Exhibit 10.2


 


EXECUTION COPY


 


 


SECOND LIEN CREDIT AGREEMENT


 


among


 


KRATOS DEFENSE & SECURITY SOLUTIONS,
INC.,


 


 


KEYBANK NATIONAL ASSOCIATION,


 


as Administrative Agent

and Lender,


 


and


 


THE OTHER FINANCIAL

INSTITUTIONS PARTIES HERETO


 


with


 


KEYBANC CAPITAL MARKETS,


 


as Lead Arranger and

Book Runner


 


Dated as of December 31, 2007


 


$10,000,000 Term Loan Facility


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION I.

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  DEFINED
  TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  USE OF
  CERTAIN TERMS

  	
  28

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  ACCOUNTING
  TERMS

  	
  29

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  ROUNDING

  	
  29

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  EXHIBITS AND
  SCHEDULES

  	
  29

  
	
   

  	
   

  	
   

  
	
  1.6

  	
  REFERENCES
  TO AGREEMENTS AND LAWS

  	
  29

  
	
   

  	
   

  
	
  SECTION II.

  	
  THE
  COMMITMENTS AND EXTENSIONS OF CREDIT

  	
  30

  
	
   

  	
   

  
	
  2.1

  	
  LOANS;
  MAXIMUM AMOUNTS

  	
  30

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  BORROWINGS,
  CONVERSIONS AND CONTINUATIONS OF LOANS

  	
  30

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  PREPAYMENTS

  	
  31

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  PRINCIPAL
  AND INTEREST

  	
  34

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  FEES

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  COMPUTATION
  OF INTEREST AND FEES

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  MAKING
  PAYMENTS

  	
  35

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  FUNDING
  SOURCES

  	
  36

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  COLLATERAL

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  INCREMENTAL
  TRIGGER DATE

  	
  37

  
	
   

  	
   

  
	
  SECTION III.

  	
  TAXES, YIELD
  PROTECTION AND ILLEGALITY

  	
  37

  
	
   

  	
   

  
	
  3.1

  	
  TAXES

  	
  37

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  ILLEGALITY

  	
  38

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  INABILITY TO
  DETERMINE RATES

  	
  39

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  INCREASED
  COST AND REDUCED RETURN; CAPITAL ADEQUACY

  	
  39

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  BREAKFUNDING
  COSTS

  	
  40

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  MATTERS APPLICABLE
  TO ALL REQUESTS FOR COMPENSATION

  	
  40

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  SURVIVAL

  	
  41

  
	
   

  	
   

  
	
  SECTION IV.

  	
  CONDITIONS
  PRECEDENT TO EXTENSION OF CREDIT

  	
  41

  
	
   

  	
   

  
	
  4.1

  	
  CONDITIONS
  OF EXTENSION OF CREDIT

  	
  41

  
								



 


i

















 


	
  SECTION V.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  46

  
	
   

  	
   

  
	
  5.1

  	
  EXISTENCE
  AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS.

  	
  46

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  POWER;
  AUTHORIZATION; ENFORCEABLE OBLIGATIONS

  	
  47

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  NO LEGAL BAR

  	
  47

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  EQUITY
  SECURITIES AND OWNERSHIP

  	
  47

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  FINANCIAL
  STATEMENTS; PROJECTIONS; NO MATERIAL ADVERSE EFFECT

  	
  48

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  LITIGATION

  	
  48

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  NO DEFAULT;
  CONTINUED BUSINESS

  	
  48

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  OWNERSHIP OF
  PROPERTY; LIENS

  	
  49

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  TAXES

  	
  49

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  MARGIN
  REGULATIONS; INVESTMENT COMPANY ACT

  	
  49

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  ERISA
  COMPLIANCE; EMPLOYEE MATTERS

  	
  50

  
	
   

  	
   

  	
   

  
	
  5.12

  	
  INTANGIBLE
  ASSETS

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.13

  	
  COMPLIANCE
  WITH LAWS

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.14

  	
  ENVIRONMENTAL
  COMPLIANCE

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.15

  	
  INSURANCE

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.16

  	
  SWAP
  OBLIGATIONS

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.17

  	
  SOLVENCY

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.18

  	
  DISCLOSURE

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.19

  	
  PATRIOT ACT

  	
  52

  
	
   

  	
   

  	
   

  
	
  5.20

  	
  RELATED
  TRANSACTIONS

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.21

  	
  SECURITY
  INTEREST IN COLLATERAL

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.22

  	
  PERMITS, ETC

  	
  53

  
	
   

  	
   

  	
   

  
	
  5.23

  	
  MATERIAL
  CONTRACTS

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.24

  	
  CERTAIN FEES

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.25

  	
  AFFILIATE
  TRANSACTIONS

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.26

  	
  CLOSING DATE
  FOREIGN SUBSIDIARIES

  	
  54

  
	
   

  	
   

  
	
  SECTION VI.

  	
  AFFIRMATIVE
  COVENANTS

  	
  54

  
	
   

  	
   

  
	
  6.1

  	
  FINANCIAL
  STATEMENTS

  	
  54

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  CERTIFICATES,
  NOTICES AND OTHER INFORMATION

  	
  56

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  PAYMENT OF
  TAXES

  	
  59

  
				



 


ii

















 


	
  6.4

  	
  PRESERVATION
  OF EXISTENCE

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  MAINTENANCE
  OF PROPERTIES

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  MAINTENANCE
  OF INSURANCE

  	
  59

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  COMPLIANCE
  WITH LAWS

  	
  60

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  INSPECTION
  RIGHTS

  	
  60

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  KEEPING OF
  RECORDS AND BOOKS OF ACCOUNT

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.10

  	
  COMPLIANCE
  WITH ERISA

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.11

  	
  COMPLIANCE
  WITH AGREEMENTS

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.12

  	
  SUBSIDIARY
  GUARANTIES AND PLEDGE OF OWNERSHIP INTERESTS

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.13

  	
  FURTHER
  ASSURANCES

  	
  62

  
	
   

  	
   

  	
   

  
	
  6.14

  	
  USE OF
  PROCEEDS

  	
  63

  
	
   

  	
   

  	
   

  
	
  6.15

  	
  LANDLORD
  WAIVERS

  	
  63

  
	
   

  	
   

  	
   

  
	
  6.16

  	
  ADDITIONAL
  MATERIAL REAL ESTATE ASSETS

  	
  63

  
	
   

  	
   

  	
   

  
	
  6.17

  	
  DORMANT
  SUBSIDIARIES

  	
  63

  
	
   

  	
   

  
	
  SECTION VII.

  	
  NEGATIVE
  COVENANTS

  	
  63

  
	
   

  	
   

  
	
  7.1

  	
  INDEBTEDNESS

  	
  63

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  LIENS

  	
  65

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  FUNDAMENTAL
  CHANGES

  	
  67

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  DISPOSITIONS

  	
  68

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  INVESTMENTS

  	
  69

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  RESTRICTED
  PAYMENTS

  	
  70

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  ERISA

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  CHANGE IN
  NATURE OF BUSINESS

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.9

  	
  TRANSACTIONS
  WITH AFFILIATES

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  USE OF
  PROCEEDS

  	
  72

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  CERTAIN
  INDEBTEDNESS PAYMENTS, ETC

  	
  72

  
	
   

  	
   

  	
   

  
	
  7.12

  	
  FINANCIAL
  COVENANTS

  	
  72

  
	
   

  	
   

  	
   

  
	
  7.13

  	
  ACCOUNTING
  CHANGES

  	
  73

  
	
   

  	
   

  	
   

  
	
  7.14

  	
  GUARANTY
  UNDER MATERIAL INDEBTEDNESS AGREEMENT

  	
  73

  
	
   

  	
   

  	
   

  
	
  7.15

  	
  AMENDMENTS
  TO ORGANIZATION AGREEMENTS, MATERIAL CONTRACTS AND FIRST LIEN LOAN DOCUMENTS

  	
  73

  
	
   

  	
   

  	
   

  
	
  7.16

  	
  NO FURTHER
  NEGATIVE PLEDGES

  	
  73

  
				



 


iii

















 


	
  7.17

  	
  RESTRICTIONS
  ON SUBSIDIARY DISTRIBUTIONS

  	
  74

  
	
   

  	
   

  	
   

  
	
  7.18

  	
  SALES AND
  LEASE BACKS

  	
  74

  
	
   

  	
   

  	
   

  
	
  7.19

  	
  DEPOSIT
  ACCOUNTS

  	
  74

  
	
   

  	
   

  	
   

  
	
  7.20

  	
  ISSUANCE OF
  DISQUALIFIED CAPITAL STOCK

  	
  75

  
	
   

  	
   

  
	
  SECTION VIII.

  	
  EVENTS OF
  DEFAULT AND REMEDIES

  	
  75

  
	
   

  	
   

  
	
  8.1

  	
  EVENTS OF
  DEFAULT

  	
  75

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  REMEDIES
  UPON EVENT OF DEFAULT

  	
  77

  
	
   

  	
   

  
	
  SECTION IX.

  	
  ADMINISTRATIVE
  AGENT

  	
  79

  
	
   

  	
   

  
	
  9.1

  	
  APPOINTMENT
  AND AUTHORIZATION OF ADMINISTRATIVE AGENT

  	
  79

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  DELEGATION
  OF DUTIES

  	
  79

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  LIABILITY OF
  ADMINISTRATIVE AGENT

  	
  79

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  RELIANCE BY
  ADMINISTRATIVE AGENT

  	
  80

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  NOTICE OF
  DEFAULT

  	
  80

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  CREDIT
  DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT

  	
  80

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  INDEMNIFICATION
  OF ADMINISTRATIVE AGENT

  	
  81

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  ADMINISTRATIVE
  AGENT IN INDIVIDUAL CAPACITY

  	
  81

  
	
   

  	
   

  	
   

  
	
  9.9

  	
  SUCCESSOR
  ADMINISTRATIVE AGENT

  	
  82

  
	
   

  	
   

  	
   

  
	
  9.10

  	
  DESIGNATION
  OF ARRANGER; NO AFFILIATE LIABILITY

  	
  82

  
	
   

  	
   

  	
   

  
	
  9.11

  	
  INTERCREDITOR
  AGREEMENT

  	
  83

  
	
   

  	
   

  
	
  SECTION X.

  	
  MISCELLANEOUS

  	
  83

  
	
   

  	
   

  
	
  10.1

  	
  AMENDMENTS;
  CONSENTS

  	
  83

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  TRANSMISSION
  AND EFFECTIVENESS OF COMMUNICATIONS AND SIGNATURES

  	
  84

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  ATTORNEY
  COSTS, EXPENSES AND TAXES

  	
  85

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  SUCCESSORS
  AND ASSIGNS

  	
  85

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  SET-OFF

  	
  88

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  SHARING OF
  PAYMENTS

  	
  88

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  NO SETOFF

  	
  89

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  NO WAIVER;
  CUMULATIVE REMEDIES

  	
  89

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  USURY

  	
  90

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  COUNTERPARTS

  	
  90

  
					



 


iv

















 


	
  10.11

  	
  INTEGRATION

  	
  90

  
	
   

  	
   

  	
   

  
	
  10.12

  	
  NATURE OF
  LENDERS’ OBLIGATIONS

  	
  91

  
	
   

  	
   

  	
   

  
	
  10.13

  	
  SURVIVAL OF
  REPRESENTATIONS AND WARRANTIES

  	
  91

  
	
   

  	
   

  	
   

  
	
  10.14

  	
  INDEMNITY BY
  BORROWER

  	
  91

  
	
   

  	
   

  	
   

  
	
  10.15

  	
  NONLIABILITY
  OF LENDER

  	
  92

  
	
   

  	
   

  	
   

  
	
  10.16

  	
  NO THIRD
  PARTIES BENEFITED

  	
  93

  
	
   

  	
   

  	
   

  
	
  10.17

  	
  SEVERABILITY

  	
  93

  
	
   

  	
   

  	
   

  
	
  10.18

  	
  CONFIDENTIALITY

  	
  93

  
	
   

  	
   

  	
   

  
	
  10.19

  	
  FURTHER
  ASSURANCES

  	
  94

  
	
   

  	
   

  	
   

  
	
  10.20

  	
  HEADINGS

  	
  95

  
	
   

  	
   

  	
   

  
	
  10.21

  	
  TIME OF THE
  ESSENCE

  	
  95

  
	
   

  	
   

  	
   

  
	
  10.22

  	
  FOREIGN
  LENDERS

  	
  95

  
	
   

  	
   

  	
   

  
	
  10.23

  	
  REMOVAL AND
  REPLACEMENT OF LENDERS

  	
  95

  
	
   

  	
   

  	
   

  
	
  10.24

  	
  GOVERNING
  LAW

  	
  96

  
	
   

  	
   

  	
   

  
	
  10.25

  	
  WAIVER OF
  RIGHT TO TRIAL BY JURY

  	
  96

  
	
   

  	
   

  	
   

  
	
  10.26

  	
  PATRIOT ACT
  NOTIFICATION

  	
  97

  
	
   

  	
   

  	
   

  
	
  10.27

  	
  ENTIRE AGREEMENT

  	
  97

  



 


v

















 


	
  EXHIBITS

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form of
  Request for Extension of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  B

  	
  Form of
  Compliance Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  C

  	
  Form of
  Term Loan Note

  	
   

  
	
   

  	
   

  	
   

  
	
  D

  	
  Form of
  Assignment and Assumption

  	
   

  
	
   

  	
   

  	
   

  
	
  E

  	
  Form of
  Pledge and Security Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  F

  	
  Form of
  Multi-Party Guaranty

  	
   

  
	
   

  	
   

  	
   

  
	
  G

  	
  Forms of
  Opinions of Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
  H

  	
  Form of
  Collateral Questionnaire

  	
   

  
	
   

  	
   

  	
   

  
	
  I

  	
  Form of
  Intercreditor Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  J

  	
  Form of
  Landlord Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments
  and Pro Rata Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1(a)

  	
  Exceptions
  to Good Standing

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1(b)

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Equity
  Securities and Ownership

  	
   

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  ERISA
  Compliance; Employee Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  5.15

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  5.25

  	
  Affiliate
  Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  5.26

  	
  Dormant
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1(b)

  	
  Existing
  Indebtedness and Liens

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1(e)

  	
  Existing
  Foreign Intercompany Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Disposition
  of Property

  	
   

  
				



 


vi

















 


	
  7.5

  	
  Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12(a) 

  	
  Maximum
  First Lien Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12(b) 

  	
  Maximum
  Total Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12(c) 

  	
  Minimum
  Liquidity Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12(d) 

  	
  Minimum
  Fixed Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12(e) 

  	
  Minimum
  Consolidated EBITDA

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Offshore and
  Domestic Lending Offices, Addresses for Notices

  	
   

  



 


vii

















 


SECOND LIEN CREDIT AGREEMENT


 


This SECOND LIEN CREDIT AGREEMENT (“Agreement”)
is entered into as of December 31, 2007, by and among KRATOS DEFENSE &
SECURITY SOLUTIONS, INC., a Delaware corporation (“Borrower”), KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent, as a Lender hereunder, such other lenders as shall from
time to time be party hereto, with KEYBANC CAPITAL MARKETS as Lead Arranger and
Book Runner hereunder.


 


RECITAL


 


Borrower has requested that Lenders provide a
senior secured term loan facility of up to $10,000,000, and Lenders and
Administrative Agent 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:


 


SECTION I.

DEFINITIONS AND ACCOUNTING TERMS


 


1.1          DEFINED TERMS.  As used in this Agreement, the following terms shall have
the meanings set forth below:


 


“Acquisition”
means any transaction or series of related transactions for the purpose of or
resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any line of business or any
division of a Person, (b) the acquisition of 100% of the capital stock,
partnership interests or equity of any Person, or otherwise causing any Person
to become a wholly-owned Subsidiary, or (c) a merger or consolidation or
any other combination with another Person (other than a Person that is a
Subsidiary).


 


“Additional Fourth Quarter 2007 Add-Backs”
means the following: (i) amounts representing general corporate expenses
of the Borrower and its Subsidiaries expected in good faith by the Borrower not
to be incurred in the future (other than in the fiscal quarter ending March 31,
2008) and not to exceed $954,000, (ii) operating losses associated with
the Borrower’s ENS operations not to exceed $383,000, (iii) non-recurring
legal expenses not to exceed $1,260,000 and (iv) expected savings in
respect of Haverstick corporate overhead not to exceed $475,000; provided, however, for avoidance of doubt, if Borrower or
any of its Subsidiaries receives in any future period any insurance proceeds in
respect of the legal expenses referred to in clause (iii) of this
definition, such proceeds shall not be taken into account in calculating
Consolidated EBITDA for such period.


 


“Additional First Quarter 2008 Add-Backs”
means amounts representing general corporate expenses of the Borrower and its
Subsidiaries expected in good faith by the Borrower not to be incurred in the
future and not to exceed $275,000.


 


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


 

















 


“Administrative Agent’s
Office” means Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.2, or such other address or
account as Administrative Agent hereafter may designate by written notice to
Borrower and Lenders.


 


“Administrative
Agent-Related Persons” means Administrative Agent
(including any successor agent), together with its Affiliates (including, in
the case of KeyBank, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.


 


“Affiliate”
means any Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with another Person.  A Person shall be deemed to be “controlled by”
any other Person if such other Person possesses, directly or indirectly, power (a) to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.


 


“Agreement”
means this Second Lien Credit Agreement, as amended, restated, extended,
supplemented or otherwise modified in writing from time to time.


 


“Annual Payments”
means, with respect to any Material Contract, (x) the total amount of the
payments expected to be paid or received, as applicable,  under such Material Contract (y) divided
by the total number of years of the term of such Material Contract.


 


“Applicable Margin”
means the following amounts per annum: in the case of the Offshore Rate Margin,
800.0 basis points, and in the case of the Base Rate Margin, 700.0 basis
points.


 


For purposes of Borrower’s payment of
interest in accordance with Section 2.4, during any Interest Period
beginning on or after the receipt by the Administrative Agent of the Compliance
Certificate with respect to the fiscal year ending December 31, 2008 for
which the Total Leverage Ratio is less than or equal to 3.25:1.00 until the
earlier of the date by which the next Compliance Certificate is required to be
delivered and the actual date of delivery of the next Compliance Certificate,
the Applicable Margin with respect to both Offshore Rate Loans and Base Rate
Loans for such Interest Period shall be reduced by 50 basis points from the rate
otherwise set forth above.  For the
avoidance of doubt, any reduction in the Applicable Margin pursuant to the
provisions above shall not be permanent and shall be in effect only for so long
as the applicable Compliance Certificate demonstrates that the Total Leverage
Ratio is at or below the requisite level. 
In the event that any financial statement delivered pursuant to Section 6.1
or Compliance Certificate delivered pursuant to Section 6.2 is shown to be
inaccurate (regardless of whether this Credit Agreement is in effect when such
inaccuracy is discovered), and such inaccuracy, if corrected would have led to
a higher Applicable Margin for any period (an “Applicable
Period”) than the Applicable Margin applied for such Applicable
Period, then (i) Borrower shall immediately deliver to Administrative
Agent a correct Compliance Certificate for such Applicable Period, (ii) the
Applicable Margin shall be determined by reference to the corrected Compliance
Certificate (but in no event shall the Lenders owe any amounts to Borrower),
and (iii) Borrower shall immediately pay to the Administrative Agent the
additional interest owing as a result of such increased Applicable Margin for
such Applicable Period, which


 


2

















 


payment shall
be promptly applied by the Administrative Agent in accordance with the terms
hereof.  This paragraph shall not limit
the rights of the Administrative Agent and the Lenders hereunder.


 


“Applicable Payment
Date” means, (a) as to any Offshore Rate Loan,
the last day of the relevant Interest Period or every ninety days, whichever is
earlier, any date that such Loan is prepaid or converted in whole or in part
and the Maturity Date; and (b) as to any other Obligations; the last
Business Day of each calendar quarter and the Maturity Date; provided, further, that interest accruing at the Default
Rate shall be payable from time to time upon demand of Administrative Agent.


 


“Approved Fund”
means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


“Arranger”
means KeyBanc Capital Markets, in its capacity as “Lead Arranger” and “Book
Runner.”


 


“Asset Sale” means a
Disposition in one transaction or a series of transactions, of all or any part
of Borrower’s or any of its Subsidiaries’ businesses, assets or properties of
any kind, whether real, personal, or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, including, without limitation,
contract rights, intellectual property and the Equity Securities of any of
Borrower’s Subsidiaries, other than inventory sold or leased in the ordinary
course of business.


 


“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 10.4), and
accepted by the Administrative Agent, in substantially the form of Exhibit D
or any other form approved by the Administrative Agent.


 


“Attorney Costs”
means and includes all reasonable attorney’s and other fees and disbursements
of any law firm or other external counsel and the allocated cost of internal
legal services and all disbursements of internal counsel.


 


“Audited Financial
Statements” means the audited consolidated balance
sheet, income statement and cash flows of Borrower and its Subsidiaries for
each 52 or 53 week year, as applicable, on or about December 31.


 


“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.


 


“Base Rate”
means 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 KeyBank as its “prime rate.”
Such prime rate is a rate set by KeyBank based upon various factors including
KeyBank’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. 
Any change in such prime rate announced by KeyBank shall take effect at
the opening of business on the day specified in the


 


3

















 


public
announcement of such change.  If KeyBank
ceases to establish or publish a prime rate, the applicable Base Rate
thereafter shall be instead the prime rate reported in The Wall Street Journal
(or the average prime rate if a high and a low prime rate are therein
reported).


 


“Base Rate Loan”
means a Loan made in not less than the Minimum Amount pursuant to Requisite
Notice to Administrative Agent by delivering (a) the initial request for
extension of credit on the Closing Date as more fully set forth in Section 2.2(a) hereof
or (b) thereafter, a Request for Extension of Credit not later than the
Requisite Time and specified to be a Base Rate Loan or if not designated
otherwise.  Interest on each Base Rate
Loan shall be calculated using the Applicable Margin for the Base Rate
effective as of the date of the advance of such Base Rate Loan.


 


“Borrower”
has the meaning set forth in the introductory paragraph hereto.


 


“Borrowing”
and “Borrow” each mean a
borrowing of Loans hereunder.


 


“Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banks in Cleveland, Ohio; New York, New York; San Francisco,
California; or (if interest is being determined by reference to the Offshore
Rate) London, England are generally authorized or obligated, by law or
executive order, to close.


 


“Capital Leases”
means any and all leases under which certain obligations are required to be
capitalized on the books of a lessee in accordance with GAAP.


 


“Cash Equivalents”
means, as at any date of determination, (i) marketable securities (a) issued
or directly and unconditionally guaranteed as to interest and principal by the
United States Government, or (b) issued by any agency of the United States
the obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year after such date; (ii) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof,
in each case maturing within one year after such date and having, at the time
of the acquisition thereof, a rating of at least A-1 from S&P or at least
P-1 from Moody’s; (iii) commercial paper maturing no more than one year
from the date of creation thereof and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates
of deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia that (a) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator), and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (a) has at least ninety five percent
(95%) of its assets invested continuously in the types of investments referred
to in clauses (i) and (ii) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody’s.


 


“Cash Acquisition
Consideration” means the amount of cash paid or
payable in connection with an Acquisition including, without limitation, (a) all
amounts recorded on the books of Borrower or any Subsidiary as deferred
liabilities (whether or not characterized as an


 


4

















 


earn-out)
determined as of the Acquisition date, (b) contingent liabilities (whether
or not characterized as an earn-out) determined as of the date paid, (c) Indebtedness
assumed or incurred in connection with such Acquisition and (d) Indebtedness
of such Persons as are acquired in such Acquisition.


 


“Change of Control”
means (a) the acquisition of, or, if earlier, the shareholder or director
approval of the acquisition of, ownership or voting control, directly or
indirectly, beneficially or of record, on or after the Closing Date, by any
Person or group (within the meaning of Rule 13d-3 of the SEC under the
Securities Exchange Act of 1934, as then in effect), of (i) shares
representing more than thirty-five percent 35% of the aggregate ordinary Voting
Power and/or economic interest represented by the issued and outstanding
capital stock of Borrower or (ii) the power (whether or not exercised) to
elect a majority of the members of the board of directors (or similar governing
body) of Borrower; (b) during any period of twelve (12) consecutive
months, the occupation of a majority of the seats (other than vacant seats) on
the board of directors or other governing body of Borrower by Persons who were
neither (i) nominated by the board of directors or other governing body of
Borrower nor (ii) appointed by directors so nominated; (c) the
occurrence of a change in control, or other similar provision, as defined in
any Material Indebtedness Agreement or (d) the termination of the
employment of Eric DeMarco by the Borrower, whether initiated by the Borrower
or by Mr. DeMarco, in substantially the role served by him as of the
Closing Date, unless an interim or permanent successor reasonably acceptable to
Administrative Agent and the Requisite Lenders is immediately appointed, such
acceptance not to be unreasonably withheld.


 


“Closing Date”
means the date all the conditions precedent in Section 4.1 are satisfied
or waived in accordance with Section 4.1.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto.


 


“Collateral” has the
meaning set forth in the Pledge and Security Agreement.


 


“Collateral Questionnaire”
means a certificate substantially in the form of Exhibit H that provides
information with respect to the personal or mixed property of each Credit
Party.


 


“Commitment”
means, in the aggregate $10,000,000, and for each Lender, the amount set forth
opposite such Lender’s name on Schedule 2.1, as such amount may be reduced or
adjusted from time to time in accordance with the terms of this Agreement
(collectively, the “Combined Commitments”).


 


“Compliance
Certificate” means a certificate substantially in the
form of Exhibit B, properly completed and signed by a Responsible Officer
of Borrower.


 


“Consolidated Capital Expenditures”
means, for any period, the aggregate of all expenditures of Borrower and its
Subsidiaries during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “purchase of property and
equipment (including the portion of liabilities under any Capital Lease that is
or should be capitalized in accordance with GAAP) or which should otherwise be
capitalized” including, for


 


5

















 


the avoidance
of doubt, expenditures in respect of software to the extent capitalized in
accordance with GAAP.


 


“Consolidated Current Assets” means,
as at any date of determination, the total assets of Borrower and its
Subsidiaries on a consolidated basis that may properly be classified as current
assets in conformity with GAAP after deducting any appropriate and adequate
reserves therefor in conformity with GAAP, excluding cash and Cash Equivalents.


 


“Consolidated Current Liabilities”
means, as at any date of determination, the total liabilities of Borrower and its
Subsidiaries on a consolidated basis that may properly be classified as current
liabilities in conformity with GAAP, excluding (i) the current portion of
long term debt, (ii) other Indebtedness with a stated maturity of less
than one year that is outstanding at such time and (iii) obligations in
respect of revolving loans under any working capital credit facility.


 


“Consolidated EBITDA”
means, for any period, (x) the sum of the following, provided that the items contained in
clauses (b)-(g) below shall be added to (a) only to the extent they
have been deducted in the calculation of Consolidated Net Income:


 


(a)           Consolidated Net Income; provided that all items of gain and income
that are properly classified as extraordinary in accordance with GAAP (but do not
fall within clauses (b)-(h) below) shall be excluded from such
Consolidated Net Income;


 


(b)           Consolidated Interest Charges;


 


(c)           the amount of taxes, based on or
measured by income, used or included in the determination of such Consolidated
Net Income;


 


(d)           the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income,
including any impairment of goodwill or other purchased intangibles as defined
under FAS 142 or FAS 144;


 


(e)           any non-cash stock based compensation
charges in such period pursuant to GAAP;


 


(f)            the amount of non-cash costs from
the disposal of assets or changes to GAAP;


 


(g)           the amount of earn-out or similar
payments required to be reported as compensation expense instead of goodwill;


 


(h)           solely
with respect to the fiscal quarter ended December 31, 2007, the Additional
Fourth Quarter 2007 Add-Backs;


 


(i)            solely
with respect to the fiscal quarter ended March 31, 2008, the Additional
First Quarter 2008 Add-Backs;


 


6

















 


(j)            upon
the implementation of FAS 141R, the amount of the purchase price and related
transaction costs of any Acquisition required to be expensed during such period
that would otherwise have been classified as goodwill prior to such implementation;


 


(k)           other
non-cash items reducing Consolidated Net Income (excluding any such non-cash
item to the extent that it represents an accrual or reserve for potential cash
items in any future period or amortization of a prepaid cash item that was paid
in a prior period);


 


minus


 


(x)            other
non-cash items increasing Consolidated Net Income for such period (excluding
any such non-cash item to the extent it represents the reversal of an accrual
or reserve for potential cash item in any prior period);


 


(y)           the
amount of interest income included in the determination of such Consolidated
Net Income; and


 


(z)            the
Rental Variance.


 


Notwithstanding the foregoing, for purposes
of calculating the Consolidated EBITDA for any period that includes any fiscal
quarter that ended prior to the Closing Date, the deemed Consolidated EBITDA
for such Fiscal Quarter shall be (i) for the fiscal quarter ended March 31,
2007, $4,776,000, (ii) for the fiscal quarter ended June 30, 2007,
$2,336,000 and (iii) for the fiscal quarter ended September 30, 2007,
$4,583,000.


 


“Consolidated Excess
Cash Flow” means:


 


(i) with
respect to fiscal year 2008, an amount (if positive) determined for Borrower
and its Subsidiaries on a consolidated basis equal to:


 


(a) The amount of set forth on the audited
Consolidated Statements of Cash Flows of Borrower for fiscal year 2008 across
from the heading “Net cash provided by continuing operations”;


 


minus


 


(b) the sum, without duplication, of the
amounts for such period of:


 


(1) voluntary and scheduled repayments
of Indebtedness (excluding repayments of any revolving credit indebtedness
except to the extent the obligation of the relevant lenders to make such
revolving credit available is permanently reduced or terminated in connection
with such repayments, to the extent of such reduction or termination);


 


(2) Consolidated Capital Expenditures
paid in cash (net of any proceeds of related financings with respect to such
expenditures); and


 


(3) the proceeds used to make mandatory
prepayments pursuant to Section 2.4(b)(i), 2.4(b)(ii) and 2.4(b)(vi),
only to the extent included in clause (i)(a) above; and


 


7

















 


(ii) for any period ending after fiscal
year 2008, an amount (if positive) determined for Borrower and its Subsidiaries
on a consolidated basis equal to:


 


(a) the sum, without duplication, of the
amounts for such period of:


 


(1) Consolidated EBITDA;


 


(2) interest income;


 


(3) extraordinary cash gains and
extraordinary cash other income; and


 


(4) the Consolidated Working Capital
Adjustment;


 


minus


 


(b) the sum, without duplication, of the
amounts for such period of:


 


(1) voluntary and scheduled repayments
of Indebtedness (excluding repayments of any revolving credit indebtedness
except to the extent the obligation of the relevant lenders to make such
revolving credit available is permanently reduced or terminated in connection
with such repayments, to the extent of such reduction or termination);


 


(2) Consolidated Capital Expenditures
paid in cash (net of any proceeds of related financings with respect to such
expenditures);


 


(3) Consolidated Interest Charges to the
extent payable in cash;


 


(4) provisions for current taxes based
on income of Borrower and its Subsidiaries and payable in cash with respect to
such period; and


 


(5) the proceeds used to make mandatory
prepayments pursuant to Section 2.4(b)(i), 2.4(b)(ii) and 2.4(b)(vi),
only to the extent included in clause (i)(a) above.


 


“Consolidated
Interest Charges” means, for any period, for Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses payable by Borrower and
its Subsidiaries in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, (b) the
portion of rent payable by Borrower and its Subsidiaries with respect to such
period under Capital Leases that is treated as interest in accordance with GAAP
and (c) the portion of rent under any Synthetic Lease Obligation that
would be treated as interest in accordance with GAAP if the Synthetic Lease
Obligation were treated as a Capital Lease under GAAP.


 


“Consolidated Net Income”
means, (i) the net income (or loss) of Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, minus (ii) the sum of:


 


8
















 


(a)                                  the income (or loss) of any Person (other than a Subsidiary
of Borrower) in which any other Person (other than Borrower or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Borrower or any of its
Subsidiaries by such Person during such period, plus


 


(b)                                 the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of Borrower or is merged into or consolidated with
Borrower or any of its Subsidiaries or that Person’s assets are acquired by
Borrower or any of its Subsidiaries; plus


 


(c)                                  the income (or loss) of any Subsidiary of Borrower to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary,
plus


 


(d)                                 any after tax gains or losses attributable to Asset Sales or
returned surplus assets of any Pension Plan, plus


 


(e)                                  the income (or loss) from discontinued operations.


 


“Consolidated Working Capital” means, as at any date of determination, the excess or deficiency of
Consolidated Current Assets over Consolidated Current Liabilities.


 


“Consolidated Working Capital
Adjustment” means, for any period on
a consolidated basis, the amount (which may be a positive or a negative number)
by which Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such period, as adjusted for any non-cash changes in deferred tax assets and deferred
tax liabilities of Borrower and its Subsidiaries;  provided, however, the Consolidated
Working Capital Adjustment may be decreased by an amount determined by the
Administrative Agent in its reasonable discretion to reflect a decrease in the
accounts payable of Borrower and its Subsidiaries resulting from a material
decrease in the historic consolidated days payable of Borrower and its
Subsidiaries.


 


“Continuation” and “Continue” mean, with respect to any
Offshore Rate Loan, the continuation of such Offshore Rate Loan as an Offshore
Rate Loan on the last day of the Interest Period for such Loan.


 


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


 


“Conversion” and “Convert” mean, with respect to any Loan,
the conversion of such Loan from or into another type of Loan.


 


“Credit Party” means Borrower
and each Guarantor.


 


“Debtor Relief Laws” means the
Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement, 


 


9

















 


receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America
or other applicable jurisdictions from time to time in effect affecting the
rights of creditors generally.


 


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


 


“Default Rate” means an
interest rate that is two  percent  (2.0%) per annum in excess of the interest rate otherwise
payable hereunder with respect to the applicable Loans (or, in the case of any
fees and other amounts, at a rate which is two percent  (2.0%)
per annum in excess of the interest rate otherwise payable hereunder for Base
Rate Loans).


 


“Disclosure Letter” means that
Disclosure Letter of even date herewith and delivered to Administrative Agent
together with this Agreement, as the same may be updated from time to time with
the consent of the Requisite Lenders.


 


“Disposition” or “Dispose” means the sale, lease or sub
lease (as lessor or sublessor), assignment, conveyance, transfer, License
Disposition or other disposition (including any sale and leaseback transaction)
of any property by any Person, or any exchange of property by such Person with
any other 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; provided,
however, that an issuance by a Person of its Equity Securities shall
not be a Disposition.


 


“Disqualified Capital Stock” means an Equity Security
that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of
the Maturity Date with respect to the Term Loans, (b) is convertible into
or exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Equity Securities of the type referred to in clause
(a) above, in each case at any time prior to the first anniversary of the
Maturity Date with respect to the Term Loans, (c) contains any repurchase
obligation that may come into effect prior to payment in full of all
Obligations, (d) requires cash dividend payments prior to one year after
the Maturity Date with respect to the Term Loans, (e) does not provide
that any claims of any holder of such Equity Security may have against Borrower
or any of its Subsidiaries (including any claims as judgment creditor or other
creditor in respect of claims for the breach of any covenant contained therein)
shall be fully subordinated (including a full remedy bar) to the Obligations in
a manner satisfactory to Administrative Agent, (f) provides the holders of
such Equity Security with any rights to receive any cash upon the occurrence of
a change of control prior to the first anniversary date on which the
Obligations have been irrevocably paid in full, unless the rights to receive
such cash are contingent upon the Obligations being irrevocably paid in full,
or (g) is prohibited by the terms of this Agreement.


 


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


 


10

















 


“Domestic Subsidiary” means a
Subsidiary that is not a Foreign Subsidiary.


 


“Dormant
Subsidiaries” has the meaning set forth
in Section 5.26 hereof.


 


“Eligible Assignee” means (a) a
financial institution organized under the laws of the United States, or any
state thereof, and having a combined capital and surplus of at least
$100,000,000; (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000, provided
that such bank is acting through a branch or agency located in the United
States; (c) any Lender or any Affiliate of a Lender or an Approved Fund; (d) any
other entity which is an “accredited investor” (as defined in Regulation D
under the Securities Act of 1933, as amended) which extends credit or buys
loans as one of its businesses, including but not limited to, insurance
companies, mutual funds and lease financing companies; or (e) any Person
(other than a natural Person) approved by Borrower (so long as no Default or
Event of Default has occurred and is continuing) and Administrative Agent.  Neither Borrower nor any Affiliate of
Borrower shall be an Eligible Assignee.


 


“Employee Benefits Plan” means any “employee
benefit plan” as defined in Section 3(3) of ERISA, including without
limitation, a 401k plan, employee stock purchase program, deferred compensation
program or similar programs maintained by Borrower or any of its Subsidiaries
within the past five years from the date hereof.


 


“Environmental Laws” means all Laws
relating to environmental, health, safety and land use matters applicable to
Borrower or any of its properties.


 


“Equity Securities” of any Person
means (a) all common stock, preferred stock, participations, shares,
partnership interests or other equity interests in such Person (regardless of
how designated and whether or not voting or non-voting) and (b) all
warrants, options and other rights to acquire any of the foregoing, other than
convertible debt securities which have not been converted into common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in any such Person.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
or any successor Federal statute.


 


“ERISA Affiliate” means any
trade or business (whether or not incorporated) under common control with
Borrower or any of its Subsidiaries within the meaning of Sections 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).  Any former ERISA Affiliate of Borrower or any
of its Subsidiaries shall continue to be considered an ERISA Affiliate of
Borrower or any such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of Borrower or such
Subsidiary and with respect to liabilities arising after such period for which
Borrower or such Subsidiary could be liable under the Code or ERISA.


 


“ERISA Event” means (i) a
“reportable event”
within the meaning of Section 4043 of ERISA and the regulations issued
thereunder with respect to any Pension Plan; (ii) the failure to meet the
minimum funding standard of Section 412 of the Code with respect to any
Pension Plan 


 


11

















 


(whether or not waived in
accordance with Section 412(d) of the Code) or the failure to make by
its due date a required installment under Section 412(m) of the Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) notice of intent to terminate
a Pension Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates from any Pension Plan with two or more
non-related contributing sponsors or the termination of any such Pension Plan
resulting in liability to Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might reasonably constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
in a complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any liability or
potential liability therefor, or the receipt by Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A
or 4042 of ERISA; (viii) the occurrence of an act or omission which could
give rise to the imposition on Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or related charges
under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan or the assets thereof, or against Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates in connection with
any Employee Benefit Plan; (x) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code) to
qualify under Section 401(a) of the Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of
the Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Code or pursuant to ERISA with respect to any Pension
Plan.


 


“Eurodollar Reserve Percentage” means, for any
day during any Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) 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 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”).


 


“Event of Default” means any of
the events specified in Section 8.


 


“Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time, or any successor
federal statute.


 


“Existing Indebtedness” means (i) Indebtedness
and other obligations outstanding under that certain Credit Agreement, dated as
of October 2, 2006, between Borrower, KeyBank National Association,
KeyBank Capital Markets and the lenders thereunder, as amended prior to 


 


12

















 


the Closing Date and (ii) Indebtedness
and other obligations outstanding under that certain Loan Agreement, dated as
of January 16, 2004, between Haverstick Consulting, Inc. and Menard, Inc.,
as amended prior to the Closing Date.


 


“Extension of Credit” means a
Borrowing, Conversion or Continuation of Loans.


 


“Extraordinary Receipts” means any cash received by
or paid to or for the account of Borrower or any of it Subsidiaries not in the
ordinary course of business,  pension
plan reversions, judgments, proceeds of settlements or other consideration of
any kind in connection with any cause of action, condemnation awards (and
payments in lieu thereof), indemnity payments and any purchase price adjustment
received in connection with any purchase agreement (including the Merger
Agreement) and proceeds of insurance, in each case net of all actual and
reasonable costs incurred by Borrower or any of its Subsidiaries, in connection
with such non-ordinary course cash receipt (excluding, however, (i) any
Net Asset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Cash Equity
Proceeds or the net cash proceeds from the incurrence of any Indebtedness of
Borrower or any of its Subsidiaries, in each case, which are subject to Section 2.3(b) and
(ii) proceeds from the Westfield Receivable.


 


“Facilities Letter” means that
certain Facilities Letter, dated October 24, 2007, by and between Arranger
and Borrower, including all attachments thereto.


 


“Federal Funds Rate” means, for any
day, the rate per annum (rounded upwards to the nearest 1/100 of 1%) 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 on the Business Day next
succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to KeyBank on such
day on such transactions as determined by Administrative Agent.


 


“Fee Letter” means that
certain Fee Letter, dated December     , 2007, by and
between Arranger and Borrower.


 


“First Lien Administrative Agent” means KeyBank National
Association, in its capacity as administrative agent under the First Lien
Credit Agreement or any successor administrative agent thereunder.


 


“First Lien Credit Agreement” means (i) that certain
credit agreement dated as of the date hereof among Borrower, KeyBank National
Association, as a lender and as administrative agent, such other lenders as
shall from time to time be party thereto, with KeyBanc Capital Markets as lead
arranger and book runner thereunder, as amended, restated, supplemented or
modified from time to time to the extent permitted by this Agreement and the Intercreditor
Agreement.


 


“First Lien Event of Default” shall have the meaning
assigned to the term “Event of Default” in the First Lien Credit Agreement.


 


13

















 


“First Lien Lender” means a “Lender” as defined
in the First Lien Credit Agreement.


 


“First Lien Leverage Ratio” means, as of
any date of determination, for Borrower and its Subsidiaries on a consolidated
basis, the ratio of (a) the aggregate amount of Indebtedness less the sum
of (i) the aggregate amount of Indebtedness under this Agreement, (ii) Subordinated
Debt as of such date and (iii) unsecured obligations in respect of
earn-out payments, holdback amounts or other similar obligations in connection
with Acquisitions by Borrower or any of its subsidiaries (including in
connection with the MRC and Haverstick Acquisitions)  to
the extent payable in cash  to (b) Consolidated
EBITDA for the period of the four quarters ending on, or ending most recently
prior to, such date.


 


“First Lien Loan Documents” means the First Lien Credit
Agreement and the other Loan Documents as defined in the First Lien Credit
Agreement, including other security documents, guaranties and the notes issued
thereunder.


 


“First Lien Loans” means, collectively, the
First Lien Term Loan and the First Lien Revolving Loans.


 


“First Lien Obligations” shall have the meaning assigned to the term “Obligations” in the First
Lien Credit Agreement.


 


“First Lien Revolving Loans” shall have the meaning assigned to the term “Revolving Loan” in the
First Lien Credit Agreement.


 


“First Lien Term Loan” shall have the meaning assigned to the term “Original Term Loan” in
the First Lien Credit Agreement.


 


“First-Tier Material Foreign
Subsidiary” means a direct Foreign Subsidiary of either
Borrower or a Domestic Subsidiary that is also a Material Subsidiary.


 


“Fixed Charge Coverage Ratio” means as of
any date of determination the ratio of (a) Borrower’s Consolidated EBITDA
for the preceding four quarters most recently ended to (b) the sum of (i) scheduled
principal amortization payments made pursuant to this Agreement and the Second
Lien Credit Agreement, (ii) Consolidated Interest Charges to the extent
paid in cash, (iii) consolidated income taxes to the extent paid in cash
(less cash income tax refunds actually received attributable to taxes paid in
the current or immediately prior fiscal year), (iv) Consolidated Capital
Expenditures, (v) cash losses resulting from discontinued operations, (vi) cash
payments made by Borrower or any of its Subsidiaries in respect of earn-out,
holdback or other similar obligations in connection with Acquisitions
(including in connection with the MRC and Haverstick Acquisitions), all as
determined in accordance with GAAP and in each case for the four quarters most
recently ended.


 


“Foreign Subsidiary” means a
Subsidiary that is organized outside of the United States of America.


 


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


 


14

















 


“GAAP” means
generally accepted accounting principles 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, that are applicable to the
circumstances as of the date of determination (except as otherwise set forth in
Section 1.3), consistently applied.


 


“Governmental Authority” means (a) any
international, foreign, federal, state, county or municipal government, or
political subdivision thereof, (b) any governmental or quasi-governmental
agency, authority, board, bureau, commission, department, instrumentality,
central bank or public body, or (c) any court, administrative tribunal or
public utility.


 


“Guarantor” shall mean
each Domestic Subsidiary which is a Material Subsidiary in existence on the
date hereof (as set forth on Schedule 5.1 hereof) and thereafter any other
Domestic Subsidiary that shall become an obligor under the Multi-Party Guaranty
pursuant to the terms of Section 6.12 hereof.


 


“Guaranty Obligation” means, as to
any Person, any (a) guaranty by such Person of Indebtedness of, or other
obligation payable or performable by, any other Person or (b) assurance,
agreement, letter of responsibility, letter of awareness, undertaking or
arrangement given by such Person to an obligee of any other Person with respect
to the payment or performance of an obligation by, or the financial condition
of, such other Person, whether direct, indirect or contingent, including any
purchase or repurchase agreement covering such obligation or any collateral
security therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person or any “keep-well”
or other arrangement of whatever nature, in each such case, given for the
purpose of assuring or holding harmless such obligee against loss with respect
to any obligation of such other Person; provided,
however, that the term Guaranty Obligation shall not include
performance bond or other bond guarantees or endorsements of instruments for
deposit or collection in the ordinary course of business.  The amount of any Guaranty Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
related primary obligation, or portion thereof, covered by such Guaranty
Obligation or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Person in good
faith.


 


“Haverstick” means Haverstick Consulting, Inc., an Indiana
corporation.


 


“Hazardous Substance” means any
substance, material or waste, including asbestos and petroleum (including crude
oil or any fraction thereof), which is or becomes designated, classified or
regulated as “toxic,” “hazardous,” a “pollutant” or similar designation under
any Laws.


 


“Historical Financial Statements” means as of the Closing
Date, (i) the audited financial statements of Borrower and its Subsidiaries,
for the fiscal year ended December 31, 2006, consisting of a consolidated
balance sheet, a consolidated statement of income and a consolidated cash flow
statement for such fiscal year, and (ii) for the interim period from December 31,
2006, to the Closing Date, internally prepared, unaudited financial statements
of 


 


15

















 


Borrower and its
Subsidiaries, consisting of a consolidated balance sheet, a consolidated
statement of income and a consolidated cash flow statement for each quarterly
period completed prior to forty-five (45) days before the Closing Date, in the
case of clauses (i) and (ii), certified by a Responsible Officer of
Borrower as fairly presenting in all material respects the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.


 


“Indebtedness” means, as to
any Person:


 


(a)                                  all obligations of such
Person for borrowed money;


 


(b)                                 all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments or
upon which interest payments are customarily paid and all obligations in
respect of drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money;


 


(c)                                  any direct or contingent
obligations of such Person arising under letters of credit (including standby
and commercial), banker’s acceptances, bank guaranties, surety bonds and
similar instruments, but excluding performance bonds and guaranties thereof,
other than in the form of a letter of credit;


 


(d)                                 the Swap Termination Value
of any Swap Contract;


 


(e)                                  with or without recourse,
all obligations of such Person to pay the deferred purchase price of property
or services in cash, including any
obligations in respect of earn-out payments, holdback amounts or other similar
obligations in connection with Acquisitions by Borrower or any of its
Subsidiaries, but excluding all trade payables
incurred in the ordinary course of business having a term of less than six (6) months
and not overdue by more than sixty (60) days, provided that (i) up to
$3,000,000 at any time outstanding of trade payables incurred in the ordinary
course of business having a term of less than six (6) months and not
overdue by more than ninety (90) days shall not be considered Indebtedness
hereunder and (ii) up to $1,000,000 at any time outstanding of trade
payables incurred in the ordinary course of business having a term of less than
six (6) months and not overdue by more than one hundred and twenty (120)
days shall not be considered Indebtedness hereunder;


 


(f)                                    Capital Leases or Synthetic
Lease Obligations, where (i) the amount of Indebtedness in the case of
Capital Leases shall be the amount of the capitalized lease liability properly
classified as a liability on a balance sheet in conformity with GAAP and (ii) the
amount of Indebtedness in the case of Synthetic Lease Obligations shall be the
sum of all outstanding principal advances and any other sums advanced and
outstanding pursuant to the Synthetic Lease Obligations;


 


(g)                                 all obligations under asset
securitization financing transactions, including recourse sales of receivables
but exclusive of nonrecourse sales of receivables;


 


(h)                                 all indebtedness secured by
any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person;


 


16

















 


(i)                                     all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital  Stock of
such Person; and


 


(j)                                     all Guaranty Obligations of
such Person in respect of any of the foregoing obligations of any other Person.


 


For all purposes of this Agreement, the Indebtedness
of any Person shall include, the Indebtedness of any partnership or joint
venture (to the extent the joint venture consists of a legal entity where a
joint venturer has pass-through liability for all of the debts of the joint
venture) in which such Person is a general partner or a joint venturer, unless
other than with respect to clause (g) above) such Indebtedness is
expressly made non-recourse to such Person (subject to customary recourse
exceptions acceptable to Requisite Lenders).


 


“Indemnified Liabilities” has the
meaning set forth in Section 10.14.


 


“Indemnitees” has the
meaning set forth in Section 10.14.


 


“Intercreditor Agreement” means an intercreditor agreement in the form of Exhibit I
among the Administrative Agent, the First Lien Administrative Agent and the
Credit Parties.


 


“Interest Period” means for each
Offshore Rate Loan, (i) initially, the period commencing on the date such
Offshore Rate Loan is disbursed or Continued or Converted into such Offshore
Rate Loan, and (ii) thereafter, the period commencing on the last day of
the preceding Interest Period, and ending, in each case, on the earlier of (x) the
scheduled Maturity Date, or (y) one, two, three or six months thereafter,
as elected by Borrower; provided that:


 


(a)                                  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;


 


(b)                                 any Interest
Period which 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


 


(c)                                  unless
Administrative Agent otherwise consents, there may not be more than five (5) Interest
Periods for Offshore Rate Loans in effect at any time.


 


“Intellectual Property Security
Agreement” means the Patent Security Agreement, the Trademark
Security Agreement, and the Copyright Security Agreement, each dated as of the
date hereof, executed in favor of Administrative Agent (for the account of each
Lender in accordance with its Pro Rata Share).


 


“Internal Control Event” means a material weakness
in, or fraud that involves management of, Borrower, which fraud has a material
effect on Borrower’s internal controls over financial and other reporting, in
each case as described in the Securities Laws, whether or not Borrower is
subject thereto.


 


17

















 


“Investment” means, as to
any Person, any investment by such Person, whether by means of the purchase or
other acquisition of stock or other securities of any other Person or by means
of a loan, creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person.  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.


 


“KeyBank” means KeyBank
National Association.


 


“Landlord Waiver” means a landlord waiver, substantially in
the form of Exhibit J hereto (or in such other form or with such
modifications as shall be approved by the Administrative Agent).


 


“Laws” or “Law” means 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.


 


“LCC Working Capital Adjustment” means the
working capital adjustment due to the Borrower in accordance with the terms of
the asset purchase agreement by and between LCC International, Inc. and
Wireless Facilities, Inc. pertaining to the sale of Wireless Facilities’
domestic engineering business.


 


“Lender” means each lender from time to time party
hereto.


 


“Lending Office” means, as to
any Lender, the office or offices of such Lender described as such on Schedule
10.2, or such other office or offices as a Lender may from time to time notify
Administrative Agent.


 


“License Disposition” means, in
respect of any patent, trademark, copyright, mask work, trade secret or other
intellectual property right owned or held by Borrower or any of its
Subsidiaries (the “IP Holder”)
which is material to Borrower or any of its Subsidiaries (together, “Material IP”), (i)   the granting by the IP Holder of an
exclusive license across all or substantially all fields, uses or regions to
any Person other than Borrower or another Subsidiary, (ii) the granting of
any license by the IP Holder that conveys directly or indirectly to any Person
other than Borrower or its Subsidiaries all or substantially all of the
economic value of such Material IP, or (iii) the abandonment by the IP
Holder of such Material IP.


 


“Lien” means (i) any
mortgage, pledge, hypothecation, assignment, deposit arrangement (including in
the nature of, cash collateral accounts or security interests), encumbrance,
lien (statutory or other), fixed or floating charge, or other security interest
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any 


 


18

















 


financing statement under
the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable and (ii) in the case of
Securities, any purchase option, call or similar right of a third party with
respect to such Securities.


 


“Liquidity Ratio” means as of
any date of determination, for Borrower and its Subsidiaries on a consolidated
basis and in accordance with GAAP, the ratio of (a) the sum of cash on
hand, Cash Equivalents, and billed and unbilled accounts receivable (excluding
accounts receivable owing from any Affiliate, shareholder or employee of
Borrower or any of its Subsidiaries) to (b) current liabilities (excluding
current liabilities of discontinued operations, current deferred tax
liabilities and deferred revenue); provided
that for all periods ending in the four fiscal quarter period prior to the
Maturity Date, current liabilities shall exclude the Obligations.


 


“Loan” means any
advance made by any Lender to Borrower as provided in Section 2.1(a) that
is a Term Loan (collectively, the “Loans”).


 


“Loan Documents” means this
Agreement, the Intercreditor Agreement, each Note, the Multi-Party Guaranty,
the Security Documents, each Request for Extension of Credit, the Post-Closing
Letter, the Fee Letter, each certificate, each fee letter, and each other
instrument or agreement from time to time executed by Borrower or any of its
Subsidiaries or any Responsible Officer and delivered in connection with this
Agreement.


 


“Material Adverse Change” means, when used with
respect to Borrower and its Subsidiaries or Haverstick and its Subsidiaries, as
the case may be, any change or effect that is materially adverse or unfavorable
to the business or the operations, assets, liabilities, employee relationships,
customer or supplier relationships, earnings or results of operations,
financial projections or forecasts, or the business prospects and condition
(financial or otherwise), of the Borrower and its Subsidiaries, taken as a
whole, or Haverstick and its Subsidiaries, taken as a whole, as the case may
be; provided however, that a Material
Adverse Change shall not be deemed to have occurred upon any change or effect
related to the happening of any event due to (i) the occurrence of a
natural or man-made disaster, (ii) armed conflict, (iii) act of
terrorism, (iv) riot, (v) act of state, (vi) a failure by
Haverstick to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending on or after the date of this
Agreement, provided, however, that the facts and
circumstances underlying any such failure may, except as may be provided in
clauses (i), (ii), (iii), (iv), (v), (vii) and (viii) of this definition,
be considered in determining whether a Material Adverse Change has occurred, (vii) conditions
generally affecting the industries in which Haverstick participates, national,
regional or world economies or financial markets or (viii) any effect
arising primarily out of or resulting primarily from actions contemplated by
the parties in connection with, or which is primarily attributable to, the
announcement or pendency of this Agreement and the transactions contemplated
hereby.


 


“Material Adverse Effect” means any set
of circumstances or events which (a) has any material adverse effect upon
the validity or enforceability of any Loan Document or the rights and remedies
of Administrative Agent and Lenders hereunder or thereunder, (b) is
material and adverse to the prospects, financial condition, business, assets or
operations of Borrower and its Subsidiaries, taken as a whole, (c) has any
material adverse effect upon the value or condition of 


 


19

















 


the Collateral, taken as a
whole, or (d) materially impairs the ability of any Credit Party to
perform the Obligations.


 


“Material Contract” means, collectively, (i) any
contract or agreement listed in the Disclosure Letter, (ii) any
contract or agreement requiring Annual Payments to be made or providing for
Annual Payments to be received, in each case in excess of $2,000,000, (iii) any
other contract or other arrangement to which Borrower or any of its
Subsidiaries is a party (other than the Loan Documents) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected
to have a Material Adverse Effect and (iv) any agreement or instrument
evidencing or governing Indebtedness (other than a Loan Document or any First
Lien Loan Document).


 


“Material Indebtedness Agreement” shall mean any
debt instrument, lease (capital, operating or otherwise), guaranty, contract,
commitment, agreement or other arrangement evidencing any Indebtedness of the
Borrower or any of its Subsidiaries in excess of $2,500,000.


 


“Material Lease” means any
lease existing on the Closing Date or entered into by Borrower or any of its
Subsidiaries after the Closing Date with annual payments in excess of $250,000.


 


“Material Real Estate Asset” means (i) any
fee-owned real estate asset having a fair market value in excess of $2,000,000
as of any date of determination, or (ii) any fee-owned real estate asset
that the Requisite Lenders have determined is material to the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of Borrower or any Subsidiary.


 


“Material Subsidiary” means each
Subsidiary of Borrower that has (a) assets as of the end of most recent
fiscal year of Borrower in excess of $2,000,000 or (b) net revenues in
excess of $5,000,000 for the most recent fiscal year of Borrower.


 


“Maturity Date” means the
earlier of (x) June 30, 2013 or (y) the date that all Term Loans
shall become due and payable in full hereunder, whether by acceleration or
otherwise.


 


“Merger Agreement” means that
certain Agreement and Plan of Merger, dated as of November 2, 2007, by and
among Borrower, Kratos Government Solutions, Inc., Haverstick Acquisition
Corporation and Haverstick, pursuant to which Haverstick, subject to certain
conditions, will become the indirect wholly-owned subsidiary of Borrower.


 


“Merger Documents” means the
Merger Agreement and all agreements attached as exhibits thereto or executed in
connection therewith, all schedules and exhibits attached to any of them, and
all certificates and other documents executed in connection therewith.


 


“Minimum Amount” means, with
respect to each of the following actions, the minimum amount and any multiples
in excess thereof set forth opposite such action:


 


	
  Type of Action

  	
   

  	
  Minimum

  Amount

  	
   

  	
  Multiples in

  excess thereof

  	
   

  
	
  Borrowing or prepayment of, or Conversion into, Base Rate Loans

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Borrowing, prepayment or Continuation of, Conversion into, Offshore
  Rate Loans

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  



 


20

















 


“MRC” means Madison
Research Corporation, an Alabama corporation.


 


“Multiemployer Plan” means any
employee benefit plan of the type described in Section 4001(a)(3) of
ERISA.


 


“Multi-Party Guaranty” means that
Multi-Party Guaranty dated as of the date hereof, executed by each Guarantor in
favor of the Administrative Agent in the form attached hereto as Exhibit F.


 


“Net Asset Sale Proceeds” means, with respect to any
Asset Sale resulting in gross proceeds of more than $5,500,000, an amount equal
to:  (i) the sum of cash payments
and Cash Equivalents received by Borrower or any of its Subsidiaries from such
Asset Sale (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received), minus (ii) any bona fide direct costs
incurred in connection with such Asset Sale, including (a) income or gains
taxes paid or payable by the seller as a result of any gain recognized in
connection with such Asset Sale during the tax period applicable to the sale
(after taking into account any available tax credits or deductions and any
tax-sharing arrangements), (b) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than
the Loans and the First Lien Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale, and (c) a reasonable reserve for any indemnification
payments (fixed or contingent) attributable to seller’s indemnities and
representations and warranties to purchaser in respect of such Asset Sale
undertaken by Borrower or any of its Subsidiaries in connection with such Asset
Sale; provided that upon release of any such
reserve, the amount released shall be considered Net Asset Sale Proceeds); provided, however, that if at any time during the term of
this Agreement Borrower and its Subsidiaries have made Asset Sales resulting in
gross proceeds of more than $8,250,000, thereafter the amount described in
clauses (i) and (ii) of this definition with respect to all Asset
Sales (regardless of size) shall be considered Net Asset Sale Proceeds.


 


“Net Cash Equity Proceeds” means cash proceeds from a
capital contribution to, or the issuance of any Equity Securities of, Borrower
or any of its Subsidiaries, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses.


 


“Net Insurance/Condemnation Proceeds” means an amount equal
to:  (i) any cash payments or
proceeds received by Borrower or any of its Subsidiaries (a) under any
casualty, business interruption or “key man” insurance policies in respect of
any covered loss thereunder, or (b) as a result of the taking of any
assets of Borrower or any of its Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a sale of
any such assets to a purchaser with such power under threat of such a taking,
minus (ii) (a) any actual and reasonable costs incurred by Borrower
or any of its Subsidiaries in connection with the adjustment or settlement of
any claims of Borrower or such Subsidiary in respect thereof, and (b) any
bona fide direct costs incurred in connection with any sale of such assets as
referred to in clause (i)(b) of this definition, including income taxes
paid or payable as a result of any gain 


 


21

















 


recognized in connection
therewith (after taking into account any available tax credits or deductions
and any tax-sharing arrangements).


 


“Note” means a
promissory note made by Borrower in favor of a Lender evidencing the Loans made
by such Lender, substantially in the form of Exhibit C (collectively, the “Notes”).


 


“Obligations” means all
advances to, and debts, liabilities, obligations, covenants and duties of,
Borrower or any of its Subsidiaries arising under any Loan Document and under
any Swap Contract (entered into with any Lender or Affiliate thereof), 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 that accrues after the commencement of any proceeding under
any Debtor Relief Laws by or against Borrower or any Subsidiary of Borrower.


 


“Offshore Rate” means for any
Interest Period with respect to each Offshore Rate Loan comprising part of the
same Borrowing, a rate per annum determined by Administrative Agent as the
offered rate for Dollar deposits in the approximate amount of the requested
Offshore Rate Loan and having a maturity comparable to such Interest Period,
which rate appears (i) on the British Bankers’ Association internet web page (http://www.bba.org.uk/public/libor/),
or via (ii) Reuters (BBALIBORS), Bloomberg, Moneyline Telerate (Page 3750)
or any other information provider of the British Bankers’ Association daily
Libor rates as of 11:00 A.M., London time, on the date (an “Interest Determination Date”) which is
the second day on which banks are open for interbank deposits in London prior
to the commencement of such Interest Period. 
If, on the Interest Determination Date for such Interest Period, the
Administrative Agent is unable to obtain any quotation as provided above, the
Offshore Rate for the relevant Interest Period shall be the rate per annum that
the Administrative Agent determines in good faith to be the arithmetic mean
(rounded, if necessary, to the nearest sixth decimal place) of all the per
annum rates of interest at which deposits in Dollars in an amount comparable to
the requested Offshore Rate Loan in Dollars in respect of which the Offshore
Rate is then being determined for a period comparable to such Interest Period
are offered by Administrative Agent to prime banks in the London interbank
market at approximately 11:00 A.M., London time on such Interest
Determination Date.  The Administrative
Agent shall provide to Borrower, upon request, details as to the manner in
which the Offshore Rate is calculated, but such calculation shall be conclusive
and binding absent manifest error.  The
Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage by dividing (i) the Offshore Rate by (ii) one minus the
Eurodollar Reserve Percentage.  The
determination of the Eurodollar Reserve Percentage and the Offshore Rate by
Administrative Agent shall be conclusive in the absence of manifest error.


 


“Offshore Rate Loan” means a Loan
made in not less than the Minimum Amount pursuant to Requisite Notice to
Administrative Agent and by deliverance of a Request for Extension of Credit
not later than the Requisite Time and specified to be an Offshore Rate Loan.


 


Interest on each Offshore Rate Loan shall be
calculated using the Applicable Margin for the Offshore Rate effective as of
the date of the advance, Continuation or Conversion, as applicable, of such
Offshore Rate.


 


22

















 


“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws; (b) with respect to any limited liability company, the
articles of formation and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership or joint venture agreement and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the secretary
of state or other department in the state of its formation, in each case as
amended from time to time.


 


“Other Taxes” has the meaning specified in Section 3.1.


 


“Outstanding Obligations” means, as of
any date, and giving effect to making any Extensions of Credit requested on
such date and all payments, repayments and prepayments made on such date, (a) when
reference is made to all Lenders, the sum of the aggregate outstanding
principal amount of all Loans, and (b) when reference is made to one
Lender, the sum of the aggregate outstanding principal amount of all Loans made
by such Lender.


 


“PBGC” means the
Pension Benefit Guaranty Corporation or any successor thereto established under
ERISA.


 


“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 or was during the past five years sponsored or maintained by Borrower or
any Subsidiary or ERISA Affiliate or to which Borrower or Subsidiary or any
ERISA Affiliate contributes or has or, during the past five years, had an
obligation to contribute, including without limitation any multiple employer
plan (as described in Section 4064(a) of ERISA).


 


“Permitted Acquisition” has the meaning
specified in Section 7.5(e).


 


“Permitted Exceptions” means with
respect to the property subject to any Material Lease as to which
Administrative Agent is granted a security interest in accordance with Section 6.15: 
(a) Liens arising by operation of law, materialmen’s, mechanics’, workers’,
repairmen’s, employees’, carriers’, warehousemen’s and other like Liens in
connection with any improvements or arising in the ordinary course of business
for amounts that either are not more than thirty (30) days past due or are
being diligently contested in good faith by appropriate proceedings and that
have been bonded for not less than the full amount in dispute (or as to which
other security arrangements satisfactory to Administrative Agent have been
made), which bonding (or arrangements) shall comply with applicable
requirements of Laws, and has effectively stayed any execution or enforcement
of such Liens; (b) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being prosecuted in good
faith and for the payment of which adequate reserves have been provided as required by GAAP or other
appropriate provisions have been made, so long as such proceedings have the
effect of staying the execution of such judgments or awards; (c) all
encumbrances, exceptions, restrictions, easements, rights of way, servitudes,
encroachments and irregularities in title, other than Liens which, in the
reasonable assessment of the Administrative Agent, do not materially impair the
value of the real property security or the use of such real property security
for its intended purpose; (d) a Lien consisting of a deposit or pledge
made, in the ordinary course 


 


23

















 


of business, in connection
with, or to secure payment of, obligations under worker’s compensation,
unemployment insurance or similar legislation; and (e) Permitted Liens.


 


“Permitted Indebtedness” has the
meaning specified in Section 7.1.


 


“Permitted Investments “ has the
meaning specified in Section 7.5.


 


“Permitted Liens “ has the
meaning specified in Section 7.2.


 


“Permitted Swap
Obligations” means all obligations (contingent or otherwise) of
Borrower or any of its Subsidiaries existing or arising under Swap Contracts, provided that such obligations are (or were) entered into by
such Person for the purpose of (i) directly mitigating risks associated
with liabilities, commitments or assets held or reasonably anticipated by such
Person, or changes in the value of securities issued by such Person in
conjunction with a securities repurchase program not otherwise prohibited
hereunder; or (ii) directly mitigating the dilution associated with the
issuance of convertible securities by Borrower, and in any event not for
purposes of speculation or taking a “market view.”


 


“Person” means any
individual, trustee, corporation, general partnership, limited partnership,
limited liability company, joint stock company, trust, unincorporated
organization, bank, business association, firm, joint venture, Governmental
Authority, or otherwise.


 


“Pledge and Security Agreement” means that
certain Pledge and Security Agreement dated as of the date hereof, in favor of
Administrative Agent (for the account of each Lender in accordance with its Pro
Rata Share) by Borrower and each Guarantor in the form of Exhibit E
hereto.


 


“Post-Closing Letter” means that certain
Post-Closing Letter dated as of the date hereof, executed by Borrower in favor
of Administrative Agent and the First Lien Administrative Agent.


 


“Prepayment Date” has the meaning set forth in Section 2.3(e).


 


“Projections” has the meaning set forth in Section 5.5(b).


 


“Pro Rata Share” means with
respect to a Lender’s obligation to make a Term Loan and receive payments of
principal, interest, fees, costs and expenses with respect thereto, (x) prior
to the making of the Term Loans, the percentage obtained by dividing (i) such
Lender’s Commitment, by (ii) the aggregate amount of all Lenders’
Commitments, and (y) from and after the making of the Term Loans, the
percentage obtained by dividing (i) the principal amount of such Lender’s
Term Loan by (ii) the aggregate principal amount of all Term Loans of all
Lenders.


 


“PT” means Pacific
Time.


 


“Register” has the meanings set forth in Section 10.4(c)


 


“Related Transactions” means the transactions
contemplated by the Merger Documents.


 


24
















 


“Rental Variance” means the difference, if positive, of the amount of cash
consolidated operating lease expense over the amount of consolidated operating
lease expense determined in accordance with GAAP as shown on the financial
statements of Borrower required to be delivered pursuant to Section 6.1.


 


“Reportable Event” means any of
the events set forth in Section 4043(b) of ERISA or the regulations
thereunder, a withdrawal from a Multiemployer Plan described in Section 4063
of ERISA, or a cessation of operations described in Section 4062(e) of
ERISA.


 


“Request for Extension of Credit” means, unless
otherwise specified herein, with respect to (a) the initial Borrowing on
the Closing Date a written request for extension of credit in form and
substance satisfactory to the Administrative Agent (which request shall also be
a joint request from the Borrower to the First Lien Administrative Agent), or (b) any
subsequent Conversion or Continuation of Loans, a written request substantially
in the form of Exhibit A duly completed and
signed by a Responsible Officer of Borrower.


 


“Requisite Lenders” means Lenders holding or being responsible for 51% or more of the sum
of all outstanding Term Loans.


 


“Requisite Notice” means, unless
otherwise provided herein, (a) irrevocable written notice to the intended
recipient or (b) irrevocable telephonic notice to the intended recipient,
promptly followed by a written notice to such recipient.  Such notices shall be (i) delivered to
such recipient at the address or telephone number specified on Schedule 10.2 or
as otherwise designated by such recipient by Requisite Notice to Administrative
Agent, and (ii) if made by Borrower, given or made by a Responsible
Officer of Borrower.  Any written notice
delivered in connection with any Loan Document shall be in the form, if any,
prescribed herein or therein.  Any notice
sent by other than hardcopy shall be promptly confirmed by a telephone call to
the recipient and, if requested by Administrative Agent, by a manually-signed
hardcopy thereof.


 


“Requisite Time” means, with
respect to any of the actions listed below, the time and date set forth below
opposite such action:


 


	
  Type of Action

  	
   

  	
  Applicable
  Time

  	
   

  	
  Date of
  Action

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Delivery of Request for
  Extension of Credit, for or notice for:

  	
   

  	
   

  	
   

  	
   

  
	
  ·                  Borrowing or
  prepayment of, or Conversion into, Base Rate Loans

  	
   

  	
  10:00 a.m.
  PT

  	
   

  	
  Same date as such
  Borrowing, prepayment or Conversion

  
	
  ·                  Borrowing,
  prepayment or Continuation of, or Conversion into, Offshore Rate Loans or
  Termination of Commitment

  	
   

  	
  10:00 a.m.
  PT

  	
   

  	
  3 Business Days prior to
  such Borrowing, prepayment Continuation, Conversion or Termination of
  Commitment

  
	
  ·                  Payments by
  Lenders or Borrower to Administrative Agent

  	
   

  	
  10:00 a.m.
  PT

  	
   

  	
  On date payment is due

  



 


“Responsible Officer” means the
chief executive officer, president, the chief financial officer, any vice
president of finance, the treasurer, the assistant treasurer or the corporate
controller of Borrower.  Any document or
certificate hereunder that is signed by a Responsible Officer of Borrower shall
be conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of Borrower and such Responsible
Officer shall be conclusively presumed to have acted on behalf of Borrower.


 


25

















 


“Restricted Payment” means:


 


(a)           the declaration or payment of any
dividend or distribution by Borrower or any Subsidiary, either in cash or
property, on any shares of Equity Securities of any class of Borrower or any
Subsidiary; and


 


(b)           any other payment or distribution by
Borrower or any Subsidiary in respect of its Equity Securities, either directly
or indirectly.


 


“Securities” means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.


 


“Securities Laws” means the Securities Act of
1933, the Securities Exchange Act of 1934, Sarbanes-Oxley Act of 2002 and the
applicable accounting and auditing principles, rules, standards and practices
promulgated, approved or incorporated by the Securities and Exchange Commission
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.


 


“Security Documents” means the
Pledge and Security Agreement and the Intellectual Property Security
Agreements.


 


“Solvent” means, as to
any Person at any time, that (i) the fair value of the property of such
Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (ii) the present fair saleable value of the property of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (iii) such Person is able to realize upon its property and pay
its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (iv) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (v) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.


 


“Subordinated Debt” means any
subordinated Indebtedness of Borrower or its Subsidiaries in form and substance
and on terms satisfactory to Requisite Lenders in their sole and absolute
discretion and expressly approved by Requisite Lenders after the date hereof.


 


“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
controlled, directly, or indirectly through one or more 


 


26

















 


intermediaries, or both, by
such Person.  Unless otherwise specified,
all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of Borrower.


 


“Swap Contract” means (a) any
and all rate swap transactions, basis swaps, 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, 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.,
or any other master agreement.


 


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


 


“Synthetic Lease Obligations” means all
monetary obligations 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 which do not appear on the
balance sheet of such Person but which, upon the insolvency or bankruptcy of
such Person, would be characterized as secured debt of such Person (without
regard for accounting treatment).


 


“Taxes” has the meaning specified in Section 3.1.


 


“Term Loan” means a term loan made by a Lender to Borrower pursuant to Section 2.1(a).


 


“Terrorism Laws”  means
any of the following (a) Executive Order 13224 issued by the President of
the United States, (b) the Terrorism Sanctions Regulations (Title 31 Part 595
of the U.S. Code of Federal Regulations), (c) the Terrorism List
Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of
Federal Regulations), (d) the Foreign Terrorist Organizations Sanctions
Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), (e) the
Patriot Act (as it may be subsequently codified), (f) all other present
and future legal requirements of any Governmental Authority addressing,
relating to, or attempting to eliminate, terrorist acts and acts of war and (g) any
regulations promulgated pursuant thereto or pursuant to any legal requirements
of any Governmental Authority governing terrorist acts or acts of war.


 


27

















 


“To the best knowledge of” means, when
modifying a representation, warranty or other statement of any Person, that the
fact or situation described therein is known by such Person (or, (i) in
the case of Borrower, known by any Responsible Officer or executive officer of
Borrower, or, (ii) in the case of any other Person other than a natural
Person, known by any officer of such Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known by such
Person (or, (i) in the case of Borrower, would have been known by any
Responsible Officer or executive officer of Borrower, or, (ii) in the case
of any other Person other than a natural Person, would have been known by any
executive officer of such Person).


 


“Total Leverage Ratio” means, as of
any date of determination, for Borrower and its Subsidiaries on a consolidated
basis, the ratio of (a) the aggregate amount of Indebtedness as of such
date to (b) Consolidated EBITDA for the period of the four fiscal quarters
ending on, or ending most recently prior to, such date.


 


“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.


 


“USA Patriot Act” means United
States Public Law 107-56, the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act
of 2001), as amended from time to time and the rules and regulations
promulgated thereunder from time to time in effect.


 


“Voting Power” shall mean,
with respect to any Person, the exclusive ability to control, through the
ownership of shares of capital stock, partnership interests, membership
interests or otherwise, the election of members of the board of directors or
other similar governing body of such Person. 
The holding of a designated percentage of Voting Power of a Person means
the ownership of shares of capital stock, partnership interests, membership
interests or other interests of such Person sufficient to control exclusively
the election of that percentage of the members of the board of directors or
similar governing body of such Person.


 


“Westfield
Receivable” means certain receivables
of Borrower related to the pending sale to Westfield Corporation of the wireless
network built, owned and operated by Borrower in various Westfield Shopping
Malls throughout the U.S.


 


1.2          USE OF CERTAIN TERMS


 


(a)           All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto or thereto, unless otherwise defined therein.


 


(b)           As used herein, unless the context
requires otherwise, the masculine, feminine and neuter genders and the singular
and plural include one another.


 


28

















 


(c)           The words “herein” and “hereunder”
and words of similar import when used in any Loan Document shall refer to the
Loan Documents as a whole and not to any particular provision thereof.  The term “including” is by way of example and
not limitation.  References herein to a
Section, subsection or clause shall, unless the context otherwise requires,
refer to the appropriate Section, subsection or clause in this Agreement.


 


(d)           The term “or” is disjunctive; the
term “and” is conjunctive.  The term “shall”
is mandatory; the term “may” is permissive.


 


1.3          ACCOUNTING TERMS.  Except as otherwise expressly provided herein, all
accounting terms not defined in this Agreement shall be construed in conformity
with 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 Borrower, Administrative Agent or any Lender
shall so request, Borrower and Administrative Agent 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 Requisite
Lenders), provided that, until so amended, such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and Borrower shall provide to Administrative Agent
and Lenders reconciliation statements requested by Administrative Agent
(reconciling the computations of such financial ratios and requirements from
the then-current GAAP computations to the computations under GAAP prior to such
change) in connection therewith. 
Financial statements and other information required to be delivered by
Borrower to Lenders pursuant to Section 6.1 shall be prepared in
accordance with GAAP as in effect at the time of such preparation (and
delivered together with the reconciliation statements provided for in Section 6.1(d),
if applicable).  Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in
conformity with those used to prepare the Historical Financial Statements.


 


1.4          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 in this Agreement and
rounding the result up or down to the nearest number (with a round-up if there
is no nearest number), to the number of places by which such ratio is expressed
in this Agreement.


 


1.5          EXHIBITS AND SCHEDULES.  All exhibits and schedules to this Agreement, either as
originally existing or as the same may from time to time be supplemented,
modified or amended with the consent of Requisite Lenders, are incorporated
herein by this reference.


 


1.6          REFERENCES TO AGREEMENTS AND
LAWS.  Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan
Documents) and other contractual instruments shall include all amendments,
restatements, extensions, supplements and other modifications thereto (unless
prohibited by any Loan Document), and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.


 


29

















 


SECTION II.

THE COMMITMENTS AND EXTENSIONS OF CREDIT


 


2.1          LOANS; MAXIMUM AMOUNTS.


 


(a)           Term Loan.  Subject to the terms and conditions set forth
in this Agreement, each Lender severally agrees to make a loan to the Borrower
in Dollars on the Closing Date in an amount equal to such Lender’s Pro Rata
Share of the Commitment.  The Commitment
shall expire concurrently with the making of the Term Loans on the Closing
Date.  Once prepaid or repaid, the Term
Loans may not be reborrowed.  The Term
Loans shall be repaid in accordance with Section 2.3 and Section 2.4.


 


(b)           Notes.  Loans made by each Lender shall
be, at the request of such Lender, evidenced by one or more Notes.  The date, amount and maturity of each Lender’s
Loans and payments and other particulars with respect thereto may be endorsed
on schedule(s) attached to its Note by each Lender and/or recorded on one
or more loan accounts or records maintained by such Lender in the ordinary
course of business.  Such Notes, loan
accounts and records shall be conclusive absent manifest error of the amount of
such Loans and payments thereon.  Any
failure to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of Borrower to pay any amount owing with
respect to the Loans.


 


2.2          BORROWINGS, CONVERSIONS AND
CONTINUATIONS OF LOANS.


 


(a)           Borrower may irrevocably request (i) the
Borrowing of the Term Loans on the Closing Date by delivering the initial
Request for Extension of Credit in form and substance satisfactory to the
Administrative Agent (which request shall also be a joint request from the
Borrower to the First Lien Administrative Agent) and (ii) a Continuation or
Conversion of any Loan by delivering a Request for Extension of Credit, in each
case, in a Minimum Amount therefor by Requisite Notice to Administrative Agent
not later than the Requisite Time therefor. 
All Borrowings, Conversions and Continuations of Loans shall constitute
Base Rate Loans unless properly and timely otherwise designated in the initial
Request for Extension of Credit or any subsequent Request for Extension of
Credit.


 


(b)           Following receipt of a Request for
Extension of Credit, Administrative Agent shall promptly notify each applicable
Lender of its Pro Rata Share thereof by Requisite Notice.  In the case of a Borrowing of Loans, each
applicable Lender shall make the funds for its Loan available to Administrative
Agent at Administrative Agent’s Office not later than the Requisite Time
therefor on the Business Day specified in such Request for Extension of
Credit.  Upon satisfaction of the
conditions set forth in Section 4.1, all funds so received shall be made
available to Borrower in Dollars. 
Administrative Agent shall promptly notify Borrower and Lenders of the
interest rate applicable to any Loan other than a Base Rate Loan upon
determination of same.


 


(c)           Except as otherwise provided herein,
an Offshore Rate Loan may be Continued or Converted only as of the last day of
the Interest Period for such Offshore Rate Loan.  During the existence of a Default or Event of
Default, no Loans may be requested as, Converted into or Continued as Offshore
Rate Loans without the consent of Requisite Lenders, and Requisite 


 


30

















 


Lenders
may demand that any or all of the then outstanding Offshore Rate Loans be
Converted immediately into Base Rate Loans.


 


(d)           The failure of any Lender to make any
Loan on any date shall not relieve any other Lender of any obligation to make a
Loan on such date, but no Lender shall be responsible for the failure of any
other Lender to so make its Loan.


 


2.3          PREPAYMENTS.


 


(a)           Voluntary Prepayments.


 


(i)            Term Loans. 
Subject to the terms of the Intercreditor Agreement, upon Requisite
Notice to Administrative Agent not later than the Requisite Time therefor,
Borrower may at any time and from time to time voluntarily prepay Term Loans in
part in the Minimum Amount therefor or in full.  Administrative Agent will promptly notify each
Lender of such voluntary prepayment and of such Lender’s Pro Rata Share of such
prepayment.  Any prepayment of a Term
Loan shall be accompanied by all accrued interest thereon and, in the case of
any Term Loan that is an Offshore Rate Loan, the amounts set forth in Section 3.5.


 


(ii)           Application of Voluntary Prepayments.  Any voluntary prepayment of any Term Loan
pursuant to Section 2.3(a)(i) shall be applied to repay outstanding
Term Loans on a pro rata basis (in accordance with the respective outstanding
principal amounts thereof) and shall be further applied on a pro rata basis to
reduce the remaining scheduled installments of principal of the Term Loans.


 


(b)           Mandatory Prepayments.


 


(i)            Asset Sales. 
No later than the first Business Day following the date of receipt by
Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, Borrower
shall (to the extent not otherwise required to be actually applied to the
prepayment of the First Lien Obligations, and subject to the Intercreditor
Agreement) prepay Loans as set forth in Section 2.3(c) or 2.3(e), as
applicable, in an aggregate amount equal to such Net Asset Sale Proceeds.


 


(ii)           Insurance/Condemnation Proceeds.  No later than the first Business Day following
the date of receipt by Borrower or any of its Subsidiaries, or Administrative
Agent as loss payee, of any Net Insurance/Condemnation Proceeds, Borrower shall
(to the extent not otherwise required to be actually applied to the prepayment
of the First Lien Obligations, and subject to the Intercreditor Agreement)
prepay Loans as set forth in Section 2.3(c) or 2.3(e), as applicable,
in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided, (i) so long as no Default or Event of Default
shall have occurred and be continuing, and (ii) to the extent that
aggregate Net Insurance/Condemnation Proceeds from the Closing Date through the
applicable date of determination do not exceed $7,500,000,  Borrower shall have the option, directly or
through one or more of its Subsidiaries to invest such Net
Insurance/Condemnation Proceeds within one hundred eighty (180) days of receipt
thereof in long term productive 


 


31

















 


assets
of the general type used in the business of Borrower and its Subsidiaries,
which investment may include the repair, restoration or replacement of the
applicable assets thereof.


 


(iii)          Issuance of Equity Securities.  On the date of receipt by Borrower or any of
its Subsidiaries of any Net Cash Equity Proceeds which, when combined with any
other Net Cash Equity Proceeds received by Borrower or any of its Subsidiaries
since the Closing Date, total  in excess of
$50,000,000, Borrower shall (to the extent not otherwise required to be
actually applied to the prepayment of the First Lien Obligations, and subject
to the Intercreditor Agreement) prepay the Loans as set forth in Section 2.3(c) or
2.3(e), as applicable, in an aggregate amount equal to one hundred percent
(100%) of such Net Cash Equity Proceeds in excess of $50,000,000; provided, however, that in the event any Net Cash Equity
Proceeds received by Borrower or any of its Subsidiaries which, when combined
with all other Net Cash Equity Proceeds received by Borrower or any of its
Subsidiaries since the Closing Date do not total  in
excess of $50,000,000, are not used in the manner described in the second
proviso of Section 7.5(e) hereof within 90 days of such receipt,
Borrower shall (to the extent not otherwise required to be actually applied to
the prepayment of the First Lien Obligations, and subject to the Intercreditor
Agreement) prepay the Loans as set forth in Section 2.3(c) or 2.3(e),
as applicable, in an aggregate amount equal to one hundred percent (100%) of
such Net Cash Equity Proceeds.


 


(iv)          Issuance of Debt.  On the date of receipt by Borrower or any of
its Subsidiaries of any cash proceeds from the incurrence of any Indebtedness
of Borrower or any of its Subsidiaries (other than with respect to any
Indebtedness permitted to be incurred pursuant to Section 7.1), Borrower
shall (to the extent not otherwise required to be actually applied to the
prepayment of the First Lien Obligations, and subject to the Intercreditor
Agreement) prepay the Loans as set forth in Section 2.3(c) or 2.3(e),
as applicable, in an aggregate amount equal to one hundred percent (100%) of
such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.


 


(v)           Consolidated Excess Cash Flow.  In the event that there shall be Consolidated
Excess Cash Flow for any fiscal year (commencing with Fiscal Year 2008),
Borrower shall (to the extent not otherwise required to be actually applied to
the prepayment of the First Lien Obligations, and subject to the Intercreditor
Agreement), no later than ninety (90) days after the end of such fiscal year,
prepay the Loans as set forth in Section 2.3(c) or 2.3(e), as
applicable, in an aggregate amount equal to seventy-five percent (75%) of such
Consolidated Excess Cash Flow.


 


(vi)          Extraordinary Receipts.  No later than the first Business Day
following the date of receipt by Borrower or any of its Subsidiaries of any
Extraordinary Receipts, Borrower shall (to the extent not otherwise required to
be actually applied to the prepayment of the First Lien Obligations, and
subject to the Intercreditor Agreement) prepay the Loans as set forth in Section 2.3(c) or
2.3(e), as applicable, in an aggregate amount equal to such Extraordinary
Receipts.


 


32

















 


(vii)         New Term Loans.   On the date of receipt by Borrower of the
proceeds of the New Term Loans (as defined in the First Lien Credit Agreement)
Borrower shall apply one hundred percent (100%) 
of such proceeds to prepay the Loans as set forth in Section 2.3(c).


 


(viii)        Prepayment Certificate. 
Concurrently with any mandatory prepayment of the Loans pursuant to
Sections 2.3(b)(i)-(vi), Borrower shall deliver to Administrative Agent a certificate
of a Responsible Officer demonstrating the calculation of the amount of the
applicable net proceeds or other applicable financial tests or proceeds giving
rise to the prepayment, as the case may be. 
In the event that Borrower shall subsequently determine that the actual
amount received exceeded the amount set forth in such certificate, Borrower
shall promptly make an additional prepayment of the Loans in an amount equal to
such excess, and Borrower shall concurrently therewith deliver to Administrative
Agent a certificate of a Responsible Officer demonstrating the derivation of
such excess.


 


(c)           Application of Mandatory
Prepayments.  Subject to Section 2.4(e) below,
any mandatory prepayment of any Loan pursuant to Section 2.3(b) shall,
subject to the terms of the Intercreditor Agreement, be applied to prepay Term
Loans on a pro rata basis (in accordance with the respective outstanding
principal amounts thereof) and shall be further applied in inverse order of
maturity to reduce the remaining scheduled installments of principal of the
Term Loans.


 


(d)           [Intentionally Omitted.]


 


(e)           Waiver of Certain
Prepayments.  Anything
contained herein to the contrary notwithstanding and excluding any mandatory
prepayment made pursuant to Section 2.3(b)(vii), in the event Borrower is
required to make any mandatory prepayment of the Term Loans, not less than five
(5) Business Days prior to the date (the “Prepayment
Date”) on which Borrower is required to make such mandatory
prepayment, Borrower shall notify Administrative Agent of the amount of such
prepayment (or, if shorter, promptly upon Borrower’s becoming aware of any
event requiring such mandatory prepayment), and Administrative Agent will
promptly thereafter notify each Lender of the amount of such Lender’s Pro Rata
Share of such mandatory prepayment and such Lender’s option to refuse such
amount.  Each such Lender may exercise
such option by giving written notice to Borrower and Administrative Agent of
its election to do so on or before the first Business Day prior to the
Prepayment Date (it being understood that any Lender which does not notify
Borrower and Administrative Agent of its election to exercise such option on or
before the first Business Day prior to the Prepayment Date shall be deemed to
have elected, as of such date, not to exercise such option to decline
payments).  On the Prepayment Date,
Borrower shall pay to Administrative Agent the amount of the mandatory
prepayment, which amount shall be applied in an amount equal to that portion of
the mandatory prepayment payable to those Lenders that have elected not to
exercise such option, to prepay the Term Loans of such Lenders (which
prepayment shall be applied to the scheduled installments of principal of the
Term Loans in accordance with Section 2.3(c)).


 


33

















 


2.4          PRINCIPAL AND INTEREST.


 


(a)           Except as otherwise provided
hereunder, if not sooner paid, Borrower agrees to pay the outstanding principal
amount of each Term Loan on the Maturity Date.


 


(b)           The principal amounts of the Term
Loans shall be repaid in consecutive quarterly installments in the aggregate
amounts set forth below on the last day of each fiscal quarter, commencing March 31,
2008:


 


	
  Fiscal Quarter Ending

  	
   

  	
  Term Loan

  Installments

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  September 30, 2012

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  December 31, 2012

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  March 31, 2013

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Maturity Date

  	
   

  	
  $

  	
  9,475,000

  	
   

  



 


Notwithstanding the foregoing, (x) such
installments shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans, as the case may be, in accordance with Sections
2.3(a)(ii) and 2.3(c), as applicable.


 


(c)           Subject to subsection (d) below, and unless otherwise
specified herein, Borrower shall pay interest on the unpaid principal amount of
each Loan (before and after default, before and after maturity, before and
after judgment, and before and after the commencement of any 


 


34

















 


proceeding under any Debtor Relief Laws) from the
date borrowed until paid in full (whether by acceleration or otherwise) on each
Applicable Payment Date at a rate per annum equal to the interest rate
determined in accordance with the definition of such type of Loan, plus the Applicable Margin specified in the definition in
this Agreement of Applicable Margin with respect to such type of Loan.


 


(d)           Notwithstanding subsection (c) of this Section, upon
the occurrence and during the continuance of an Event of Default, the principal
amount of all Loans outstanding and, to the extent permitted by applicable law,
any interest payments on the Loans or any fees or other amounts owed hereunder,
shall thereafter bear interest (including post petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws,
whether or not allowed in such a proceeding) payable on demand at the Default
Rate.  Payment or acceptance of the
increased rates of interest provided for in this section is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.


 


2.5          FEES.  Borrower shall pay to Administrative Agent,
Arranger and Lenders all fees and other amounts specified in the Facilities
Letter and the Fee Letter in the amounts and at the times specified
therein.  All fees payable under the
Facilities Letter and the Fee Letter are solely for the account of
Administrative Agent, Arranger and/or the Lenders, as applicable, and are
nonrefundable.


 


2.6          COMPUTATION OF
INTEREST AND FEES.  Computation of interest on
Base Rate Loans when the Base Rate is determined by KeyBank’s “prime rate”
shall be calculated on the basis of a year of 365 or 366 days, as the case may
be, and the actual number of days elapsed. 
Computation of other types of interest and all fees shall be calculated
on the basis of a year of 360 days and the actual number of days elapsed, which
results in a higher yield to Lenders than a method based on a year of 365 or
366 days.  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 bear interest for one day.


 


2.7          MAKING PAYMENTS.  Except as otherwise
provided herein, all payments by Borrower or any Lender hereunder shall be made
to Administrative Agent at Administrative Agent’s Office not later than the
Requisite Time for such type of payment. 
All payments received after such Requisite Time shall be deemed received
on the next succeeding Business Day.  All
payments shall be made in immediately available funds in lawful money of the
United States of America.  All payments
by Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.


 


(a)           Upon satisfaction of any applicable
terms and conditions set forth herein, Administrative Agent shall promptly pay
amounts received in accordance with the prior subsection available in like
funds as received, as follows:  (i) if payable to Borrower, by
crediting such account as Borrower may designate in writing to Administrative
Agent from time to time, and (ii) if payable to any Lender, by wire
transfer to such Lender at its Lending Office. 
In the case of amounts held by Administrative Agent that are payable to
Borrower, if any applicable terms and conditions are not so satisfied,
Administrative Agent shall return any funds it is 


 


35

















 


holding
that would otherwise be payable to Borrower to the Lenders making such funds
available, without interest.


 


(b)           Subject to the definition of “Interest
Period,” if any payment to be made by Borrower shall come due on a day other than
a Business Day, payment shall instead be considered due on the next succeeding
Business Day, and such extension of time shall be reflected in computing
interest and fees.


 


(c)           Unless Borrower or any Lender has
notified Administrative Agent prior to the date any payment to be made by it is
due, that it does not intend to remit such payment, Administrative Agent may,
in its sole and absolute discretion, assume that Borrower or Lender, as the
case may be, has timely remitted such payment and may, in its sole and absolute
discretion and in reliance thereon, make available such payment to the Person
entitled thereto.  If such payment was
not in fact remitted to Administrative Agent in immediately available funds,
then:


 


(i)            if
Borrower failed to make such payment, each Lender shall forthwith on demand
repay to Administrative Agent the amount of such assumed payment made available
to such Lender, together with interest thereon in respect of each day from and
including the date such amount was made available by Administrative Agent to
such Lender to the date such amount is repaid to Administrative Agent at the
Federal Funds Rate; and


 


(ii)           if any Lender failed to make such payment, Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Lender.  If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent’s demand
therefor, Administrative Agent promptly shall notify Borrower, and Borrower
shall pay such corresponding amount to Administrative Agent.  Administrative Agent also shall be entitled
to recover from such Lender interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
Administrative Agent to Borrower to the date such corresponding amount is
recovered by Administrative Agent, (A) from such Lender at a rate per
annum equal to the daily Federal Funds Rate, and (B) from Borrower, at a
rate per annum equal to the interest rate applicable to such Borrowing.  Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment or to prejudice any rights
which Administrative Agent or Borrower may have against any Lender as a result
of any default by such Lender hereunder.


 


(d)           If Administrative Agent or any Lender
is required at any time to return to Borrower, or to a trustee, receiver,
liquidator, custodian, or any official under any proceeding under Debtor Relief
Laws, any portion of a payments made by Borrower, each Lender shall, on demand
of Administrative Agent, return its share of the amount to be returned, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the daily Federal Funds Rate.


 


2.8          FUNDING SOURCES.  Nothing in this Agreement
shall be deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a 


 


36

















 


representation by any Lender
that it has obtained or will obtain the funds for any Loan in any particular
place or manner.


 


2.9          COLLATERAL.  Borrower’s Obligations are
secured by or will be secured by the Security Documents.


 


2.10        INCREMENTAL TRIGGER DATE.  Upon receipt of notice from the First Lien
Administrative Agent that the Incremental Trigger Date (as defined in the First
Lien Credit Agreement) has occurred, each Lender shall promptly execute an
Acceptance Letter (as defined in the First Lien Credit Agreement), whereupon
such Lender shall become a lender under the First Lien Credit Agreement with a
commitment to fund a new term loan tranche under the First Lien Credit
Agreement (but in no event greater than $10,000,000) equal to its Pro Rata
Share of the principal amount of the Loans.


 


SECTION III.

TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.1          TAXES.


 


(a)         Any and all
payments by Borrower to or for the account of Administrative Agent or any
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges (including, but
not limited to, estimated taxes), and all liabilities with respect thereto,
excluding, in the case of Administrative Agent and each Lender, (i) taxes
imposed on or measured by its net income, (ii) franchise taxes imposed on
it (in lieu of net income taxes) by the jurisdiction (or any political
subdivision thereof) under the Laws of which Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office; (iii) any
branch profits tax imposed by the United States of America or any similar tax
imposed by another jurisdiction in which Borrower is located; (iv) applicable
withholding tax imposed by Sections 1441 and 1442 of the Code that is withheld by
Administrative Agent from a payment to any Foreign Lender (as defined in Section 10.22
of this Agreement) pursuant to Section 10.22; and (v) any penalties,
interest, costs and expenses (including Attorney Costs) imposed on
Administrative Agent or any Lender arising from a determination by any
Governmental Authority that Administrative Agent did not properly withhold any
tax or other amount from payments made in respect of any Foreign Lender (all
such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as “Taxes”).  If Borrower shall be required by any Laws to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to Administrative Agent or any Lender (other than as a result of a breach by a
Foreign Lender of its obligations under Section 10.22 of this Agreement), (A) 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), Administrative Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (B) Borrower
shall make such deductions, (C) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Laws, and (D) within 30 days after the date of such
payment, Borrower shall furnish to Administrative Agent (who shall forward the
same to such Lender) the original or a certified copy of a receipt evidencing
payment thereof.


 


37

















 


(b)        In addition,
Borrower agrees to pay any and all present or future stamp, recording, filing,
transfer, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).


 


(c)         If Borrower
shall be required by the Laws of any jurisdiction outside the United States to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to Administrative Agent or any Lender, Borrower shall also pay to such Lender
or Administrative Agent (for the account of such Lender), at the time interest
is paid, such additional amount that the respective Administrative Agent or
such Lender specifies as necessary to preserve the after tax yield (after
factoring in United States (federal and state) taxes imposed on or measured by
net income) such Lender would have received if such deductions (including
deductions applicable to additional sums payable under this Section) had not
been made.


 


(d)        Borrower
agrees to indemnify, defend and hold Administrative Agent and each Lender
harmless for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by Administrative Agent and such Lender; and (ii) any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto; provided
that (A) Borrower shall not be obligated to indemnify the Administrative
Agent or any Lender for any penalties described in clause (ii) above to
the extent the Administrative Agent or such Lender, as applicable, (1) had
actual knowledge of the existence of the tax, interest, or expense, the
non-payment of which gave rise to such penalties, and (2) failed to give
Borrower notice of such tax, interest or expense within ten (10) Business
Days after the Administrative Agent or such Lender received actual knowledge of
the existence thereof; and (B) except to the extent contemplated in clause
(A) of this Section 3.1(d), nothing contained in this subsection (d) shall
be deemed to imply any obligation on the part of the Administrative Agent or
any Lender to provide Borrower with the notice of any such tax, penalty,
interest or expense.  Payment under this
subsection (d) shall be made within 30 days after the date the Lender or
the Administrative Agent makes a demand therefor.


 


3.2          ILLEGALITY.


 


If any Lender determines that any Laws have 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
Offshore Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the Offshore
Rate, then, on notice thereof by Lender to Borrower through Administrative
Agent, any obligation of such Lender to make Offshore Rate Loans shall be
suspended until such Lender notifies Administrative 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 Administrative Agent), prepay or
Convert all Offshore Rate Loans of such Lender, either on the last day of the
Interest Period thereof, if such Lender may lawfully continue to maintain such
Offshore Rate Loans to such day, or immediately, if Lender may not lawfully
continue to maintain such Offshore Rate Loans. 
Each Lender agrees to designate a different Lending Office if such 


 


38

















 


designation will avoid the
need for such notice and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender.


 


3.3          INABILITY
TO DETERMINE RATES.


 


If, in connection with any Request for Extension of
Credit involving any Offshore Rate Loan, Administrative Agent determines that (a) Dollar
deposits are not being offered to banks in the applicable offshore dollar
market for the applicable amount and Interest Period of the requested Offshore
Rate Loan, (b) adequate and reasonable means do not exist for determining
the underlying interest rate for such Offshore Rate Loan, or (c) such
underlying interest rate does not adequately and fairly reflect the cost to
Lender of funding such Offshore Rate Loan, Administrative Agent will promptly
notify Borrower and all Lenders. 
Thereafter, the obligation of all Lenders to make or maintain such
Offshore Rate Loan shall be suspended until Administrative Agent revokes such
notice.  Upon receipt of such notice,
Borrower may revoke any pending request for a Borrowing of Offshore Rate Loans
or, failing that, be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.


 


3.4          INCREASED COST AND REDUCED RETURN;
CAPITAL ADEQUACY.


 


(a)                                  If any Lender determines that any Laws announced after the
date hereof


 


(i)            impose
on such Lender any Tax, duty, or other charge with respect to any Offshore Rate
Loans or its obligation to make Offshore Rate Loans (other than as a result of
any change in the rate of applicable taxes imposed on or measured by the net
income of Administrative Agent or any Lender);


 


(ii)           change the basis on which Taxes are imposed on any amounts
payable to such Lender under this Agreement in respect of any Offshore Rate
Loans;


 


(iii)          impose or modify any reserve, special deposit, or similar
requirement (other than the reserve requirement utilized in the determination
of the Offshore Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(including its Commitment); or


 


(iv)          impose on such Lender or on the offshore Dollar interbank
market any other condition affecting this Agreement or any of such extensions
of credit or liabilities or commitments;


 


and the result of any of the
foregoing is to increase the cost to such Lender of making, Converting into,
Continuing, or maintaining any Offshore Rate Loans or to reduce any sum
received or receivable by such Lender under this Agreement with respect to any
Offshore Rate Loans, then from time to time upon demand of such Lender (with a
copy of such demand to Administrative Agent), Borrower shall pay to such Lender
such additional amounts as will compensate such Lender for such increased cost
or reduction (except to the extent that such increased cost or reduction is an
amount subject to Section 3.1, in which case the sum received or
receivable by such Lender shall be increased in accordance with the provisions
of Section 3.1).


 


39

















 


(b)           If any Lender determines that any
change in or the interpretation of any Laws announced after the date hereof
have the effect of reducing the rate of return on the capital of such Lender or
compliance by such Lender (or its Lending Office) or any corporation
controlling such Lender as a consequence of such Lender’s obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender’s desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to Administrative Agent), Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction; provided, however,
that Borrower shall not be required to pay additional amounts to compensate any
Lender for (i) any applicable withholding tax imposed by Sections 1441 and
1442 of the Code that is withheld by Administrative Agent from a payment to any
Foreign Lender pursuant to Section 10.22, (ii) any reduction in
connection with any penalties, interest, costs and expenses (including Attorney
Costs) arising from a determination by any Governmental Authority that
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of any Foreign Lender; or (iii) any change in the
rate of applicable taxes imposed on or measured by net income.


 


3.5          BREAKFUNDING
COSTS.


 


Upon demand of any Lender (with a copy to
Administrative 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:


 


(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.


 


3.6          MATTERS APPLICABLE TO ALL REQUESTS FOR
COMPENSATION.


 


(a)           The Administrative Agent or any
Lender claiming compensation under this Section 3 shall deliver to
Borrower a certificate setting forth in reasonable detail the additional amount
or amounts to be paid to it hereunder, which shall be conclusive in the absence
of clearly demonstrable error.  In determining
such amount, Lenders may use any reasonable averaging and attribution
methods.  For purposes of this Section 3,
a Lender shall be deemed to have funded each Offshore Rate Loan at the Offshore
Rate for such Loan by a matching deposit or other borrowing in the offshore
Dollar interbank market, whether or not such Offshore Rate Loan was in fact so
funded.


 


(b)           Borrower shall not be obligated to pay any amount under
this Section 3 which arose prior to the date which is 180 days preceding
the date of such demand or is attributable to


 


40
















 


periods
prior to the date which is 180 days preceding the date of such demand; provided, however, that in the event any
Law is enacted that retroactively imposes any cost or charge upon the
Administrative Agent or any Lender that would otherwise be a basis for
compensation under Sections 3.1 through 3.5, the Administrative Agent or such
Lender may make a demand for such compensation through and including the date
which is 180 days after the date upon which such Law takes effect.


 


(c)           Upon any Lender making a claim for
compensation under Section 3.1 or 3.4, Borrower may remove and replace
such Lender in accordance with Section 10.23 hereof.


 


3.7          SURVIVAL.


 


All of Borrower’s obligations under this Section 3
shall survive for a period of one (1) year after the later of termination
of the Commitments, and payment in full of all Obligations; provided, however, that the obligation of
Borrower to make any payment under this Section 3 is contingent upon the
receipt by Borrower of the certificate described in Section 3.6(a) within
the later of (a) 180 days after the later of the repayment of all Loans
and the termination of the Commitment, or (b) in the case of any Law
retroactively imposing any cost or charge upon the Administrative Agent or any
Lender, 180 days after the date upon which such Law takes effect.


 


SECTION IV.

CONDITIONS PRECEDENT TO EXTENSION OF CREDIT


 


4.1          CONDITIONS
OF EXTENSION OF CREDIT.


 


The obligation of each Lender to make the Term Loans
hereunder is subject to satisfaction (or waiver by Administrative Agent) of the
following conditions precedent:


 


(a)           Loan Documents and Other
Closing Deliverables.  Unless
waived by Administrative Agent and Lenders, Administrative Agent’s receipt of
the following, each of which shall be originals unless otherwise specified or
agreed to by Administrative Agent, each properly executed by a Responsible
Officer of the applicable Credit Party, each dated on, or in the case of third
party certificates, recently before the Closing Date and each in form and
substance satisfactory to Administrative Agent, Lenders and their legal
counsel:


 


(i)            executed
counterparts of this Agreement, sufficient in number for distribution to
Administrative Agent, Lenders and Borrower;


 


(ii)           the Notes executed by Borrower in favor of each Lender,
each in a principal amount equal to such Lender’s Commitment;


 


(iii)          the Multi-Party Guaranty;


 


(iv)          the Pledge and Security Agreement, together with such
certificates, stock powers, registrations and other supporting documents as
Administrative Agent shall reasonably require;


 


(v)           the
Intellectual Property Security Agreements;


 


41

















 


(vi)          executed counterparts of the Intercreditor Agreement;


 


(vii)         the First Lien Loan Documents;


 


(viii)        such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of Borrower as
Administrative Agent may require to establish the identities of and verify the
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer thereof;


 


(ix)           sufficient copies of each Organization Document of each
Credit Party, as applicable, and, to the extent applicable, certified as of a
recent date by the appropriate governmental official, for each Lender, each
dated the Closing Date or a recent date prior thereto;


 


(x)            resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents and the Merger Documents to which it is
a party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment;


 


(xi)           a good standing certificate from the applicable
Governmental Authority of each Credit Party’s jurisdiction of incorporation,
organization or formation and in each jurisdiction in which it is qualified as
a foreign corporation or other entity to do business, each dated a recent date
prior to the Closing Date;


 


(xii)          a certificate signed by a Responsible Officer of Borrower (A) that
the representations and warranties made by Borrower herein are true and correct
on and as of the Closing Date (except to the extent such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date), (B) that Borrower is in
compliance with all the terms and provisions of the Loan Documents to which it
is a party, and no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the borrowing contemplated
hereby, and (C) that there has been no event or circumstance since the
date of the Audited Financial Statements which could reasonably be expected to
have a Material Adverse Effect;


 


(xiii)         opinions of counsel to Borrower in substantially the form of
Exhibit G and otherwise in form and substance reasonably satisfactory to
Administrative Agent;


 


(xiv)        such reliance letters as Administrative Agent shall request
providing for the right of the Administrative Agent and the Lenders to rely on
any legal opinions, solvency opinions or fairness opinions delivered to
Borrower or any of its Subsidiaries in connection with the Related
Transactions, in each case addressed to the Administrative Agent and Lenders;
and


 


(xv)         such other assurances, certificates, documents, consents or
opinions as Administrative Agent or Requisite Lenders reasonably may require.


 


42

















 


(b)           Fees
and Expenses.  Any fees and expenses required to be paid by
Borrower or any of its Subsidiaries to Administrative Agent, Arranger or any
Lender on or before the Closing Date pursuant to the Facilities Letter, the Fee
Letter, any Loan Document or otherwise shall have been paid.


 


(c)           Attorney Costs.  Unless waived by Administrative Agent,
Borrower shall have paid all Attorney Costs of Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts
of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between Borrower and Administrative Agent).


 


(d)           Litigation.  Administrative Agent and its counsel shall
have been provided sufficient information concerning any and all outstanding
litigation involving Borrower or its Subsidiaries and shall be satisfied with
the same, in its sole and absolute discretion.


 


(e)           Related Transactions.  Administrative Agent shall have received:


 


(i)            evidence,
reasonably satisfactory to Administrative Agent, that the Borrower has
completed, or concurrently with the initial credit extension hereunder will
complete, the Related Transactions in accordance with the terms of the Merger
Documents (without any amendment thereto or waiver thereunder unless consented
to by Administrative Agent). 
Administrative Agent shall have received a copy of the Merger Documents
and all instruments, documents and agreements related thereto, certified in
certificate of a Responsible Officer of Borrower, dated the Closing Date, as
correct and complete; and


 


(ii)           evidence reasonably satisfactory to it that since December 31,
2006, there shall have been no Material Adverse Change with respect to Borrower
and its Subsidiaries or Haverstick and its Subsidiaries.


 


(f)            Existing Indebtedness.  On the Closing Date, Borrower and its Subsidiaries
shall have (i) repaid in full all Existing Indebtedness, (ii) terminated
any commitments to lend or make other extensions of credit thereunder, (iii) delivered
to Administrative Agent all documents or instruments necessary to release all
Liens securing Existing Indebtedness or other obligations of Borrower and its
Subsidiaries thereunder being repaid on the Closing Date, and (iv) made
arrangements satisfactory to Administrative Agent with respect to the
cancellation of any letters of credit outstanding thereunder or the issuance of
Letters of Credit under the First Lien Credit Agreement to support the
obligations of Borrower and its Subsidiaries with respect thereto.


 


(g)           Authorizations and
Consents.  Each Credit Party
shall have obtained all governmental authorizations and all consents of other
Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents and the Merger Documents and
each of the foregoing shall be in full force and effect and in form and
substance reasonably satisfactory to Administrative Agent.  All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated 


 


43

















 


by the Loan
Documents or the Merger Documents or the financing thereof and no action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.


 


(h)           Collateral.  In order to create in favor of Administrative
Agent, for the benefit of Lenders, a valid, perfected security interest in the
personal property Collateral, Administrative Agent shall have received:


 


(i)            evidence
satisfactory to Administrative Agent of the compliance by each Credit Party of
their obligations under the Pledge and Security Agreement and the other
Security Documents (including their obligations to execute and deliver UCC
financing statements, originals of securities, instruments and chattel paper
and any agreements governing deposit and/or securities accounts as provided
therein);


 


(ii)           A completed Collateral Questionnaire dated the Closing
Date and executed by a Responsible Officer of each Credit Party, together with
all attachments contemplated thereby, including (A) the results of a
recent search, by a Person satisfactory to Administrative Agent, of all
effective UCC financing statements (or equivalent filings) made with respect to
any personal or mixed property of any Credit Party in the jurisdictions
specified in the Collateral Questionnaire, together with copies of all such
filings disclosed by such search, and (B) UCC termination statements (or
similar documents) duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) disclosed in such search (other than any
such financing statements in respect of Permitted Liens);


 


(iii)          opinions of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) with respect to the creation and
perfection of the security interests in favor of Administrative Agent in such
Collateral and such other matters governed by the laws of each jurisdiction in
which any Credit Party or any personal property Collateral is located as Administrative
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent; and


 


(iv)          evidence that each Credit Party shall have taken or caused
to be taken any other action, executed and delivered or caused to be executed
and delivered any other agreement, document and instrument (including without
limitation, any intercompany notes evidencing Indebtedness permitted to be
incurred pursuant to Section 7.1(e)) and made or caused to be made any
other filing and recording (other than as set forth herein) reasonably required
by Collateral Agent.


 


(v)           executed
notices of assignment of claims in connection with United States government
receivables complying with the terms of the Assignment of Claims Act of 1940,
31 U.S.C. § 3727, 41 U.S.C. § 15 and otherwise acceptable in form to
Administrative Agent, to be held by the Administrative Agent, and written
authorization in form and substance satisfactory to Administrative Agent
authorizing 


 


44

















 


Administrative Agent to file such notices with the
appropriate governmental authorities at Administrative Agent’s discretion upon
an Event of Default.


 


(vi)          with respect to each Material Lease, a Landlord Waiver from
the landlord under such Material Lease; provided that
no such Landlord Waiver shall be required with respect to any Material Lease
that could not be obtained after the Credit Party that is the lessee under such
Material Lease shall have used its reasonable best efforts to do so.


 


(i)            Control Agreements.  Administrative Agent shall have received a
duly executed control agreement covering any applicable account collateral to
the extent required under the Pledge and Security Agreement.


 


(j)            Financial Statements;
Projections.  Lenders shall
have received from Borrower (i) the Historical Financial Statements, (ii) pro
forma consolidated and consolidating financial statements of Borrower and its
Subsidiaries as at the Closing Date, and reflecting the consummation of the
Haverstick Acquisition, the related financings and the other transactions
contemplated by the Loan Documents and the Merger Documents to occur on or
prior to the Closing Date, which pro forma financial statements shall be in
form and substance satisfactory to Administrative Agent, and (iii) the
Projections.


 


(k)           Evidence of
Insurance.  Administrative
Agent shall have received a certificate from Borrower’s insurance broker or
other evidence satisfactory to it that all insurance required to be maintained
pursuant to Section 6.6 is in full force and effect, together with
endorsements naming Administrative Agent, for the benefit of Lenders, as
additional insured and loss payee thereunder to the extent required under Section 6.6.


 


(l)            Solvency Certificate.  On the Closing Date, Administrative Agent
shall have received a certificate from Borrower dated as of the Closing Date
and addressed to Administrative Agent and Lenders, and in form, scope and
substance satisfactory to Administrative Agent, with appropriate attachments and
demonstrating that after giving effect to the consummation of the Merger
Documents and the Extensions of Credit to be made on the Closing Date, Borrower
and its Subsidiaries are and will be Solvent.


 


(m)          Due Diligence.  Other than changes occurring in the ordinary
course of business, no information or materials are or should have been
available to Borrower and its Subsidiaries as of the Closing Date that are
materially inconsistent with the material previously provided to Administrative
Agent for its due diligence review of Borrower and its Subsidiaries.


 


(n)           Minimum EBITDA.  The pro forma financial statements delivered
pursuant to Section 4.1(j) shall demonstrate in form and substance
reasonably satisfactory to Administrative Agent that on the Closing Date and
immediately after giving effect to any Extensions of Credit to be made on the
Closing Date and the payment of all fees and expenses required to be paid in
cash on the Closing Date, Borrower shall have generated trailing twelve month
Consolidated EBITDA of at least $15,000,000.


 


(o)           Proceeds of First Lien
Credit Agreement.  Borrower
shall have received $65,500,000 in gross proceeds from borrowings under the
First Lien Credit Agreement.


 


45

















 


(p)           Representations and
Warranties.  The
representations and warranties of Borrower contained in each of the Loan
Documents shall be correct on and as of the date of such Extension of Credit,
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.


 


(q)           No Default or Event of
Default.  no Default or Event
of Default exists, or would result from such proposed Extension of Credit.


 


(r)            Notice of Borrowing.  Administrative Agent shall have timely
received a Request for Extension of Credit by Requisite Notice by the Requisite
Time.


 


(s)           Other Assurances,
Certificates and Documents. 
Administrative Agent shall have received, in form and substance
satisfactory to it, such other assurances, certificates, documents or consents
related to the foregoing as Administrative Agent and Requisite Lenders
reasonably may require.


 


(t)            No Orders, Judgment or
Decrees.  No order, judgment
or decree of any Governmental Authority shall purport to restrain any Lender
from making any Loans to be made by it; no injunction or other restraining
order shall have been issued, shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans hereunder.


 


(u)           Post-Closing Agreement. 
Administrative Agent shall have received a fully executed copy of the
Post-Closing Letter, setting forth post-closing obligations of the Borrower and
its Subsidiaries with respect to certain conditions set forth in this Section 4.1,
in form and substance satisfactory to Administrative Agent in all respects.


 


SECTION V.

REPRESENTATIONS AND WARRANTIES


 


Borrower represents and warrants to Administrative
Agent and Lenders that:


 


5.1          EXISTENCE AND QUALIFICATION; POWER;
COMPLIANCE WITH LAWS.


 


(a)           Each Credit Party is duly organized,
validly existing and, except as set forth on Schedule 5.1(a), in good standing
under the Laws of the state of its organization, has the requisite power and
authority and the legal right to own, lease and operate its properties, to
conduct its business as currently conducted, is duly qualified and in good
standing under the Laws of every jurisdiction where it is required to be so
qualified, except where the failure to be so qualified could not be reasonably
expected to have a Material Adverse Effect, and is in compliance with all Laws
except to the extent that noncompliance could not be reasonably expected to
have a Material Adverse Effect.


 


(b)           Schedule 5.1(b) attached
hereto lists, as of the Closing Date, each of the Subsidiaries.


 


46

















 


(c)           Immediately after giving effect to
the Related Transactions, the Borrower will indirectly own 100% of the issued
and outstanding Equity Securities of Haverstick and its Subsidiaries.


 


5.2          POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS.


 


Each Credit Party has the requisite power and
authority and the legal right to make, deliver and perform each Loan Document
to which it is a party and Borrower has the corporate or other entity power and
authority to borrow hereunder and has taken all necessary action to authorize
the borrowings on the terms and conditions of this Agreement and to authorize
the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party.  No
consent or authorization of, filing with, or other act by or in respect of any
Governmental Authority or any other Person, is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents.  The Loan Documents have been duly executed
and delivered by each Credit Party which is a party hereto, and constitute
legal, valid and binding obligations of such Credit Party, enforceable against
such Credit Party in accordance with their respective terms.


 


5.3          NO LEGAL BAR.


 


The execution, delivery, and performance by each
Credit Party of the Loan Documents to which it is a party and compliance with
the provisions thereof have been duly authorized by all requisite action on the
part of such Credit Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) any
Organization Documents of the Credit Parties, (ii) any applicable material
Laws, rules, or regulations or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any material Contractual
Obligation of such Credit Party or any of its Subsidiaries or by which any of
them or any of their property is bound or subject, (b) constitute a
default under any material agreement or instrument, (c) require any
registration with, consent or approval of, notice to, or any other action to,
with or by, and Governmental Authority, or (d) result in, or require, the
creation or imposition of any Lien on any of the properties of such Credit
Party or any of its Subsidiaries (other than the Liens granted in connection
herewith).


 


5.4          EQUITY SECURITIES AND OWNERSHIP.


 


The Equity Securities of
each of Borrower and its Subsidiaries has been duly authorized and validly
issued and is fully paid and non-assessable. 
Except as set forth on Schedule 5.4, as of the date hereof, there is no
existing option, warrant, call, right, commitment or other agreement to which
Borrower or any of its Subsidiaries is a party requiring, and there is no
membership interest or other Equity Security of Borrower or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Borrower or any of its Subsidiaries of any additional membership
interests or other Equity Securities of Borrower or any of its Subsidiaries or
other Equity Securities convertible into, exchangeable for or evidencing the
right to subscribe for or purchase, a membership interest or other Equity
Security of Borrower or any of its Subsidiaries.  Schedule 5.4 sets forth a true, complete and
correct list as of the Closing Date, both before and after giving effect to the
Loan Documents and the Related 


 


47

















 


Transactions,
of the name of Borrower and each of its Subsidiaries and indicates for each
such Person (other than Borrower) its ownership (by holder and percentage
interest) and the type of entity of each of them, and the number and class of
authorized and issued Equity Securities of such Subsidiary.  Except as set forth on Schedule 5.4, as of
the Closing Date, neither Borrower nor any of its Subsidiaries has any equity
investments in any other corporation or entity.


 


5.5                               FINANCIAL
STATEMENTS; PROJECTIONS; NO MATERIAL ADVERSE EFFECT.


 


(a)           The Historical 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 in all material respects the financial condition of Borrower and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and (iii) to
the extent required by GAAP, show all material indebtedness and other
liabilities, direct or contingent, of Borrower and its Subsidiaries as of the
date thereof.


 


(b)           On and as of the relevant date of
determination, the Projections of Borrower and its Subsidiaries for the period
of fiscal year 2007 through and including fiscal year 2012, including quarterly
projections for each month during fiscal years 2007 and 2008 (the “Projections”) are based on good faith estimates and
assumptions made by the management of Borrower and as of the relevant date of
determination, management of Borrower believed that the Projections were
reasonable and attainable.


 


(c)           Since December 31, 2006, (i) there
has been no event or circumstance which could reasonably be expected to have a
Material Adverse Effect and (ii) except as set forth on Schedule 5.5
hereto and as disclosed in the Borrower’s public filings with the Securities
and Exchange Commission from time to time, no Internal Control Event has
occurred.


 


5.6          LITIGATION.


 


Except as disclosed in the Disclosure
Letter, there are (a) no lawsuits, investigations or
proceedings of or before an arbitrator or Governmental Authority pending or, to
the best of knowledge of Borrower, threatened by or against Borrower or any of
its Subsidiaries or against any of their properties or revenues which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, (b) no orders, writs, injunctions, judgments, or decrees of any
court or government agency or instrumentality to which the Borrower or any of
its Subsidiaries is a party or by which the property or assets of them are
bound, or (c) no grievances, disputes, or controversies outstanding with
any union or other organization of the employees of Borrower or any of its
Subsidiaries, or, to the knowledge of Borrower or such Subsidiaries, threats of
work stoppage, strike, or pending demands for collective bargaining, which
could reasonably be expected to cause or result in a Material Adverse Effect.


 


5.7          NO DEFAULT; CONTINUED BUSINESS.


 


Neither Borrower nor any its Subsidiaries are in
default under or with respect to any Contractual Obligation which could
reasonably be expected to have a Material Adverse Effect, 


 


48

















 


and no Default or Event of
Default has occurred and is continuing or will result from the consummation of
this Agreement or any of the other Loan Documents, or the making of the
Extensions of Credit hereunder.  There
exists no actual, pending, or, to Borrower’s knowledge, any threatened
termination, cancellation or limitation of, or any modification or change in
the business relationship of Borrower or any Subsidiary and any customer or
supplier, or any group of customers or suppliers, whose purchases or supplies,
individually or in the aggregate, could reasonably be expected to cause or
result in a Material Adverse Effect, and there exists no present condition or
state of facts or circumstances that could reasonably be expected to have a
Material Adverse Effect or prevent any Credit Party from conducting such
business or the transactions contemplated by this Agreement in substantially
the same manner in which it was previously conducted.


 


5.8          OWNERSHIP OF PROPERTY; LIENS.


 


Borrower and its Subsidiaries have valid fee or
leasehold interests in all real property which they use in their respective
businesses, and Borrower and its Subsidiaries have good and marketable title to
all their other property, and none of such property is subject to any Lien,
except as permitted in Section 7.2.


 


5.9          TAXES.


 


Borrower and its Subsidiaries have timely filed all
material tax returns which are required to be filed, and have paid, or made
provision for the payment of, all taxes whether or not shown as due on any tax
return, except (a) such taxes, if any, as are being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
both established and maintained in accordance with GAAP, and (b) immaterial
taxes in de minimis amounts; provided, however, that in each case no
material item or portion of property of Borrower or any of its Subsidiaries is
in jeopardy of being seized, levied upon or forfeited.  Borrower knows of no proposed tax assessment
against Borrower or any of its Subsidiaries which is not being actively
contested by Borrower or such Subsidiary in good faith and by appropriate
proceedings and as to which adequate reserves have been both established and
maintained in accordance with GAAP.


 


5.10        MARGIN REGULATIONS; INVESTMENT COMPANY
ACT.


 


(a)           Neither Borrower for any of its Subsidiaries
is engaged nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.  No part of the proceeds of any Extensions of
Credit hereunder will be used for “purchasing” or “carrying” “margin stock” as
so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulations T, U or X of such Board of Governors.


 


(b)           Neither Borrower nor any of its
Subsidiaries is or is required to be registered as an “investment company”
under the Investment Company Act of 1940.


 


49

















 


5.11        ERISA COMPLIANCE; EMPLOYEE MATTERS.


 


(a)           Each Employee Benefits Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other applicable Laws.  Each
Employee Benefits Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination or opinion 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 Pension 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 Pension Plan.  There has
been no prohibited transaction (which is not otherwise exempt under Section 4975
of the Code) or violation of the fiduciary responsibility rules under
ERISA with respect to any Employee Benefits Plan that has or could reasonably
be expected to have a Material Adverse Effect.


 


(b)           (i) No ERISA Event has occurred or,
to the best of knowledge of Borrower or any Subsidiary or ERISA Affiliate, is
reasonably expected to occur; (ii) no Pension Plan has any Unfunded
Pension Liability; (iii) neither Borrower nor any Subsidiary or 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 Subsidiary or ERISA Affiliate has incurred, or, to the best of
knowledge of Borrower or any Subsidiary or ERISA Affiliate, reasonably expects
to incur, any liability (and, to the best of knowledge of Borrower or any
Subsidiary or ERISA Affiliate, no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither
Borrower nor any Subsidiary or ERISA Affiliate has engaged in a transaction
that could be subject to Sections 4069 or 4212(c) of ERISA.  Except to the extent required under Section 4980B
of the Code, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates extending beyond the end of the month in which any such retired or
former employee terminates employment.


 


(c)           Borrower and each of its Subsidiaries
has good labor relations.  Borrower, its
Subsidiaries, and their respective employees, agents and representatives have
not committed any material unfair labor practice as defined in the National
Labor Relations Act.  Neither Borrower
nor any of its Subsidiaries has been or is engaged in any unfair labor practice
that could reasonably be expected to have a Material Adverse Effect.  There has been and is (a) no unfair
labor practice charge or complaint pending against Borrower or any of its
Subsidiaries, or to the best knowledge of Borrower, threatened against any of
them before the National Labor Relations Board or any other Governmental
Authority and no grievance or arbitration proceeding arising out of or under
any collective bargaining agreement or similar agreement that is so pending
against Borrower or any of its Subsidiaries or to the best knowledge of
Borrower, threatened against any of them, (b) no labor dispute, strike,
lockout, slowdown or work stoppage in existence or threatened against,
involving or affecting Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, (c) no labor
union, labor organization, trade union, works council, or group of employees of
Holdings or any of its 


 


50

















 


Subsidiaries
has made a pending demand for recognition or certification, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened to be brought or
filed with the National Labor Relations Board or any other Governmental
Authority, and (d) to the best knowledge of Borrower, no union
representation question existing with respect to any of the employees of
Holdings or any of its Subsidiaries and, to the best knowledge of Borrower, no
labor union organizing activity with respect to any employees of Borrower or
any of its Subsidiaries that is taking place, except (with respect to any
matter specified in clause (a), (b), (c), or (d) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect or as disclosed in Schedule 5.11.


 


5.12        INTANGIBLE ASSETS


 


Borrower and its Subsidiaries own, or possess the
right to use, all trademarks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intangible assets that are used in the conduct
of their respective businesses as now operated or could obtain such right
without causing a Material Adverse Effect, and none of such items, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or intangible asset of any other Person to the
extent that such conflict has or could reasonably be expected to have a
Material Adverse Effect.


 


5.13        COMPLIANCE WITH LAWS


 


Borrower and its Subsidiaries are in compliance in
all material respects with all material Laws that are applicable to such
Person.


 


5.14        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 such
Environmental Laws and claims do not, and could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.


 


5.15        INSURANCE


 


The properties of Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of Borrower, in such amounts, with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Borrower or such Subsidiary operates.  Schedule 5.15 sets forth a list of all
insurance maintained by or on behalf of the Credit Parties and each of their
Subsidiaries as of the Closing Date and, as of the Closing Date, all premiums
in respect of such insurance have been paid


 


51

















 


5.16        SWAP OBLIGATIONS


 


Neither Borrower nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations.  Borrower has
undertaken its own independent assessment of its consolidated assets,
liabilities and commitments and has considered appropriate means of mitigating
and managing risks associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in determining whether
to enter into any Swap Contract.


 


5.17        SOLVENCY


 


Borrower has received consideration that is the
reasonable equivalent value of the obligations and liabilities Borrower has
incurred in favor of Administrative Agent and the Lenders.  Each Credit Party is Solvent and each Credit
Party will be Solvent after giving effect to (i) the execution and
delivery of the Loan Documents to Administrative Agent and the Lenders and the
Extensions of Credit thereunder and (ii)  the Related Transactions (on a
pro forma basis).


 


5.18        DISCLOSURE


 


No statement, information, report, representation,
or warranty made by any Credit Party in any Loan Document or furnished to
Lender in connection with any Loan Document contains any untrue statement of a
material fact or, when viewed together with Borrower’s periodic reports filed
under the Exchange Act and the rules and regulations promulgated
thereunder, omits to state any material fact necessary to make the statements
herein or therein not misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time. 
After due inquiry by Borrower, there is no known fact that any Credit
Party has not disclosed to Administrative Agent and the Lenders that has or is
reasonably likely to have a Material Adverse Effect.


 


5.19        PATRIOT ACT.


 


(a)           Neither the Loans contemplated
hereunder nor the use of the proceeds thereof will violate the Anti-Terrorism Order,
the USA Patriot Act, the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.


 


(b)           Neither Borrower nor any Subsidiary (1) is
a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1
of the Anti-Terrorism Order, or (2) to the best knowledge of Borrower,
engages in any dealings or transactions with any such Person.  The Borrower and its Subsidiaries are in
compliance, in all material respects, with the USA Patriot Act.


 


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


 


52

















 


5.20        RELATED TRANSACTIONS.


 


(a)           Borrower has heretofore furnished
Administrative Agent true and correct copies of the Merger Documents.


 


(b)           The Related Transactions have been
(or, on the Closing Date, shall concurrently be) completed in compliance with
the terms of the Merger Documents and all applicable Laws.  No material provision of the Merger Documents
was (or shall be) amended or waived in connection with the transactions
described therein unless consented to by Administrative Agent, which consent
shall not be unreasonably withheld.  All
material and necessary authorizations, consents, approvals, exceptions or other
actions by or notices to or filings with any court or administrative or
governmental body or other Person required in connection with the execution,
delivery or performance of the Merger Documents or the consummation of the
Related Transactions are (or, on the Closing Date, shall concurrently be) final
and in full force and effect.


 


(c)           The execution and delivery of the
Merger Documents did not, and the consummation of the Related Transactions will
not, materially violate any material statute or regulation of the United States
(including any securities law) or of any state or other applicable
jurisdiction, or any material order, judgment or decree of any court or
governmental body binding on Borrower or any Subsidiary, or result in a breach
of, or constitute a default under, any material agreement, indenture,
instrument or other document, or any judgment, order or decree, to which
Borrower or any Subsidiary is a party or by which Borrower or any Subsidiary is
bound.


 


5.21        SECURITY INTEREST IN COLLATERAL.


 


The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of Administrative Agent, for the benefit of Administrative
Agent and the Lenders, and such Liens constitute perfected and continuing Liens
on the Collateral, securing the Obligations, enforceable against the applicable
Loan Party and all third parties, and having priority over all other Liens on
the Collateral except in the case of (a) Liens permitted pursuant to Section 7.2,
to the extent any such Liens would have priority over the Liens in favor of
Collateral Agent pursuant to any applicable law, (b) Liens perfected only
by possession (including possession of any certificate of title) to the extent
Administrative Agent has not obtained or does not maintain possession of such
Collateral and (c) Liens in favor of the First Lien Administrative Agent.


 


5.22        PERMITS, ETC.


 


Each Credit Party has, and
is in compliance with, all permits, licenses, authorizations, approvals,
entitlements and accreditations required for such Person lawfully to own,
lease, manage or operate, or to acquire, each business currently owned, leased,
managed or operated, or to be acquired, by such Person, which, if not obtained,
could reasonably be expected to have a Material Adverse Effect.  No condition exists or event has occurred
which, in itself or with the giving of notice or lapse of time or both, would
result in the suspension, revocation, impairment, forfeiture or non-renewal of
any such permit, license, authorization, approval, entitlement or
accreditation, and there is no claim that any thereof is not in full force and
effect, except, to the 


 


53

















 


extent
any such condition, event or claim could not be reasonably be expected to have
a Material Adverse Effect.


 


5.23        MATERIAL CONTRACTS.


 


Set forth in the Disclosure
Letter is a true, correct and complete list of all the Material Contracts in
effect on the Closing Date.  All such Material
Contracts, together with any updates provided pursuant to Section 6.2(l),
are in full force and effect and no defaults currently exist thereunder (other
than as described in the Disclosure Letter or in such updates).


 


5.24         CERTAIN FEES


 


No broker’s or finder’s fee
or commission will be payable with respect hereto or any of the transactions
contemplated hereby.


 


5.25        AFFILIATE TRANSACTIONS.


 


Except as set forth on
Schedule 5.25, as of the date of this Agreement, there are no existing or
proposed agreements, arrangements, understandings, or transactions between any
Credit Party and any of the officers, members, managers, directors,
stockholders, parents, other interest holders, employees, or Affiliates (other
than other Credit Parties) of any Credit Party or any members of their
respective immediate families, and none of the foregoing Persons are directly
or indirectly indebted to or have any direct or indirect ownership,
partnership, or voting interest in any Affiliate of any Credit Party or any Person
with which any Credit Party has a business relationship or which competes with
any Credit Party.


 


5.26        DORMANT SUBSIDIARIES.


 


None
of the Foreign Subsidiaries of Borrower set forth on Schedule 5.26 (the “Dormant Subsidiaries”) have any material continuing
operations or conduct any material business and all are in the process of being
dissolved by the Borrower.  Borrower is
using its reasonable best efforts to complete the dissolution process with
respect to each Dormant Subsidiary in a timely manner.


 


SECTION VI.

AFFIRMATIVE COVENANTS


 


So long as any Obligation (excluding inchoate
indemnity obligations) remains unpaid or unperformed, Borrower shall, and shall
(except in the case of Borrower’s reporting covenants set forth in Sections 6.1
and 6.2(a)-(c)), cause each Subsidiary, to:


 


6.1          FINANCIAL STATEMENTS.


 


Deliver to Administrative Agent and each Lender, in
form and detail satisfactory to Administrative Agent and Requisite Lenders:


 


54

















 


(a)           as soon as available, but in any
event within 90 days after the end of each fiscal year of Borrower, a
consolidated balance sheet, a consolidated statement of income and a
consolidated cash flow statement of Borrower and its Subsidiaries as at the end
of such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing, which report and opinion shall be prepared in
accordance with GAAP and shall not be subject to any qualifications or
exceptions as to the scope of the audit nor to any qualifications or exceptions
not reasonably acceptable to Requisite Lenders;


 


(b)           as soon as available, but in any
event within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of Borrower, a consolidated balance sheet, a consolidated
statement of income and a consolidated cash flow statement of Borrower and its
Subsidiaries as at the end of such fiscal quarter, and 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 and certified by a Responsible Officer of
Borrower as fairly presenting in all material respects the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.


 


(c)           as soon as available, but in any
event within 45 days after the end of each fiscal month of Borrower (including
months which began prior to the Closing Date), a consolidated balance sheet, a
consolidated statement of income and a consolidated cash flow statement of
Borrower and its Subsidiaries as at the end of such fiscal month, and for such
fiscal month 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
month of the previous fiscal year and the corresponding portion of the previous
fiscal year, all in reasonable detail and certified by a Responsible Officer of
Borrower as fairly presenting in all material respects the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes; provided, however,
that with respect to the delivery of such financial statements during fiscal
year 2008, there shall be no requirement to deliver comparisons to the
corresponding month from the prior fiscal year.


 


(d)           if, as a result of any change in
accounting principles and policies (or the application thereof) from those used
in the preparation of the Historical Financial Statements, the consolidated
financial statements of Borrower and its Subsidiaries delivered pursuant to Section 6.1(a) or
6.1(b) will differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such sections had no such
change in accounting principles and policies been made, then, together with the
first delivery of such financial statements after such change, one or more
statements of reconciliation for all such prior financial statements in form
and substance satisfactory to Administrative Agent.


 


Reports required to be delivered pursuant to clauses
(a), (b) and (c) of this Section 6.1 shall be deemed to have
been delivered on the date on which Borrower posts such reports on Borrower’s
internet website at the website address listed on Schedule 10.2 hereof or when
such 


 


55

















 


report is posted on the
Securities and Exchange Commission’s website at www.sec.gov; provided that (x) Borrower shall notify Administrative
Agent of the posting of any such new material, and (y) in every instance
Borrower shall provide paper copies of the Compliance Certificates required by
clause (a) of Section 6.2 to Administrative Agent and each
Lender.  Except for the Compliance
Certificates referred to in such clause (a) of Section 6.2,
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the reports referred to in clauses (a) and (b) of
this Section 6.1, and in any event shall have no responsibility to monitor
compliance by Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such reports.


 


6.2          CERTIFICATES, NOTICES AND OTHER
INFORMATION.


 


Deliver to Administrative Agent and each Lender, in
form and detail satisfactory to Administrative Agent and Requisite Lenders:


 


(a)           within five (5) days after the
delivery of the financial statements referred to in Sections 6.1(a) and
(b), a duly completed Compliance Certificate signed by a Responsible Officer of
Borrower;


 


(b)           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 all
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 Sections 13 or 15(d) of the Exchange Act, and not
otherwise required to be delivered to Administrative Agent pursuant hereto;


 


(c)           promptly after the occurrence
thereof, notice of any Default or Event of Default;


 


(d)           notice of any change in accounting
policies or financial reporting practices by Borrower or any Subsidiary that is
material to Borrower or to Borrower and its Subsidiaries on a consolidated
basis;


 


(e)           promptly after the commencement
thereof, notice of any litigation, investigation or proceeding affecting
Borrower where the reasonably expected damages to Borrower exceed $2,500,000,
or in which injunctive relief or similar relief is sought, which relief, if
granted, could reasonably be expected to have a Material Adverse Effect;


 


(f)            promptly after the occurrence
thereof, notice of any Reportable Event with respect to any Pension Plan or the
intent to terminate any Pension Plan, or the institution of proceedings or the
taking or expected taking of any other action to terminate any Pension Plan or
withdraw from any Pension Plan;


 


(g)           (i) in advance of, if known, or
promptly after the occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Borrower, its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the IRS, the
Department of Labor or the PBGC with respect thereto; and (ii) promptly following
such ERISA Event, copies of (1) each 


 


56

















 


Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
with the IRS with respect to each Pension Plan; (2) all notices received
by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies
of such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;


 


(h)           promptly after the occurrence
thereof, notice of any Material Adverse Effect;


 


(i)            as soon as practicable and in any
event no later than January 31 of each fiscal year, a consolidated plan
and financial forecast for such fiscal year and each fiscal year (or portion
thereof) through the final maturity date of the Loans (a “Financial
Plan”), including (i) a forecasted consolidated and
consolidating balance sheet and forecasted consolidated and consolidating
statements of income and cash flows of Borrower and its Subsidiaries for each
such fiscal year, together with pro forma Compliance Certificates for each such
fiscal year and an explanation of the assumptions on which such forecasts are
based, (ii) forecasted consolidated statements of income and cash flows of
Borrower and its Subsidiaries for each month of the fiscal year then beginning,
(iii) forecasts demonstrating projected compliance with the requirements
of Section 7.12 through the Maturity Date of the Term Loans, and (iv) forecasts
demonstrating adequate liquidity through the Maturity Date of the Term Loans,
together, in each case, with an explanation of the assumptions on which such
forecasts are based all in form and substance reasonably satisfactory to
Administrative Agent and accompanied by a certificate from a Responsible Office
of Borrower certifying that the projections contained therein are based upon
good faith estimates and assumptions believed by Borrower to be reasonable at
the time made and at the time of delivery thereof; provided,
however, that with respect to fiscal year 2008, the monthly
forecasts described in clause (ii) above may be delivered up to 90 days
after the Closing Date;


 


(j)            as soon as practicable and in any
event by the last day of each fiscal year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Borrower and its Subsidiaries and
all material insurance coverage planned to be maintained by Borrower and its
Subsidiaries in the immediately succeeding fiscal year;


 


(k)           with reasonable promptness, written
notice of any change in the board of directors (or similar governing body) of
Borrower;


 


(l)            promptly, and in any event within
ten Business Days (i) after any Material Contract of Borrower or any of
its Subsidiaries is terminated or amended in a manner that would (x) decrease
the revenue to be received by any Credit Party during any fiscal year under
such Material Contract by more than 25% or (y) increase the cost to be
paid by any Credit Party during any fiscal year under such Material Contract by
more than 25%, and (ii) after any new Material Contract is
entered into, a written statement describing such event, with copies of such
material amendments or new contracts, delivered to Administrative Agent (to the
extent such delivery is permitted by the terms of any such Material Contract, provided that no such prohibition on delivery shall be
effective if it were bargained for by Borrower or its applicable 


 


57

















 


Subsidiary
with the intent of avoiding compliance with this Section 6.2(l)), and an
explanation of any actions being taken with respect thereto;


 


(m)          as soon as practicable (but, in any
event, within 7  days) following receipt thereof,
copies of all environmental audits and reports with respect to environmental
matters at any facility of Borrower or its Subsidiaries or which relate to any
environmental liabilities of Borrower or its Subsidiaries which, in any such
case, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect;


 


(n)           at least thirty (30) days prior to
the occurrence of any change (i) in any Credit Party’s corporate name, (ii) in
any Credit Party’s identity or corporate structure, or (iii) in any Credit
Party’s Federal Taxpayer Identification Number, Borrower will furnish to the
Administrative Agent notice thereof. 
Borrower agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral and for the Collateral at all
times following such change to have a valid, legal and perfected security
interest as contemplated in the Security Documents.  Borrower will furnish to Administrative Agent
prompt written notice of any Lien (other than Permitted Liens) or claims made
or asserted against any Collateral or interest therein.  Borrower also agrees promptly to notify
Administrative Agent in writing if any material portion of the Collateral is
lost, damaged or destroyed;


 


(o)           each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to Section 6.1(a), a certificate (i) either confirming that there has
been no material change in such information since the date of the Collateral
Questionnaire delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this Section and/or identifying such
changes, and (ii) updating the Collateral Questionnaire to reflect
material changes in such information since the date of the Collateral
Questionnaire delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this Section;


 


(p)           promptly (i) if any Credit Party
obtains knowledge that any Credit Party or any Person which owns, directly or
indirectly, any Equity Securities of any Credit Party, or any other holder at
any time of any direct or indirect equitable, legal or beneficial interest
therein is the subject of any of the Terrorism Laws, such Credit Party will
notify Administrative Agent and (ii) upon the request of any Lender, such
Credit Party will provide any information such Lender believes is reasonably
necessary to be delivered to comply with the Patriot Act;


 


(q)           promptly, such other data and
information as from time to time may be reasonably requested by Administrative
Agent;


 


(r)            concurrently with the delivery of
all reports, statements and other information delivered pursuant to the First
Lien Credit Agreement, copies of such reports, statements and other
information, except to the extent that such information has already been
delivered to the Administrative Agent and the Lenders in accordance with the
terms hereof; and


 


58
















 


(s)           concurrent
notice of and a copy of each amendment (or proposed amendment) to the First
Lien Credit Agreement, regardless of whether such amendment is permitted under
the Intercreditor Agreement without the consent of the Administrative Agent
and/or the Lenders.


 


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.  The annual reports, proxies, financial
statements or other communications required by Section 6.2(b) above
shall be deemed to have been delivered on the date on which Borrower posts such
reports on Borrower’s website on the Internet at the website address listed on
Schedule 10.2 hereof or when such report is posted on the Securities and
Exchange Commission’s website at www.sec.gov; provided
that Borrower shall notify Administrative Agent of the posting of any such new
material.  Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the reports
and communications referred to in Section 6.2(b), and in any event shall
have no responsibility to monitor compliance by Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such reports and communications.


 


6.3          PAYMENT OF TAXES.


 


Pay and discharge when due all taxes,
assessments, and governmental charges, except for (a) any such tax,
assessment, charge, or levy which is a Lien permitted under Section 7.2(i) and
(b) immaterial taxes in de minimis
amounts.


 


6.4          PRESERVATION OF EXISTENCE.


 


Preserve and maintain its existence,
governmental authorizations, licenses, permits, rights, franchises and
privileges necessary or desirable in the normal conduct of its business, except
(i) as permitted by Section 7.3, or (ii) where failure to do so
could not reasonably be expected to have a Material Adverse Effect.


 


6.5          MAINTENANCE OF PROPERTIES.


 


Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good order and condition, subject to wear and tear in the ordinary course of
business, and not permit any waste of its properties, except where failure to
do so could not reasonably be expected to have a Material Adverse Effect.


 


6.6          MAINTENANCE OF INSURANCE.


 


Borrower will maintain or cause to be
maintained, with financially sound and reputable insurers, (i) business
interruption insurance reasonably satisfactory to Administrative Agent, and (ii) casualty
insurance, such public liability insurance, third party property damage
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrower and its Subsidiaries as are
customarily carried or maintained under similar circumstances by Persons of
established reputation of similar size and engaged in similar businesses, in
each case in such amounts (giving effect to self insurance which comports with
the requirements of this Section and provided that adequate reserves
therefor are maintained in


 


59

















 


accordance
with GAAP), with such deductibles, covering such risks and otherwise on such
terms and conditions as shall be customary for such Persons.  Each such policy of insurance shall (i) name
Administrative Agent, on behalf of Lenders as an additional insured thereunder
as its interests may appear, and (ii) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Administrative Agent, on
behalf of Lenders, as the loss payee thereunder and provides for at least
thirty (30) days’ prior written notice to Administrative Agent of any
modification or cancellation of such policy and that no act or default of
Borrower or any other Person shall affect the right of Administrative Agent to
recover under such policy or policies in case of loss or damage.


 


6.7          COMPLIANCE WITH LAWS.


 


(a)           Comply with the requirements of all
applicable Laws and orders of any Governmental Authority, noncompliance with
which could reasonably be expected to have a Material Adverse Effect.


 


(b)           Conduct its operations and keep and
maintain its property in material compliance with all Environmental Laws.


 


6.8          INSPECTION RIGHTS.


 


At any time during regular business hours and
as often as reasonably requested upon reasonable notice, permit Administrative
Agent or any Lender, or any employee, agent or representative thereof, to
examine, audit and make copies and abstracts from Borrower’s records and books
of account and to visit and inspect its and its Subsidiaries’ properties and to
discuss its affairs, finances and accounts with any of its officers and key
employees, and, upon request, furnish promptly to Administrative Agent or any
Lender true copies of all financial information and internal management reports
made available to their senior management. 
Notwithstanding any provision of this Agreement to the contrary, so long
as no Default or Event of Default shall have occurred and be continuing,
neither Borrower nor any of its Subsidiaries shall be required to disclose,
permit the inspection, examination, photocopying or making extracts of, or
discuss, any document, information or other matter that (i) constitutes
non-financial trade secrets or non-financial proprietary information, or (ii) the
disclosure of which to any Lender, or its designated representative, is then
prohibited by law or any agreement binding on Borrower or any of its
Subsidiaries that was not entered into by Borrower or any such Subsidiary for
the purpose of concealing information from the Lenders.  Borrower shall, however, furnish to
Administrative Agent such information concerning Borrower’s intellectual
property (including, without limitation, application and registration numbers
for any filings in connection with such intellectual property) as is reasonably
necessary to permit Administrative Agent (on behalf of itself and the other
Lenders) to perfect a security interest in such intellectual property.  Borrower will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of Administrative
Agent and Lenders once during each fiscal year to be held at Borrower’s
corporate offices (or at such other location as may be agreed to by Borrower
and Administrative Agent) at such time as may be agreed to by Borrower and
Administrative Agent.


 


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6.9          KEEPING OF RECORDS
AND BOOKS OF ACCOUNT.


 


Keep records and books of account adequate to
prepare financial statements in conformity with GAAP, consistently applied, and
in conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over Borrower or any applicable Subsidiary.


 


6.10        COMPLIANCE WITH ERISA.


 


Cause, and cause each of its ERISA Affiliates
to:  (a) maintain each Employee Benefits Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
applicable Laws; (b) to take all actions to cause each Employee Benefits
Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; and (c) make all required contributions to any Pension
Plan subject to Section 412 of the Code.


 


6.11        COMPLIANCE WITH AGREEMENTS.


 


Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, except for
any such Contractual Obligations (a) the nonperformance of which would not
cause a Default or Event of Default, (b) then being contested by any of
them in good faith by appropriate proceedings, or (c) if the failure to
comply therewith could not reasonably be expected to have a Material Adverse
Effect.


 


6.12        SUBSIDIARY GUARANTIES AND PLEDGE OF
OWNERSHIP INTERESTS.


 


(a)           Domestic Subsidiaries.  In the event that the aggregate gross
revenues or assets of Borrower and Guarantors for any fiscal year ending after
the Closing Date when taken together with 65% of the aggregate gross revenues
and assets of Borrower’s Foreign Subsidiaries as to which 65% of the ownership
interests thereof have been pledged in favor of Administrative Agent for the
benefit of Lenders, is less than 95% of the aggregate gross revenues or assets
of Borrower and its Subsidiaries on a consolidated basis for such fiscal year,
Borrower will, within 90 days after the end of such fiscal year, cause one or
more additional Domestic Subsidiaries to execute and deliver to Administrative
Agent a joinder to the Multi-Party Guaranty and to the Pledge and Security
Agreement along with any such other supporting documentation, certificates
(accompanied by irrevocable undated stock powers, duly endorsed in blank),
corporate governance and authorization documents as may be deemed reasonably
necessary or advisable by Administrative Agent such that the aggregate gross
revenues and assets for such fiscal year of Borrower and Guarantors, when taken
together with 65% of the aggregate gross revenues and assets of Borrower’s Foreign
Subsidiaries as to which 65% of the ownership interests thereof have been
pledged in favor of Administrative Agent for the benefit of Lenders, equal to
at least 95% of the aggregate gross revenues and assets of Borrower and its
Subsidiaries on a consolidated basis for such fiscal year.  In addition, in the event that (x) Borrower
creates or acquires a Domestic Subsidiary which is a Material Subsidiary, or (y) any
Domestic Subsidiary of Borrower that has not previously executed a joinder to
the Multi-Party Guaranty and the Pledge and Security Agreement becomes a
guarantor in respect of the obligations of Borrower or any Subsidiary under any
Material Indebtedness Agreement, Borrower shall within forty-five (45) days
(unless a longer period is agreed to by Administrative Agent) (i) cause
such Domestic


 


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Subsidiary
to execute and deliver to Administrative Agent a joinder to the Multi-Party
Guaranty and the Pledge and Security Agreement along with any such other
supporting documentation, certificates (accompanied by irrevocable undated
stock powers, duly endorsed in blank), corporate governance and authorization
documents as may be deemed necessary or advisable by Administrative Agent, (ii) execute
and deliver a supplement to the Pledge and Security Agreement pledging to
Administrative Agent (for the benefit of each Lender in accordance with its Pro
Rata Share) the ownership interests in such Domestic Subsidiary, and (iii) deliver
to Administrative Agent (for the benefit of each Lender in accordance with its
Pro Rata Share) the outstanding share certificates (or other evidence of its
equity) evidencing such pledged ownership interests.


 


(b)           Foreign Subsidiary Stock
Pledge.  In the event Borrower or any
Domestic Subsidiary creates or acquires a First-Tier Material Foreign
Subsidiary, Borrower shall and shall cause its Domestic Subsidiaries to, within
90 days (unless a longer period is agreed to by Administrative Agent), (i) pledge
to Administrative Agent, for the benefit of the Lenders, 65% of the ownership
interest owned by a Credit Party pursuant to the Pledge and Security Agreement,
(ii) deliver to Agent, for the benefit of the Lenders, the outstanding
shares certificates (or other evidence of equity), as applicable, evidencing
such pledged ownership interest, and (iii) take such further actions as
Administrative Agent reasonably requests to perfect the security interest in
such pledged ownership interests; provided,
however, that, if Administrative Agent, in its sole discretion after
consultation with Borrower, determines that the cost of perfecting, in a
foreign jurisdiction, the Administrative Agent’s security interest, for the
benefit of the Lenders, in such ownership interests relating to any First-Tier
Material Foreign Subsidiary is impractical or cost-prohibitive, then the
Administrative Agent may agree to forego the foreign perfection of such
security interest.


 


6.13        FURTHER ASSURANCES.


 


At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Requisite Lenders may
reasonably request in order to effect fully the purposes of the Loan Documents,
including providing Lenders with any information reasonably requested pursuant
to Section 10.26.  In furtherance
and not in limitation of the foregoing, each Credit Party shall take such
actions as Administrative Agent may reasonably request from time to time to
ensure that the Obligations are guaranteed by the Guarantors and are secured by
substantially all of the assets of Borrower and its Material Subsidiaries and
all of the outstanding Equity Securities of Borrower and its Material Subsidiaries
(subject to limitations contained in the Loan Documents with respect to Foreign
Subsidiaries), and shall give Administrative Agent prompt written notice of its
acquisition of any asset or assets with a value representing more than 5% of
the combined assets of Borrower and its Subsidiaries as at the Closing Date to
the extent that Collateral Agent’s security interest therein to secure the
Obligations will not be perfected by the Uniform Commercial Code filings
currently in effect at such time.


 


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6.14        USE OF PROCEEDS.


 


Use the proceeds of the Term Loans for lawful
corporate purposes including (i) the Related Transactions, (ii) the
refinancing of existing indebtedness of Borrower, its Subsidiaries and
Haverstick and its Subsidiaries on the Closing Date and (iii) working
capital and general corporate purposes, including Acquisitions, not otherwise
in contravention of this Agreement.  No
part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any law, including Regulations T, U
and X of the Board of Governors of the Federal Reserve System.


 


6.15        LANDLORD WAIVERS.
Concurrently with
entering into any Material Lease after the Closing Date, use its reasonable
best efforts to obtain a Landlord Waiver with respect to such Material Lease
and the property leased thereby.


 


6.16        ADDITIONAL MATERIAL REAL ESTATE ASSETS.


 


In the event that any Credit Party acquires a
Material Real Estate Asset after the Closing Date or any real property asset
owned or leased on the Closing Date becomes a Material Real Estate Asset and
such interest has not otherwise been made subject to the Lien of the Security
Documents in favor of Administrative Agent, for the benefit of lenders, then
such Credit Party, contemporaneously with acquiring such Material Real Estate
Asset, or promptly after a real estate asset owned or leased on the Closing
Date becomes a Material Real Estate Asset, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages,
documents, instruments, agreements, opinions and certificates as Administrative
Agent shall reasonably require with respect to each such Material Real Estate
Asset to create in favor of Administrative Agent, for the benefit of Lenders, a
valid and, subject to any filing and/or recording referred to herein, perfected
security interest in such Material Real Estate Assets.  In addition to the foregoing, Borrower shall,
at the request of Requisite Lenders, deliver, from time to time, to
Administrative Agent such appraisals as are required by law or regulation of
Material Real Estate Assets with respect to which Administrative Agent has been
granted a Lien.


 


6.17        DORMANT SUBSIDIARIES.


 


Borrower
shall not permit any of the Dormant Subsidiaries to have any material
continuing operations or conduct any material business and shall use its
reasonable best efforts to complete the dissolution process with respect to
each Dormant Subsidiary in a timely manner.


 


SECTION VII.

NEGATIVE COVENANTS


 


So long as any Obligations remain unpaid or
unperformed, Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly:


 


7.1          INDEBTEDNESS.


 


Create, incur, assume or suffer to exist any
Indebtedness except for the following (“Permitted Indebtedness”):


 


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(a)           (x) Indebtedness under the Loan
Documents and (y) Indebtedness
constituting First Lien Obligations (as defined in the Intercreditor Agreement,
and subject to the limitations and parameters set forth in such definition);


 


(b)           Indebtedness outstanding on the date
hereof and listed on Schedule 7.1 hereto;


 


(c)           Indebtedness of Borrower and its
Subsidiaries under loans and Capital Leases incurred by Borrower or any of its
Subsidiaries to finance the acquisition by such Person of real property,
improvements, fixtures, equipment or other fixed assets (together with
attachments, ascensions, additions, “soft costs” and proceeds thereof); provided that in each case, (i) such
Indebtedness is incurred by such Person at the time of, or not later than six (6) months
after, the acquisition by such Person of the property so financed, (ii) such
Indebtedness does not exceed the purchase price of the property so financed,
and (iii) the aggregate of all such Indebtedness at any time outstanding
does not exceed $2,750,000;


 


(d)           Indebtedness of Borrower and its
Subsidiaries under initial or successive refinancings, refundings, renewals or
extensions of any Indebtedness permitted by subsections (b), (c), (j), (k), (l) and
(m) of this Section 7.1; provided
that, with respect to any such refinanced, refunded, renewed or extended
Indebtedness, (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 the reasonable premium or other amount paid, and reasonable fees and
expenses incurred, in connection with such refinancing and by an amount equal
to any utilized commitments thereunder, (ii) the terms and conditions
thereof, including those relating to amortization, maturity, collateral and
subordination, are not less favorable to the Lenders than the Indebtedness
being refinanced, refunded, renewed or extended, (iii) the weighted
average life of the principal payments pursuant to such Indebtedness shall be
no shorter than the weighted average life of such payments pursuant to such
Indebtedness immediately prior to such refinancing, refunding, renewal or
extension, (iv) such Indebtedness shall not include Indebtedness of an
obligor that was not an obligor with respect to the Indebtedness being
refinanced, refunded, renewed or extended and (v) such Indebtedness shall
not be refinanced, refunded, renewed or extended if any Default or Event of Default
has occurred and is continuing or would result therefrom;


 


(e)           Indebtedness of Borrower to any of
Borrower’s Subsidiaries, Indebtedness of any of Borrower’s Subsidiaries to
Borrower or Indebtedness of any of Borrower’s Subsidiaries to any of Borrower’s
other Subsidiaries; provided that
the aggregate amount of Indebtedness of Borrower or any Guarantor to any
Foreign Subsidiary or any Subsidiary which is not a Guarantor other than
Indebtedness of Foreign Subsidiaries in existence on the Closing Date set forth
on Schedule 7.1(e), does not exceed $550,000 at any time outstanding; and provided further  that (i) all such Indebtedness
shall be evidenced by promissory notes and all such notes shall be subject to a
Lien pursuant to the Pledge and Security Agreement, (ii) all such
Indebtedness shall be unsecured and subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement that in any such
case, is reasonably satisfactory to Administrative Agent, and (iii) any
payment by any such Guarantor Subsidiary under any guaranty of the Obligations
shall result in a pro tanto reduction of the amount of any Indebtedness owed by
such Subsidiary to Borrower or to any of its Subsidiaries for whose benefit
such payment is made.


 


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(f)            Subordinated Debt as the same shall
have been approved by Requisite Lenders; provided
that the aggregate amount of such Subordinated Debt at any time outstanding
shall not exceed $5,500,000;


 


(g)           [Intentionally omitted];


 


(h)           Indebtedness incurred in favor of
sellers in connection with Permitted Acquisitions, to the extent permitted in
the definition thereof, and provided that
all such Indebtedness shall be unsecured and subordinated in right of payment
to the payment in full of the Obligations on terms and subject to documentation
reasonably satisfactory to Requisite Lenders;


 


(i)            Indebtedness arising in the ordinary
course of business in connection with the corporate credit card programs of
Borrower and its Subsidiaries in an amount not to exceed $1,138,500 at any time
outstanding;


 


(j)            Guaranty Obligations of Borrower or
any of its Subsidiaries guarantying Indebtedness otherwise permitted hereunder
of Borrower or any Subsidiary of Borrower;


 


(k)           Indebtedness arising from the
honoring of a check, draft or similar instrument against insufficient funds or
from the endorsement of instruments for collection arising in the ordinary
course of Borrower’s or any Subsidiary’s’ business;


 


(l)            Permitted Swap Obligations;


 


(m)          Indebtedness of Borrower or any of its
Subsidiaries with respect to surety, appeal, indemnity, performance or other
similar bonds arising in the ordinary course of business;


 


(n)           Indebtedness with respect to
agreements providing for indemnification, adjustment of purchase price, earnest
money or similar obligations in connection with Acquisitions or Dispositions
otherwise permitted by this Agreement;


 


(o)           Indebtedness with respect to cash
deposited by customers to obtain the right to delivery of future goods or
services; and


 


(p)           Other unsecured Indebtedness not
included in (a) through (n) above and not exceeding, in the aggregate
at any one time $2,750,000; provided that
all such Indebtedness shall be subordinated in right of payment to the payment
in full of the Obligations on terms and subject to documentation reasonably
satisfactory to Requisite Lenders.


 


7.2          LIENS.


 


Incur, assume or suffer to exist, any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for the following (“Permitted
Liens”):


 


(a)           Liens existing on the date hereof and
listed on Schedule 7.1 and any renewals or extensions thereof; provided that the property covered thereby
is not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.1(b);


 


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(b)           Liens pursuant to any Loan Document
and, subject to the Intercreditor Agreement, the First Lien Loan Documents;


 


(c)           Liens on the property or assets of
any Person which becomes a Subsidiary of Borrower after the date of this
Agreement or acquired after the date of this Agreement; provided that (i) such Liens exist at
the time such Person became a Subsidiary or the assets were acquired, (ii) such
Liens were not created in contemplation of the acquisition of such Person or
assets and (iii) such Liens do not at any time apply to any other assets
or properties of the Borrower;


 


(d)           Rights of vendors or lessors under
conditional sale agreements, Capital Leases or other agreements relating to
Indebtedness described in Section 7.1(c) or other title retention
agreements; provided that in each
case, (i) such rights secure or otherwise relate to Permitted
Indebtedness, (ii) such rights do not extend to any property other than
property acquired with the proceeds of such Permitted Indebtedness (together
with accessions, additions, replacements and proceeds thereof), and (iii) such
rights do not secure any Indebtedness other than Permitted Indebtedness;


 


(e)           Liens incurred in the ordinary course
of business in connection with leases, subleases, licenses and sublicenses
granted to Persons not interfering in any material respect with the business of
Borrower and its Subsidiaries and any interest or title of a lessee or licensee
under any such leases, subleases, licenses or sublicenses;


 


(f)            Liens arising in connection with
judgments not constituting an Event of Default pursuant to Section 8.1(i);


 


(g)           [Intentionally omitted];


 


(h)           Liens required in connection with the
corporate credit card program of Borrower and its Subsidiaries, provided that any Collateral securing such Liens shall not
exceed $330,000 at any time;


 


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


 


(j)            carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlord’s or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than 60
days or which are being contested in good faith and by appropriate proceedings,
if adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;


 


(k)           pledges or deposits in connection
with worker’s compensation, unemployment insurance and other social security
legislation;


 


(l)            deposits to secure the performance
of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business (including,
without limitation, Liens securing all those obligations described in Section 7.1(m));


 


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(m)          easements, rights-of-way,
restrictions, Liens granted by a third-party lessor to any Person 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 any Person;


 


(n)           Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties and
in connection with the importation of goods in the ordinary course of Borrower’s
and its Subsidiaries’ businesses;


 


(o)           Liens arising in the ordinary course
of business solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights and remedies as to
deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by Borrower in excess of those set forth by
regulations promulgated by the Federal Reserve Board, and (ii) such
deposit account is not intended by Borrower or any Subsidiary to provide
collateral to the depository institution;


 


(p)           Liens on insurance proceeds in favor
of insurance companies with respect to the financing of insurance premiums, in
each case arising in the ordinary course of business; and


 


(q)           purported Liens evidenced by the
filing of Uniform Commercial Code precautionary financing statements relating
to operating leases entered into in the ordinary course of business.


 


(r)            Liens not otherwise permitted
hereunder on the property or assets of Borrower and any of its Subsidiaries
securing Indebtedness, provided
the aggregate Indebtedness secured thereby does not exceed $550,000, and such
Liens either (a) do not encumber any Collateral or (b) are
subordinated to the Liens securing the Obligations on terms and subject to
documentation satisfactory to the Administrative Agent;


 


provided, however, that in no event shall any
Lien (other than Liens granted pursuant to the Security Documents) be permitted
to exist on, or in respect of, (i) any depositary or investment account
containing any cash or Cash Equivalent of Borrower or any of its Domestic
Subsidiaries, except for Liens in favor of the entity (and its affiliates) with
which any such depository or investment account is maintained or (ii) any
Collateral consisting of Securities pledged pursuant to the Security Documents.


 


7.3          FUNDAMENTAL CHANGES.


 


Merge or consolidate with or into any Person
or liquidate, wind-up or dissolve itself, or permit or suffer any liquidation
or dissolution or sell all or substantially all of its assets, except that:


 


(a)           any Subsidiary may merge with (i) Borrower,
provided that Borrower shall be
the continuing or surviving corporation, (ii) any Guarantor Subsidiary or,
if such Subsidiary is not a Guarantor, with any other Subsidiary, and (iii) any
joint venture, partnership or other Person, so long as such joint venture,
partnership and other Person will, as a result of making such merger


 


67

















 


and
all other contemporaneous related transactions, become a Guarantor Subsidiary
or, if such Subsidiary is not a guarantor, a Subsidiary;


 


(b)           any Subsidiary may sell or transfer
all or substantially all of its assets (through voluntary liquidation,
dissolution or winding up or otherwise), to Borrower or to another Subsidiary
that is a Guarantor or, if the selling or transferring Subsidiary is not a
Guarantor, to any other Subsidiary;


 


(c)           Borrower may merge into or
consolidate with any other Person; provided
that (i) Borrower is the surviving corporation, and (ii) prior to and
immediately after giving effect to such merger or consolidation, no Default or
Event of Default shall have occurred and be continuing; and


 


(d)           any Subsidiary may merge or
consolidate with or into any other Person or sell all or substantially all of
its assets to the extent such transaction is a Disposition otherwise permitted
under Section 7.4 (other than Section 7.4(c)) or an Investment
otherwise permitted under Section 7.5 (other than Section 7.5(c)) and
prior to and immediately after giving effect to such merger or consolidation,
no Default or Event of Default shall have occurred and be continuing.


 


7.4          DISPOSITIONS.


 


Make any Dispositions, except:


 


(a)           Dispositions of assets (i) that
do not constitute Asset Sales or (ii) made to Borrower or any Guarantor
Subsidiary;


 


(b)           Dispositions consisting of subleases
of leased real property no longer necessary to the operation of the applicable
Credit Party’s business;


 


(c)           Dispositions permitted by Section 7.3;


 


(d)           Dispositions of the property
described on Schedule 7.4;


 


(e)           Dispositions which constitute the
making or liquidating of Permitted Investments;


 


(f)            Dispositions which constitute the
incurrence (but not the enforcement) of Permitted Liens;


 


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


 


(h)           Asset Sales, the proceeds of which
when aggregated with the proceeds of all other Asset Sales made since the
Closing Date, are less than $11,000,000; provided (1) the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by the board of
directors of Borrower (or similar governing body)), (2) no less than
eighty percent (80%) thereof shall be paid in cash, and (3) the Net Asset
Sale Proceeds thereof shall be applied as required by Section 2.3(b)(i).


 


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7.5          INVESTMENTS.


 


Make any Investments, except for the
following (“Permitted Investments”):


 


(a)           Investments existing on the Closing
Date and set forth on Schedule 7.5;


 


(b)           Investments in cash and Cash
Equivalents, and which conform to the investment policies adopted by the Board
of Directors of Borrower from time to time;


 


(c)           Investments permitted by Section 7.1
or Section 7.3;


 


(d)           Investments (i) in any
Securities received in satisfaction or partial satisfaction thereof from
financially troubled account debtors, and (ii) constituting deposits,
prepayments and other credits to suppliers made in the ordinary course of
business consistent with the past practices of Borrower and its Subsidiaries;


 


(e)           Investments constituting
Acquisitions; provided that each
such Acquisition (each, a “Permitted
Acquisition”) meets the following criteria: (i) in the case of
a merger, amalgamation or other combination including Borrower, Borrower shall
be the surviving entity, (ii) in the case of a merger, amalgamation or
other combination including a Credit Party (other than Borrower), a Credit
Party shall be the surviving entity; (iii) the business to be acquired
shall be (x) in same business or lines of business in which Borrower and
its Subsidiaries are engaged as of the Closing Date and (y) shall have had
positive Consolidated EBITDA for the four quarter period most recently ended
prior to the date of such acquisition, (iv) no Default or Event of Default
shall exist prior to or after giving effect to such Acquisition or shall result
therefrom, (v) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all applicable Laws, (vi) Borrower
shall have provided to Administrative Agent and each of the Lenders, at least
ten (10) Business Days prior to such Acquisition, a certificate of a
Responsible Officer of Borrower showing pro
forma compliance with Section 7.12 hereof, both before and
after the proposed Acquisition, together with all relevant financial
information with respect to such Acquisition, including the aggregate
consideration for such Acquisition and any other information required to
demonstrate compliance with Section 7.12, (vii) such Acquisition
shall have been approved by the board of directors or other governing body or
controlling Person of the Person from whom the business is acquired, (viii) (A) the
aggregate consideration in respect of all Acquisitions occurring after the
Closing Date, whether consisting of Cash Acquisition Consideration or Equity
Securities, shall not exceed (x) $220,000,000 during the term of this
Agreement and (y) $110,000,000 in any twelve month period and (B) the
aggregate Cash Acquisition Consideration in respect of all Acquisitions
occurring after the Closing Date shall not exceed $27,500,000 during the term of
this Agreement, in each case unless otherwise approved by the Requisite
Lenders; provided further, that the amount set
forth in clause (viii)(B) of this Section 7.5(e) may be
increased by Net Cash Equity Proceeds (not to exceed $55,000,000 in the aggregate
during the term of this Agreement) received by the Borrower after the Closing
Date, so long as any such Net Cash Equity Proceeds are actually used to fund a
Permitted Acquisition within 90 days of such receipt by Borrower; and provided further that the amount of consideration paid in
respect of any Acquisition, regardless of the form of that consideration, shall
be deemed to be the total purchase price of such Acquisition  (including
all fees and expenses paid in connection therewith), regardless of how any
portion of


 


69

















 


such
purchase price may be treated for purposes of calculating Consolidated EBITDA
hereunder or for any other purpose.


 


(f)            Investments of Borrower and its
Subsidiaries in Permitted Swap Obligations;


 


(g)           Advances to officers, directors and
employees of Borrower and its Subsidiaries for travel, entertainment,
relocation and analogous ordinary business purposes;


 


(h)           Investments of Borrower in any of its
Subsidiaries and Investments of any Subsidiary of Borrower in Borrower or
another Subsidiary of Borrower; provided, however,
that in the case of any such Investments that are equity Investments, the
Equity Securities represented thereby shall be pledged to the Administrative
Agent pursuant to the Pledge and Security Agreement; and provided
further, that the aggregate amount of Investments by Borrower and
Guarantors in Foreign Subsidiaries and non-Guarantor Subsidiaries (which are
not otherwise permitted under this Section 7.5), other than Investments in respect of any
Indebtedness of Foreign Subsidiaries in existence on the Closing Date as set
forth on Schedule 7.1(e) that has been converted into Equity Interests in
such Subsidiary after the date hereof, does not exceed $550,000 at any time outstanding;


 


(i)            Extensions of credit to customers or
suppliers of Borrower and its Subsidiaries in the ordinary course of business
and any Investments received in satisfaction or partial satisfaction thereof;


 


(j)            Guaranty Obligations permitted by Section 7.1;


 


(k)           Investments received by Borrower or
any of its Subsidiaries as distributions on claims in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;


 


(l)            Investments of any Subsidiary
existing at the time it becomes a Subsidiary of Borrower, provided
that such Investments were not made in anticipation of such Person becoming a
Subsidiary of Borrower; and


 


(m)          Investments consisting of loans to
employees, officers and directors, the proceeds of which shall be used to
purchase Equity Securities of Borrower or its Subsidiaries and


 


(n)           Other Investments not exceeding
$2,750,000 in the aggregate at any time outstanding.


 


7.6          RESTRICTED PAYMENTS.


 


Make any Restricted Payments, except as
follows:


 


(a)           Borrower or any Subsidiary, as
applicable, may pay dividends or other distributions (i) on account of any
shares of any class of capital stock of Borrower now or hereafter outstanding
solely in shares of that class of stock to holders of that class or (ii) payable
by a Subsidiary to Borrower or to a Guarantor Subsidiary;


 


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(b)           Borrower may distribute rights
pursuant to a shareholder rights plan or redeem such rights, provided that such redemption is in accordance with the
terms of such shareholder rights plan;


 


(c)           Borrower may make Restricted Payments
or purchase its own Equity Securities in connection with or pursuant to any of
its Employee Benefits Plans or in connection with the death, retirement or
termination of its employees, officers or directors, in an amount not to exceed
$1,100,000 in the aggregate in any fiscal year or $3,300,000 in the aggregate over
the life of this Agreement; and


 


(d)           Borrower may repurchase fractional
shares of capital stock arising out of stock dividends, splits or combinations,
business combinations or conversion of convertible securities.


 


7.7          ERISA.


 


At any time engage in a transaction which
could be subject to Section 4069 or 4212(c) of ERISA, or permit any
Employee Benefits Plan to (a) engage in any non-exempt “prohibited
transaction” (as defined in Section 4975 of the Code); (b) fail to
comply with ERISA or any other applicable Laws; or (c) incur any material “accumulated
funding deficiency” (as defined in Section 302 of ERISA), which, with
respect to each event listed above could reasonably be expected to have a
Material Adverse Effect.


 


7.8          CHANGE IN NATURE OF BUSINESS.


 


Engage, either directly or indirectly through
Affiliates or Acquisitions in any line of business other than the business of
designing, engineering, installing and testing C5ISR (command/control,
communications, computing, combat, intelligence, surveillance and
reconnaissance) systems, providing engineering design support and systems
integration services for weapons systems and associated support systems,
operating and maintaining technical services for military target ranges and
weapons system ranges, providing technical support solutions for federal,
state, local and municipal government agencies, and providing a variety of
communication products and surveillance products for federal government
agencies, any other business incidental or reasonably related thereto, or any
businesses that are, as determined by the Board of Directors of Borrower in its
good faith reasonable judgment, appropriate extensions thereof.


 


7.9          TRANSACTIONS WITH AFFILIATES.


 


Enter into any transaction of any kind with
any Affiliate (other than transactions among Credit Parties) of Borrower other
than arm’s-length transactions with Affiliates that are otherwise permitted
hereunder and except as follows:


 


(a)           reasonable and customary fees in
Borrower’s industry paid to members of the board of directors (or similar
governing body) of Borrower; and


 


(b)           reasonable and customary compensation
arrangements and benefit plans for officers and other employees of Borrower and
its Subsidiaries entered into or maintained in the ordinary course of business;
provided that such transactions
could not reasonably be expected to have a Material Adverse Effect on Borrower
or any Subsidiary.


 


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7.10        USE OF PROCEEDS.


 


Use the proceeds of the Loans for any purpose
other than (i) the consummation of the Related Transactions, (ii) the
refinancing of existing indebtedness of Borrower, its Subsidiaries and
Haverstick and its Subsidiaries on the Closing Date and (iii) working
capital and general corporate purposes of Borrower and its Subsidiaries,
including Acquisitions, not otherwise in contravention of this Agreement.


 


7.11        CERTAIN INDEBTEDNESS PAYMENTS, ETC.


 


(a) Pay, prepay, redeem, purchase,
defease or otherwise satisfy in any manner prior to the scheduled payment
thereof any portion of any Subordinated Debt or (b) amend, modify or
otherwise change the terms of any document, instrument or agreement evidencing
Subordinated Debt such that such amendment, modification or change would (i) cause
the outstanding aggregate principal amount of all such Subordinated Debt so
amended, modified or changed to be increased (except as a consequence of the
deferral of cash interest payments by adding such payments to the principal
amount thereof) as a consequence of such amendment, modification or change, (ii) increase
the interest rate applicable thereto, or (iii) accelerate the scheduled
payment thereof.


 


7.12        FINANCIAL COVENANTS.


 


(a)           Maximum First Lien Leverage Ratio. 
Permit the First Lien Leverage Ratio, determined as of the last
day of any fiscal quarter of Borrower (measured on a rolling four quarter basis
for the trailing four fiscal quarters) to be greater than the correlative ratio
indicated in the table set forth on Schedule 7.12(a).


 


(b)           Maximum Total Leverage
Ratio.  Permit the Total
Leverage Ratio, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis for the trailing four fiscal
quarters) to be greater than the correlative ratio indicated in the table set
forth on Schedule 7.12(b).


 


(c)           Minimum Liquidity
Ratio.  Permit the Liquidity
Ratio at any time to be less than the correlative ratio indicated in the table
set forth on Schedule 7.12(c).


 


(d)           Minimum Fixed Charge
Coverage Ratio.  Permit the
Fixed Charge Coverage Ratio, determined as of the last day of any fiscal
quarter of Borrower (measured on a rolling four quarter basis for the trailing
four fiscal quarters) to be less than the correlative ratio indicated in the
table set forth on Schedule 7.12(d).


 


(e)           Minimum Consolidated
EBITDA.  Permit Consolidated
EBITDA, determined as of the last day of any fiscal quarter of Borrower
(measured on a rolling four quarter basis for the trailing four fiscal
quarters), to be less than the correlative amount indicated in the table set
forth on Schedule 7.12(e).


 


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(f)            Certain Calculations.  With respect to any period during which a
Permitted Acquisition or an Asset Sale has occurred, for purposes of
determining compliance with each of the financial covenants set forth in
Sections 7.12(a), (b), (d) and (e), if during such period the Borrower or
any Subsidiary shall have made any Permitted Acquisition or Asset Sale,
Consolidated EBITDA and the components of Consolidated Fixed Charges for such
period shall be calculated after giving pro
forma effect to such Permitted Acquisition or Asset Sale and any
Indebtedness incurred or repaid in connection therewith as if such Permitted
Acquisition, Asset Sale or Indebtedness had occurred or been incurred or
repaid, as applicable, on the first day of such period; provided that, with respect to Permitted
Acquisitions, the pro forma
effect and add-backs may be derived from the financial statements delivered in
connection with the Permitted Acquisition pursuant to Section 7.5(e)(vi),
as approved by the Administrative Agent (which approval shall not be
unreasonably withheld).


 


7.13        ACCOUNTING CHANGES.


 


Change (i) its fiscal year (currently
ending on December 31), or (ii) its accounting practices except as
required by GAAP.


 


7.14        GUARANTY UNDER
MATERIAL INDEBTEDNESS AGREEMENT.


 


Permit any Domestic Subsidiary of Borrower to
be or become liable as an obligor under any Material Indebtedness Agreement
unless such Subsidiary shall also be a Guarantor under this Agreement prior to
or concurrently therewith.  Permit any
Foreign Subsidiary of Borrower to be or become liable as an obligor under any
Material Indebtedness Agreement unless 65% of the ownership interests thereof have
been pledged in favor of Administrative Agent for the benefit of Lenders.


 


7.15        AMENDMENTS
TO ORGANIZATION AGREEMENTS, MATERIAL CONTRACTS AND FIRST LIEN LOAN DOCUMENTS.


 


(a) Amend or permit any amendments to any Credit
Party’s Organization Documents; (b) amend or permit any
amendments to, or terminate or waive any provision of, any Material Contract requiring
Annual Payments to be made or providing for Annual Payments to be received, in
each case in excess of $5,000,000 if such amendment, termination, or waiver
would (i) decrease the revenue to be received by any Credit Party during
any fiscal year under such Material Contract by more than 25% or (ii) increase
the cost to be paid by any Credit Party during any fiscal year under such
Material Contract by more than 25%; or (c) amend or permit any material amendment to any
First Lien Loan Document in contravention of the Intercreditor Agreement.


 


7.16        NO FURTHER NEGATIVE PLEDGES.


 


Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness permitted
hereby or to be sold pursuant to an executed agreement with respect to an Asset
Sale permitted under Section 7.4, (b) the First Lien Credit Agreement and any
collateral documents related thereto as in effect on the date hereof and (c) restrictions by
reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses, contracts with Governmental
Authorities and similar agreements entered into in the


 


73

















 


ordinary course of business (provided that
such restrictions are limited to the property or assets secured by such Liens
or the property or assets subject to such leases, licenses or similar
agreements, as the case may be) permit any Credit Party to enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties
or assets, whether now owned or hereafter acquired.


 


7.17        RESTRICTIONS ON
SUBSIDIARY DISTRIBUTIONS.


 


Except as provided herein and in the First Lien Credit Agreement,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Borrower to (a) pay dividends or make any other distributions on any of
such Subsidiary’s Equity Securities owned by Borrower or any other Subsidiary
of Borrower, (b) repay or prepay any Indebtedness owed by such Subsidiary
to Borrower or any other Subsidiary of Borrower, (c) make loans or
advances to Borrower or any other Subsidiary of Borrower, or (d) transfer
any of its property or assets to Borrower or any other Subsidiary of Borrower
other than restrictions (i) in agreements evidencing Indebtedness
permitted by Section 7.1(c) that impose restrictions on the property
so acquired, (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses,
contracts with Governmental Authorities, joint venture agreements and similar
agreements entered into in the ordinary course of business, and (iii) create
customary restrictions on the Disposition of assets contained in agreements
relating to the sale of assets pending such sale, provided such restrictions
and conditions apply only to the assets that are to be sold and such sale is
permitted hereunder.  No Credit Party
shall, nor shall it permit its Subsidiaries to, enter into any Contractual
Obligation which would prohibit a Subsidiary of Borrower from becoming a Credit
Party.


 


7.18        SALES AND LEASE BACKS.


 


Directly or indirectly become or remain
liable as lessee or as a guarantor or other surety with respect to any lease of
any property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to
sell or to transfer to any other Person (other than Borrower or any of its
Subsidiaries) or (b) intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by such
Credit Party to any Person (other than Borrower or any of its Subsidiaries) in
connection with such lease.


 


7.19        DEPOSIT ACCOUNTS.


 


Except for any cash collateral account
permitted under Section 6.1(i) and 6.2(h) and necessary to
support the credit card program of Borrower and its Subsidiaries, establish or
maintain a Deposit Account or Securities Account (as each such term is defined
in the Pledge and Security Agreement) that is not subject to a Control
Agreement (as defined in the Pledge and Security Agreement) and no Credit Party
will deposit Collateral (including the proceeds thereof) or the proceeds of
Loans in a Deposit Account or Securities Account that is not subject to a
Control Agreement, except as may be permitted under the Pledge and Security
Agreement.


 


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7.20        ISSUANCE OF DISQUALIFIED CAPITAL STOCK.


 


Issue or sell any Disqualified Capital Stock.


 


SECTION VIII.


EVENTS OF DEFAULT AND REMEDIES


 


8.1          EVENTS OF DEFAULT.


 


Any one or more of the following events shall constitute an Event of
Default:


 


(a)           Borrower fails to
pay (i) when due the principal of and premium, if any, on any Loan whether
at stated maturity, by acceleration or otherwise; or (ii) when due any
installment of principal of any Loan, by notice of voluntary prepayment, by
mandatory prepayment or otherwise; or


 


(b)           Borrower fails to
pay interest on any Outstanding Obligation or any fees due hereunder within
three (3) Business Days after the date when due; or


 


(c)           Any default occurs
in the observance or performance of any agreement contained in Section 6.4
or Section 7; or


 


(d)           Any default occurs
in the observance or performance of any agreement contained in Section 6.1
and such default continues for three (3) days; or


 


(e)           The occurrence of an
Event of Default (as such term is or may hereafter be specifically defined in
any other Loan Document) under any other Loan Document; or Borrower fails to
perform or observe any other covenant or agreement (not specified in
subsections (a), (b) (c) or (d) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for
30 days; or


 


(f)            Any representation,
warranty, certification or other statement made or deemed made by any Credit
Party in any in any Loan Document proves to have been incorrect in any material
respect when made or deemed made; or


 


(g)           (i) Any Credit
Party (x) defaults on any payment when due, which remains uncured beyond
any applicable cure period, of principal or interest on any Indebtedness (other
than Indebtedness hereunder or under the First Lien Loan Documents) having an
aggregate principal amount in excess of $3,850,000, or (y) defaults in the
observance or performance of any other agreement or covenant relating to any
Indebtedness (other than Indebtedness hereunder or under the First Lien Loan
Documents) or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur, the effect of which default
or other event is to cause, or to permit the holder or holders of such
Indebtedness (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,
any Indebtedness in excess of $3,850,000 to become payable or cash collateral
in respect thereof to be demanded on account of such default or other event; or
(ii) the occurrence under any Swap Contract of an “Early Termination Date”
(or such similar term as defined in such Swap Contract) resulting from (x) any
event of default under such Swap Contract as to which Borrower or any Subsidiary
is the “Defaulting Party” (or such similar term as defined in such Swap
Contract) or (y) any termination event under any Swap Contract (as


 


75

















 


defined therein) as to which
Borrower or any Subsidiary is an affected party (as so defined) (other than
termination events resulting solely from changes in the value of Borrower’s
stock price or other rates, prices or indices underlying any such Swap
Contract), and as to which, in either event, the “Swap Termination Value” (or
such similar term as defined in such Swap Contract) owed by Borrower or such
Subsidiary as a result thereof is greater than $3,850,000; or (iii) any
Credit Party (x) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) beyond any
applicable cure period in respect of the First Lien Obligations, or any of the
First Lien Obligations are declared to be due and payable (or automatically
become due and payable) prior to the stated maturity of such First Lien
Obligations as a result of a First Lien Event of Default, unless such
declaration by the holders of the First Lien Obligations is rescinded in
accordance with the provisions of the First Lien Credit Agreement as in effect
on the Closing Date, or (y) the occurrence of any other First Lien Event
of Default and such First Lien Event of Default remains uncured and unwaived
for forty-five days after the First Lien Administrative Agent has received
notice of such First Lien Event of Default; or


 


(h)           Any Loan Document,
at any time after its execution and delivery and for any reason other than the
agreement of all Lenders or satisfaction in full of all the Obligations, ceases
to be in full force and effect or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any respect; or
Administrative Agent shall not have or shall cease to have a valid and
perfected Lien in any Collateral purported to be covered by the Security
Documents with the priority required by the relevant Security Document, in each
case for any reason other than the failure of Administrative Agent to take any
action within its control; or any Credit Party contests the validity or
enforceability of any Loan Document or denies that it has any or further
liability or obligation under any Loan Document to which it is a party, or
purports to revoke, terminate or rescind any such Loan Document; or


 


(i)            A final judgment
(to the extent not covered by insurance (less any deductible) from a solvent
insurer who has accepted tender of defense and is defending such action)
against Borrower or any Subsidiary is entered for the payment of money in
excess of $3,850,000 and such judgment remains unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of thirty (30) days from the date
of its entry, or any non-monetary final judgment is entered against Borrower or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect and such judgment remains unvacated, unbonded or unstayed by appeal or
otherwise for a period of thirty (30) days from the date of its entry.


 


(j)            (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
Borrower or any of its Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other Debtor Relief Laws now or hereafter in effect, which
decree or order is not stayed; or any other similar relief shall be granted
under any applicable federal or state law; or (ii) an involuntary case shall
be commenced against Borrower or any of its Subsidiaries under the Bankruptcy
Code or under any other Debtor Relief Laws now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Borrower or any of its Subsidiaries,
or over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Borrower or any of its Subsidiaries for all or a
substantial part of its property; or a


 


76

















 


warrant of attachment,
execution or similar process shall have been issued against any substantial
part of the property of Borrower or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for sixty (60) days without
having been dismissed, bonded or discharged; or


 


(k)           (i) Borrower or
any of its Subsidiaries shall have an order for relief entered with respect to
it or shall commence a voluntary case under the Bankruptcy Code or under any 


 


other Debtor Relief Laws now or hereafter in effect, or shall consent
to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Borrower
or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Borrower or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the board of directors (or similar governing body)
of Borrower or any of its Subsidiaries (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to herein or in Section 8.1(j); or


 


(l)            (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 the Borrower
or its Subsidiaries under Title IV of ERISA to the Pension Plan, Multiemployer
Plan or the PBGC in an aggregate amount in excess of $3,850,000; (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $3,850,000; (iii) Borrower or any Subsidiary 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
$3,850,000; or (iv) the events listed in clauses (i), (ii) and (iii) in
the aggregate have resulted or could reasonably be expected to result in
liability of Borrower or its Material Subsidiaries in excess of $3,850,000; or


 


(m)          There occurs any
Change of Control; or


 


(n)           There occurs a
change in the assets, liabilities, financial condition, operations, affairs or
prospects of Borrower and its Subsidiaries, taken as a whole, which in the
reasonable determination of Requisite Lenders has had or could reasonably be
expected to have a Material Adverse Effect.


 


8.2          REMEDIES UPON EVENT
OF DEFAULT.


 


Without limiting any other rights or remedies of Administrative Agent
or Lenders provided for elsewhere in this Agreement, or the other Loan
Documents, or by applicable Law, or in equity, or otherwise, subject to the
Intercreditor Agreement:


 


(a)           Upon the occurrence,
and during the continuance, of any Event of Default other than an Event of
Default described in Section 8.1(j) or (k):


 


(i)            Requisite
Lenders may request Administrative Agent to, and Administrative Agent thereupon
shall, declare all or any part of the unpaid principal of all Loans, all
interest accrued and unpaid thereon and all other amounts payable under the
Loan Documents to be immediately due and payable, whereupon the same shall
become


 


77

















 


and be
immediately due and payable, without protest, presentment, notice of dishonor,
demand or further notice of any kind, all of which are expressly waived by
Borrower.


 


(b)           Upon the occurrence
of any Event of Default described in Section 8.1(j) or (k):


 


(i)            all obligations of
Administrative Agent or Lenders shall automatically terminate without notice to
or demand upon Borrower, which are expressly waived by Borrower; and


 


(ii)           the unpaid principal
of all Loans, all interest accrued and unpaid thereon and all other amounts
payable under the Loan Documents shall be immediately due and payable, without
protest, presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower.


 


(c)           [Intentionally
Omitted.]


 


(d)           Upon the occurrence
of any Event of Default, Lenders and Administrative Agent, or any of them,
without notice to (except as expressly provided for in any Loan Document) or
demand upon Borrower, which are expressly waived by Borrower (except as to
notices expressly provided for in any Loan Document), may proceed to (but only
with the consent of Requisite Lenders) protect, exercise and enforce their
rights and remedies under the Loan Documents against Borrower and such other
rights and remedies as are provided by Law or equity (including, without
limitation, the provisions of the applicable Uniform Commercial Code).


 


(e)           Except as permitted
by Section 10.5, no Lender may exercise any rights or remedies with
respect to the Obligations without the consent of Requisite Lenders in their
sole and absolute discretion.  Subject to
the Intercreditor Agreement, the order and manner in which Administrative Agent’s
and Lenders’ rights and remedies are to be exercised shall be determined by
Requisite Lenders in their sole and absolute discretion.  Subject to the Intercreditor Agreement,
regardless of how a Lender may treat payments for the purpose of its own
accounting, for the purpose of computing the Obligations hereunder, payments
shall be applied first, to costs and expenses (including Attorney Costs)
incurred by Administrative Agent and each Lender, second, to the payment of
accrued and unpaid interest on the Loans to and including the date of such application,
third, to the payment of the unpaid principal of the Loans, and fourth, to the
payment of all other amounts (including fees) then owing to Administrative
Agent and Lenders under the Loan Documents, in each case (other than with
respect to any applicable fees that are not shared ratably, which amounts shall
be paid as otherwise directed herein) paid pro rata to each Lender in the same
proportions that the aggregate Obligations owed to each Lender under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to
all Lenders, without priority or preference among Lenders.  Each Credit Party acknowledges the relative
rights, priorities and agreements, as set forth in the Intercreditor Agreement
and this Agreement, including as set forth in this Section 8.2(e).  No application of payments will cure any
Event of Default, or prevent acceleration, or continued acceleration, of
amounts payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of Administrative Agent and Lenders hereunder
or thereunder or at Law or in equity.


 


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SECTION IX.


ADMINISTRATIVE AGENT


 


9.1          APPOINTMENT AND
AUTHORIZATION OF ADMINISTRATIVE AGENT.


 


Each Lender hereby irrevocably (subject to Section 9.9) appoints,
designates and authorizes Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document,
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Administrative Agent.  Without
limiting the generality of the foregoing sentence, the use of the term “agent”
in this Agreement with reference to Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. 
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.


 


9.2          DELEGATION OF DUTIES.


 


Administrative Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.


 


9.3          LIABILITY OF
ADMINISTRATIVE AGENT.


 


No Administrative Agent-Related Person shall (i) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any Lender for any recital, statement,
representation or warranty made by Borrower or any Subsidiary or Affiliate of
Borrower, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of Borrower or any other party to
any Loan Document to perform its obligations hereunder or thereunder.  No Administrative Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of Borrower or any of Borrower’s Subsidiaries or Affiliates.


 


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9.4          RELIANCE BY
ADMINISTRATIVE AGENT.


 


(a)           Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrower), independent
accountants and other experts selected by Administrative Agent.  Administrative Agent shall be fully justified
in failing or refusing to take any action under any other Loan Document unless
it shall first receive such advice or concurrence of Requisite Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.  Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of Requisite
Lenders or all Lenders, if required hereunder, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of
Lenders.  Where this Agreement expressly
permits or prohibits an action unless Requisite Lenders otherwise determine,
and in all other instances, Administrative Agent may, but shall not be required
to, initiate any solicitation for the consent or a vote of Lenders.


 


(b)           For purposes of
determining compliance with the conditions specified in Section 4.1, each
Lender that has executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
either sent by Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender.


 


9.5          NOTICE OF DEFAULT.


 


Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
Administrative Agent for the account of Lenders, unless Administrative Agent
shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. 
Administrative Agent will notify Lenders of its receipt of any such
notice.  Administrative Agent shall take
such action with respect to such Default or Event of Default as may be directed
by Requisite Lenders in accordance with Section 8; provided,
however, that unless and until Administrative Agent has received any
such direction, Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable or in the best interest of
Lenders.


 


9.6          CREDIT DECISION;
DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.


 


Each Lender acknowledges that no Administrative Agent-Related Person
has made any representation or warranty to it, and that no act by
Administrative Agent hereinafter taken,


 


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including any consent to and
acceptance of any assignment or review of the affairs of Borrower and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Administrative Agent-Related Person to any Lender as to any matter,
including whether Administrative Agent-Related Persons have disclosed material
information in their possession.  Each
Lender, including any Lender by assignment, represents to Administrative Agent
that it has, independently and without reliance upon any Administrative
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower
hereunder.  Each Lender also represents
that it will, independently and without reliance upon any Administrative
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower.  Except for notices, reports and other
documents expressly required to be furnished to Lenders by Administrative Agent
herein, Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of Borrower or any of its Subsidiaries which may come into the
possession of any Administrative Agent-Related Person.


 


9.7          INDEMNIFICATION OF
ADMINISTRATIVE AGENT.


 


Lenders shall indemnify upon demand each Administrative Agent-Related
Person (to the extent not reimbursed by or on behalf of Borrower and without
limiting the obligation of Borrower to do so), pro rata,
and hold harmless each Administrative Agent-Related Person from and against any
and all Indemnified Liabilities incurred by it; provided,
however, that no Lender shall be liable for the payment to any
Administrative Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person’s gross negligence or willful
misconduct; provided, further, that no action taken
in accordance with the directions of Requisite Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this
Section.  Without limitation of the
foregoing, each Lender shall reimburse Administrative Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that Administrative Agent is not reimbursed for such expenses by or on behalf
of Borrower.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Administrative Agent.


 


9.8          ADMINISTRATIVE AGENT
IN INDIVIDUAL CAPACITY.


 


KeyBank and its Affiliates may make loans to, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting 


 


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or other business with Borrower
and its Subsidiaries and Affiliates as though KeyBank were not Administrative
Agent hereunder and without notice to or consent of Lenders.  Lenders acknowledge that, pursuant to such
activities, KeyBank or its Affiliates may receive information regarding
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of Borrower or such Affiliate) and
acknowledge that Administrative Agent shall be under no obligation to provide
such information to them.  With respect
to its Loans, KeyBank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
Administrative Agent.


 


9.9          SUCCESSOR
ADMINISTRATIVE AGENT.


 


Administrative Agent may, and at the request of Requisite Lenders
(which, for purposes hereof, so long as KeyBank National Association holds at least
20% of the Combined Commitments as of the Closing Date, must include KeyBank
National Association) shall, resign as Administrative Agent upon 30 days’
notice to Lenders.  If Administrative
Agent resigns under this Agreement, Requisite Lenders shall appoint from among
Lenders a successor administrative agent for Lenders which successor
administrative agent shall be approved by Borrower.  If no successor administrative agent is
appointed prior to the effective date of the resignation of Administrative Agent,
Administrative Agent may appoint, after consulting with Lenders and Borrower
and upon approval of Borrower (other than at any time as there exists a Default
or an Event of Default) which will not be unreasonably withheld, a successor
administrative agent from among Lenders. 
Upon the acceptance of its appointment as successor administrative agent
hereunder, such successor administrative agent shall succeed to all the rights,
powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor
administrative agent and the retiring Administrative Agent’s appointment,
powers and duties as Administrative Agent shall be terminated.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Section 9
and Sections 10.3 and 10.14 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent (whether
due to absence of Borrower approval or otherwise) by the date which is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as Requisite Lenders appoint a successor
agent as provided for above.  Any Administrative
Agent hereunder must hold a Commitment in an amount not less than the
$5,000,000.


 


9.10        DESIGNATION OF
ARRANGER; NO AFFILIATE LIABILITY.


 


The parties hereto hereby designate KeyBanc Capital Markets, an
Affiliate of KeyBank as “Sole Arranger” and “Sole Book Runner” under this
Agreement.  None of Lenders (or
Affiliates of Lenders) identified from time to time herein by the titles “Lead
Arranger,” “Book Runner,” or similar titles shall have any right, power,
obligation, liability, responsibility or duty under this Agreement in such
capacity.  Without limiting the
foregoing, none of Lenders (or Affiliates of Lenders) so identified shall have
or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on any of


 


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Lenders (or Affiliates of
Lenders) so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.


 


9.11        INTERCREDITOR
AGREEMENT.


 


Each of the Lenders hereby acknowledges that it has received and
reviewed the Intercreditor Agreement and agrees to be bound by the terms
thereof.  Each Lender (and each Person
that becomes a Lender hereunder pursuant to Section 10.4) hereby
authorizes and directs the Administrative Agent to enter into the Intercreditor
Agreement on behalf of such Lender and agrees that the Administrative Agent may
take such actions on its behalf as is contemplated by the terms of the
Intercreditor Agreement.  Each Lender
authorizes the Administrative Agent to execute and deliver the Security
Documents as contemplated by the Intercreditor Agreement.


 


SECTION X.


MISCELLANEOUS


 


10.1        AMENDMENTS; CONSENTS.


 


Subject to the terms of the Intercreditor Agreement, no amendment,
modification, supplement, extension, termination or waiver of any provision of
this Agreement or any other Loan Document, no approval or consent thereunder,
and no consent to any departure by Borrower therefrom shall be effective unless
in writing signed by Requisite Lenders and acknowledged by Administrative
Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.  Except as otherwise expressly provided
herein, without the approval in writing of Administrative Agent and all Lenders
that would be affected thereby, no amendment, modification, supplement,
termination, waiver or consent may be effective:


 


(a)           To reduce the amount
of principal, principal prepayments or the rate of interest payable on, any
Loan, or the amount of any fee or other amount payable to any Lender under the
Loan Documents (unless such modification is consented to by each Lender
entitled to receive such fee) or to waive an Event of Default consisting of the
failure of Borrower to pay when due principal or interest;


 


(b)           To postpone any date
fixed for any payment of principal of, prepayment of principal of, or any
installment of interest on, any Loan, to extend the term of, or increase the
amount of, any Lender’s Commitment (it being understood that a waiver of an
Event of Default shall not constitute an extension or increase in the
Commitment of any Lender) or modify the Pro Rata Share of any Lender;


 


(c)           To release
collateral in which Lenders have a security interest to secure the performance
of Borrower’s obligations under the Loan Documents constituting more than
$2,500,000;


 


(d)           To release all or
substantially all of the Guarantors from the Guaranty except as expressly
provided in the Loan Documents;


 


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(e)           To amend the
definition of “Requisite Lenders” or “Pro Rata Share” or the provisions of Section 4,
Section 9, this Section 10.1 or Section 10.6;


 


(f)            To consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under any Loan Document; and


 


(g)           To amend any
provision of this Agreement that expressly requires the consent or approval of
all Lenders;


 


provided, however,
that (i) no amendment, waiver or consent shall, unless in writing and
signed by Administrative Agent in addition to Requisite Lenders or all Lenders,
as the case may be, affect the rights or duties of Administrative Agent, (ii) the
Facilities Letter and the Fee Letter (or any similar letters that may be
entered into from time to time) may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto, and (iii) any
waiver, amendment or modification of the Intercreditor Agreement (and any
related definitions) may be effected by an agreement or agreements in writing
entered into among the Administrative Agent, the First Lien Administrative
Agent (with the consent of the Requisite Lenders but without the consent of any
Credit Party, so long as such amendment, waiver or modification does not impose
any additional duties or obligations on the Credit Parties or alter or impair
any right of any Credit Party under the Loan Documents).  Any amendment, modification, supplement,
termination, waiver or consent pursuant to this Section shall apply
equally to, and shall be binding upon, all Lenders and Administrative Agent.


 


10.2        TRANSMISSION AND
EFFECTIVENESS OF COMMUNICATIONS AND SIGNATURES.


 


(a)           Modes of
Delivery.  Except as otherwise
provided in any Loan Document, notices, requests, demands, directions,
agreements and documents delivered in connection with the Loan Documents
(collectively, “communications”) shall be
transmitted by Requisite Notice to the number and address set forth on Schedule
10.2, may be delivered by the following modes of delivery, and shall be
effective as follows:


 


	
  Mode of Delivery

  	
   

  	
  Effective on earlier of actual
  receipt and:

  
	
  Courier

  	
   

  	
  Scheduled delivery date

  
	
  Facsimile

  	
   

  	
  When transmission in legible form complete

  
	
  Mail

  	
   

  	
  Fourth Business Day after deposit in U.S. mail first class postage
  pre-paid

  
	
  Personal delivery

  	
   

  	
  When received

  
	
  Telephone

  	
   

  	
  When conversation completed

  



 


provided, however, that communications
delivered to Administrative Agent pursuant to Section 2 must be in writing
and shall not be effective until actually received by Administrative Agent.


 


(b)           Reliance by
Administrative Agent and Lenders. 
Administrative Agent and Lenders shall be entitled to rely and act on
any communications purportedly given by or on behalf of Borrower even if (i) such
communications (A) were not made in a manner specified herein, (B) were
incomplete or (C) were not preceded or followed by any other notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any subsequent related communications provided for
herein.  Borrower shall indemnify
Administrative Agent


 


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and Lenders from any loss,
cost, expense or liability as a result of relying on any communications
permitted herein.


 


(c)           Effectiveness
of Facsimile Documents and Signatures.  Documents and agreements delivered from time
to time in connection with the Loan Documents may be transmitted and/or signed
by facsimile.  The effectiveness of any
such documents and signatures shall, subject to applicable Law, have the same
force and effect as hardcopies with manual signatures and shall be binding on
all Borrower and its Subsidiaries and Administrative Agent and Lenders.  Administrative Agent may also request that
any such documents and signature be confirmed by a manually-signed hardcopy
thereof; provided, however, that the failure to
request or deliver any such manually-signed hardcopy shall not affect the
effectiveness of any facsimile documents or signatures.


 


10.3        ATTORNEY COSTS,
EXPENSES AND TAXES.


 


Borrower agrees (a) to pay or reimburse Administrative Agent and
each Lender for all reasonable costs and expenses incurred in connection with
the development, preparation, negotiation and execution of the Loan Documents,
and the development, preparation, negotiation and execution of any amendment,
waiver, consent, supplement or modification to any Loan Documents, and any
other documents prepared in connection herewith or therewith, including all
reasonable Attorney Costs, and (b) to pay or reimburse Administrative
Agent and each Lender for all costs and expenses incurred in connection with
any refinancing, restructuring, reorganization (including a bankruptcy
reorganization), collection and enforcement or attempted enforcement, or
preservation of any rights under any Loan Documents, and any other documents
prepared in connection herewith or therewith, or in connection with any
refinancing, or restructuring of any such documents in the nature of a “workout”
or of any insolvency or bankruptcy proceeding, including Attorney Costs.  The foregoing costs and expenses shall
include all reasonable search, filing, and appraisal charges and fees and
recording, filing, transfer, court, documentary, stamp or similar taxes related
thereto, and other out-of-pocket expenses incurred by Administrative Agent or
any Lender and the cost of independent public accountants and other outside
experts retained by Administrative Agent or any Lender.  Any amount payable by Borrower under this Section shall
bear interest from the tenth (10th) Business Day following the date of demand
for payment at the Default Rate, unless waived by Administrative Agent.  The agreements in this Section shall
survive repayment of all Obligations.


 


10.4        SUCCESSORS AND
ASSIGNS.


 


(a)           Successors
and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of paragraph (b) of this Section 10.4,
(ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section 10.4 or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (f) of
this Section 10.4 (and any other attempted assignment or transfer


 


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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 paragraph (d) of
this Section 10.4 and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent 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 the Loans 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 Loans at the time owing to it or in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be
assigned; and


 


(B)           in
any case not described in paragraph (b)(i)(A) of this Section 10.4,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of
the Trade Date) shall not be less than $1,000,000, unless the Administrative
Agent otherwise consents (such consent not to be unreasonably withheld or
delayed).


 


(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 Loan assigned.


 


(iii)          Required Consents.  No
consent shall be required for any assignment except to the extent required by
paragraph (b)(i)(B) of this Section 10.4 and, in addition the consent
of the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments to a Person who is not an Eligible
Assignee.


 


(iv)          Assignment
and Assumption.  The parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500, and the assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.


 


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


 


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


 


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Subject to acceptance and recording thereof by the Administrative Agent
pursuant to paragraph (c) of this Section 10.4, from and after the
effective date specified in each Assignment and Assumption, the assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections III, 10.3, 10.14 and 10.15
of this Agreement with respect to facts and circumstances occurring prior to
the effective date of such assignment. 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (d) of this Section 10.4.


 


(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in Cleveland, Ohio 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 owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative 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 the 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, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent 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, modification or waiver
which (A) extends the Maturity Date as to such Participant or any other
date upon which any payment of money is due to such Participant, (B) reduces
the rate of interest owing to such Participant, any fee or any other monetary
amount owing to such Participant, or (C) reduces the amount of any
installment of principal owing to such Participant all as described in Sections
10.1(a) and 10.1(b).  Subject to
paragraph (e) of this Section, the Borrower agrees that each Participant
shall be entitled to the


 


87

















 


benefits of Section III to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 10.4.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.5 as
though it were a Lender, provided such
Participant agrees to be subject to Section 10.6 as though it were a
Lender.


 


(e)           Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section III
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section III
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 10.22
as though it were a Lender.


 


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


 


10.5        SET-OFF.


 


Subject to the Intercreditor Agreement, in addition to any rights and remedies
of Administrative Agent and Lenders or any assignee or participant of any
Lender or any Affiliate thereof (each, a “Proceeding Party”)
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Proceeding Party is authorized at any time and from time to time,
without prior notice to Borrower, any such notice being waived by Borrower to
the fullest extent permitted by law, to proceed directly, by right of set-off,
banker’s lien, or otherwise, against any assets of Borrower and its
Subsidiaries which may be in the hands of such Proceeding Party (including all
general or special, time or demand, provisional or other deposits and other
indebtedness owing by such Proceeding Party to or for the credit or the account
of Borrower) and apply such assets against the Obligations, irrespective of
whether such Proceeding Party shall have made any demand therefor and although
such Obligations may be unmatured.  Each
Lender agrees promptly to notify Borrower and Administrative Agent after any
such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application.


 


10.6        SHARING OF PAYMENTS.


 


Subject to the Intercreditor Agreement, each Lender severally agrees
that if it, through the exercise of any right of setoff, banker’s lien or
counterclaim against Borrower or otherwise, receives payment on account of the
Outstanding Obligations held by it that is ratably more than any other Lender
receives in payment on account of the Outstanding Obligations held by such
other Lender, then, subject to applicable Laws: 
(a) the Lender exercising the right of setoff, banker’s lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from such other Lender a participation
in the Outstanding Obligations held by the other Lender and shall pay to such
other Lender a purchase


 


88

















 


price in an amount so that the
share of the Outstanding Obligations held by each Lender after the exercise of
the right of setoff, banker’s lien or counterclaim or receipt of payment shall
be in the same proportion that existed prior to the exercise of the right of
setoff, banker’s lien or counterclaim or receipt of payment; and (b) such
other adjustments and purchases of participations shall be made from time to
time as shall be equitable to ensure that all Lenders share any payment
obtained in respect of the Outstanding Obligations ratably in accordance with
each Lender’s share of the Outstanding Obligations immediately prior to, and
without taking into account, the payment; provided that,
if all or any portion of a disproportionate payment obtained as a result of the
exercise of the right of setoff, banker’s lien, counterclaim or otherwise is
thereafter recovered from the purchasing Lender by Borrower or any Person
claiming through or succeeding to the rights of Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest.  Each Lender that purchases a participation in
the Outstanding Obligations pursuant to this Section shall from and after
the purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of
the Outstanding Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Outstanding Obligations
purchased.  Borrower expressly consents
to the foregoing arrangements and agrees that any Lender holding a
participation in an Obligation so purchased may exercise any and all rights of
setoff, banker’s lien or counterclaim with respect to the participation as
fully as if Lender were the original owner of the Obligation purchased.


 


10.7        NO SETOFF.


 


As to any and all funds, securities or other assets of Borrower which
are now or hereafter held by Administrative Agent or any Lender as collateral
pursuant to this Agreement or any other Loan Document for any of the
Obligations (collectively the “Collateral Assets”),
Administrative Agent and Lenders agree that they shall not exercise any right
of setoff or recoupment against nor shall they assert any security interest in
the Collateral Assets in connection with any other obligation owed to
Administrative Agent or any Lender which is unrelated to this Agreement or the
Loan Documents, except for:   (i) recovery
for any items deposited with Administrative Agent or any Lender and returned
unpaid or as to which claims have been asserted as to breach of transfer or
presentment warranties, (ii) overdrafts on any account which generated the
funds which constitute part of the Collateral Assets, (iii) automated
clearing house entries, and (iv) Administrative Agent or any Lender’s
usual and customary fees for services rendered in connection with the assets or
bank accounts which constitute the Collateral Assets.


 


10.8        NO WAIVER; CUMULATIVE
REMEDIES.


 


(a)           No failure by any
Lender or Administrative Agent to exercise, and no delay by any Lender or
Administrative Agent 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 under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. 
Without limiting the generality of the foregoing, the terms and
conditions of Section 4 may be waived in whole or in part, with or without
terms or conditions, in respect of any Extension of Credit without


 


89

















 


prejudicing Administrative
Agent’s or Lender’s rights to assert them in whole or in part in respect of any
other Extension of Credit.


 


(b)           The rights,
remedies, powers and privileges herein or therein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by
Law.  Any decision by Administrative Agent
or any Lender not to require payment of any interest (including interest at the
Default Rate), fee, cost or other amount payable under any Loan Document or to
calculate any amount payable by a particular method on any occasion shall in no
way limit or be deemed a waiver of Administrative Agent’s or Lender’s right to
require full payment thereof, or to calculate an amount payable by another
method that is not inconsistent with this Agreement, on any other or subsequent
occasion.


 


(c)           The terms and
conditions of Section 9 are for the sole benefit of Administrative Agent
and Lenders.


 


10.9        USURY.


 


Notwithstanding anything to the contrary contained in any Loan
Document, the interest and fees 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 Administrative Agent or any Lender shall
receive interest or a fee in an amount that exceeds the Maximum Rate, the
excessive interest or fee shall be applied to the principal of the Outstanding
Obligations or, if it exceeds the unpaid principal, refunded to Borrower.  In determining whether the interest or a fee
contracted for, charged, or received by Administrative Agent or any 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.


 


10.10      COUNTERPARTS.


 


This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


 


10.11      INTEGRATION.


 


This Agreement, together with the other Loan Documents and any letter
agreements referred to herein, comprises the complete and integrated agreement
of the parties on the subject matter hereof and supersedes all prior
agreements, written or oral, on the subject matter hereof.  In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control and govern; provided
that the inclusion of supplemental rights or remedies in favor of
Administrative Agent or Lenders in any other Loan Document shall not be deemed
a conflict with this Agreement.  Each
Loan Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any
party, but rather in accordance with the fair meaning thereof.


 


90

















 


10.12      NATURE OF LENDERS’
OBLIGATIONS.


 


Nothing contained in this Agreement or any other Loan Document and no
action taken by Administrative Agent or Lenders or any of them pursuant hereto
or thereto may, or may be deemed to, make Lenders a partnership, an
association, a joint venture or other entity, either among themselves or with
Borrower or any Affiliate of Borrower. 
Each Lender’s obligation to make any Extension of Credit pursuant hereto
is several and not joint or joint and several; provided
that, in the case of the initial Extension of Credit only, each Lender’s
obligation is conditioned upon the performance by all other Lenders of their
obligations to make the initial Extension of Credit.  A default by any Lender will not increase the
Pro Rata Share attributable to any other Lender.


 


10.13      SURVIVAL OF
REPRESENTATIONS AND WARRANTIES.


 


All representations and warranties made hereunder and in any Loan
Document, certificate or statement delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
thereof but shall terminate when no Obligations remain outstanding under any
Loan Document.  Such representations and
warranties have been or will be relied upon by Administrative Agent and each
Lender, notwithstanding any investigation made by Administrative Agent or any
Lender or on their behalf.


 


10.14      INDEMNITY BY BORROWER.


 


(a)           Borrower agrees to
indemnify, defend (subject to Indemnitees’ selection of counsel), save and hold
harmless each Administrative Agent-Related Person and each Lender and each of
their respective Affiliates, directors, officers, agents, attorneys and
employees (each, an “Indemnitee”)
from and against:  (a) any and all
claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than Administrative Agent or any Lender)
relating directly or indirectly to a claim, demand, action or cause of action
that such Person asserts or may assert against Borrower, any of its Affiliates
or any its officers or directors; (b) any and all claims, demands, actions
or causes of action arising out of or relating to, the Loan Documents, any
predecessor loan documents, the Commitments, the use or contemplated use of the
proceeds of any Loan, property that is the subject of any Material Lease or any
other collateral given to secure the obligations of Borrower under this
Agreement, or the relationship of Borrower, Administrative Agent and Lenders
under this Agreement; (c) any administrative or investigative proceeding
by any Governmental Authority arising out of or related to a claim, demand, action
or cause of action described in subsection (a) or (b) above; and (d) all
liabilities, claims, actions, loss, damages, including, without limitation,
foreseeable and unforeseeable consequential damages, costs and expenses
(including sums paid in settlement of claims and all consultant, expert and
legal fees and expenses of Indemnitees’ counsel) directly or indirectly arising
out of or resulting from any Hazardous Substance being present at any time in
or around any part of Borrower’s or any Subsidiary’s properties (leasehold or
fee), or in the soil, groundwater or soil vapor on or under Borrower’s or any
Subsidiary’s properties (leasehold or fee), including those incurred in
connection with any investigation of site conditions or any clean-up, remedial,
removal or restoration work, or any resulting damages or injuries to the person
or property of any third parties or to any natural resources; (e) any and
all liabilities, losses, costs or expenses (including Attorney Costs) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,


 


91

















 


action, cause of action or
proceeding, in all cases, whether or not an Indemnitee is a party to such
claim, demand, action, cause of action or proceeding, including those
liabilities caused by an Indemnitee’s own comparative, contributory or sole
negligence (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that
no Indemnitee shall be entitled to indemnification for any loss caused by its
own gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable order or for any loss
asserted against it by another Indemnitee. 
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this Section 10.14 may be unenforceable in whole or
in part because they are violative of any law or public policy, the applicable
Credit Party shall contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.


 


(b)           To the extent
permitted by applicable law, no Credit Party shall assert, and each Credit
Party hereby waives, any claim against each Administrative Agent-Related Person
and each Lender and each of their respective Affiliates, directors, officers,
agents, attorneys and employees, on any theory of liability, for special,
indirect, consequential or punitive damages 
(as opposed to direct or actual damages) (whether or not the claim
therefor is based on contract, tort or duty imposed by any applicable legal
requirement) arising out of, in connection with, as a result of, or in any way
related to, this Agreement or any Loan Document or any agreement or instrument
contemplated hereby or thereby or referred to herein or therein, the
transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof or any act or omission or event occurring in connection
therewith, and each Credit Party hereby waives, releases and agrees not to sue upon
any such claim or any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.


 


10.15      NONLIABILITY OF LENDER.


 


Borrower acknowledges and agrees that:


 


(a)           Any inspections of
any property of Borrower made by or through Administrative Agent or Lenders are
for purposes of administration of the Loan Documents only, and Borrower is not
entitled to rely upon the same (whether or not such inspections are at the
expense of Borrower);


 


(b)           By accepting or
approving anything required to be observed, performed, fulfilled or given to
Administrative Agent or Lenders pursuant to the Loan Documents, neither
Administrative Agent nor Lenders shall be deemed to have warranted or
represented the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision or condition thereof, and such acceptance or
approval thereof shall not constitute a warranty or representation to anyone
with respect thereto by Administrative Agent or Lenders;


 


(c)           The relationship between
Borrower and Administrative Agent and Lenders is, and shall at all times
remain, solely that of borrower and lenders; neither Administrative Agent nor
Lenders shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates; neither
Administrative Agent nor any Lender undertakes or assumes any responsibility or
duty to Borrower or its Affiliates to select, review, inspect, supervise, pass


 


92






 












 


judgment
upon or inform Borrower or its Affiliates of any matter in connection with
their property or the operations of Borrower or its Affiliates; Borrower and
its Affiliates shall rely entirely upon their own judgment with respect to such
matters; and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by Lender in connection with such
matters is solely for the protection of Lenders and neither Borrower nor any
other Person is entitled to rely thereon; and


 


(d)           Neither Administrative Agent nor
Lenders shall be responsible or liable to any Person for any loss, damage,
liability or claim of any kind relating to injury or death to Persons or damage
to property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnifies and holds Administrative Agent
and Lenders harmless from any such loss, damage, liability or claim.


 


10.16      NO THIRD PARTIES BENEFITED.


 


This Agreement is made for the purpose of
defining and setting forth certain obligations, rights and duties of Borrower,
Administrative Agent and Lenders in connection with the Extensions of Credit,
and is made for the sole benefit of Borrower, Administrative Agent and Lenders,
and Administrative Agent and Lenders’ successors and assigns.  Except as provided in Sections 10.14 and
10.22, no other Person shall have any rights of any nature hereunder or by
reason hereof.


 


10.17      SEVERABILITY.


 


Any provision of the Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


10.18      CONFIDENTIALITY.


 


Administrative Agent and each Lender shall
use any confidential non-public information concerning Borrower and its
Subsidiaries that is furnished to Administrative Agent or such Lender by or on
behalf of Borrower and its Subsidiaries in connection with the Loan Documents
that has been identified in writing as confidential at the time so furnished
(collectively, “Confidential Information”)
solely for the purpose of evaluating and providing products and services to
them and administering and enforcing the Loan Documents, and it will hold the
Confidential Information in confidence in accordance with such Person’s
customary procedures for handling confidential of the same nature.  Notwithstanding the foregoing, Administrative
Agent and each Lender may disclose Confidential Information to:  (a) their
Affiliates, or any of their or their Affiliates’ directors, officers,
employees, advisors, or representatives (collectively, the “Representatives”) whom it determines need
to know such information for the purposes set forth in this Section (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Confidential Information and
instructed to keep such Confidential Information confidential); (b) any
bank or financial institution or other entity to which such Lender has assigned
or desires to assign an interest or participation in the Loan 


 


93

















 


Documents or
the Obligations or indirect contractual counterparties (or the professional
advisors thereto) in connection with Swap Contracts, provided that any such foregoing recipient of such
Confidential Information agrees to keep such Confidential Information
confidential as specified herein; (c) any governmental agency or
regulatory body having or claiming to have authority to regulate or oversee any
aspect of Administrative Agent’s or such Lender’s business or that of their
Representatives in connection with the exercise of such authority or claimed
authority; (d) to the extent necessary or appropriate to effect or
preserve Administrative Agent or such Lender’s or any of their Affiliates’
security (if any) for any Obligation or to enforce any right or remedy or in
connection with any claims asserted by or against Administrative Agent or such
Lender or any of its Representatives; (e) pursuant to any subpoena or any
similar legal or regulatory process so long as Borrower is, or has been, to the
extent possible, given notice of such legal or regulatory process and the
opportunity to seek a protective order; (f) to any rating agency when
required by it, provided that, prior to any
disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender; and (g) disclosures
to any Lender’s financing sources, provided that
prior to any disclosure, such financing source is informed of the confidential
nature of the information.  For purposes
hereof, the term “Confidential Information”
shall not include information that (x) is in Administrative Agent’s or
such Lender’s possession prior to its being provided by or on behalf of
Borrower and its Subsidiaries, provided
that such information is not known by Administrative Agent or such Lender to be
subject to another confidentiality agreement with, or other legal or
contractual obligation of confidentiality to, Borrower, (y) is or becomes
publicly available (other than through a breach hereof by Administrative Agent
or such Lender), or (z) becomes available to Administrative Agent or such
Lender on a nonconfidential basis, provided
that the source of such information was not known by Administrative Agent or
such Lender to be bound by a confidentiality agreement or other legal or
contractual obligation of confidentiality with respect to such
information.  Administrative Agent and
each Lender acknowledges that (i) the Confidential Information may include
material non-public information concerning the Borrower or a Subsidiary, as the
case may be, (ii) it has developed compliance procedures regarding the use
of material, non-public information and (iii) it will handle material
non-public information concerning the Borrower or a Subsidiary in accordance
with all Laws, including federal and state securities Laws applicable to
Administrative Agent or such Lender, as applicable, provided that neither Administrative Agent nor any Lender
shall in any way be responsible for compliance with such Laws by Borrower or
any of its Subsidiaries and provided,
further, that nothing in this sentence shall limit the right of
Administrative Agent or any Lender to disclose Confidential Information as
otherwise permitted in this Section 10.18.


 


10.19      FURTHER ASSURANCES.


 


Borrower and its Subsidiaries shall, at their
expense and without expense to Administrative Agent or Lenders, do, execute and
deliver such further acts and documents as any Lender or Administrative Agent
from time to time reasonably requires for the assuring and confirming unto
Lenders of the rights hereby created or intended now or hereafter so to be, or
for carrying out the intention or facilitating the performance of the terms of
any Loan Document.


 


94

















 


10.20      HEADINGS.


 


Section headings in this Agreement and
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.


 


10.21      TIME OF THE ESSENCE.


 


Time is of the essence of the Loan Documents.


 


10.22      FOREIGN LENDERS.


 


Each Lender that is a “foreign corporation,
partnership or trust” within the meaning of the Code (a “Foreign Lender”) shall deliver to Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or after accepting an assignment
of an interest herein), two duly signed completed copies of either Form W-8BEN
or any successor thereto (relating to such Person and entitling it to a
complete exemption from withholding on all payments to be made to such Person
by Borrower pursuant to this Agreement) or Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by Borrower
pursuant to this Agreement) of the IRS or such other evidence satisfactory to
Borrower and Administrative Agent that no withholding under the United States
federal income tax laws is required with respect to such Person.  Thereafter and from time to time, each such
Person shall (a) promptly submit to Administrative Agent such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and
Administrative Agent of any available exemption from, United States withholding
taxes in respect of all payments to be made to such Person by Borrower pursuant
to this Agreement, and (b) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that Borrower make any deduction or
withholding for taxes from amounts payable to such Person.  If such Persons fail to deliver the above
forms or other documentation, then Administrative Agent may withhold from any
interest payment to such Person an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code.  If any Governmental Authority asserts that
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Person, such Person shall indemnify
Administrative Agent therefor, including all penalties and interest and costs
and expenses (including Attorney Costs) of Administrative Agent.  The obligation of Lenders under this Section shall
survive the payment of all Obligations and the resignation or replacement of
Administrative Agent.


 


10.23      REMOVAL AND REPLACEMENT OF LENDERS.


 


Under any circumstances set forth in this
Agreement providing that Borrower shall have the right to remove and replace a
Lender as a party to this Agreement, Borrower may, upon notice to such Lender
and Administrative Agent, remove such Lender by causing such Lender to assign
its Commitment to one or more other Lenders or Eligible Assignees acceptable to
Borrower and Administrative Agent; provided, however, that during the existence of any Event of Default,
Borrower may not remove or replace a Lender pursuant to this Section 10.23.  Any 


 


95

















 


removed or
replaced Lender shall be entitled to (x) payment in full of all principal,
interest, fees and other amounts owing to such Lender or such Lender’s
affiliated Indemnitees under any Loan Document through the date of termination
or assignment (including any amounts payable pursuant to Section 3.5 and
any applicable prepayment compensation under Section 2.3) and (y) a
release of such Lender from its obligations under the Loan Documents.  Any Lender being replaced shall execute and
deliver an Assignment and Assumption covering such Lender’s Commitment, and
shall otherwise comply with Section 10.4 (and Borrower shall be
responsible for payment of any processing and recordation fee payable under Section 10.4(b)(iv)).  Administrative Agent shall distribute an amended
Schedule 2.1, which shall
thereafter be incorporated into this Agreement, to reflect adjustments to
Lenders and their Commitments.


 


10.24      GOVERNING LAW.


 


(a)           THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT ADMINISTRATIVE AGENT AND EACH LENDER SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.


 


(b)           ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER,
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  BORROWER, ADMINISTRATIVE AGENT AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
HERETO.  BORROWER, ADMINISTRATIVE AGENT
AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.


 


10.25      WAIVER OF RIGHT TO TRIAL BY JURY.


 


EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT 


 


96

















 


MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.


 


10.26      PATRIOT ACT NOTIFICATION.


 


Each Lender subject to the Act and the Administrative Agent (for itself
and not on behalf of any Lender) hereby notifies Borrower (and each Subsidiary)
that, pursuant to the requirements of the USA Patriot Act, it is required to
obtain, verify and record information that identifies Borrower (and, to the
extent requested, each Subsidiary), which information includes the name and
address of Borrower (and, to the extent requested, each Subsidiary) and other
information that will allow such Lender or Administrative Agent to identify
Borrower (and, to the extent requested, each Subsidiary) in accordance with the
USA Patriot Act.


 


10.27      ENTIRE AGREEMENT.


 


This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted
by evidence of prior, contemporaneous, or subsequent oral agreements of the
parties.  There are no unwritten oral
agreements between the parties.


 


[SIGNATURES ON FOLLOWING PAGE.]


 


97

















 


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


 


	
  KRATOS DEFENSE & SECURITY 

  SOLUTIONS, INC., 

  a Delaware corporation, 

  as Borrower

  	
  KEYBANK NATIONAL ASSOCIATION,
  

  as Administrative Agent and Lender

  



 


	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
    Raed Y. Alfayourmi

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
    Vice President

  



 


 


Signature Page to Second Lien Credit
Agreement


 

















 


SCHEDULE 7.12(a)


 


MAXIMUM FIRST LIEN LEVERAGE RATIO


 


	
  Fiscal Quarter 

  Ending

  	
   

  	
  First Lien 

  Leverage 

  Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  5.39:1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  5.33:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.33:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  4.07:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  3.62:1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.34:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.09:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  2.83:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  2.62:1.00

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.20:1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.04:1.00

  	
   

  
	
  September 30, 2010 and thereafter

  	
   

  	
  1.93:1.00

  	
   

  



 

















 


SCHEDULE 7.12(b)


 


MAXIMUM TOTAL LEVERAGE RATIO


 


	
  Fiscal Quarter 

  Ending

  	
   

  	
  Total 

  Leverage 

  Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  6.44:1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  6.34:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  5.06:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  4.78:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  4.23:1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.93:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.67:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.35:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.13:1.00

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.75:1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.64:1.00

  	
   

  
	
  September 30, 2010 and thereafter

  	
   

  	
  2.48:1.00

  	
   

  



 

















 


SCHEDULE 7.12(c)


 


MINIMUM LIQUIDITY RATIO


 


	
  Fiscal Quarter 

  Ending

  	
   

  	
  Liquidity 

  Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.17:1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.25:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.25:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.26:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.39:1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.40:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.40:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  1.42:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  1.42:1.00

  	
   

  
	
  March 31, 2010

  	
   

  	
  1.31:1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  1.32:1.00

  	
   

  
	
  September 30, 2010

  	
   

  	
  1.35:1.00

  	
   

  
	
  December 31, 2010

  	
   

  	
  1.36:1.00

  	
   

  
	
  March 31, 2011

  	
   

  	
  1.35:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  1.35:1.00

  	
   

  
	
  September 30, 2011

  	
   

  	
  1.36:1.00

  	
   

  
	
  December 31, 2011

  	
   

  	
  1.36:1.00

  	
   

  
	
  March 31, 2012

  	
   

  	
  1.36:1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  1.35:1.00

  	
   

  
	
  September 30, 2012

  	
   

  	
  1.37:1.00

  	
   

  
	
  December 31, 2012

  	
   

  	
  1.25:1.00

  	
   

  



 

















 


SCHEDULE 7.12(d)


 


MINIMUM FIXED CHARGE COVERAGE RATIO


 


	
  Fiscal Quarter 

  Ending

  	
   

  	
  Fixed 

  Charge 

  Coverage 

  Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  0.45:1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  0.49:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  0.55:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  0.71:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  0.93:1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  0.90:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  0.99:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  0.97:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  0.98:1.00

  	
   

  
	
  March 31, 2010 and thereafter

  	
   

  	
  1.00:1.00

  	
   

  



 

















 


SCHEDULE 7.12(e)


 


MINIMUM CONSOLIDATED EBITDA


 


	
  Fiscal Quarter 

  Ending

  	
   

  	
  Consolidated 

  EBITDA

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  15,607

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  14,817

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  16,515

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  15,800

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  17,220

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  17,583

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  18,123

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  18,714

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  19,131

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  19,078

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  19,116

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  19,854

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  20,686

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  21,528

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  22,194

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  22,762

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  23,343

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  23,584

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  23,833

  	
   

  
	
  September 30, 2012

  	
   

  	
  $

  	
  24,075

  	
   

  
	
  December 31, 2012

  	
   

  	
  $

  	
  24,331