denies that it has any or



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further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document or any provision thereof; or



     (k) Change of Control. There occurs any Change of Control with respect to Borrower
and/or any Guarantor except as permitted by Section 7.04 or 7.05; provided, however, that a Change
of Control resulting from the death of Sotirios Vahaviolos shall not constitute an Event of Default
if Borrower identifies and employs a replacement executive officer reasonably acceptable to the
Agent within 60 days; or



     (l) Material Adverse Effect. There occurs any event or circumstance that has a
Material Adverse Effect.



     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following actions:



     (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;



     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by Borrower;



     (c) require that Borrower Cash Collateralize the L/C Obligations (in an amount equal to the
then Outstanding Revolving Loan Amount thereof); and



     (d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies
available to it, the Lenders and the L/C Issuer under the Loan Documents;



provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and
all interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically
become effective, in each case without further act of Agent or any Lender.



     8.03 Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and



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payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by Agent in the following order:



First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including reasonable fees, charges and disbursements of counsel to
Agent and amounts payable under Article III), payable to Agent in its capacity as such;



Second, to payment of that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal, interest and L/C Fees) payable to Lenders and the L/C Issuer
(including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer
(including fees and time charges for attorneys who may be employees of any Lender or the L/C
Issuer) and amounts payable under Article III), ratably among them in proportion to the respective
amounts described in this clause Second payable to them;



Third, to payment of that portion of the Obligations constituting accrued and unpaid L/C
Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among Lenders and the
L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;



Fourth, to payment of that portion of the Obligations constituting unpaid principal of the
Loans and L/C Borrowings, ratably among Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Fourth held by them;



Fifth, to Agent for the account of the L/C Issuer, to Cash Collateralize that portion of
L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and



Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to Borrower or as otherwise required by applicable Law.



Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of
Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under
such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after
all Letters of Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.



     ARTICLE IX. AGENT



     9.01 Appointment and Authorization of Agent.



     (a) Each of the Lenders and the L/C issuer hereby irrevocably appoints Bank of America to act
on its behalf as Agent hereunder and under the other Loan Documents and authorizes Agent to take
such actions on its behalf and to exercise



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such powers as are delegated to Agent by the terms
hereof and thereof, together with such actions and powers as are reasonably incidental thereto.
The provisions of this Article are solely for the benefit of Agent, the Lenders and the L/C Issuer,
and neither Borrower nor any other Loan Party shall have rights as a third party beneficiary of any
of such provisions.



     (b) Agent shall also act as the “collateral agent” under the Loan Documents, and each of the
Lenders and the L/C Issuer hereby irrevocably appoints and authorizes Agent to act as the agent of
such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens
on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with
such powers and discretion as are reasonably incidental thereto. In this connection, Agent, as
“collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by Agent pursuant
to Section 9.05 or otherwise for purposes of holding or enforcing any Lien on the Collateral (or
any portion thereof) granted under the Collateral Documents, or for exercising any rights and
remedies thereunder at the direction of Agent), shall be entitled to the benefits of all provisions
of this Article IX and Article X, as though such co-agents, sub-agents and attorneys-in-fact were
the “collateral agent” under the Loan Documents as if set forth in full herein with respect
thereto.



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



     9.03 Exculpatory Provisions. Agent shall not have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing, Agent:



     (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;



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



70









 







counsel, may expose Agent to liability or that is contrary to any
Loan Document or applicable Law; and



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



     (d) Agent shall not be liable for any action taken or not taken by it (i) with the consent or
at the request of the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Sections 8.02 and 10.01) or (ii) in the absence of its own gross negligence or
willful misconduct. Agent shall be deemed not to have knowledge of any Default unless and until
written notice describing such Default is given to Agent by Borrower, a Lender or the L/C Issuer.
Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any other Loan Document,
(ii) the contents of any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement, instrument or
document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to Agent.



     9.04 Reliance by Agent. Agent shall be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper
Person. Agent also may rely upon any statement made to it orally or by telephone and believed by
it to have been made by the proper Person, and shall not incur any liability for relying thereon.
In determining compliance with any condition hereunder to the making of a Loan, or the issuance of
a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C
Issuer, Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer
unless Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to
the making of such Loan or the issuance of such Letter of Credit. Agent may consult with legal
counsel (who may be counsel for Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in accordance with the advice
of any such counsel, accountants or experts.



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



     9.06 Resignation of Agent. Agent may at any time give notice of its resignation to Lenders, the L/C Issuer and
Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with Borrower, to appoint a successor, which shall be a bank with an office
in the United States, or an Affiliate of any such bank with an office in the United States. If no
such successor shall have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of
Lenders and the L/C Issuer, appoint a successor Agent meeting the qualifications set forth above;
provided that if Agent shall notify Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any collateral security held by Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Agent shall
continue to hold such collateral security until such time as a successor Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to or through Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder
or under the other Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor. After the retiring
Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article
and Section 10.04 shall continue in effect for the benefit of such retiring Agent, its sub agents
and their respective Related Parties in respect of any actions taken or omitted to be taken by any
of them while the retiring Agent was acting as Agent.



Any resignation by Bank of America as Agent pursuant to this Section shall also constitute its
resignation as L/C Issuer. Upon the acceptance of a successor’s appointment as Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring L/C Issuer, (b)



72









 







the retiring L/C Issuer shall be discharged from all of
their respective duties and obligations hereunder or under the other Loan Documents, and (c) the
successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.



     9.07 Non-Reliance on Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance
upon Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and
without reliance upon Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder.



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, no Lender holding a title listed
on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as Agent, a Lender or the
L/C Issuer hereunder.



     9.09 Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, Agent (irrespective of whether the principal of any Loan or
L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Agent shall have made any demand on Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:



     (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in order to have the claims of
Lenders, the L/C Issuer and Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, the L/C Issuer and Agent and their respective agents and
counsel and all other amounts due Lenders, the L/C Issuer and Agent under Sections 2.03(i) and (j),
2.09 and 10.04) allowed in such judicial proceeding; and



     (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;



and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C



73









 







Issuer to make such
payments to Agent and, in the event that Agent shall consent to the making of such payments
directly to Lenders and the L/C Issuer, to pay to Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agent and its agents and counsel, and any
other amounts due Agent under Sections 2.08, 2.11 or 10.04. Nothing contained herein shall be
deemed to authorize Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or the L/C Issuer or to authorize Agent to vote in respect
of the claim of any Lender or the L/C Issuer in any such proceeding.



     9.10 Guaranty Matters. Each Lender and the L/C Issuer hereby irrevocably authorizes Agent, at its option and in
its discretion, to release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by Agent
at any time, each Lender and the L/C Issuer will confirm in writing Agent’s authority to release
any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.



     9.11 Collateral Matters.



     (a) Each Lender and the L/C Issuer hereby irrevocably authorizes and directs Agent to enter
into the Collateral Documents for the benefit of such Lender and the L/C Issuer. Each Lender and
the L/C Issuer hereby agrees, and each holder of any Note by the acceptance thereof will be deemed
to agree, that, except as otherwise set forth in Section 10.01, any action taken by the Required
Lenders, in accordance with the provisions of this Agreement or the Collateral Documents, and the
exercise by the Required Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and binding upon all of
Lenders and the L/C Issuer. Agent is hereby authorized (but not obligated) on behalf of all of
Lenders and the L/C Issuer, without the necessity of any notice to or further consent from any
Lender or the L/C Issuer from time to time prior to, an Event of Default, to take any action with
respect to any Collateral or Collateral Documents which may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to the Collateral Documents.



          (b) Each Lender and the L/C issuer hereby irrevocably authorize Agent, at its option and in
its discretion,



               (i) to release any Lien on any property granted to or held by Agent under any Loan Document
(A) upon termination of the Aggregate Revolving Loan Commitments and payment in full of all
Obligations (other than contingent indemnification obligations) and the expiration or termination
of all Letters of Credit, (B) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, (C) subject to Section 10.01, if approved,
authorized or ratified in writing by the Required Lenders, or (D) in connection with any
foreclosure sale or other disposition of Collateral after the occurrence of an Event of Default;
and



74









 





               (ii) to subordinate any Lien on any property granted to or held by Agent under any Loan
Document to the holder of any Lien on such property that is permitted by this Agreement or any
other Loan Document.



Upon request by Agent at any time, each Lender and the L/C Issuer will confirm in writing Agent’s
authority to release or subordinate its interest in particular types or items of Collateral
pursuant to this Section 9.11.



     (c) Subject to clause (b) above, Agent shall (and is hereby irrevocably authorized by each
Lender and the L/C Issuer to) execute such documents as may be necessary to evidence the release or
subordination of the Liens granted to Agent for the benefit of Agent and Lenders and the L/C Issuer
herein or pursuant hereto upon the applicable Collateral; provided that (i) Agent shall not be
required to execute any such document on terms which, in Agent’s opinion, would expose Agent to or
create any liability or entail any consequence other than the release or subordination of such
Liens without recourse or warranty and (ii) such release or subordination shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of Borrower or any
other Loan Party in respect of) all interests retained by Borrower or any other Loan Party,
including the proceeds of the sale, all of which shall continue to constitute part of the
Collateral. In the event of any sale or transfer of Collateral, or any foreclosure with respect to
any of the Collateral, Agent shall be authorized to deduct all expenses reasonably incurred by
Agent from the proceeds of any such sale, transfer or foreclosure.



     (d) Agent shall have no obligation whatsoever to any Lender, the L/C Issuer or any other
Person to assure that the Collateral exists or is owned by Borrower or any other Loan Party or is
cared for, protected or insured or that the Liens granted to Agent herein or in any of the
Collateral Documents or pursuant hereto or thereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular priority, or to
exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to Agent in this Section
9.11 or in any of the Collateral Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, given Agent’s own interest in the Collateral as one of
Lenders and that Agent shall have no duty or liability whatsoever to Lenders or the L/C Issuer.



     (e) Each Lender and the L/C Issuer hereby appoints each other Lender as agent for the purpose
of perfecting Lenders’ and the L/C Issuer’s security interest in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender or the L/C Issuer
(other than Agent) obtain possession of any such Collateral, such Lender or the L/C Issuer shall
notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such Collateral to
Agent or in accordance with Agent’s instructions.



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     ARTICLE X. MISCELLANEOUS



     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and
no consent to any departure by Borrower or any other Loan Party therefrom, shall be effective
unless in writing signed by the Required Lenders and Borrower or the applicable Loan Party, as the
case may be, and acknowledged by Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:



     (a) waive any condition set forth in Section 4.01(a) without the written consent of each
Lender; provided, however, in the sole discretion of Agent, only a waiver by Agent shall be
required with respect to immaterial matters or items specified in Section 4.01(a) (iii) or (iv)
with respect to which Borrower has given assurances satisfactory to Agent that such items shall be
delivered promptly following the Closing Date;



     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;



     (c) postpone any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts due to Lenders (or
any of them) hereunder or under any other Loan Document without the written consent of each Lender
directly affected thereby;



     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iii) of the second proviso to this Section 10.01) any fees or
other amounts payable hereunder or under any other Loan Document, without the written consent of
each Lender directly affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation
of Borrower to pay interest or L/C Fees at the Default Rate or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;



     (e) change Section 2.12 or Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender;



     (f) change any provision of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; or



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     (g) release any Guarantor from the Guaranty or release the Liens on all or substantially all
of the Collateral in any transaction or series of related transactions
except in accordance with the terms of any Loan Document, without the written consent of each
Lender;



and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed
by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C
Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by Agent in
addition to the Lenders required above, affect the rights or duties of Agent under this Agreement
or any other Loan Document; and (iii) the Agent Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be
increased or extended without the consent of such Lender.



     10.02 Notices; Effectiveness; Electronic Communications.



     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:



          (i) if to Borrower, Agent or the L/C Issuer, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on Schedule 10.02; and



          (ii) if to any other Lender, to the address, telecopier number, electronic mail address or
telephone number specified in its Administrative Questionnaire.



Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).



     (b) Electronic Communications. Notices and other communications to Lenders and the
L/C Issuer hereunder may be delivered or furnished by electronic



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communication (including e-mail and Internet or intranet websites) pursuant to procedures
approved by Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable has notified the
Agent that it is incapable of receiving notices under such Article by electronic communication.
Agent or Borrower may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or communications. Unless Agent
otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such
as by the “return receipt requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the website address
therefor.



     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF BORROWER MATERIALS OR THE
ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM BORROWER
MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH BORROWER
MATERIALS OR THE PLATFORM. In no event shall Agent or any of its Related Parties (collectively,
the “Agent Parties”) have any liability to Borrower, any Lender, the L/C Issuer or any
other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of Borrower’s or Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment
to have resulted from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to Borrower, any Lender, the L/C
Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as
opposed to direct or actual damages).



     (d) Change of Address, Etc. Each of Borrower, Agent and the L/C Issuer may change its
address, telecopier or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to Borrower, Agent and the L/C Issuer. In



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addition, each Lender agrees to notify Agent from time to time to ensure that Agent has on
record (i) an effective address, contact name, telephone number, telecopier number and electronic
mail address to which notices and other communications may be sent and (ii) accurate wire
instructions for such Lender.



     (e) Reliance by Agent, L/C Issuer and Lenders. Agent, the L/C Issuer and Lenders
shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices)
purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. Borrower shall indemnify Agent, the L/C Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of Borrower. All
telephonic notices to and other telephonic communications with Agent may be recorded by Agent, and
each of the parties hereto hereby consents to such recording.



     10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or Agent to exercise, and no delay by any such
Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.



     10.04 Expenses; Indemnity; Damage Waiver.



     (a) Costs and Expenses. Borrower shall pay (i) all reasonable out of pocket expenses
incurred by Agent and its Affiliates (including the reasonable fees, charges and disbursements of
counsel for Agent set forth in Section 4.01(c) hereof), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out of pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out of pocket expenses incurred by Agent, any
Lender or the L/C Issuer (including the reasonable fees, charges and disbursements of any counsel
for Agent, any Lender or the L/C Issuer), in connection with the enforcement or protection of its
rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under this Section, or
(B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out
of pocket expenses incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.



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     (b) Indemnification by Borrower. Borrower shall indemnify Agent (and any sub-agent
thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee), asserted against any
Indemnitee by any third party or by Borrower or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder, or the consummation of the transactions
contemplated hereby or thereby, or, in the case of Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or from any property
owned or operated by Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by Borrower or any other
Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee; (y) result from a claim brought by Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other
Loan Document, if Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction; or (z) are or relate to
Taxes.



     (c) Reimbursement by Lenders. To the extent that Borrower for any reason fails to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to Agent (or any such sub-agent), the L/C Issuer or such
Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related
expense,
as the case may be, was incurred by or asserted against Agent (or any such sub-agent) or the
L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for
Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of
the Lenders under this subsection (c) are subject to the provisions of Section 2.11(d).



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     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.
No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual damages resulting from
the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.



     (e) Payments. All amounts due under this Section shall be payable not later than ten
Business Days after demand therefor.



     (f) Survival. The agreements in this Section shall survive the resignation of Agent
and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Revolving Loan
Commitments and the repayment, satisfaction or discharge of all the other Obligations.



     10.05 Payments Set Aside. To the extent that any payment by or on behalf of Borrower is made to Agent, the L/C Issuer
or any Lender, or Agent, the L/C Issuer or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to
be fraudulent or preferential, set aside or required (including pursuant to any settlement entered
into by Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally
agrees to pay to Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders and the L/C Issuer under clause
(b) of the preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.



     10.06 Successors and Assigns.



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     (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that neither Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior written consent of
Agent, the L/C Issuer and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.



     (b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:



          (i) Minimum Amounts. 



               (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender no minimum amount need be assigned; and



               (B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the
Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to Agent or, if “Trade Date” is specified in the Assignment and Assumption,
as of the Trade Date, shall not be less than $5,000,000 unless each of Agent and, so long as no
Event of Default has occurred and is continuing, Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members
of an Assignee Group and concurrent assignments from members of an Assignee Group to a single
assignee (or to an assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been met.



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          (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned.



          (iii) Required Consents. No consent shall be required for any assignment except to
the extent required by subsection (b)(i)(B) of this Section and, in addition:



               (A) the consent of Borrower (such consent not to be unreasonably withheld or delayed) shall be
required unless (1) an Event of Default has occurred and is continuing at the time of such
assignment or (2) such assignment is to a Lender or an Affiliate of a Lender;



               (B) the consent of Agent (such consent not to be unreasonably withheld or delayed) shall be
required if such assignment is to a Person that is not a Lender or an Affiliate of such Lender with
respect to such Lender; and



               (C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed)
shall be required for any assignment that increases the obligation of the assignee to participate
in exposure under one or more Letters of Credit (whether or not then outstanding).



          (iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to Agent an Assignment and Assumption, together with a processing and recordation fee in
the amount, if any, required as set forth in Schedule 10.06; provided, however, that the
Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case
of any assignment. The assignee, if it is not a Lender, shall deliver to Agent an Administrative
Questionnaire. The Agent shall deliver a copy of such Assignment and Assumption to the Borrower,
in accordance with Section 10.02.



          (v) No Assignment to Borrower. No such assignment shall be made to Borrower or any of
Borrower’s Affiliates or Subsidiaries.



          (vi) No Assignment to Natural Persons. No such assignment shall be made to a natural
person.



Subject to acceptance and recording thereof by Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from



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its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Upon request, Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender and (to the extent the assigning Lender continues
to hold any portion of the Commitments being assigned) to the assigning Lender in exchange for the
Note, if any, previously issued to the assigning Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with subsection (d) of this Section.



     (c) Register. Agent, acting solely for this purpose as an agent of Borrower, shall
maintain at the Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of, and
principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and Borrower, Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by Borrower
and any Lender, at any reasonable time and from time to time upon reasonable prior notice.



     (d) Participations. Any Lender may at any time, without the consent of, or notice to,
Borrower or Agent, sell participations to any Person (other than a natural person or Borrower or
any of Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender’s participations in L/C Obligations) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the performance of such
obligations and (iii) Borrower, Agent, the L/C Issuer and the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification described in the
first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01,
3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also



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shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.12 as though it were a Lender.



     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with Borrower’s prior written consent.



     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.



     (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.



     (h) Deemed Consent of Borrower. If the consent of Borrower to an assignment to an
Eligible Assignee is required hereunder (including a consent to an assignment which does not meet
the minimum assignment threshold specified in Section 10.06(b)(i)(B)), Borrower shall be deemed to
have given its consent five Business Days after the date notice thereof has been delivered to
Borrower by the assigning Lender (through Agent) unless such consent is expressly refused by
Borrower prior to such fifth Business Day.



     (i) Resignation as L/C Issuer. Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 30 days’ notice to Borrower and the Lenders, resign
as L/C Issuer. In the event of any such resignation as L/C Issuer, Borrower shall be entitled to
appoint from among Lenders a successor L/C Issuer hereunder; provided, however, that no failure by
Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C
Issuer. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect



85









 







thereto (including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). Upon the appointment of a
successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer, as the case may be, and (b) the successor
L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements satisfactory to Bank of
America to effectively assume the obligations of Bank of America with respect to such Letters of
Credit.



     10.07 Treatment of Certain Information; Confidentiality. Each of Agent, Lenders and the L/C Issuer agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors
and representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential and that the party disclosing Information to such Person shall remain liable for any
direct damages arising out of any such unauthorized disclosure by any such Person), (b) to the
extent requested by any regulatory authority, purporting to have jurisdiction over it (including
any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or similar legal process
(after prior notice to Borrower to the extent reasonably practicable and not prohibited by
applicable law), (d) to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and its obligations, (g) with
the consent of Borrower or (h) to the extent such Information (x) becomes publicly available other
than as a result of a breach of this Section or (y) becomes available to Agent, any Lender, the L/C
Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than
Borrower. For purposes of
this Section, “Information” means all information received from Borrower or any
Subsidiary relating to Borrower or any Subsidiary or any of their respective businesses, other than
any such information that is available to Agent, any Lender or the L/C Issuer on a nonconfidential
basis prior to disclosure by Borrower or any Subsidiary. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised reasonable care to maintain the
confidentiality of such Information. Each of Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning Borrower or a
Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it



86









 







will handle such material non-public information in
accordance with applicable Law, including applicable Federal and state securities Laws.



     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer
and each of their respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such
Affiliate to or for the credit or the account of Borrower or any other Loan Party against any and
all of the obligations of Borrower or such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer or any such Affiliate,
irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this
Agreement or any other Loan Document and although such obligations of Borrower or such Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer
different from the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C
Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify
Borrower and Agent promptly after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.



     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid
or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied
to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrower. In
determining whether the interest contracted for, charged, or received by Agent or a Lender exceeds
the
Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.



     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective
when it shall have been executed by Borrower and Agent and when Agent



87









 







shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties
hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this Agreement.



     10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by Agent and each Lender, regardless of any investigation made by Agent or any
Lender or on their behalf and notwithstanding that Agent or any Lender may have had notice or
knowledge of any Default at the time of any Credit Extension, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or
any Letter of Credit shall remain outstanding.



     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions
of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b)
the parties shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.



     10.13 Governing Law; Jurisdiction; Etc.



     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW JERSEY.



     (b) SUBMISSION TO JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW JERSEY AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW
JERSEY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW JERSEY STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES



88









 







HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.



     (c) WAIVER OF VENUE. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF
THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.



     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.



     10.14 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.



     10.15 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, Borrower and each
other Loan Party



89









 







acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i)
the credit facilities provided for hereunder and any related arranging or other services in
connection therewith (including in connection with any amendment, waiver or other modification
hereof or of any other Loan Document) are an arm’s-length commercial transaction between Borrower,
each other Loan Party and their respective Affiliates, on the one hand, and Agent, on the other
hand, and Borrower and each other Loan Party is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions contemplated hereby and
by the other Loan Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, Agent is and has been
acting solely as a principal and is not the financial advisor, agent or fiduciary, for Borrower,
any other Loan Party or any of their respective Affiliates, stockholders, creditors or employees or
any other Person; (iii) Agent has not assumed and will not assume an advisory, agency or fiduciary
responsibility in favor of Borrower or any other Loan Party with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to any amendment, waiver
or other modification hereof or of any other Loan Document (irrespective of whether Agent has
advised or is currently advising Borrower, any other Loan Party or any of their respective
Affiliates on other matters) and Agent has no obligation to Borrower, any other Loan Party or any
of their respective Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set
forth herein and in the other Loan Documents; (iv) Agent and its Affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of Borrower, the other
Loan Parties and their respective Affiliates, and Agent has no obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and (v) Agent has not
provided and will not provide any legal, accounting, regulatory or tax advice with respect to any
of the transactions contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of Borrower and the other Loan Parties has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.
Each of Borrower and the other Loan Parties hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against Agent with respect to any breach or alleged
breach of agency or fiduciary duty.



     10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and Agent (for itself and
not on behalf of any Lender) hereby notifies 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 Borrower, which information
includes the name and address of Borrower and other information that will allow such Lender or
Agent, as applicable, to identify Borrower in accordance with the Act.



     10.17 Time of the Essence. Time is of the essence of the Loan Documents.



90









 





IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the
date first above written.



	 	 	 	 	 
	 	MISTRAS GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	Matthew Correia 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender, Co- Lead Bookrunner and L/C Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	William T. Franey 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A. as a
Lender and Co-Lead Bookrunner

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Amended and Restated Credit Agreement





91










 





SCHEDULE 2.01




COMMITMENTS




AND APPLICABLE PERCENTAGES




	 	 	 	 	 	 	 	 	 
	 	 	Revolving Loan	 	 	 	 
	Lender	 	Commitment	 	 	Applicable Percentage	 
	 
	Bank of America, N.A.
	 	$	7,500,000	 	 	 	50.000000000	%
	JPMorgan Chase Bank, N.A.
	 	$	7,500,000	 	 	 	50.000000000	%
	Total
	 	$	15,000,000	 	 	 	100.000000000	%






	 	 	 	 	 	 	 	 	 
	 	 	Term Loan	 	 	 	 
	Lender	 	Commitment	 	 	Applicable Percentage	 
	 
	Bank of America, N.A.
	 	$	12,500,000	 	 	 	50.000000000	%
	JPMorgan Chase Bank
	 	$	12,500,000	 	 	 	50.000000000	%
	Total
	 	$	25,000,000	 	 	 	100.000000000	%






 









 





SCHEDULE 10.02




AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES




BORROWER:

Mistras Group, Inc.

195 Clarksville Road

Princeton Junction, NJ 08550

Attention: Paul “Pete” Peterik

Telephone: 609.716.4103

Telecopier: 609.716.4179

Electronic Mail: ppeterik@pacndt.com

U.S. Taxpayer Identification Number: 22-3341267




With a copy to:




Sheldon G. Nussbaum

Fulbright & Jaworski L.L.P.

666 Fifth Avenue

New York, NY 10103

United States of America




ADMINISTRATIVE AGENT:




Administrative Agent’s Office 

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

101 N. Tryon Street

Mail Code: NC1-001-04-39

Charlotte, NC 28255-0001

Attention: Renee Daniels-Moring

Telephone: (704) 387-9468

Telecopier: (704) 310-3288

Electronic Mail: renee.d.daniels-moring@bankofamerica.com

Account No.: 136-621-225-0600

Ref: Mistras Group, Inc.

ABA# 026009593




Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

100 Federal Street, 12th

Mail Code: MA5-100-12-02

Boston, MA 02110

Attention: Kecia Holden

Telephone: (617) 434-8860




 









 





Telecopier: (617) 790-1363

Electronic Mail: kecia.holden@bankofamerica.com




L/C
ISSUER:
Standby Letters of Credit:



Bank of America, N.A.

Trade Operations

One Fleet Way

Mail Code: PA6-580-02-30

Scranton, PA 18507





			
	Attention:	 	Alfonso (Al) Malave

Telephone: 570.330.4212

Telecopier: 570.330.4186





Electronic Mail: alfonso.malave@bankofamerica.com




 









 





SCHEDULE 10.06




PROCESSING AND RECORDATION FEES



Agent will charge assigning Lender a processing and recordation fee (an “Assignment Fee”)
in the amount of $2,500 for each assignment; provided, however, that in the event of two or more
concurrent assignments to members of the same Assignee Group (which may be effected by a
suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent
assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group), the Assignment Fee will be $2,500 plus the amount set
forth below:




	 	 	 	 	 	 	 
	Transaction	 	Assignment Fee	 	 
	 
	 	 	 	 	 	 
	First four concurrent assignments
or suballocations to members of an
Assignee Group (or from members of
an Assignee Group, as applicable)

	 	 	-0-	 	 	 
	 
	 	 	 	 	 	 
	Each additional concurrent assignment
or suballocation to a member of such
Assignee Group (or from a member of
such Assignee Group, as applicable)

	 	$	500	 	 	 







 












 





EXHIBIT A




FORM OF COMMITTED LOAN NOTICE




Date:                          ,           




To: Bank of America, N.A., as Agent



Ladies and Gentlemen:




     Reference is made to that certain Amended and Restated Credit Agreement, dated as of
[                         ,           ] (as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among [                    , a           ] (the “Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent and L/C
Issuer.



	 
	     The undersigned hereby requests (select one):








	o	 	Borrowing of Revolving Loans
	 
	o	 	Conversion or continuation of Revolving Loans






	 	1.	 	On                                                             (a Business Day).
	 
	 	2.	 	In the amount of $                                                  
	 
	 	3.	 	Comprised of                                                   
	 
	 	 	 	                         [Type of Loan requested]







	 	4.	 	For Eurodollar Rate Loans: with an Interest Period of                months.





     The undersigned hereby requests (select one):




	o	 	Borrowing of the Term Loan
	 
	o	 	Conversion or continuation of the Term Loan






	 	1.	 	On                                                   (a Business Day).
	 
	 	2.	 	In the amount of $                                                  
	 
	 	3.	 	Comprised of                                                   
	 
	 	 	 	                         [Type of Loan requested]







	 	4.	 	For Eurodollar Rate Loans: with an Interest Period of                months.





 









 





     The Committed Borrowing requested herein complies with the provisions of Section 2.02 of the
Agreement.



	 	 	 	 	 	 	 
	 	 	MISTRAS GROUP, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





 









 





EXHIBIT B




FORM OF REVOLVING NOTE




$                                                   



     FOR VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to
                                                  
or registered assigns (“Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Revolving Loan from time to
time made by the Lender to Borrower under that certain Amended and Restated Credit Agreement, dated
as of [                                                  
        ,                ] (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used herein as
therein defined), among Borrower, the Lenders from time to time party thereto, JPMorgan Chase Bank,
N.A., as Co-Lead Bookrunner and Bank of America, N.A., as Agent, Co-Lead Bookrunner and L/C Issuer.



     Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from
the date of such Loans until such principal amount is paid in full, at such interest rates and at
such times as provided in the Agreement. All payments of principal and interest shall be made to
the Agent for the account of the Lender in Dollars in immediately available funds at the Agent’s
Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in the Agreement.



     This Note is one of the Revolving Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and conditions
provided therein. This Note is also entitled to the benefits of the Guaranty and is secured by the
Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified
in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable all as provided in the Agreement. Revolving Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the
ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Loans and payments with respect thereto.



     Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



 









 





     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
JERSEY.



	 	 	 	 	 	 	 
	 	 	MISTRAS GROUP, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





 









 





LOANS AND PAYMENTS WITH RESPECT THERETO




	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	Amount of Principal	 	 	Outstanding	 	 	 
	 	 	 	 	 	 	 	 	End of Interest	 	 	or Interest Paid	 	 	Principal Balance	 	 	 
	Date	 	Type of Loan Made	 	 	Amount of Loan Made	 	 	Period	 	 	This Date	 	 	This Date	 	 	Notation Made By




 









 





EXHIBIT C




FORM OF TERM NOTE




$                                                   



     FOR VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to
                                                   or registered assigns (“Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of the Term Loans made by the
Lender to Borrower under that certain Amended and Restated Credit Agreement, dated as of
[                                                  ,                ] (as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among Borrower, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A.,
as Co-Lead Bookrunner and Bank of America, N.A., as Agent, Co-Lead Bookrunner and L/C Issuer.



     Borrower promises to pay interest on the unpaid principal amount of the Term Loans from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. All payments of principal and interest shall be made to the
Agent for the account of the Lender in Dollars in immediately available funds at the Agent’s
Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in the Agreement.



     This Note is one of the Term Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. This Note is also entitled to the benefits of the Guaranty and is secured by the
Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified
in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable all as provided in the Agreement.



     Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



 











 





     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
JERSEY.



	 	 	 	 	 	 	 
	 	 	MISTRAS GROUP, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





 









 





LOANS AND PAYMENTS WITH RESPECT THERETO




	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	Amount of Principal	 	 	Outstanding	 	 	 
	 	 	 	 	 	 	 	 	End of Interest	 	 	or Interest Paid	 	 	Principal Balance	 	 	 
	Date	 	Type of Loan Made	 	 	Amount of Loan Made	 	 	Period	 	 	This Date	 	 	This Date	 	 	Notation Made By




 










 





EXHIBIT D




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                




To: Bank of America, N.A., as Administrative Agent



Ladies and Gentlemen:




     Reference is made to that certain Amended and Restated Credit Agreement, dated as of
[                                  
                ,    
            ] (as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among [                
                                  , a              
                
                     ] (“Borrower”), the Lenders from
time to time party thereto, JPMorgan Chase Bank, N.A., as Co-Lead Bookrunner and Bank of America,
N.A., as Agent and L/C Issuer.



     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                                                   of Borrower, and that, as such, he/she is authorized to execute and
deliver this Certificate to Agent on the behalf of Borrower, and that:



[Use following paragraph 1 for fiscal year-end financial statements]




     1. Attached hereto as Schedule 1 are the year-end audited financial statements required by
Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of the above date,
together with the report and opinion of an independent certified public accountant required by such
section.



[Use following paragraph 1 for fiscal quarter-end financial statements]




     1. Attached hereto as Schedule 1 are the unaudited financial statements required by Section
6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of the above date. Such
financial statements fairly present the financial condition, results of operations and cash flows
of Borrower and its Consolidated Subsidiaries in accordance with GAAP as at such date and for such
period, subject only to normal year-end audit adjustments and the absence of footnotes.



     2. The officer executing this Certificate on behalf of the Borrower has reviewed and is
familiar with the terms of the Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or otherwise) of
Borrower during the accounting period covered by the attached financial statements.



 









 





     3. A review of the activities of Borrower during such fiscal period has been made under the
supervision of the officer executing this Certificate on behalf of the Borrower with a view to
determining whether during such fiscal period Borrower performed and observed all its Obligations
under the Loan Documents, and



[select one:]




[to the best knowledge of the officer executing this Certificate on behalf of the Borrower during
such fiscal period, Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it, and no Default has occurred and is continuing.]



—or—




     [the following covenants or conditions have not been performed or observed and the following
is a list of each such Default and its nature and status:]



     4. The representations and warranties of Borrower contained in Article V of the Agreement,
and/or any representations and warranties of Borrower or any other Loan Party that are contained in
any document furnished at any time under or in connection with the Loan Documents, are true and
correct on and as of the date hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Compliance Certificate, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Agreement, including the statements in connection with which this Compliance
Certificate is delivered.



     5. The financial covenant analyses and information set forth on Schedules 2 and 3 attached
hereto are true and accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                                                   



	 	 	 	 	 	 	 
	 	 	MISTRAS GROUP, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 






 










 





For the Quarter/Year ended                                         (“Statement Date”)




SCHEDULE 2

to the Compliance Certificate

($ in 000’s)




	 	 	 	 	 	 	 	 	 
	I.	 	Section 6.12(a) — EBITDA	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	1. 	 	net income:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	2. 	 	less income or plus loss from discontinued
operations and extraordinary items:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	3. 	 	plus income taxes:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	4. 	 	plus interest expense:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	5. 	 	plus depreciation, depletion and amortization
(including non-cash loss on retirement of assets):	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	6. 	 	plus stock option expense:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	7. 	 	Total EBITDA:	 	$                    
	 
	 	 	 	 	 	 	 	 
	II.	 	Section 6.12(b) — Debt Service Coverage Ratio.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	A.	 	Fixed Charge Cash Flow:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	1. 
	 	net income, after income tax:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	2. 
	 	less income or plus loss from discontinued
operations and extraordinary items:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	3. 
	 	plus depreciation, depletion and amortization:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	4. 
	 	plus interest expense on all obligations:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	5. 
	 	minus dividend, withdrawals and other
distributions:
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	6. 
	 	Total Fixed Charge Cash Flow:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	B.	 	Liabilities:	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	1. 
	 	Current portion of long term liabilities and
current portion of capitalized lease obligations:
	 	$                    






 









 






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	2. 
	 	plus interest expense on all obligations:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	3. 
	 	Total (Line II.B.1 + Line II.B.2):
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	C.	 	Debt Service Coverage Ratio (Line II.A.6 /
Line II.B.3):	 	           to 1.0
	 
	 	 	 	 	 	 	 	 
	 	 	Minimum Required:	 	1.10 to 1.0
	 
	 	 	 	 	 	 	 	 
	III.	 	Section 6.12(c) — Funded Debt to EBITDA Ratio.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	A.	 	Funded Debt	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	1. 
	 	all outstanding liabilities for borrowed money
plus other interest-bearing liabilities, including
current and long-term liabilities:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	2. 
	 	less the non-current portion of Subordinated
Liabilities:
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	3. 
	 	Total Funded Debt:
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 	 	B.	 	Total EBITDA	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	C.	 	Ratio (Line III.A.3 / Line III.B.6):	 	           to 1.0
	 
	 	 	 	 	 	 	 	 
	Minimum Required:	 	2.5 to 1.0
	 
	 	 	 	 	 	 	 	 
	IV.	 	Free Cash Flow	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Free Cash Flow	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	1. 
	 	Total EDITDA
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	2. 
	 	less all taxes paid or payable in cash
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	3. 
	 	less cash interest paid
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	4. 
	 	less all capital expenditures made in cash
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	5. 
	 	less all scheduled and non-scheduled principal
payments on Funded Debt made during the
period (excluding free cash flow payments
pursuant to Section 2.05(c) of the Credit
Agreement)
	 	($                    )






 









 






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	6. 
	 	less acquisition costs
	 	($                    )
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	7. 
	 	plus or minus changes in working capital
	 	$                    
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	8. 
	 	Total Free Cash Flow
	 	$                    







 












 





EXHIBIT E




FORM

OF

ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective
Date set forth below and is entered into by and between [the][each] Assignor identified in item 1
below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2 below
([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees] hereunder are several and not joint.] Capitalized terms used but not
defined herein shall have the meanings given to them in the Amended and Restated Credit Agreement
identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed
to and incorporated herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full.



     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by Agent
as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations
in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding rights and obligations
of [the Assignor][the respective Assignors] under the respective facilities identified below
(including, without limitation, the Letters of Credit included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] against any Person, whether known or unknown, arising under or
in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by
[the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as, [the][an] “Assigned Interest”). Each such sale and assignment is without
recourse to [the][any] Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by [the][any] Assignor.




	1.	 	Assignor[s]:                                         





 









 





	2.	 	Assignee[s]:                                          for each Assignee, indicate Affiliate of [identify Lender]]
	 
	3.	 	Borrower(s):                                         
	 
	4.	 	Administrative Agent: Bank of America, N. A., as the administrative agent under the Credit
Agreement
	 
	5.	 	Credit Agreement: [Amended and Restated Credit Agreement, dated as of                     , among
                    , the Lenders from time to time party thereto, Bank of America, N.A., as
Administrative Agent[and L/C Issuer]]
	 
	6.	 	Assigned Interest[s]:





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate Amount	 	 	 	 	 	 
	 	 	 	 	 	 	of	 	Amount of	 	Percentage	 	 
	Assignor[s]	 	Assignee[s]	 	Facility	 	Commitment/Loans	 	Commitment/Loans	 	Assigned of	 	CUSIP
	 	 	 	 	Assigned	 	for all Lenders	 	Assigned	 	Commitment/Loans	 	No.
	 
	 

	 	 	 	     
	 	$                    
	 	$                    
	 	                    %	 	 
	 

	 	 	 	     
	 	$                    
	 	$                    
	 	                    %	 	 
	 

	 	 	 	     
	 	$                    
	 	$                    
	 	                    %	 	 







	[7.	 	Trade Date:                                         ]




Effective Date:                                         , 20      [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



 









 





[Consented to and] Accepted:




Bank of America, N. A., as

     Administrative Agent





				
	By:	 	
 

Title:	 





[Consented to:]





				
	By:	 	
 

Title:	 





 









 





ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION





     1. Representations and Warranties.



          1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made in or in
connection with the Amended and Restated Credit Agreement or any other Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv)
the performance or observance by Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.



          1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Amended and Restated Credit Agreement, (ii) it meets all the requirements to be an assignee under
Section 10.06(b)(iii),(v) and (vi) of the Amended and Restated Credit Agreement (subject to such
consents, if any, as may be required under Section 10.06(b)(iii) of the Amended and Restated Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the
Amended and Restated Credit Agreement as a Lender thereunder and, to the extent of [the][the
relevant] Assigned Interest, shall have the obligations of a Lender thereunder, and (iv) it is
sophisticated with respect to decisions to acquire assets of the type represented by [the][such]
Assigned Interest and either it, or the Person exercising discretion in making its decision to
acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Amended and Restated Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements delivered pursuant to
Section [___] thereof, as applicable, and such other documents and information as it deems
appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest ,and (vi) it has independently and without
reliance upon Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest; and (b) agrees that (i) it will,



 









 







independently and without reliance upon Agent, [the][any] Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender.



     2. Payments. From and after the Effective Date, Agent shall make all payments in
respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other
amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the
Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.



     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of 
                    
[confirm that
choice of law provision parallels the Amended and Restated Credit Agreement].



 









 





EXHIBIT F




FORM OF OPINION OF COUNSEL TO BORROWER