Document:

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL
RELEASE 

This Separation Agreement and General Release (the “Agreement”)
is made this 3rd day of October, 2006, by and between Penn National Gaming,
Inc., a Pennsylvania corporation (the “Employer”) and Kevin DeSanctis (the “Executive”).

BACKGROUND

A.   Executive is currently employed by Employer
as its President and Chief Operating Officer pursuant to that certain
employment agreement between Employer and Executive, dated as of May 26, 2004
(the “Employment Agreement”), which agreement expires on May 26, 2007 (the “Expiration
Date”).

B.   In order to effect an orderly transition of
Executive’s responsibilities prior to the Expiration Date, Executive and
Employer have now mutually agreed that Employer may elect to terminate the
employment relationship after the date hereof in accordance with Section 1 of
this Agreement.

C.   Executive and Employer desire to set forth
the terms of the separation and to provide for mutual general releases, all as
more specifically set forth herein.

NOW, THEREFORE, in
consideration of the foregoing preambles, the mutual covenants and agreements
set forth below and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

1.             Transition Services.

1.1           Officer
Transition Services.  In order to
assist Employer with an orderly transition of Executive’s responsibilities,
Executive agrees to continue to serve in his current capacity as President and
Chief Operating Officer of Employer until the earlier of (i) Employer’s written
notice (such notice to be not less than five (5) business days) to Executive
that it has completed an orderly transition of Executive’s officer
responsibilities, (ii) thirty (30) days after the first date of employment of
Executive’s successor or (iii) December 31, 2006 (the “Officer Termination Date”).  During the period from the date hereof until
the Officer Termination Date, Executive shall continue to report to the
corporate headquarters in Wyomissing, Pennsylvania and shall, at Employer’s
request, continue to perform his roles and responsibilities in the same manner
as prior to the date hereof.  Effective
as of the close of business on the Officer Termination Date and without any
further action by either party, Executive shall be deemed to have resigned from
all positions held as an officer or director of 

 

 

Employer and
any of its Affiliates (as such term is defined under Rule 144 promulgated
pursuant to the Securities Act of 1933, as amended).

1.2           Non-Officer
Transition Services.  Following the
Officer Termination Date, Executive agrees to continue to serve as a
non-officer employee of Employer until February 9, 2007 (the “Termination Date”).  During the period from the Officer
Termination Date until the Termination Date, Executive shall not be required to
report to the corporate headquarters on a regular basis but shall make himself
reasonably available to assist Employer on such matters as the parties may
mutually determine require the assistance of Executive.  Effective as of the close of business on the
Termination Date and without any further action by either party, Executive’s
employment with Employer shall be deemed to be terminated.

1.3           Employment Agreement.  The Employment Agreement shall remain in full
force and effect until the Officer Termination Date.  In the event of any conflict between the
terms of the Employment Agreement and the terms hereof, the provisions of this
Agreement shall control.  After the
Officer Termination Date, this Agreement shall solely govern the relationship
between the parties.

2.             Compensation.

2.1           Compensation.  Employer will continue to pay Executive his
current base salary until the Officer Termination Date.  During the period from the Officer
Termination Date until the Termination Date, Employer will pay Executive $1,000
per week.

2.2           Bonus Payment.  To the extent the Compensation Committee
determines that Employer’s performance for 2006 merits the payment of an annual
bonus to Level I employees, then Executive shall be entitled to a pro-rata
bonus (based on the number of days elapsed through the Officer Termination
Date) based on the same percentage of base salary received by other Level I
employees.  Such payment will be made within
thirty (30) days of the Termination Date, subject to Executive executing a
bring-down of the releases set forth in Section 6 of this Agreement.

2.3           Expenses; Paid
Time Off.  Executive shall be reimbursed in the normal
course for all reasonable business-related expenses incurred by him in accordance
with Employer’s policies on or before the Termination Date and submitted within
forty-five (45) days after the Termination Date.  Executive shall continue to be entitled to
four (4) weeks of paid vacation time in each calendar year through the Termination
Date, and Executive shall all be paid for any earned but unused vacation and
other personal days in accordance with Employer’s policies.

2.4           Benefits.  Executive shall continue to participate in
Employer’s medical plans, deferred compensation plan, 401(k) and other medical
and savings plans through 

 

 2
 

 

the
Termination Date.  Employer confirms that
as of the date of this Agreement, Executive is 100% vested in his 401(k)
account and his benefits under Employer’s non-qualified deferred compensation
plan.  After the Termination Date,
Executive will be entitled to continue his health benefits at his expense as
provided by COBRA.  In addition, Employer
and Executive will take such action as is necessary to transfer to Executive
the ownership of, and the obligations arising under, the $5,000,000 life
insurance policy on the life of Executive and the lease of Executive’s Employer
provided automobile.

2.5           Equity
Compensation.  All equity
compensation awards held by Executive shall continue to vest until the Termination
Date in accordance with their respective terms, including, without limitation,
Section 14.4 of Employer’s 2003 Long Term Incentive Compensation Plan (the “Plan”),
which section shall apply to all equity compensation awards held by
Executive.  A detailed vesting schedule
is set forth on Exhibit A hereto. 
Following the Termination Date and notwithstanding any provision of the
Plan or any option agreement or certificate to the contrary, all vested stock
options shall remain exercisable until the earlier of August 9, 2007 or the
expiration of the term of the option (other than any options which are
incentive stock options, which shall remain exercisable in accordance with
their terms), and all unvested equity compensation (including all restricted stock
grants) awards shall be deemed terminated. 
Employer hereby agrees to amend Executive’s stock options to the extent
necessary to conform to this Section 2.5.

2.6           No
Other Compensation.  Other than as
specifically set forth in this Agreement, Executive shall not be eligible for
any other compensation for services rendered prior to the Termination Date
including, without limitation, bonus, further stock option grants or other
incentive compensation, related to his employment with Employer.  This provision does not affect Executive’s
entitlement to continued benefits under Employer’s employee benefit plans in
accordance with their terms through the Termination Date.

3.             Covenants.

3.1           Regulatory
Matters; Further Assurances.  The
parties will cooperate in good faith with each other in terminating or
transferring any licenses presently held by Executive that were issued in
connection with his employment with Employer and in taking such other actions
as are necessary to effect the purposes set forth herein.  Executive agrees to execute and deliver such
instruments and documents in his capacity as a registered person with any
regulatory agency required to be filed by Employer until his successor has been
duly qualified, so long as such documents are in form and substance reasonably
satisfactory to Executive.

3.2           Indemnification.  Notwithstanding anything in Section 6.2 below
and to the extent permitted pursuant to the Pennsylvania Business Corporation
Law of 1988, as 

 

 3
 

 

amended, and
the Bylaws of Employer, Employer shall defend and indemnify Executive with
respect to acts or omissions of Executive as an employee, agent, officer or
director of Employer or its Affiliates occurring on or prior to the Termination
Date.

3.3           Corporate
Property.  Executive agrees that on
or before the Officer Termination Date, he will return to Employer all property
of Employer or its Affiliates in his possession including, but not limited to,
keys, access cards, identification cards, credit cards, files (including files
pertaining to potential acquisitions, partnerships and other strategic
opportunities), records, publications, customer or vendor lists, computers,
telephones or other electronic devices and any reports or compendia made by
Executive or any other person concerning Employer or its business or prospects
and any copies in any format of any of the foregoing.

3.4           Confidentiality.  Executive hereby acknowledges that as a
result of his employment by Employer he has had access to, obtained, or
developed certain confidential or legally privileged information (including but
not limited to trade secrets, methods and practices, financial information,
information technology systems, technical and research data, new product
development information, pricing information, business and marketing plans,
lobbying activities, acquisition prospects and strategies and compliance
matters) of Employer and its Affiliates (collectively “Information”), and that
such Information constitutes valuable, special and unique property of Employer
and its Affiliates.  Executive agrees
that he shall hold inviolate and keep secret all such Information and will not
for any reason or purpose use, permit to be used, or disclose to any party any
Information.  Notwithstanding anything to
the contrary in the foregoing, Executive may divulge any Information required
by law to be divulged by him to any government commission, agency or other
regulatory body or pursuant to a subpoena; provided, however, that, unless it
is not feasible under the circumstances, prior to divulging any such
Information, Executive shall advise Employer’s General Counsel that a request
has been made and cooperate with Employer, if requested, in Employer’s efforts
to seek protective relief against the divulgence of any such Information.  In any event, unless prohibited by law,
Executive will keep Employer fully advised of any contacts from any such
government agency, commission or regulatory body, and any Information given by
him to the same.

3.5           Disparaging
Remarks.  Executive and Employer
agree that neither shall directly or indirectly make disparaging remarks about
the other party or their respective employers, employees, directors, officers,
products or services (as applicable) to any person or entity or directly or
indirectly make or solicit any comments, statements or the like to the media or
other third parties which may be considered derogatory or detrimental.  This provision shall not apply to sworn
testimony given in a court proceeding or compelled under subpoena.

 

 4
 

 

4.             Non-Competition & Non-Solicitation.

4.1           Non-Competition.

4.1.1        Without limiting the
generality of any other provision hereof, the parties acknowledge and agree
that the non-competition provisions in Section 6 of the Employment Agreement
shall continue in full force and effect until the Officer Termination Date;
provided, however, that, Employer agrees that Executive may spend a reasonable
amount of time, during business hours or otherwise, on the formation of his new
business so long as such efforts do not unreasonably interfere with his duties
hereunder and are limited to such matters as may be mutually agreed upon by
Employer and Executive.

4.1.2        Following the Officer
Termination Date, Executive shall have no restrictions on his ability to
compete with Employer except with respect to certain opportunities that may be
mutually agreed upon by Employer and Executive.

4.2           Non-Solicitation.  From the date hereof through the second
anniversary of the Termination Date, Executive will not, except with the prior
written consent of Employer, directly or indirectly, solicit or hire, or
encourage the solicitation or hiring of, any person who is, or was within a six
month period prior to such solicitation or hiring, an executive or management
employee of Employer or any of its Affiliates for any position as an employee,
independent contractor, consultant or otherwise , or induce any such person to
terminate his or her employment relationship with Employer or any of its
Affiliates or to breach his or her employment agreement with Employer or any of
its Affiliates.

5.             No Admissions. 
The terms of this Agreement are not to be considered as an admission on
behalf of either party.  Neither this
Agreement nor its terms shall be admissible as evidence of any liability or
wrongdoing by either party or any of the Releasees in any judicial,
administrative or other proceeding now pending or hereafter instituted by any
person or entity.  Employer is entering
into this Agreement solely for the purpose of effectuating a mutually
satisfactory separation of Executive’s employment.  Both parties acknowledge and agree that
Employer and Executive shall be permitted to file this Agreement with the
Securities Exchange Commission and such other regulatory bodies as either party
may deem appropriate or necessary.

6.             Release and Covenant not to Sue.

6.1           Definitions.

6.1.1        When used in this
Agreement, the word “Releasees” means Employer and all or any of its past and
present subsidiary and affiliated corporations, companies, partnerships, joint
ventures and other entities and their groups, divisions, departments and units,

 

 5
 

 

and their past
and present directors, trustees, officers, managers, partners, supervisors,
employees, attorneys, agents and consultants, and their predecessors,
successors and assigns.

6.1.2        When used in this
Agreement, the word “Claims” means each and every claim, complaint, cause of
action, and grievance, whether known or unknown and whether fixed or
contingent, and each and every promise, assurance, contract, representation,
guarantee, warranty, right and commitment of any kind, whether known or unknown
and whether fixed or contingent.

6.2           Release of
Employer.  In consideration of the
promises of Employer set forth in this Agreement, and intending to be legally
bound, Executive hereby irrevocably remises, releases and forever discharges
all Releasees of and from any and all Claims that he (on behalf of either
himself or any other person or persons) ever had, now has or may have against
any and all of the Releasees, or which he (or his heirs, executors, administrators
or assigns or any of them) hereafter can, shall or may have against any and all
of the Releasees, for by reason of any cause, matter, thing, occurrence or
event whatsoever relating to or arising out of his employment with Employer.  Executive acknowledges and agrees that the
Claims released in this Section 6.2 include, but are not limited to, (a) any
and all Claims based on any law, statute or constitution or based on contract
or in tort on common law, (b) any and all Claims based on or arising under any
civil rights laws, such as any Pennsylvania employment laws, or Title VII of
the Civil Rights Act of 1964, the Federal Age Discrimination in Employment Act
(the “ADEA”), the Americans with Disabilities Act, the Family and Medical Leave
Act, the Occupational Safety and Health Act, and similar state and local
statutes, laws and ordinances, (c) any and all Claims pertaining to
discrimination, harassment, or retaliation, whether based on race, color,
religion, gender, age, sexual orientation, handicap and/or disability, national
origin, whistle-blowing or any other legally protected class, (d) any and all
Claims under any grievance or complaint procedure of any kind, (e) any and all
Claims based on or arising out of or related to his recruitment by, employment
with, the termination of his employment with, his performance of any services
in any capacity for, or any business transaction with, each or any of the
Releasees and (f) any and all Claims for attorneys’ fees, including litigation
costs and expenses in connection any of the foregoing.  Executive also understands, that by signing
this Agreement, he is waiving all Claims against any and all of the Releasees
released by this Agreement; provided, however, that as set forth
in section 7(f)(1)(c) of the ADEA, as added by the Older Workers Benefit
Protection Act of 1990, nothing in this Agreement constitutes or shall be
construed to constitute a waiver by Executive of any rights or claims that may
arise after the date hereof; provided, further, that the foregoing
is not intended to release any claim that Executive may have to (i)
indemnification or directors and officers liability insurance coverage, (ii)
payment of the benefits provided under this Agreement (including accrued and
unpaid vacation, base salary and bonus through the date of termination of
employment), (iii) accrued and vested benefits under any retirement plan or
deferred compensation account or plan and (iv) benefits to which Executive is
entitled under the Employee Retirement Income Security Act of 1974, as
amended.   

 

 6
 

 

In addition,
Executive waives any right to initiate or otherwise voluntarily participate in
any shareholders’ derivative action with respect to Employer and its
majority-owned subsidiaries by reason of any act or omission prior to the date
of this Agreement, including, without limitation, being a named plaintiff in or
causing to be filed on Executive’s behalf or as a class action any such
derivative action.

6.3           Release by
Employer.  Employer and its majority
controlled subsidiaries hereby irrevocably remise, release and forever
discharge Executive from any Claims arising prior to the date hereof, except
any Claim arising under this Agreement.

6.4           Covenant Not to
Sue.  Executive covenants and agrees
not to sue the Releasees and each or any of them for any Claims released by
this Agreement and to waive any recovery related to any Claims covered by this
Agreement.  Employer and its majority
controlled subsidiaries covenant and agree not to sue Executive for any Claims
released by this Agreement and to waive any recovery related to any Claims
covered by this Agreement.

7.             Review and Consideration Period. Executive
acknowledges that he has been instructed to and has had the opportunity to
review this Agreement with an attorney and/or any person of his choosing before
signing it. Executive further acknowledges that he has had twenty-one (21) days
to consider this Agreement. By executing this Agreement, Executive acknowledges
that, as of the date of execution, he has either considered the Agreement for
twenty-one (21) days, or has, on the advice of counsel, waived the twenty-one
(21) day consideration period.

8.             Revocation Right. Executive shall have seven (7)
days after signing this Agreement to revoke it. This Agreement shall not be
effective nor will any consideration be provided until after the revocation
period has passed. A revocation of this Agreement shall be written and shall
not be effective unless actually received by the Chairman or General Counsel of
Employer on or before the 7th day after this
Agreement has been signed.

9.             Notices. All notices, requests, demands, claims,
and other communications hereunder will be in writing and addressed to the
intended recipient as set forth below. Any party hereto may give any notice,
request, demand, claim or other communication hereunder by registered or
certified mail, return receipt requested, or delivery in person or by any
nationally known overnight courier service that requires a return receipt or
signature for delivery.  Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other party hereto
notice in the manner herein set forth.

 

 7
 

 

If to Executive:                 Kevin DeSanctis

2 Woods Way

Wyomissing, PA 19610

If to Employer:                  Penn National
Gaming, Inc.

825 Berkshire Blvd., Suite 200

Wyomissing, PA 19610

Attention: General Counsel

10.           Remedies.  No remedy conferred upon either party by this Agreement is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and in addition to and not in derogation of any other
remedy or right given hereunder or now or hereafter existing at law or in
equity, including, without limitation, any remedies conferred upon either party by virtue of their prior
employment relationship.  No delay
or omission by either party in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, and any such right, remedy or power may
be exercised by any either party from
time to time and as often as may be deemed expedient or necessary by the party in its sole
discretion.  Executive acknowledges that
money damages would not be a sufficient remedy for any breach of this Agreement
by Executive and that Employer shall be entitled to specific performance and
injunctive relief as remedies for any such breach, in addition to all other
remedies available at law or equity to Employer.

11.           Enforceability. If any
provision of this Agreement shall be invalid or unenforceable, in whole or in
part, then such provision shall be deemed to be modified or restricted to the
extent and in the manner necessary to render the same valid and enforceable, or
shall be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so
modified or restricted, or as if such provision had not been originally
incorporated herein, as the case may be; provided, however, that if the
modification or restriction of some provision of this Agreement deprives any
party hereto of the substantial benefit of his or its bargain as set forth
herein, then such modification or restriction shall be deemed ineffective.

 

 8
 

 

12.           Executive’s Acknowledgment.  Executive acknowledges that he has carefully
read this Agreement and that he has executed it voluntarily and with full
knowledge and understanding of its significance, meaning and binding effect.  Executive further declares that he is
competent to understand the content and effect of this Agreement and that his
decision to enter into this Agreement has not been influenced in any way by
fraud, duress, coercion, mistake or misleading information and that he has not
relied on any information except what is set forth herein.

13.           Governing Law.  Executive and Employer agree that the terms
of this Agreement shall be interpreted under and consistent with the laws of
the Commonwealth of Pennsylvania.  In any
legal proceeding, involving directly or indirectly, any matter arising out of
or related to this Agreement, each of the parties hereby irrevocably submits to
the exclusive jurisdiction of the Court of Common Pleas of Berks County,
Pennsylvania or the Federal Court of the Eastern District of Pennsylvania and
agrees not to raise any objection to such jurisdiction or to maintaining of the
venue of any such proceeding, and service of process in any such proceeding may
be duly effected by mailing a copy thereof, by registered mail, postage
prepaid, or by hand delivery or by a nationally recognized overnight delivery
service to each party thereto.

14.           Entire Agreement.  This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings between the
parties with respect to the subject matter hereof and, except as may otherwise
be set forth herein, supersedes all prior agreements, covenants, and understandings, inducements or conditions
pertaining thereto, express or implied, oral or written.

15.           Amendment and Assignment;
Successors and Assigns. This Agreement may not be modified, altered,
supplemented, terminated or amended except by a writing signed by the parties.
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs,
representatives, successors, assigns and affiliates of the parties hereto.

IN WITNESS WHEREOF, the
parties have executed this Separation Agreement and General Release on date first
set forth above.

 

	
  EXECUTIVE

  	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ KEVIN
  DESANCTIS

  	
   

  	
   

  	
  By:

  	
  /s/ PETER M.
  CARLINO

  	
   

  
	
  Kevin DeSanctis

  	
   

  	
  Peter M. Carlino, Chairman

  
							

 

 9Exhibit 10.1

 

 

CREDIT AGREEMENT

 

among

 

WIRELESS
FACILITIES, INC.,

 

KEYBANK NATIONAL ASSOCIATION,

 

as Administrative Agent,

Lender and

Letter of Credit Issuing Lender

 

and

 

THE OTHER FINANCIAL

INSTITUTIONS PARTIES HERETO

 

with

 

KEYBANC CAPITAL MARKETS,

 

as Designated Sole Arranger
and

Sole Book Manager

 

Dated as of October 2, 2006

 

$85,000,000 Revolving Credit
Facility

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  DEFINED TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
  USE OF CERTAIN TERMS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
  ACCOUNTING TERMS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
  ROUNDING

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
  EXHIBITS AND SCHEDULES

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  1.6

  	
  REFERENCES TO AGREEMENTS AND LAWS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION II THE COMMITMENTS AND EXTENSIONS OF CREDIT

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  LOANS; MAXIMUM AMOUNTS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
  BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
  LETTERS OF CREDIT

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
  PREPAYMENTS

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
  REDUCTION OR TERMINATION OF COMMITMENTS

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
  PRINCIPAL AND INTEREST

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
  FEES

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
  COMPUTATION OF INTEREST AND FEES

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
  MAKING PAYMENTS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
  FUNDING SOURCES

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
  COLLATERAL

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
  ADDITIONAL LOAN COMMITMENTS

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION III TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  TAXES

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
  ILLEGALITY

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
  INABILITY TO DETERMINE RATES

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
  INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
  BREAKFUNDING COSTS

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
  MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  3.7

  	
  SURVIVAL

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION IV CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  CONDITIONS OF INITIAL EXTENSION OF CREDIT

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
  CONDITIONS TO ALL EXTENSIONS OF CREDIT

  	
   

  	
  42

  

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION V REPRESENTATIONS AND WARRANTIES

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
  POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
  NO LEGAL BAR

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
  FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  5.5

  	
  LITIGATION

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  5.6

  	
  NO DEFAULT; CONTINUED BUSINESS

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  5.7

  	
  OWNERSHIP OF PROPERTY; LIENS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  5.8

  	
  TAXES

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  5.9

  	
  MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
  HOLDING COMPANY ACT

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  5.10

  	
  ERISA COMPLIANCE

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  5.11

  	
  INTANGIBLE ASSETS

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  5.12

  	
  COMPLIANCE WITH LAWS

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  5.13

  	
  ENVIRONMENTAL COMPLIANCE

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  5.14

  	
  INSURANCE

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  5.15

  	
  SWAP OBLIGATIONS

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  5.16

  	
  SOLVENCY

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  5.17

  	
  DISCLOSURE

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  5.18

  	
  PATRIOT ACT

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  5.19

  	
  RELATED TRANSACTIONS

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VI AFFIRMATIVE COVENANTS

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  FINANCIAL STATEMENTS

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
  CERTIFICATES, NOTICES AND OTHER INFORMATION

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
  PAYMENT OF TAXES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
  PRESERVATION OF EXISTENCE

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
  MAINTENANCE OF PROPERTIES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  6.6

  	
  MAINTENANCE OF INSURANCE

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  6.7

  	
  COMPLIANCE WITH LAWS

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  6.8

  	
  INSPECTION RIGHTS

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  6.9

  	
  KEEPING OF RECORDS AND BOOKS OF ACCOUNT

  	
   

  	
  51

  

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  6.10

  	
  COMPLIANCE WITH ERISA

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  6.11

  	
  COMPLIANCE WITH AGREEMENTS

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  6.12

  	
  SUBSIDIARY GUARANTIES AND PLEDGE OF OWNERSHIP INTERESTS

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  6.13

  	
  USE OF PROCEEDS

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  6.14

  	
  HYPOTHECATION OF MATERIAL LEASES

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VII NEGATIVE COVENANTS

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  INDEBTEDNESS

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
  LIENS

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
  FUNDAMENTAL CHANGES

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
  DISPOSITIONS

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
  INVESTMENTS

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
  RESTRICTED PAYMENTS

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
  ERISA

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
  CHANGE IN NATURE OF BUSINESS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
  TRANSACTIONS WITH AFFILIATES

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
  USE OF PROCEEDS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  7.11

  	
  CERTAIN INDEBTEDNESS PAYMENTS, ETC

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  7.12

  	
  FINANCIAL COVENANTS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  7.13

  	
  ACCOUNTING CHANGES

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  7.14

  	
  RESTRICTIVE AGREEMENTS

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  7.15

  	
  GUARANTY UNDER MATERIAL INDEBTEDNESS AGREEMENT

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION VIII EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  EVENTS OF DEFAULT

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
  CERTAIN FINANCIAL COVENANT DEFAULTS

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
  REMEDIES UPON EVENT OF DEFAULT

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION IX ADMINISTRATIVE AGENT

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
  APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
  DELEGATION OF DUTIES

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
  LIABILITY OF ADMINISTRATIVE AGENT

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
  RELIANCE BY ADMINISTRATIVE AGENT

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
  NOTICE OF DEFAULT

  	
   

  	
  66

  

 

iii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
  CREDIT DECISION; DISCLOSURE OF INFORMATION BY
  ADMINISTRATIVE AGENT

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  9.7

  	
  INDEMNIFICATION OF ADMINISTRATIVE AGENT

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  9.8

  	
  ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  9.9

  	
  SUCCESSOR ADMINISTRATIVE AGENT

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  9.10

  	
  DESIGNATION OF ARRANGER; NO AFFILIATE LIABILITY

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION X MISCELLANEOUS

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  AMENDMENTS; CONSENTS

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
  TRANSMISSION AND EFFECTIVENESS OF COMMUNICATIONS AND
  SIGNATURES

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  10.3

  	
  ATTORNEY COSTS, EXPENSES AND TAXES

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  10.4

  	
  BINDING EFFECT; ASSIGNMENT

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
  SET-OFF

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  10.6

  	
  SHARING OF PAYMENTS

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  10.7

  	
  NO SETOFF

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  10.8

  	
  NO WAIVER; CUMULATIVE REMEDIES

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  10.9

  	
  USURY

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  10.10

  	
  COUNTERPARTS

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  10.11

  	
  INTEGRATION

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  10.12

  	
  NATURE OF LENDERS’ OBLIGATIONS

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  10.13

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  10.14

  	
  INDEMNITY BY BORROWER

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  10.15

  	
  NONLIABILITY OF LENDER

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  10.16

  	
  NO THIRD PARTIES BENEFITED

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  10.17

  	
  SEVERABILITY

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  10.18

  	
  CONFIDENTIALITY

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  10.19

  	
  FURTHER ASSURANCES

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  10.20

  	
  HEADINGS

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  10.21

  	
  TIME OF THE ESSENCE

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  10.22

  	
  FOREIGN LENDERS

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  10.23

  	
  REMOVAL AND REPLACEMENT OF LENDERS

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  10.24

  	
  GOVERNING LAW

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  10.25

  	
  WAIVER OF RIGHT TO TRIAL BY JURY

  	
   

  	
  80

  

 

iv

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  10.26

  	
  ENTIRE AGREEMENT

  	
   

  	
  80

  

 

v

 

EXHIBITS

 

	
  A

  	
  Form of Request for
  Extension of Credit

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  B

  	
  Form of Compliance
  Certificate

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  C

  	
  Form of Note

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  D

  	
  Form of Assignment and
  Acceptance

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  E-1

  	
  Form of General Security
  Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  E-2

  	
  Form of Intellectual
  Property Security Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  E-3

  	
  Form of UK Pledge
  Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F

  	
  Form of Multi-Party
  Guaranty

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  G

  	
  Form of Acceptance Letter

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  H

  	
  Forms of Opinions of
  Counsel

  	
   

  	
   

  

 

 

SCHEDULES

 

	
  2.1

  	
  Commitments and Pro Rata
  Shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Material Subsidiaries and
  First-Tier Material Foreign Subsidiaries

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Existing Indebtedness and
  Liens

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
  Disposition of Property

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
  Offshore and Domestic
  Lending Offices, Addresses for Notices

  	
   

  	
   

  

 

 

CREDIT
AGREEMENT

 

This CREDIT AGREEMENT (“Agreement’) is
entered into as of October 2, 2006, by and among WIRELESS FACILITIES, INC., a
Delaware corporation (“Borrower”), KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, as a
Lender and as Issuing Lender hereunder, such other lenders as shall from time
to time be party hereto with KEYBANC CAPITAL MARKETS as designated Sole
Arranger and Sole Book Manager hereunder.

 

RECITAL

 

Borrower has requested that
Lenders and Issuing Lender provide a revolving line of credit, and Lenders,
Issuing Lender 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 in excess of 50% of the capital stock, partnership
interests or equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary).

 

“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
Credit Agreement, as amended, restated, extended, supplemented or otherwise
modified in writing from time to time.

 

“Applicable Margin” means the
following amounts per annum (expressed in basis points per annum), based upon
the Total Leverage Ratio:

 

	
  Total Leverage Ratio

  	
   

  	
  Offshore Rate

  Margin (bps)

  	
   

  	
  Base Rate

  Margin (bps)

  	
   

  	
  Commitment

  Fee (bps)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X 3
  3.50

  	
   

  	
  350.0

  	
   

  	
  150.0

  	
   

  	
  75.0

  	
   

  
	
  X is 3
  3.00 but < 3.50

  	
   

  	
  300.0

  	
   

  	
  100.0

  	
   

  	
  75.0

  	
   

  
	
  X is 3
  2.50 but < 3.00

  	
   

  	
  250.0

  	
   

  	
  50.0

  	
   

  	
  60.0

  	
   

  
	
  X is 3
  2.00 but < 2.50

  	
   

  	
  225.0

  	
   

  	
  25.0

  	
   

  	
  50.0

  	
   

  
	
  X is 3
  1.5 but < 2.00

  	
   

  	
  200.0

  	
   

  	
  0.0

  	
   

  	
  40.0

  	
   

  
	
  X < 1.5

  	
   

  	
  175.0

  	
   

  	
  0.0

  	
   

  	
  30.0

  	
   

  

 

For purposes of Borrower’s
payment of interest in accordance with Section 2.6 and the Commitment Fee
specified in Section 2.7(a), each Applicable Margin calculated in accordance
with the most recent Compliance Certificate received by Administrative Agent
shall be in effect from the date such Compliance Certificate is received by
Administrative Agent to but excluding the date the next Compliance Certificate
is received; provided, however, that the
Applicable Margin from the Closing Date until Administrative Agent’s receipt of
Borrower’s first Compliance Certificate shall be the amounts set forth above as
applying the Total Leverage Ratio set forth on a pro forma
Compliance Certificate calculated as of June 30, 2006 (with adjustment for the
MRC Acquisition and any Borrowing hereunder in connection therewith) and
delivered on or before the Closing Date; 
provided, further, that after the
Closing Date Borrower may submit another pro forma
Compliance Certificate for the period ending September 29, 2006 and the
Applicable Margin will be adjusted to reflect the Total Leverage Ratio set
forth therein.

 

“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.

 

“Arranger” means KeyBanc
Capital Markets, in its capacity as “Sole Arranger” and “Sole Book Manager.”

 

“Assignment and Acceptance” means an
Assignment and Acceptance substantially in the form of Exhibit D.

 

2

 

“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.

 

“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 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 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 Acquisition
Consideration” means the amount of cash paid or payable prior to
the Maturity Date 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 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 

 

3

 

meaning of Rule 13d-3 of the
SEC under the Securities Exchange Act of 1934, as then in effect), of shares
representing more than forty-five percent 45% of the aggregate ordinary Voting
Power represented by the issued and outstanding capital stock 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; or (c) the occurrence of a change in control, or
other similar provision, as defined in any Material Indebtedness Agreement (but
excluding any Material Indebtedness Agreement between the Borrower and any Subsidiary
or between any Subsidiaries) (triggering a default or mandatory prepayment,
which default or mandatory prepayment has not been waived in writing).

 

“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.

 

“Commitment” means, 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”).

 

“Commitment Fee” has the
meaning set forth in Section 2.7 hereof.

 

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

 

“Consolidated EBITDA” means the sum
of the following, provided that the items contained
in clauses (b)-(h) 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, income,
loss or expense that are properly classified as extraordinary in accordance
with GAAP or are unusual or non-recurring (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;

 

4

 

(f)            The amount of non-cash
costs from discontinued operations, 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; and

 

(h)           The amount of
non-recurring cash charges resulting from discontinued operations or the
disposal of assets in an amount not to exceed $7,500,000 in any period of four
consecutive fiscal quarters; provided that if,
for any period of four consecutive fiscal quarters, the Total Leverage Ratio
(calculated without giving effect to this clause (h) for such period) is
greater than 2.00 to 1.00, the amount of such non-recurring cash charges which
may be added back to Consolidated EBITDA for such four consecutive quarter period
and the immediately preceding four consecutive fiscal quarters shall not exceed
$10,000,000.

 

For purposes of calculating
Consolidated EBITDA for any period in connection with each of the Total
Leverage Ratio and the Fixed Charge Coverage Ratio, if during such period the
Borrower or any Subsidiary shall have made any Permitted Acquisition (but, for
purposes of calculating the Fixed Charge Coverage Ratio, the only Permitted
Acquisition referred to in this paragraph will be the MRC Acquisition) after
June 30, 2006, Consolidated EBITDA for such period shall be calculated
after giving pro forma effect to such
Permitted Acquisition as if such Permitted Acquisition occurred on the first
day of such period and so long as the pro forma
effect and add-backs may be derived from the Income Statement, as prepared in connection
with the Permitted Acquisition, as approved by the Administrative Agent (which
approval shall not be unreasonably withheld).

 

“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, for any
period, for Borrower and its Subsidiaries on a consolidated basis, net income
of Borrower and its Subsidiaries in accordance with GAAP.

 

“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.

 

5

 

“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 of the United States of America, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States 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 equal to the Base Rate plus the applicable margin specified in
the definition of Applicable Margin, if any, applicable to Base Rate Loans,
plus 2% per annum; provided, however,
that with respect to an Offshore Rate Loan, the Default Rate shall be an
interest rate equal to the interest rate otherwise applicable to such Loan,
plus the Applicable Margin specified for Offshore Rate Loans, plus 2% per
annum, in each case to the fullest extent permitted by applicable Laws.

 

“Disclosure Letter” means that
Disclosure Letter of even date herewith and delivered to Administrative Agent
together with this Agreement.

 

“Disposition” or “Dispose” mean the sale, transfer, License Disposition or
other disposition (including any sale and leaseback transaction) of any
property by any Person, including any sale, assignment, transfer or other
disposal with or without recourse of any notes or accounts receivable or any
rights and claims associated therewith; provided, however,
that an issuance by Borrower of its Equity Securities shall not be a
Disposition.

 

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

 

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

 

“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) a
Person that is primarily engaged in the business of commercial banking and that
is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of
which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary; (d) another Lender; (e) 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 (f) other lenders or institutional investors consented to in
writing in advance by Administrative Agent and Borrower. Neither Borrower nor
any Affiliate of Borrower shall be an Eligible Assignee.

 

6

 

“Employee Benefits Plan” means a 401k
plan, employee stock purchase program, deferred compensation program or similar
programs from time to time maintained by Borrower or any of its Subsidiaries.

 

“ENCO Systems” means
collectively ENCO Systems, Inc. and ENCO Systems Partnership, Ltd.

 

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

 

“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 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).

 

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

 

“Escrowed Securities” means the
Cuculic Collateral, as such term is defined in Section 1 of the General
Security Agreement.

 

“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 

 

7

 

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 Lender” has the
meaning specified in Section 2.12(d).

 

“Extension of Credit” means
(a) a Borrowing, Conversion or Continuation of Loans and (b) a Letter of
Credit Action wherein a new Letter of Credit is issued or which has the effect
of increasing the amount of, extending the maturity of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of
drawings thereunder.

 

“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” has the
meaning specified in Section 2.7(b).

 

“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 fiscal quarters most recently ended
plus consolidated operating lease expenses (as determined in accordance with GAAP)
during such period to (b) the sum of Borrower’s consolidated capital expenditures
(excluding, however, up to (i) $3,000,000 of costs related to the Oracle
upgrade project that were spent through September 29, 2006 and (ii) an
additional $1,000,000 related to such Oracle upgrade project spent between
September 30, 2006 and September 28, 2007), Consolidated Interest
Charges, consolidated operating lease expenses and consolidated cash income
taxes paid (less cash income tax refunds actually received) (all as determined
in accordance with GAAP) for the four fiscal quarters most recently ended.

 

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

 

“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 

 

8

 

profession, that are
applicable to the circumstances as of the date of determination, consistently
applied; provided  however
that for purposes of calculating the Total Leverage Ratio, the Liquidity Ratio
and the Fixed Charge Coverage Ratio (and in each case the components thereof),
GAAP shall mean GAAP as in effect and applied on the Closing Date, without
giving effect to any subsequent change in such principles.

 

“General Security
Agreement” means that certain 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-1 hereto.

 

“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.

 

“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.

 

“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.

 

“Indebtedness” means:

 

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

 

9

 

(b)           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 (whether in the form of a letter of credit or
otherwise);

 

(c)           net obligations
under any Swap Contract (excluding, however, any interest rate or foreign
exchange swap transactions) in an amount equal to the Swap Termination Value of
such Swap Contract;

 

(d)           with or without
recourse, all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements);

 

(e)           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
appearing on Borrower’s financial statements delivered in accordance with
Sections 6.l (a) and (b) of this Agreement 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;

 

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

 

(g)           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 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.

 

“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 

 

10

 

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 that certain Intellectual Property 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-2 hereto.

 

“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.

 

“Issuing Lender” means KeyBank
National Association, or any other Lender, who from time to time effects a
Letter of Credit Action in accordance with the terms of this Agreement.

 

“KeyBank” means KeyBank
National Association.

 

“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.

 

“Lender” means each
lender from time to time party hereto and, as the context requires, Issuing Lender.

 

“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.

 

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

 

11

 

“Letter of Credit Action” means the
issuance, supplement, amendment, renewal, extension, modification or other
action relating to a Letter of Credit hereunder.

 

“Letter of Credit
Application” means an application for a Letter of Credit Action
from time to time in use by Issuing Lender.

 

“Letter of Credit
Expiration Date” means the scheduled Maturity Date.

 

“Letter of Credit Sublimit” means an
amount equal to $10,000,000. The Letter of Credit Sublimit is part of, and not
in addition to, the combined Commitments.

 

“Letter of Credit Usage” means, as at
any date of determination, the aggregate amount available to be drawn under all
outstanding Letters of Credit plus the aggregate amount of all drawings under
the Letters of Credit not reimbursed by Borrower or converted into Loans.

 

“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 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 financing statement under
the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.

 

“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, marketable securities, 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; 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 (collectively,
the “Loans”).

 

“Loan Documents” means this
Agreement, each Note, the Multi-Party Guaranty, the Security Documents, each
Letter of Credit Application, each Request for Extension of Credit, 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.

 

12

 

“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 the Collateral, or (d) materially
impairs the ability of any Credit Party to perform the Obligations.

 

“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 $10,000,000.

 

“Material Lease” means any
lease entered into by Borrower or its Subsidiaries after the Closing Date for
premises in excess of 50,000 square feet.

 

“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;  provided, however, WFI do Brasil
Tecnologia em Telecomunicaçiõnes LTDA., a Brazilian commercial limited
liability company, shall not in any event constitute a Material Subsidiary.

 

“Maturity Date” means
(a) October 3, 2011, or (b) such earlier date upon which the combined
Commitments may be terminated in accordance with the terms of this Agreement.

 

“Merger Agreement” means that
certain Agreement of Merger, dated as of August 8, 2006, by and among Borrower,
WFI Government Services, Inc., MRC Merger Company, Inc., and MRC, pursuant to
which MRC, subject to certain conditions, will become the indirect wholly-owned
subsidiary of Borrower.

 

“Merger Documents” means the
Merger Agreement and agreements attached as exhibits thereto and 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 Base Rate Loans

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

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

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Letter of Credit
  Action

  	
   

  	
  $

  	
  25,000

  	
   

  	
  None

  	
   

  
	
  Reduction or
  Increase in Commitment

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

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

 

13

 

“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 in the form attached hereto as Exhibit F.

 

“New Lender” is defined in
Section 2.12(c).

 

“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 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 or Affiliate 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 a Offshore Rate Loan. 

 

14

 

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 of such Offshore Rate.

 

“Ordinary Course
Dispositions” means:

 

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

 

(b)           Dispositions of
cash, cash equivalents or inventory in the ordinary course of business;

 

(c)           Dispositions of
property to the extent that such property is exchanged for credit against the
purchase price of similar replacement property, or the proceeds of such sale
are reasonably promptly applied to the purchase price of such replacement
property or where Borrower or its Subsidiary determine in good faith that the
failure to replace such equipment will not be detrimental to the business of
Borrower or such Subsidiary; provided that
the net book value of all assets sold but not replaced pursuant to this clause
(c) by the Borrower and its Subsidiaries shall not exceed the Threshold Amount
over the life of this Agreement;

 

(d)           Dispositions of
assets or property by any Subsidiary of Borrower to Borrower or another
Subsidiary of Borrower, or by Borrower to any Subsidiary of Borrower; provided that the net book value of all assets disposed of
by Borrower and Guarantors to non-Guarantor Subsidiaries shall not exceed the
Threshold Amount over the life of this Agreement;

 

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

 

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

 

provided, however, that, other
than with respect to Dispositions of the types described in clauses (a) and (c)
of this definition, no such Disposition shall be for significantly less than
the fair market value of the property being disposed of.

 

“Ordinary Course
Indebtedness” means:

 

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

 

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

 

(c)           Permitted Swap
Obligations;

 

15

 

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

 

(e)           Indebtedness
with respect to cash deposited by customers to obtain the right to delivery of
future goods or services.

 

“Ordinary Course
Investments” means Investments consisting of

 

(a)           Investments in
other assets properly classified as “marketable securities” or “cash” or “cash
equivalents” under GAAP, and which conform to the investment policies adopted
by the Board of Directors of Borrower from time to time;

 

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

 

(c)           Investments of
Borrower in any of its Subsidiaries and Investments of any Subsidiary of
Borrower in Borrower or another Subsidiary of Borrower; provided
that the aggregate amount of Investments by Borrower and Guarantors in
non-Guarantor Subsidiaries (which are not otherwise permitted under Sections
7.5(a) and 7.5(c)-(g)) shall not exceed the Threshold Amount at any time;

 

(d)           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;

 

(e)           Guaranty Obligations
permitted by Section 7.1;

 

(f)            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;

 

(g)           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

 

(h)           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
other loans to non-executive officers and employees.

 

“Ordinary Course Liens” means:

 

(a)           Liens pursuant
to any Loan Document;

 

16

 

(b)           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;

 

(c)           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;

 

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

 

(e)           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 clause (d) of the definition of Ordinary Course
Indebtedness);

 

(f)            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;

 

(g)           attachment,
judgment or other similar Liens arising in connection with litigation or other
legal proceedings (and not otherwise an Event of Default hereunder) in the
ordinary course of business that is currently being contested in good faith by
appropriate proceedings, adequate reserves have been set aside, and no material
property is subject to a material risk of loss or forfeiture;

 

(h)           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;

 

(i)            Liens arising
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;

 

(j)            Liens on
insurance proceeds in favor of insurance companies with respect to the
financing of insurance premiums; and

 

17

 

(k)                                  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.

 

“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.

 

“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 (i) the
aggregate outstanding principal amount of all Loans, and (ii) all Letter of
Credit Usage, and (b) when reference is made to one Lender, the sum of (i) the
aggregate outstanding principal amount of all Loans made by such Lender, and
(ii) such Lender’s ratable risk participation in all Letter of Credit Usage.

 

“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
sponsored or maintained by Borrower or any ERISA Affiliate or to which Borrower
or any ERISA Affiliate contributes or has an obligation to contribute, or in
the case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five plan
years.

 

“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 6.14:  (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 

 

18

 

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 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 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.

 

“Plan” means any
employee benefit plan maintained or contributed to by Borrower or by any trade
or business (whether or not incorporated) under common control with Borrower as
defined in Section 4001(b) of ERISA and insured by the Pension Benefit Guaranty
Corporation under Title IV of ERISA.

 

“Pro Rata Share” means, with
respect to each Lender, the percentage of the combined Commitments set forth
opposite the name of such Lender on Schedule 2.1, as such share may be adjusted
as contemplated herein.

 

“PT” means Pacific
Time.

 

“Related Transactions” means the
transactions contemplated by the Merger Document(s).

 

“Reportable Event” means any of
the events set forth in Section 4043(b) of ERISA or the regulations thereunder,
a withdrawal from a 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, (a) with respect to a
Borrowing, Conversion or Continuation of Loans, a written request substantially
in the form of Exhibit A, and (b) with respect to a Letter of Credit
Action, a Letter of Credit Application; in each case duly completed and signed
by a Responsible Officer of Borrower and

 

19

 

“Requisite Lenders” means, as of
any date of determination:  (a) if the
Commitments are then in effect, Lenders having in the aggregate more than 50%
of the combined Commitments then in effect and (b) if the Commitments have then
been terminated and there are Outstanding Obligations, Lenders holding
Outstanding Obligations aggregating more than 50% of such Outstanding
Obligations; provided, however, that the
voting rights of any Lender that has failed to fund any amounts when required
to do so hereunder shall be limited to the Outstanding Obligations with respect
to such Lender.

 

“Requisite Notice” means, unless
otherwise provided herein, (a) irrevocable written notice to the intended
recipient or (b) except with respect to Letter of Credit Actions (which must be
in writing), 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 or Conversion

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •                  Letter of Credit Action

  	
   

  	
  10:00 a.m. PT

  	
   

  	
  2
  Business Days prior to such action (or such lesser time which is acceptable
  to Issuing Lender)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •                  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 or the assistant treasurer of Borrower. Any
document or certificate hereunder that is signed by a Responsible Officer of
Borrower shall be 

 

20

 

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.

 

“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.

 

“Security Documents” means the
General Security Agreement, the Intellectual Property Security Agreement and
the UK Pledge Agreement.

 

“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
Indebtedness of Borrower or its Subsidiaries in form and substance 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 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 

 

21

 

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).

 

“Threshold Amount” means $10,000,000.

 

“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 Commitments” means an
amount equal to the aggregate amount of all Commitments (i.e., initially $85,000,000),
as the same may increase pursuant to Section 2.12 or decrease pursuant to
section 2.5.

 

“Total Leverage Ratio” means, as of
any date of determination, for Borrower and its Subsidiaries on a consolidated
basis, the ratio of (a) the principal amount of Indebtedness as of such
date (but excluding Indebtedness with respect to earn-out payments and
hold-backs incurred pursuant to the ENCO Systems Acquisition, the MRC
Acquisition or other Permitted Acquisitions), less cash on hand and cash equivalents,
to (b) Consolidated EBITDA for the period of the four fiscal quarters
ending on, or ending most recently prior to, such date.

 

22

 

“UK Pledge Agreement” means that
certain Charge over Shares 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 in the form of Exhibit E-3 hereto.

 

“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.

 

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.

 

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

 

23

 

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, 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.

 

SECTION
II

THE COMMITMENTS AND EXTENSIONS OF CREDIT

 

2.1                               LOANS;
MAXIMUM AMOUNTS.

 

(a)                                  Subject to the
terms and conditions set forth in this Agreement, each Lender severally agrees
to make, Convert and Continue Loans until the Maturity Date in such amounts as
Borrower may from time to time request; provided, however,
that the Outstanding Obligations of all Lenders shall not exceed at any time
the combined Commitments, as the same may be from time to time adjusted in
accordance with this Agreement and there shall be no more than five (5)
Offshore Rate Loans outstanding at any one time. The amount of the combined
Commitments initially totals $85,000,000. Following the date of this Agreement,
the amount of the combined Commitments may be increased by up to $40,000,000 to
a total not to exceed $125,000,000 , in accordance with, and subject to the
terms of, Section 2.12 hereof. This is a revolving credit and, subject to the
terms and conditions hereof, Borrower may borrow, Convert, Continue, prepay and
reborrow Loans as set forth herein without premium or penalty.

 

(b)                                 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 so 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.

 

24

 

2.2                               BORROWINGS,
CONVERSIONS AND CONTINUATIONS OF LOANS.

 

(a)                                  Borrower may
irrevocably request a Borrowing, Conversion or Continuation of Loans in a
Minimum Amount therefor by delivering a Request for Extension of Credit
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 as set forth in the prior sentence.

 

(b)                                 Following
receipt of a Request for Extension of Credit, Administrative Agent shall
promptly notify each Lender of its Pro Rata Share thereof by Requisite Notice. In
the case of a Borrowing of Loans, each 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 applicable conditions set
forth in Section 4.2 (and, in the case of the initial Extension of Credit
hereunder, 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 Lenders may demand that any or all of the then
outstanding Offshore Rate Loans be Converted immediately into Base Rate Loans.

 

(d)                                 If a Loan is to
be made on the same date that another Loan is due and payable, Borrower or
Lenders, as the case may be, shall, unless Administrative Agent otherwise
requests, make available to Administrative Agent the net amount of funds giving
effect to both such Loans and the effect for purposes of this Agreement shall
be the same as if separate transfers of funds had been made with respect to
each such Loan.

 

(e)                                  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                               LETTERS
OF CREDIT.

 

(a)                                  The
Letter of Credit Sublimit. Subject to the terms and
conditions set forth in this Agreement, until the Letter of Credit Expiration
Date, Issuing Lender shall take such Letter of Credit Actions as Borrower may
from time to time request; provided, however,
that (i) the Outstanding Obligations of each Lender shall not at any time
exceed such Lender’s Commitment; (ii) the Outstanding Obligations of all
Lenders shall not at any time exceed the combined Commitments; and (iii) Letter
of Credit Usage shall not at any time exceed the Letter of Credit Sublimit.

 

25

 

(b)                                 Letter
of Credit Actions. Subject to the terms and conditions set forth in
this Agreement, until the Letter of Credit Expiration Date, Issuing Lender
shall take such Letter of Credit Actions as Borrower may from time to time
request. Subject to subsection (g) below and unless consented to by Issuing
Lender and Requisite Lenders, no Letter of Credit may expire more than twelve
(12) months after the date of its issuance or last renewal; provided, however, that no Letter of Credit shall expire
after the Letter of Credit Expiration Date unless Borrower shall post cash
collateral with respect to such Letter of Credit in such manner as is
reasonably satisfactory to Issuing Lender and the amount of the Letter of
Credit does not exceed the Letter of Credit Sublimit.

 

(c)                                  Requesting
Letter of Credit Actions. Borrower may irrevocably
request a Letter of Credit Action in a Minimum Amount therefor by delivering a
Letter of Credit Application therefor to Issuing Lender, with a copy to Administrative
Agent (who shall notify Lenders) by Requisite Notice not later than the
Requisite Time therefor. Each Letter of Credit Action shall be in a form
acceptable to Issuing Lender in its sole discretion. Unless Administrative
Agent notifies Issuing Lender that such Letter of Credit Action is not
permitted hereunder, or Issuing Lender notifies Administrative Agent that it
has determined that such Letter of Credit Action is contrary to any Laws or
policies of Issuing Lender, Issuing Lender shall, upon satisfaction of the
applicable conditions set forth in Section 4.2 with respect to any Letter of
Credit Action constituting an Extension of Credit, effect such Letter of Credit
Action. This Agreement shall control in the event of any conflict with any
Letter of Credit Application. Upon the issuance of a Letter of Credit, each
Lender shall be deemed to have purchased from Issuing Lender a risk
participation therein in an amount equal to such Lender’s Pro Rata Share times
the amount of such Letter of Credit.

 

(d)                                 Reimbursement
of Payments Under Letters of Credit. Borrower shall reimburse
Issuing Lender through Administrative Agent for any payment that Issuing Lender
makes under a Letter of Credit on or before the date of such payment; provided, however, that if the conditions precedent set
forth in Section 4.2 can be satisfied, Borrower may request a Borrowing of
Loans pursuant to Section 2.2 to reimburse Issuing Lender for such payment, or,
failing to make such request, Borrower shall be deemed to have requested a
Borrowing of Base Rate Loans on such payment date pursuant to subsection (e)
below.

 

(e)                                  Funding
by Lender When Issuing Lender Not Reimbursed. Upon any drawing under a
Letter of Credit, Issuing Lender shall notify Administrative Agent and Borrower.
If Borrower fails to timely make the payment required pursuant to subsection
(d) above, Issuing Lender shall notify Administrative Agent of such fact and
the amount of such unreimbursed payment. Administrative Agent shall promptly
notify each Lender of its Pro Rata Share of such amount by Requisite Notice. Each
Lender shall make funds in an amount equal its Pro Rata Share of such amount
available to Administrative Agent at Administrative Agent’s Office not later
than the Requisite Time therefor on the Business Day specified by
Administrative Agent, Administrative Agent shall remit the funds so received to
Issuing Lender. The obligation of each Lender to so reimburse Issuing Lender
shall be absolute and unconditional and shall not be affected by the occurrence
of a Default or Event of Default or any other occurrence or event. Any such 

 

26

 

reimbursement
shall not relieve or otherwise impair the obligation of Borrower to reimburse
Issuing Lender for the amount of any payment made by Issuing Lender under any
Letter of Credit, together with interest as provided herein.

 

(f)                                    Nature
of Lenders’ Funding. If the conditions precedent set forth in
Section 4.2 can be satisfied (except for the giving of a Request for Extension of
Credit) on any date Borrower is obligated to, but fails to, reimburse Issuing
Lender for a drawing under a Letter of Credit, the funding by Lenders pursuant
to the previous subsection shall be deemed to be a Borrowing of Base Rate Loans
(without regard to the Minimum Amount therefor) deemed requested by Borrower. If
the conditions precedent set forth in Section 4.2 cannot be satisfied on the
date Borrower is obligated to, but fails to, reimburse Issuing Lender for a
drawing under a Letter of Credit, the funding by Lenders pursuant to the
previous subsection shall be deemed to be a funding by each Lender of its risk
participation in such Letter of Credit, and each Lender making such funding
shall thereupon acquire a pro rata participation, to the extent of its
reimbursement, and interest in the claim of Issuing Lender against Borrower in
respect of such payment and shall share in accordance with that pro rata
participation, in any payment made by Borrower with respect to such claim. Any
amounts made available by a Lender under its risk participation shall be
payable by Borrower upon demand of Administrative Agent, and shall bear
interest at a rate per annum equal to the Default Rate.

 

(g)                                 Obligations
Absolute. The obligation of Borrower to pay to Issuing Lender
the amount of any payment made by Issuing Lender under any Letter of Credit
shall be absolute, unconditional, and irrevocable. Without limiting the
foregoing, Borrower’s obligation shall not be affected by any of the following
circumstances:

 

(i)                                     any lack of
validity or enforceability of such Letter of Credit, this Agreement, or any
other agreement or instrument relating thereto;

 

(ii)                                  any amendment
or waiver of or any consent to departure from such Letter of Credit, this
Agreement, or any other agreement or instrument relating hereto or thereto;

 

(iii)                               the existence
of any claim, setoff, defense, or other rights which Borrower may have at any
time against Issuing Lender, Administrative Agent or any Lender, any
beneficiary of such Letter of Credit (or any persons or entities for whom any
such beneficiary may be acting) or any other Person, whether in connection with
such Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;

 

(iv)                              any demand,
statement, or any other document presented under such Letter of Credit proving
to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever so long
as any such document appeared to comply with the terms of the Letter of Credit;

 

27

 

(v)                                 any payment
made by Issuing Lender under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising
in connection with any proceeding under any Debtor Relief Laws;

 

(vi)                              the existence,
character, quality, quantity, condition, packing, value or delivery of any
property purported to be represented by documents presented in connection with
such Letter of Credit or for any difference between any such property and the
character, quality, quantity, condition, or value of such property as described
in such documents;

 

(vii)                           the time,
place, manner, order or contents of shipments or deliveries of property as
described in documents presented in connection with such Letter of Credit or
the existence, nature and extent of any insurance relative thereto;

 

(viii)                        the solvency or
financial responsibility of any party issuing any documents in connection with
such Letter of Credit;

 

(ix)                                any failure or
delay in notice of shipments or arrival of any property;

 

(x)                                   any error in
the transmission of any message relating to such Letter of Credit not caused by
Issuing Lender, or any delay or interruption in any such message;

 

(xi)                                any error,
neglect or default of any correspondent of Issuing Lender in connection with
such Letter of Credit;

 

(xii)                             any consequence
arising from acts of God, wars, insurrections; civil unrest, terrorist action,
disturbances, labor disputes, emergency conditions or other causes beyond the
control of Issuing Lender;

 

(xiii)                          so long as
Issuing Lender in good faith determines that the document appears to comply
with the terms of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to in any document submitted
to Issuing Lender in connection with such Letter of Credit; and

 

(xiv)                         any other
circumstances whatsoever where Issuing Lender has acted in good faith.

 

In addition, Borrower will
promptly examine a copy of each Letter of Credit and amendments thereto
delivered to it and, in the event of any claim of noncompliance with Borrower’s
instructions or other irregularity, Borrower will immediately notify Issuing
Lender in writing. Borrower shall be conclusively deemed to have waived any
such 

 

28

 

claim against Issuing Lender
and its correspondents unless such notice is given as aforesaid.

 

(h)                                 Role of
Issuing Lender. Each Lender and Borrower agree that, in paying any
drawing under a Letter of Credit, Issuing Lender shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Administrative
Agent-Related Person nor any of the respective correspondents, participants or
assignees of Issuing Lender shall be liable to any Lender for any action taken
or omitted in connection herewith at the request or with the approval of
Lenders or Requisite Lenders, as applicable; any action taken or omitted in the
absence of gross negligence or willful misconduct; or the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit. Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude Borrower’s pursuing such
rights and remedies as it may have against the beneficiary or transferee at law
or under any other agreement. No Administrative Agent-Related Person, nor any
of the respective correspondents, participants or assignees of Issuing Lender,
shall be liable or responsible for any of the matters described in subsection
(g) above. In furtherance and not in limitation of the foregoing, Issuing
Lender may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and Issuing Lender shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

(i)                                     Applicability
of ISP98 and UCP. Unless otherwise expressly agreed by Issuing Lender
and Borrower when a Letter of Credit is issued and subject to applicable laws,
performance under Letters of Credit by Issuing Lender, its correspondents, and
beneficiaries will be governed by, with respect to standby Letters of Credit,
the rules of the “International Standby Practices 1998” (ISP98) or such later
revision as may be published by the International Chamber of Commerce (the “ICC’).

 

(j)                                     Letter
of Credit Fee. On each Applicable Payment Date, Borrower shall
pay to Administrative Agent in arrears, for the account of each Lender in
accordance with its Pro Rata Share, a Letter of Credit fee equal to the
Applicable Margin for Offshore Rate Loans on a per annum basis times the actual
daily maximum amount available to be drawn under each Letter of Credit for the
period since the later of the Closing Date and the previous Applicable Payment
Date. If there is any change in the Applicable Margin during any quarter, the
actual daily amount shall be computed and multiplied by the Applicable Margin
separately for each period during such quarter that such Applicable Margin was
in effect.

 

(k)                                  Fronting
Fee and Documentary and Processing Charges Payable to Issuing Lender. On each
Applicable Payment Date, Borrower shall pay to 

 

29

 

Administrative
Agent for the sole account of Issuing Lender a fronting fee in an amount equal
to 0.150% per annum on the daily average face amount of all outstanding Letters
of Credit, payable in arrears. In addition, Borrower shall pay directly to
Issuing Lender, upon demand, for its sole account its customary documentary and
processing charges in accordance with its standard schedule, as from time to
time in effect, for any Letter of Credit Action or other occurrence relating to
a Letter of Credit for which such charges are customarily made. Such fees and
charges are nonrefundable.

 

2.4                               PREPAYMENTS.

 

(a)                                  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 Loans in part
in the Minimum Amount therefor or in full without premium or penalty. Administrative
Agent will promptly notify each Lender thereof and of such Lender’s Pro Rata
Share of such prepayment. Any prepayment of a Loan shall be accompanied by all
accrued interest thereon and any prepayment of an Offshore Rate Loan shall be
made together with the amounts set forth in Section 3.5.

 

(b)                                 If for any
reason the Outstanding Obligations exceed the combined Commitments as in effect
or as reduced because of any limitation set forth in this Agreement or
otherwise, Borrower shall immediately prepay Loans in an aggregate amount equal
to such excess.

 

2.5                               REDUCTION
OR TERMINATION OF COMMITMENTS. Upon Requisite Notice to
Administrative Agent not later than the Requisite Time therefor, Borrower may
at any time and from time to time, without premium or penalty, permanently and
irrevocably reduce the Commitments in a Minimum Amount therefor to an amount
not less than the Outstanding Obligations at such time or terminate the Commitments.
Any such reduction or termination shall be accompanied by payment of all
accrued and unpaid commitment fees with respect to the portion of the
Commitments being reduced or terminated. Administrative Agent shall promptly
notify Lenders of any such request for reduction or termination of the
Commitments. Each Lender’s Commitment shall be reduced by an amount equal to
such Lender’s Pro Rata Share times the amount of such reduction.

 

2.6                               PRINCIPAL
AND INTEREST.

 

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

 

(b)                                 Subject to
subsection (c) 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 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.

 

30

 

(c)                                  Notwithstanding
subsection (b) of this Section, while any Event of Default exists or after
acceleration, Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
outstanding Obligations, at the Default Rate.

 

2.7                               FEES.

 

(a)                                  Commitment
Fee. Borrower shall pay to Administrative Agent (for the account of each
Lender according to its Pro Rata Share) the respective commitment fee (the “Commitment Fee” set
forth in the definition of Applicable Margin, calculated on the average unused
amount of the combined Commitments. The Commitment Fee shall be calculated and
payable quarterly in arrears on each Applicable Payment Date. The Commitment
Fee shall continue to accrue at all times, including at any time during which
one or more conditions in Section 4 are not met.

 

(b)                                 Agency
and Arrangement Fees. Borrower shall pay to Administrative Agent
and Arranger an administrative agency fee and a structuring and arrangement
fee, respectively, in such amounts and on the Closing Date as set forth in a
separate letter agreement dated August 7, 2006 among Borrower,
Administrative Agent and Arranger (the “Fee Letter”). Such
fees are for the services to be performed by Administrative Agent in acting as
Administrative Agent and for the services of Arranger in structuring and
arranging the credit facilities under this Agreement, respectively, and are
fully earned on the date paid. The Fee Letter may be modified to reflect the
mutual agreement of Borrower, Administrative Agent and Arranger to reflect
those additional fees associated with any increase of the Total Commitment as
may be agreed pursuant to the terms of Section 2.12 hereof. All fees payable
under the Fee Letter are solely for Administrative Agent’s and Arranger’s own
account and are nonrefundable.

 

2.8                               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.

 

2.9                               MAKING
PAYMENTS.

 

(a)                                  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.

 

31

 

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

 

(c)                                  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.

 

(d)                                 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.

 

32

 

(e)                                  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.

 

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

 

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

 

2.12                        ADDITIONAL
LOAN COMMITMENTS.

 

(a)                                  Provided that
no Default of Event of Default shall have occurred and be continuing, Borrower
shall have the option from time to time, by giving written notice (an “Increase Notice”), to the
Administrative Agent prior to December 31, 2006, subject to the terms and
conditions set forth in this Agreement, to increase the Total Commitments by an
amount up to $40,000,000 (the amount of the requested increase to be set forth
in the Increase Notice) (which, assuming no previous reduction in the
Commitments, would result in a maximum Total Commitment of $125,000,000). The
increase in the Total Commitment pursuant to any such particular request shall
be at least in the Minimum Amount but in no event greater than $40,000,000 less
any previous increase in the Total Commitment pursuant to this Section and less
any reduction pursuant to Section 2.5 (a “Requested Increase”). The Increase Notice shall contain such other details with
respect to such Requested Increase as the Administrative Agent shall reasonably
request.

 

(b)                                 Upon receipt of
the Increase Notice, from Borrower, Administrative Agent shall promptly send a
copy of the Increase Notice to each Lender and shall request that each such
Lender increase its Commitment by an amount equal to its Pro Rata Share of the
Requested Increase (the “First Request”).
Each Lender shall have the right, but not the obligation, acting in its sole
and absolute discretion, to increase its Commitment by an amount equal to its
Pro Rata Shares of the Requested Increase, and shall have a period of fifteen
(15) days from the First Request to notify Administrative Agent whether or not
such Lender elects so to increase its Commitment. Any Lender that fails to
respond to the First Request within such fifteen (15)-day period will be deemed
to have elected not to increase its respective Commitment. If all Lenders elect
to increase their respective Commitments by amounts equal to their respective
Pro Rata Share of the Requested Increase, Administrative Agent shall so notify
Borrower and Lenders, and Borrower shall proceed in accordance with Section (c)
below. If any Lender (any such Lender, a “Declining Lender”) shall not elect or shall be deemed to have elected not to
increase its Commitment as aforesaid, (i) the amount of such Declining Lender’s
Commitment shall remain unchanged, (ii) Administrative Agent shall notify
Borrower and each of the other 

 

33

 

Lenders
as to which Lenders have elected to increase their Commitments and by what
amounts and (iii) if Borrower so requests, Administrative Agent shall either
(A) solicit from the Lenders that elected to increase their respective
Commitments a further increase in their Commitments in an aggregate amount
equal to all or any portion of the aggregate amount of the Declining Lender’s
Pro Rata Share of the Requested Increase (the “Shortfall”) or (B) submit a list of proposed
lenders that are not then a party to this Credit Agreement to Borrower for its
review and approval (such approval not to be unreasonably withheld or delayed)
in order to obtain additional Commitments in an amount equal to the Shortfall.

 

(c)                                  In connection
with the Requested Increase in the Commitments of some or all of the Lenders as
provided in Section 2.12(b) above, Borrower shall execute a modification to its
Notes (each a “Modified Note”) evidencing
such increase, as well as such other modifications to this Credit Agreement as
Administrative Agent shall reasonably request. In connection with the addition
of new lenders as a result of solicitations by Administrative Agent pursuant to
2.12(b) above (the “New Lenders”), Borrower, Administrative Agent and each New Lender shall
execute an Acceptance Letter in the form of Exhibit G, Borrower shall execute a Note to each New Lender in the amount of the New Lender’s
Commitment (a “New Note”) and
Borrower, Administrative Agent and the Lenders shall execute such modifications
to this Credit Agreement (including, without limitation, modifications of the
financial covenants contained in Section 7.12 hereof) as Administrative
Agent shall reasonably request, whereupon the New Lender shall become, and have
the rights and obligations of a “Lender”, with
a Commitment in the amount set forth in such Acceptance Letter. Each Modified
Note and New Note shall constitute a “Note” for all
purposes of this Credit Agreement. Borrower shall also execute and deliver to
Administrative Agent and the Lenders such additional documents, instruments,
certifications and opinions as the Administrative Agent may require in its sole
and absolute discretion, including, without limitation, a Compliance
Certificate, demonstrating compliance with all covenants, representations and
warranties set forth in the Loan Documents after giving effect to the increase,
and any amendments to Security Documents as Administrative Agent may request,
and Borrower shall pay any updated Uniform Commercial Code searches, all filing
costs and fees, Attorney Costs and any and all intangible taxes or other taxes,
assessments or charges or any similar fees, taxes or expenses arising in
connection with such increase.

 

(d)                                 If at the time
a New Lender becomes a Lender (or a Lender increases its Commitment) pursuant
to this Section 2.12 there is any principal outstanding under the existing
Notes of the previously admitted Lenders (the “Existing
Lenders”), such New
Lenders (or Lender increasing its Commitment) shall remit to Administrative
Agent an amount equal to the Outstanding Percentage (as defined below)
multiplied by the Commitment of the New Lenders (or the amount of the increase
in the Commitment of a Lender increasing its Commitment), which amount shall be
deemed advanced under the Loan of the New Lender (or the Lender increasing its
Commitment). Administrative Agent shall pay such amount to the Existing Lenders
in accordance with the Existing Lenders’ respective Pro Rata Shares (as
calculated immediately prior to the admission of the New Lenders (or the
increase in a Lender’s Commitment), and such payment shall effect an automatic
reduction of the outstanding principal balance under the respective 

 

34

 

Notes
of the Existing Lenders. For purposes of this Section, the term “Outstanding Percentage” means
the ratio of (i) the aggregate outstanding principal amount under the Notes of
the Existing Lenders, immediately prior to the admission of the New Lender (or
the increase in the Commitment of a Lender), to (ii) the aggregate of the
Commitments of the Existing Lenders (as increased pursuant to this Section, if
applicable) and the New Lenders. 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.

 

(e)                                  Notwithstanding
anything in this Section 2.12 to the contrary, making the Requested Increase is
subject to the approval of Administrative Agent and each of the Lenders or New
Lenders, as applicable, acting in their sole and absolute discretion, and no
provision in this Agreement or any other Loan Document shall constitute (or be
construed to constitute) a commitment by Administrative Agent or any Lender to
lend any Requested Increase, and additional conditions and fees may be required
by them in connection therewith.

 

(f)                                    The obligation
of the Administrative Agent and the Lenders or New Lenders to make the
Requested Increase pursuant to this Section 2.12 shall be conditioned upon
satisfaction of the following conditions precedent which must be satisfied
prior to the effectiveness of any increase of the Total Commitment:

 

(i)                                     Payment of
Arrangement Fee. Borrower shall have paid to Administrative Agent the
fees associated with
the Requested Increase as Administrative Agent and Borrower shall mutually
agree.

 

(ii)                                  No Default. On the date
such Increase Notice is given and on the date such increase becomes effective,
both immediately before and after the Total Commitment is increased, there
shall exist no Default or Event of Default;

 

(iii)                               Representations
and Warranties. The representations and warranties made by
Borrower in the Loan Documents or otherwise made by or on behalf of Borrower or
any of its respective Subsidiaries in connection therewith or after the date
thereof shall be true and correct in all material respects on the date of such
Increase Notice and on the date the Total Commitment is increased, except to
the extent that such representations and warranties specifically refer to an
earlier date in which case such representations and warranties shall have been
true and correct in all material respects as of such earlier date, both
immediately before and after giving effect thereto; and

 

(iv)                              Other. Borrower
shall satisfy such other conditions to such Requested Increase as Administrative
Agent may require in its reasonable discretion (including, without limitation,
financial information and reasonably satisfactory evidence, including opinions,
of due authorization, execution, delivery, enforceability and absence of
conflicts typically delivered in connection with extension of credit to a
business entity).

 

35

 

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, 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 the assertion 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.

 

(b)                                 In addition,
Borrower agrees to pay any and all present or future stamp, 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 

 

36

 

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 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 

 

37

 

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).

 

(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 

 

38

 

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 the assertion 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 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.

 

39

 

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, the termination of all Letters of Credit 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 EXTENSIONS OF CREDIT

 

4.1                               CONDITIONS
OF INITIAL EXTENSION OF CREDIT. The obligation of each
Lender to make its initial Extension of Credit hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)                                  Unless waived
by Administrative Agent and Lenders, Administrative Agent’s receipt of the
following, each of which shall be originals or facsimiles (followed promptly by
originals) unless otherwise specified, 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 General
Security Agreement, together with such certificates, stock powers,
registrations and other supporting documents as Administrative Agent shall
reasonably require;

 

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

 

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

 

(vii)                           [Intentionally
Reserved];

 

(viii)                        the original
Fee Letter;

 

40

 

(ix)                                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;

 

(x)                                   such evidence
as Administrative Agent and any Lender may reasonably require to verify that
each Credit Party is duly organized or formed, validly existing, in good
standing and qualified to engage in business in such jurisdiction(s) as
specified in Section 5.1, including certified copies of such Credit Party’s certificates
of good standing and/or qualification to engage in business, tax clearance
certificates, and the like;

 

(xi)                                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, and (C) that there
has been no event or circumstance since the date of the Audited Financial
Statements which has a Material Adverse Effect;

 

(xii)                             opinions of
counsel to Borrower in substantially the form of Exhibit H;

 

(xiii)                          with respect to
the property owned or leased by Borrower and each Guarantor, Borrower shall
have caused to be delivered to Administrative Agent (i) the results of Uniform
Commercial Code lien searches for the states of California and Delaware and any
other state where a Guarantor is organized or has its chief executive office,
satisfactory to Agent and the Lenders, and (ii) Uniform Commercial Code
termination statements reflecting termination of all financing statements previously
filed by any Person except as expressly permitted hereunder; and

 

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

 

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

 

(c)                                  Unless waived
by 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 

 

41

 

proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between Borrower and Administrative Agent).

 

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

 

(e)                                  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 material amendment thereto or waiver thereunder 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 shall be final and in full force and
effect and shall be in form and substance reasonably satisfactory to
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;

 

(ii)                                  evidence
reasonably satisfactory to it that (1) the aggregate purchase price under the
Related Transactions shall not exceed $70,000,000, it being understood that the
purchase price may increase or decrease after the Closing Date in accordance
with the Merger Documents but in no event shall the purchase price exceed
$80,000,000, (2) the aggregate fees and expenses payable by the Borrower
with respect to the Related Transactions will not exceed $3,500,000, and
(3) there has been no Material Adverse Effect with respect to the Borrower
since December 31, 2005 and to the best knowledge of Borrower with respect to
MRC since December 31, 2005; and

 

(iii)                               pro
forma/projected financial statements of the Borrower and pro forma calculations
of the covenants set forth in Section 7.12, in each case giving effect to the
Related Transactions and the funding of the Loans on the Closing Date.

 

4.2                               CONDITIONS
TO ALL EXTENSIONS OF CREDIT. In addition to any
applicable conditions precedent set forth elsewhere in this Section 4 or in
Section 2, the obligation of each Lender to honor any Request for Extension of
Credit other than a Conversion or Continuation is subject to the following
conditions precedent:

 

42

 

(a)                                  the
representations and warranties of Borrower contained in Section 5 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;

 

(b)                                 no Default or
Event of Default exists, or would result from such proposed Extension of
Credit;

 

(c)                                  Administrative
Agent shall have timely received a Request for Extension of Credit by Requisite
Notice by the Requisite Time; and

 

(d)                                 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.

 

Each Request for Extension
of Credit by Borrower shall be deemed to be a representation and warranty that
the conditions specified in Sections 4.2(a) and (b) have been satisfied on and
as of the date of such Extension of Credit.

 

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 a corporation duly incorporated, validly existing and in good standing under
the Laws of the state of its incorporation, has the corporate power and
authority and the legal right to own, lease and operate its properties and to
conduct its business as currently conducted, is duly qualified and in good
standing under the Laws of its state of incorporation and in all other
jurisdictions 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
attached hereto lists, as of the Closing Date, each of the Material
Subsidiaries and each First-Tier Material Foreign Subsidiary.

 

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

 

5.2                               POWER;
AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Credit Party has the
corporate 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
limited partnership 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 

 

43

 

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, or (c) 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                               FINANCIAL
STATEMENTS; NO MATERIAL ADVERSE EFFECT.

 

(a)                                  The Audited
Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present 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)                                 Since the date
of the Audited Financial Statements, there has been no event or circumstance
which could reasonably be expected to have a Material Adverse Effect except as
disclosed in the Disclosure Letter.

 

5.5                               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.

 

5.6                               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, and no
Default or Event of Default has occurred and 

 

44

 

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.

 

5.7                               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.

 

5.8                               TAXES. Borrower and
its Subsidiaries have filed all material tax returns which are required to be
filed, and have paid, or made provision for the payment of, all taxes with
respect to the periods, property or transactions covered by said returns, or
pursuant to any assessment received by Borrower or its respective Subsidiaries,
except (a) such taxes, if any, as are being contested in good faith by
appropriate proceedings and as to which adequate reserves have been 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.

 

5.9                               MARGIN
REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING 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 U or X of such Board of Governors.

 

(b)                                 Neither
Borrower nor any of its Subsidiaries (i) is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.

 

5.10                        ERISA
COMPLIANCE.

 

(a)                                  Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other applicable Laws. Each Plan or other employee 

 

45

 

benefit
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 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 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 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 ERISA
Affiliate, is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither Borrower nor any ERISA Affiliate has
incurred, or, to the best of knowledge of Borrower or any ERISA Affiliate,
reasonably expects to incur, any liability (and, to the best of knowledge of
Borrower or any 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 ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.

 

5.11                        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.

 

5.12                        COMPLIANCE
WITH LAWS. Borrower and its Subsidiaries are in compliance in
all material respects with all material Laws that are applicable such Person.

 

5.13                        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.

 

5.14                        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 

 

46

 

engaged in similar
businesses and owning similar properties in localities where Borrower or such
Subsidiary operates.

 

5.15                        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.

 

5.16                        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 no
Credit Party will not be Solvent after giving effect to (i) the execution
and delivery of the Loan Documents to Administrative Agent and the Lenders and
(ii)  the Related Transactions (on a pro forma basis).

 

5.17                        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.

 

5.18                        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 

 

47

 

advantage,
in violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.

 

5.19                        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.

 

SECTION
VI

AFFIRMATIVE COVENANTS

 

So long as any Obligation
(excluding inchoate indemnity obligations) remains unpaid or unperformed, or
any portion of the Commitments remain outstanding, 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:

 

(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 and
exceptions not reasonably acceptable to Requisite Lenders;

 

48

 

(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.

 

Reports required to be
delivered pursuant to clauses (a) and (b) 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 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;

 

49

 

(e)                                  promptly after
the commencement thereof, notice of any litigation, investigation or proceeding
affecting Borrower where the reasonably expected damages to Borrower exceed $5,000,000,
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 Plan
or the intent to terminate any Plan, or the institution of proceedings or the
taking or expected taking of any other action to terminate any Plan or withdraw
from any Plan;

 

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

 

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

 

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(c) 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. Lender shall have no obligation to request the delivery or to
maintain copies of the reports and communications referred to in Section
6.2(c), 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 an Ordinary Course Lien under subsection (b) of the definition of
such term and (b) immaterial taxes in de minimis
amounts.

 

6.4                               PRESERVATION
OF EXISTENCE. Preserve and maintain its existence, 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.

 

50

 

6.6                               MAINTENANCE
OF INSURANCE. Maintain liability and casualty insurance with
responsible insurance companies reasonably satisfactory to Administrative Agent
in such amounts and against such risks as is customary for similarly situated
businesses.

 

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.

 

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 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 Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; and (c) make
all required contributions to any 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

 

51

 

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 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 90% 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 General 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 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 90% 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 Multi-Party Guaranty and General 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 Subsidiary to execute and deliver to Administrative Agent a joinder to
the Multi-Party Guaranty and the General 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 General 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. Notwithstanding
anything in this Section 6.12 to the contrary, Borrower shall not be required
to deliver to Administrative Agent share or stock certificates evidencing
Escrowed Securities until such time as such Escrowed Securities are eligible
for release from escrow to Borrower.

 

(b)                                 Foreign
Subsidiary Stock Pledge. In the event Borrower creates or acquires a
First-Tier Material Foreign Subsidiary, Borrower shall and shall cause its

 

52

 

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 General 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                        USE OF
PROCEEDS. Use the proceeds of Extensions of Credit for
lawful general corporate purposes including working capital and general
corporate purposes, including Acquisitions, not otherwise in contravention of
this Agreement.

 

6.14                        HYPOTHECATION
OF MATERIAL LEASES. Concurrently with entering into any Material Lease
after the Closing Date, at Administrative Agent’s option, (a) use its
reasonable efforts to obtain consent of the relevant landlord to permit
Borrower to deliver to Administrative Agent a Leasehold Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing in
commercially reasonable form entered into by Borrower, as Trustor, in favor of
Administrative Agent, as Beneficiary (for the account of each Lender in
accordance with its Pro Rata Share), encumbering Borrower’s leasehold interest
in the real property subject to the Material Lease as security for the
performance of all Obligations of Borrower, together with any required landlord
consent; and (b) cause to be issued by a title insurer reasonably
acceptable to Administrative Agent an ALTA Leasehold Lender’s leasehold policy
of title insurance insuring Administrative Agent that the Lien of the foregoing
Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing is a first and primary Lien on Borrower’s leasehold interest in
the real property subject to the Material Lease, with such endorsements as
Administrative Agent may reasonably require, subject only to Permitted
Exceptions.

 

SECTION
VII

NEGATIVE COVENANTS

 

So long as any Obligations
remain unpaid or unperformed, or any portion of the Commitments remain
outstanding, 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”):

 

(a)                                  Indebtedness
under the Loan Documents;

 

53

 

(b)                                 Indebtedness
outstanding on the date hereof and listed on Schedule 7.1 hereto and any
refinancings, refundings, renewals or extensions thereof; provided
that (i) the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension except by an amount equal to
the premium or other amount paid, and fees and expenses incurred, in connection
with such refinancing and by an amount equal to any utilized commitments
thereunder, and (ii) the weighted average life of the principal payments
pursuant to such refinanced, refunded, renewed or extended 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;

 

(c)                                  Ordinary Course
Indebtedness;

 

(d)                                 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 the Threshold Amount;

 

(e)                                  Indebtedness of
Borrower and its Subsidiaries under initial or successive refinancings,
refundings, renewals or extensions of any Indebtedness permitted by subsections
(c) and (d) above; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to the
premium or other amount paid, and fees and expenses incurred, in connection
with such refinancing, and (ii) the weighted average life of the principal
payments pursuant to such refinanced, refunded, renewed or extended 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;

 

(f)                                    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
Subsidiary which is not a Guarantor at any time outstanding does not exceed
$5,000,000;

 

(g)                                 Subordinated
Debt as the same shall have been approved by Requisite Lenders;

 

(h)                                 Indebtedness
which may arise as a result of any invalidity of receivables sold as described
in Section 7.4(b), or in similar transactions as approved by Administrative
Agent; provided (i) the aggregate of all
such Indebtedness at any time outstanding does not exceed the Threshold Amount
and (ii) such Indebtedness is

 

54

 

subordinated
to the Obligations hereunder pursuant to a subordination agreement in form and
substance satisfactory to Administrative Agent;

 

(i)                                     Indebtedness
incurred in favor of sellers in connection with Permitted Acquisitions, but
only to the extent permitted in the definition thereof;

 

(j)                                     Indebtedness in
the form of reimbursement obligations to issuers of letters of credit (other
than the Issuing Lender) for the account of Borrower or any of Borrower’s
Subsidiaries provided the aggregate amount of
such Indebtedness at anytime does not exceed the then unused portion of the
Letter of Credit Sublimit; and

 

(k)                                  Other
Indebtedness not included in (a) through (j) above and not exceeding, in the
aggregate at any one time $5,000,000.

 

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(a);

 

(b)                                 Ordinary Course
Liens;

 

(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, and (ii) such Liens were not
created in contemplation of the acquisition of such Person or assets;

 

(d)                                 Rights of
vendors or lessors under conditional sale agreements, Capital Leases or other
agreements relating to Indebtedness described in Section 7.1(d) 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
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(h);

 

55

 

(g)                                 Liens securing
Indebtedness permitted under Section 7.1(h) on selected assets as shall be
reasonably necessary, in the judgment of Administrative Agent, to support the
sale receivables of Foreign Subsidiaries to the extent permitted under Section
7.4(b);

 

(h)                                 Liens securing
Indebtedness constituting reimbursement obligations permitted by Section
7.1(j); and

 

(i)                                     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 $5,000,000;

 

provided, however, that in no
event shall any Lien be permitted to exist on, or in respect of, any depositary
or investment account containing any cash or cash equivalent of Borrower or any
of its Domestic Subsidiaries, except for (i) Liens in favor of the entity (and
its affiliates) with which any such depository or investment account is
maintained and (ii) Liens on any cash collateral account given to secure the
reimbursement obligations of Borrower or any of its Subsidiaries with respect
to letters of credit permitted under Section 7.1(j) hereof.

 

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 and all other contemporaneous related transactions, becomes 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 or an Investment otherwise permitted
under Section 7.5 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:

 

56

 

(a)                                  Ordinary Course
Dispositions;

 

(b)                                 True sales of
the accounts receivable of Foreign Subsidiaries, or similar arrangements
approved by Administrative Agent, entered into to finance the operations of
Borrower’s Foreign Subsidiaries; and

 

(c)                                  Dispositions
permitted by Section 7.3;

 

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

 

(e)                                  Other
Dispositions of property having an aggregate net book value from the date
hereof not exceeding $5,000,000.

 

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

 

(a)                                  Investments
existing on the Closing Date and any Investments made in exchange or
replacement thereof provided the amount of cash in such Investment is not
increased at the time of such exchange or replacement;

 

(b)                                 Ordinary Course
Investments;

 

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

 

(d)                                 Investments
arising from rights received by Borrower and its Subsidiaries upon the required
payment of any permitted contingent obligations of Borrower and its
Subsidiaries; provided that the aggregate
amount of such Investments shall not exceed $5,000,000 at any time;

 

(e)                                  Investments
constituting Acquisitions; provided that
(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 similar to the lines of business of the Borrower
and its Subsidiaries, (iv) no Default or Event of Default shall exist
prior to or after giving effect to such Acquisition, (v) if consideration
paid for such Acquisition is in excess of $5,000,000, 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, (vi) such
Acquisition is not in the nature of a hostile takeover, (vii) the Cash
Acquisition Consideration associated with the MRC Acquisition shall not exceed
$80,000,000, and (viii) the aggregate Cash Acquisition Consideration of
the Acquisition, when taken together with the Cash Acquisition Consideration of
all other Acquisitions occurring after the date hereof (including the MRC
Acquisition), shall not exceed $135,000,000, unless otherwise approved by the
Requisite Lenders (each such Acquisition being a “Permitted
Acquisition”);

 

57

 

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

 

(g)                                 Other
Investments not exceeding $7,500,000 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) payable
solely in shares of capital stock of Borrower or (ii) payable by a Subsidiary
to Borrower or to a Guarantor Subsidiary;

 

(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 employment, termination or compensation of its employees, officers or
directors;

 

(d)                                 Borrower may
purchase its own Equity Securities pursuant to one or more stock repurchase
programs; provided that (i) no Default or Event of
Default shall have occurred and be continuing, (ii) after giving effect to any
such repurchases Borrower shall be in compliance with Section 7.12; and (iii)
when combined with the amount of all dividends, purchases or redemptions made
under Section 7.6(e), the total of all such purchases of Equity Securities
shall not exceed the sum of $10,000,000 in the aggregate over the life of this
Agreement;

 

(e)                                  Borrower or any
Subsidiary of Borrower may declare or pay any dividends in respect of its
Equity Securities or purchase or redeem shares of its Equity Securities or make
distributions to shareholders not otherwise permitted hereunder; provided that (i) the aggregate amount paid or
distributed in any period of four consecutive quarters (excluding any amounts
covered by subsection (b) above) does not exceed $10,000,000; and (ii) when
combined with the amount of all purchases of Equity Securities made under
Section 7.6(d) but excluding those made under Section 7.6(c), the total of all
such dividends, purchases or redemptions shall not exceed the sum of $15,000,000
in the aggregate over the life of this Agreement; and

 

(f)                                    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 Pension 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

 

58

 

defined in Section 302 of
ERISA), which, with respect to each event listed above, when combined with any
other event listed above, has 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
acting as an independent provider of outsourced engineering and network
deployment services, security systems engineering and integration services and
other technical services for the wireless communications industry, the U.S.
government, and enterprise customers, including, without limitation, the
design, deployment, integration and the overall management of communications
and security networks, 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 Borrower or any of its Subsidiaries
and any Subsidiary) 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
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
do not have a Material Adverse Effect on Borrower or any Subsidiary.

 

7.10                        USE OF
PROCEEDS. Use of the proceeds of the Loans for any purpose
other than (i) for working capital and other general corporate purposes of the Borrower
and its Subsidiaries, (ii) for the refinancing of existing Indebtedness and (iii)
for Acquisitions, including, without limitation, the MRC Acquisition and the
Related Transactions, all to the extent permitted hereunder.

 

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 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 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 (i) for each fiscal
quarter ending on or prior to March 31, 2007, 4.00 to 1.00, (ii) for the
fiscal quarter

 

59

 

ending June 30, 2007, 3.75 to 1.00, (iii) for the fiscal quarter
ending September 30, 2007, 3.50 to 1.00, and (iv) for each fiscal quarter
ending on or after December 31, 2007 and thereafter, 3.00 to 1.00.

 

(b)                                 Minimum
Liquidity Ratio. Permit the Liquidity Ratio at any time to be less
than 1.35 to 1.00.

 

(c)                                  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 (i) for each fiscal quarter ending on or prior to March
31, 2007, 1.10 to 1.00, and (ii) for each fiscal quarter thereafter, 1.25
to 1:00.

 

7.13                        ACCOUNTING
CHANGES. Change (i) its fiscal year (currently a 52 or 53
week year, as applicable, ending on or about December 31), or (ii) its
accounting practices except as permitted by GAAP.

 

7.14                        RESTRICTIVE
AGREEMENTS. Except as set forth in this Agreement, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (a) make,
directly or indirectly, any dividend, return of capital or other distribution
to Borrower or to any other Subsidiary, (b) make, directly or indirectly, loans
or advances or capital contributions to Borrower or (c) transfer, directly or
indirectly, any of the properties or assets of such Subsidiary to Borrower,
except for such encumbrances or restrictions existing under or by reason of
(i) applicable law, (ii) customary non-assignment provisions in leases or
other agreements entered in the ordinary course of business and consistent with
past practices, or (iii) customary restrictions in security agreements or
mortgages securing Indebtedness or capital leases, of Borrower or such Subsidiary
to the extent such restrictions shall only restrict the transfer of the
property subject to such security agreement, mortgage or lease.

 

7.15                        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.

 

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 any principal on the date when due; or

 

(b)                                 Borrower fails
to pay interest on any Outstanding Obligation, the Commitment Fee or any other
fees due hereunder within three (3) Business Days after the date when due; or
fails to pay any other fees or amount payable to Administrative Agent

 

60

 

or
any Lender under any Loan Document within five (5) Business Days after the date
due; or

 

(c)                                  Any default
occurs in the observance or performance of any agreement contained in 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 or warranty in any Loan Document proves to have been incorrect
in any material respect when made or deemed made; or

 

(g)                                 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) having an aggregate principal amount in excess of
the Threshold Amount, or (y) defaults in the observance or performance of any
other agreement or covenant relating to any Indebtedness (other than
Indebtedness hereunder) 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 the Threshold Amount 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 (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 (as defined in such Swap Contract) or (y)
any termination event under any Swap Contract (as 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 owed by
Borrower or such Subsidiary as a result thereof is greater than the Threshold
Amount; 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 any Credit Party 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

 

61

 

(i)                                     A final
judgment (to the extent not covered by insurance from a solvent insurer who has
accepted tender of defense and is defending such action) against Borrower or
any Material Subsidiary is entered for the payment of money in excess of the
Threshold Amount 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 Material Subsidiary that has 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)                                     Borrower or any
of its Material Subsidiaries institutes or consents to the institution of any
proceeding under Debtor Relief Laws, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
is appointed without the application or consent of that Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under Debtor Relief Laws relating to any such Person or to all or
any part of its property is instituted without the consent of that Person and
continues undismissed or unstayed for 45 calendar days, or an order for relief
is entered in any such proceeding; or

 

(k)                                  (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 the Threshold Amount; (ii)
the aggregate amount of Unfunded Pension Liability among all Pension Plans at
any time exceeds the Threshold Amount; (iii) Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or (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 the Threshold
Amount; or

 

(1)                                  There occurs
(i) any Change of Control, or (ii) any event relating to a change in the
corporate ownership, control or governance of Borrower or any Subsidiary as
issuer (“Issuer”) of any notes, bonds,
debentures, Subordinated Debt or other debt securities, the result of which is
to cause Indebtedness evidenced by any such notes, bonds, debentures,
Subordinated Debt or other debt securities to be subject to mandatory
redemption or repurchase by Issuer, provided the
outstanding amount of such outstanding Indebtedness exceeds the Threshold
Amount; or

 

(m)                               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 a Material Adverse
Effect.

 

62

 

8.2                               CERTAIN
FINANCIAL COVENANT DEFAULTS. In the event that Borrower
determines to restate any of its financial statements and announces the same or
delivers such restated financial statements to Administrative Agent or any
Lender and, after giving effect to such restatement, as of the end of any
fiscal period of Borrower there would exist an Event of Default by virtue of
such restatement due to breach of Section 7.12 as of such fiscal period end
date, such Event of Default shall be deemed to arise as of the end of such
fiscal period. Notwithstanding Section 2.6(c) to the contrary, interest shall
accrue at the Default Rate in respect of any Event of Default arising solely by
virtue of this Section 8.2 only from the earlier of the date such restatement
is announced or such restated financial statements are delivered.

 

8.3                               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:

 

(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):

 

(i)                                     Requisite
Lenders may request Administrative Agent to, and Administrative Agent thereupon
shall, terminate the Commitments and/or 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 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; and/or

 

(ii)                                  Issuing Lender,
with the approval of Administrative Agent on behalf of Requisite Lenders, may
demand immediate payment by Borrower of an amount equal to the aggregate amount
of all outstanding Letter of Credit Usage to be held in a blocked Letter of
Credit cash collateral account held with KeyBank.

 

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

 

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

 

(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; and

 

(iii)                               an amount equal
to the aggregate amount of all outstanding Letter of Credit Usage shall be
immediately due and payable to Issuing Lender without notice to or demand upon
Borrower, which are expressly waived by Borrower, to be held in a blocked Letter of Credit cash collateral account
held with KeyBank.

 

63

 

(c)                                  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).

 

(d)                                 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. 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. 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 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.
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.

 

SECTION
IX

ADMINISTRATIVE AGENT

 

9.1                               APPOINTMENT
AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

 

(a)                                  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

 

64

 

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.

 

(b)                                 Issuing Lender
shall act on behalf of Lenders with respect to any Letters of Credit issued by
it and the documents associated therewith until such time and except for so
long as Administrative Agent may agree at the request of Requisite Lenders to
act for such Issuing Lender with respect thereto; provided,
however, that Issuing Lender shall have all of the benefits and
immunities (i) provided to Administrative Agent in this Section 9 with respect
to any acts taken or omissions suffered by Issuing Lender in connection with
Letters of Credit issued by it or proposed to be issued by it and the application
and agreements for letters of credit pertaining to the Letters of Credit as
fully as if the term “Administrative Agent” as used in this Section 9 included
Issuing Lender with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to Issuing Lender.

 

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.

 

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

 

65

 

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, 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

 

66

 

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. Whether or not the transactions contemplated
hereby are consummated, 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, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrower and its
Subsidiaries and Affiliates as though KeyBank were not Administrative Agent or
Issuing Lender 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 or
Issuing Lender.

 

67

 

9.9                               SUCCESSOR
ADMINISTRATIVE AGENT. Administrative Agent may, and at the request
of Requisite Lenders 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 10.11 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. Notwithstanding the foregoing, however, KeyBank
may not be removed as Administrative Agent at the request of Requisite Lenders
unless KeyBank shall also simultaneously be replaced as “Issuing
Lender” hereunder pursuant to documentation in form and substance
reasonably satisfactory to KeyBank. 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 “Sole Arranger,” “Sole
Book Runner,” “Syndication Agent,” “Documentation Agent” 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 Lenders (or Affiliates of
Lenders) so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.

 

SECTION
X

MISCELLANEOUS

 

10.1                        AMENDMENTS;
CONSENTS. 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

 

68

 

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,
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, interest or any Commitment Fee;

 

(b)                                 To postpone any
date fixed for any payment of principal of, prepayment of principal of, or any
installment of interest on, any Loan or any installment of any Commitment Fee,
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 the
Threshold Amount;

 

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

 

(e)                                  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 Issuing
Lender in addition to Requisite Lenders or all Lenders, as the case may be,
affect the rights or duties of Issuing Lender, (ii) 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, and (iii) the fee letters may be amended, or
rights or privileges thereunder waived, in a writing executed by the parties thereto.
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:

 

69

 

	
  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 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 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 documentary, stamp or similar taxes
related thereto, and other out-of-pocket

 

70

 

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                        BINDING EFFECT; ASSIGNMENT.

 

(a)                                  This Agreement
and the other Loan Documents to which Borrower is a party will be binding upon
and inure to the benefit of Borrower, Lenders and Administrative Agent and
their respective successors and assigns, except that, Borrower may not assign
its rights hereunder or thereunder or any interest herein or therein without
the prior written consent of all Lenders and any such attempted assignment
shall be void. Any Lender may at any time pledge its Note or any other
instrument evidencing its rights as a Lender under this Agreement to a Federal
Reserve Bank, but no such pledge shall release each such Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.

 

(b)                                 From time to
time following the Closing Date, each Lender may assign to one or more Eligible
Assignees all or any portion of its Commitment and/or Extensions of Credit; provided that (i) such assignment, if not to a Lender
or an Affiliate of the assigning Lender, shall be consented to by Borrower at
all times other than during the existence of a Default or Event of Default and
by Administrative Agent and Issuing Lender (which approval of Borrower shall
not be unreasonably withheld), (ii) a copy of a duly signed and completed
Assignment and Acceptance shall be delivered to Administrative Agent, (iii)
except in the case of an assignment (A) to an Affiliate of the assigning Lender
or to another Lender or (B) of the entire remaining Commitment of the assigning
Lender, the portion of the Commitment assigned shall not be less than $5,000,000,
and (iv) the effective date of any such assignment shall be as specified in the
Assignment and Acceptance, but not earlier than the date which is five Business
Days after the date Administrative Agent has received the Assignment and
Acceptance. Upon any required consent by Administrative Agent, Issuing Lender
and Borrower to such assignment and payment of the requisite fee described
below, the assignee named therein shall be a Lender for all purposes of this
Agreement, with the Pro Rata Share therein set forth and, to the extent of such
Pro Rata Share, the assigning Lender shall be released from its further
obligations under this Agreement. Borrower agrees that it shall execute and
deliver upon request (against delivery by the assigning Lender to Borrower of
the Note, if any, previously issued to such assigning Lender, or, if any such
Note is lost or destroyed, an affidavit as to such fact and a lost note
indemnity from such assigning Lender with respect to such Note) to such
assignee Lender, one or more Notes evidencing such assignee Lender’s Loans, and
to the assigning Lender if requested, one or more Notes evidencing Loans under
any Commitment retained by the assigning Lender. Administrative Agent’s consent
to any assignment shall not be deemed to constitute any representation or
warranty by any Administrative Agent-Related Person as to any matter. For
purposes hereof, each mutual fund that is an Affiliate of a Lender shall be deemed to

 

71

 

be
a single Eligible Assignee, whether or not such fund is managed by the same
fund manager as other mutual funds that are Affiliates of the same Lender.

 

(c)                                  After receipt
of a completed Assignment and Acceptance, and receipt of an assignment fee of
$3,500 (unless such fee is waived by the Administrative Agent) from such
Eligible Assignee (including in the case of assignments to Affiliates of
assigning Lenders), Administrative Agent shall, promptly following the effective
date thereof, provide to Borrower and Lenders a revised Schedule 10.2 giving
effect thereto.

 

(d)                                 Each such
Lender may from time to time, without the consent of any other Person, grant
participations to one or more other Person (including another Lender) of all or
any portion of its Pro Rata Share of its Commitment or Extensions of Credit; provided, however, 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, (iii) participating banks or other financial institutions
shall not be a Lender hereunder for any purpose except, if the participation
agreement so provides, for the purposes of Section 3 (but only to the
extent that the cost of such benefits to Borrower does not exceed the cost
which Borrower would have incurred in respect of such Lender absent the
participation) and subject to Sections 10.5 and 10.6, (iv) Borrower,
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations
under this Agreement, (v) the participation agreement shall not restrict
an increase in the combined Commitments, or in granting Lender’s Pro Rata
Share, so long as the amount of the participation interest is not affected
thereby, and (vi) the consent of the holder of such participation interest
shall not be required for amendments or waivers of provisions of the Loan
Documents; provided, however, that the assigning
Lender may, in any agreement with a participant, give such participant the
right to consent to any matter 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. Any Lender
that sells a participation to any Person that is a “foreign corporation,
partnership or trust” within the meaning of the Code shall include in its
participation agreement with such Person a covenant by such Person that such
Person will comply with the provisions of Section 10.22 as if such Person
were a Lender and provide that Administrative Agent and Borrower shall be third
party beneficiaries of such covenant.

 

10.5                        SET-OFF.
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

 

72

 

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. 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 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.

 

73

 

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
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

 

74

 

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.

 

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 the later
of (a) when the Commitments are terminated and (b) 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. Borrower agrees to indemnify, defend, save and hold
harmless each Administrative Agent-Related Person and each Lender and their
respective Affiliates, directors, officers, agents, attorneys and employees
(collectively, the “Indemnitees”) 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,

 

75

 

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, 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 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 or for any loss asserted against it by another Indemnitee.

 

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 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.

 

76

 

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 Documents or the Obligations, 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) 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; and
(e) pursuant to any subpoena or any similar legal process so long as
Borrower is, or has been, given notice of such legal process and the
opportunity to seek a protective order. 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

 

77

 

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
Lender 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.

 

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 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

 

78

 

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 (i) non ratably
terminating such Lender’s Commitment, and (ii) if being replaced, causing such
Lender to assign its Commitment to one or more other Lenders or Eligible
Assignees acceptable to Borrower, Administrative Agent and Issuing Lender; 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 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),
(y) appropriate assurances and indemnities (which may include letters of
credit) as such Lender may reasonably require with respect to its participation
interest in any Letters of Credit and (z) a release of such Lender from its
obligations under the Loan Documents. Any Lender being replaced shall execute
and deliver an Assignment and Acceptance covering such Lender’s Commitment, and
shall otherwise comply with Section 10.4. 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.

 

In order to make all Lender’s
interests in any outstanding Extensions of Credit ratable in accordance with
any revised Pro Rata Shares after giving effect to the removal or replacement
of a Lender, Borrower shall pay or prepay, but only to the extent necessary, on
the effective date thereof, all outstanding Extensions of Credit of the Lenders
required to so be repaid or prepaid, together with any amounts due under
Section 3.5. Borrower may then request Extensions of Credit from Lenders in
accordance with their revised Pro Rata Shares with respect to the Extensions of
Credit so repaid or prepaid.

 

10.24                 GOVERNING
LAW.

 

(a)                             THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE; 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 THE

 

79

 

COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, 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 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                 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.]

 

80

 

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

 

	
  WIRELESS
  FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  as Administrative Agent,

  Issuing Lender and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Scott M. Brickner

  	
   

  	
  By:

  	
  /s/
  Raed Y. Alfayourmi

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Scott
  M. Brickner

  	
   

  	
  Name:

  	
  Raed
  Y. Alfayourmi

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  Vice
  President

  

 

 

Signature Page to Credit
Agreement

 

 

EXHIBIT
A

 

FORM
OF REQUEST FOR EXTENSION OF CREDIT

 

Date:

 

To:                              KeyBank
National Association

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement dated as of October 2, 2006, between Wireless
Facilities, Inc., a Delaware corporation (“Borrower”) and, Lenders from time to
time party thereto, and KeyBank National Association, as Administrative Agent,
Lender and Issuing Lender with KeyBanc Capital Markets as designated Sole
Arranger and Sole Book Manager (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement”) the terms defined therein being used herein as
therein defined).

 

The undersigned hereby
requests (select one):

 

 ̈                                    A Borrowing of
Loans                          ̈                                    A Conversion or
Continuation of Loans

 

1.                                       On

 

2.                                       In the amount
of $

 

3.                                       Comprised of [Offshore
Rate or Base Rate]

 

[type
of Loan requested]

 

4.                                       If applicable:  with an Interest Period of [1, 2, 3 or 6] months.

 

The foregoing request
complies with the requirements of Section 2.1 of the Agreement. Other than in
connection with a Conversion or Continuation of Loans, the undersigned hereby
certifies that the following statements are true on the date hereof, and will
be true on the above date, before and after giving effect to the Extension of
Credit:

 

(a)                                  The
representations and warranties made by Borrower in the Agreement, or which are
contained in any certificate, document or financial or other statement
furnished at any time under or in connection therewith, are and will be correct
on and as of the date of this Extension of Credit, except to the extent that
such representations and warranties specifically refer to any earlier date; and

 

A-1

 

(b)                                 No Default or
Event of Default has occurred and is continuing on the date hereof or after
giving effect to this Extension of Credit.

 

	
   

  	
  WIRELESS
  FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

A-2

 

EXHIBIT
B

COMPLIANCE CERTIFICATE

 

FINANCIAL
STATEMENT DATE:

 

To:                              KeyBank
National Association, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement as of October 2, 2006 between WIRELESS FACILITIES,
INC., a Delaware corporation (“Borrower”), Lenders
from time to time party thereto, and KeyBank National Association, as
Administrative Agent and Issuing Lender with KeyBanc Capital Markets as
designated Sole Arranger and Sole Book Manager (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as
therein defined).

 

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

 

[Use following for fiscal
year-end financial statements]

 

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

 

[Use following for fiscal
quarter-end financial statements]

 

l.                                          Attached hereto
as Schedule 1 are the unaudited financial statements required by Section 6.1
(b) of the Agreement for the fiscal quarter of Borrower ended as of the above
date. Such financial statements fairly present the financial condition, results
of operations and changes in financial position of Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such periods,
subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.                                       The undersigned
has reviewed and is familiar with the terms of the Agreement and has made, or
has caused to be made under his supervision, a detailed review of the
transactions and conditions (financial or otherwise) of Borrower during the
accounting period covered by the attached financial statements.

 

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

 

[select one]

 

B-1

 

[to the best knowledge of
the undersigned during such fiscal period, Borrower performed and observed each
covenant and condition of the Loan Documents applicable to it.]

 

—or—

 

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

 

4.                                       The following
financial covenant analyses and information set forth on Schedule 2 attached
hereto are true and accurate on and as of the date of this Certificate.

 

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

 

	
   

  	
  WIRELESS
  FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

B-2

 

SCHEDULE
2

TO THE COMPLIANCE CERTIFICATE

($ IN 000’S)

 

Section 7.12(a) - Total
Leverage Ratio.

 

Indebtedness at Statement
Date (as calculated below):

 

	
   

  	
   

  	
   

  	
   

  	
  Actual
  
  /   /   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  Borrowed
  Money and obligations evidenced by bonds, debentures, notes or other similar
  instruments

  	
   

  	
  USD$0

  	
   

  
	
  B.

  	
   

  	
  Letters
  of Credit and similar instruments

  	
   

  	
  USD$0

  	
   

  
	
  C.

  	
   

  	
  net
  obligations under Swap Contracts (other than interest rate and foreign
  exchange swap transactions)

  	
   

  	
  USD$0

  	
   

  
	
  D.

  	
   

  	
  deferred
  purchase price of property

  	
   

  	
  USD$0

  	
   

  
	
  E.

  	
   

  	
  indebtedness
  secured by a Lien on property of Borrower or its Subsidiaries

  	
   

  	
  USD$0

  	
   

  
	
  F.

  	
   

  	
  Capital
  Leases and Synthetic Lease Obligations

  	
   

  	
  USD$0

  	
   

  
	
  G.

  	
   

  	
  all
  obligations under asset securitization financing transactions (other than
  non-recourse sales of receivables)

  	
   

  	
  USD$0

  	
   

  
	
  H.

  	
   

  	
  Guaranty
  Obligations

  	
   

  	
  USD$0

  	
   

  
	
  I.

  	
   

  	
  Indebtedness
  (Sum of A-H)

  	
   

  	
  USD$0

  	
   

  
	
  J.

  	
   

  	
  To
  the extent included in A-H above, Indebtedness with respect to earn-out
  payments and hold backs incurred pursuant to the Enco Systems Acquisition,
  the MRC Acquisition or other Permitted Acquisition

  	
   

  	
  USD$0

  	
   

  
	
  K.

  	
   

  	
  cash
  on hand and cash equivalents

  	
   

  	
  USD$0

  	
   

  
	
  L.

  	
   

  	
  Total
  Indebtedness (Indebtedness shown on line I above less lines J and K)

  	
   

  	
  USD$0

  	
   

  

 

Consolidated EBITDA(1)
measured on a rolling four quarter basis for the four fiscal quarters ended as
of the Statement Date (“Subject Period”):

 

(1)                                  For
purposes of calculating Consolidated EBITDA for any period in connection with
each of the Total Leverage Ratio and the Fixed Charge Coverage Ratio, if during
such period the Borrower or any Subsidiary shall have made any Permitted
Acquisition (but, for purposes of calculating the Fixed Charge Coverage Ratio,
the only Permitted Acquisition referred to in this paragraph will be the MRC
Acquisition) after June 30, 2006, Consolidated EBITDA for such period
shall be calculated after giving pro forma
effect to such Permitted Acquisition as if such Permitted Acquisition occurred
on the first day of such period and so long as the pro forma
effect and add-backs may be derived from the Income Statement, as prepared in

 

 

	
   

  	
   

  	
   

  	
   

  	
  Actual

     /   /   

  	
   

  	
  Actual

     /   /   

  	
   

  	
  Actual

     /   /   

  	
   

  	
  Actual

     /   /   

  	
   

  	
  LTM

     /   /   

  	
   

  
	
  M.

  	
   

  	
  Consolidated Net Income(2)

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  N.

  	
   

  	
  Consolidated Interest Charges

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  O.

  	
   

  	
  taxes based on income (refunds)

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  P.

  	
   

  	
  depreciation

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  Q.

  	
   

  	
  amortization

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  R.

  	
   

  	
  non-cash stock based compensation

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  S.

  	
   

  	
  non-cash costs from discontinued operations,
  disposal of assets or changes to GAAP

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  T.

  	
   

  	
  amount of earn-out or similar payments required
  to be reported as compensation

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  U.

  	
   

  	
  amount of non-recurring cash charges resulting
  from discontinued operations and disposal of assets in an amount not to
  exceed $7,500,000 in any period of four consecutive fiscal quarters(3)

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  
	
  V.

  	
   

  	
  Consolidated EBITDA (M plus (to the extent
  deducted in the calculation of Consolidated Net Income) the sum of N-U)

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  	
  USD$0

  	
   

  

 

Total Leverage Ratio at                           ,
20    (L divided by V)                 
to 1.00

 

In Compliance for the Fiscal
Quarter ended                                            ?                   Yes o             No o

 

 

connection with the Permitted Acquisition, as approved by the
Administrative Agent (which approval shall not be unreasonably withheld).

 

(2)                                  In determining Consolidated Net Income,
all items of gain, income, loss or expense that are properly classified as
extraordinary in accordance with GAAP or are unusual or non-recurring (but do
not fall within clauses (N)-(U) shall be excluded from such Consolidated Net
Income.

 

(3)                                  In
the event for any period of four consecutive fiscal quarters calculated without
giving effect to this clause (U), the Total Leverage Ratio (for such period) is
greater than 2.00 to 1.00, the amount permitted to be added back pursuant to
this clause (U) for such four quarter period and the immediately preceding four
consecutive fiscal quarters shall not exceed $10,000,000 in the aggregate.

 

 

Section 7.12(b) -
Liquidity Ratio.

 

A.                                   Current assets
at Statement Date (cash, cash equivalents, marketable securities, accounts
receivable (excluding accounts receivable owing from any affiliate, shareholder
or employee)):  $

 

B.                                     Current
liabilities at Statement Date: $

 

Liquidity Ratio at                           ,
20    (A divided by B)              
to 1.00

 

In Compliance for the Fiscal
Quarter ended                                  ?                                                 Yes o             No o

 

Section 7.12(c) – Fixed
Charge Coverage Ratio.

 

	
  FIXED
  CHARGE COVERAGE RATIO

  	
   

  	
   

  	
   

  	
   

  
	
  (A)
  EBITDA plus rent expense (for rolling four quarters)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Actual

     /   /   

  	
  Actual

     /   /   

  	
  Actual

     /   /   

  	
  Actual

     /   /   

  	
   

  
	
  Add:

  	
  Consolidated
  EBITDA from above 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  consolidated
  operating lease expenses 

  	
   

  
								

EBITDAR:
(A)

 

(B) Charges

 

Add:                                         consolidated capital expenditures

Consolidated Interest Charges

consolidated operating lease expenses

consolidated cash income taxes paid

 

Less:                                        consolidated cash income tax refunds received

 

Fixed
Charges: (B)

 

Fixed Charge Coverage Ratio: (A) divided by (B)

 

	
   

  	
   

  	
  Minimum Required:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Compliance:

  	
  Yes

  	
  o

  	
  No

  	
  o

  

 

 

EXHIBIT
C

 

FORM
OF NOTE

 

	
  $

  	
                          ,
  200  

  

 

FOR VALUE RECEIVED, the
undersigned (the “Borrower”), hereby
promises to pay to the order of                                
(the “Lender”), on the Maturity Date (as
defined in the Credit Agreement referred to below) the principal amount of                                 
($                         ),
or such lesser principal amount of Loans (as defined in the Credit Agreement
referred to below) payable by Borrower to Lender on such Maturity Date under
that certain Credit Agreement, dated as of October 2, 2006, among Borrower,
Lenders from time to time party thereto, KeyBank National Association, as
Administrative Agent and Issuing Lender with KeyBanc Capital Markets as
designated Sole Arranger and Sole Book Manager (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;” the
terms defined therein being used herein as therein defined).

 

Borrower promises to pay
interest on the unpaid principal amount of each Loan from the date of such Loan
until such principal amount is paid in full, at such interest rates, and
payable at such times as are specified in the Agreement.

 

All payments of principal
and interest shall be made to Administrative Agent for the account of Lender in
United States dollars in immediately available funds at Administrative Agent’s
Payment office.

 

If any amount is not paid in
full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

 

This Note is one of the “Notes”
referred to in the Agreement. Reference is hereby made to the Agreement for
rights and obligations of payment and prepayment, events of default and the
right of Lender to accelerate the maturity hereof upon the occurrence of such
events. Loans made by Lender shall be evidenced by one or more loan accounts or
records maintained by Lender in the ordinary course of business. Lender may
also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Loans and payments with respect thereto.

 

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

 

Borrower agrees to pay all
collection expenses, court costs and Attorney Costs (whether or not litigation
is commenced) which may be incurred by Lender in connection with the collection
or enforcement of this Note, all as further set forth in the Agreement.

 

C-1

 

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

 

	
   

  	
  WIRELESS
  FACILITIES, INC.,

  a Delaware corporation,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

C-2

 

LOANS
AND PAYMENTS WITH RESPECT THERETO

 

	
  Date

  	
   

  	
  Type of

  Loan

  Made

  	
   

  	
  Amount of

  Loan

  Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal

  or Interest

  Paid this

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made by

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
D

 

FORM
OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to that
certain Credit Agreement dated as of October 2, 2006 between Wireless
Facilities, Inc., a Delaware corporation (“Borrower”), Lenders from time to time
party thereto, KeyBank National Association, as Administrative Agent and
Issuing Lender with KeyBanc Capital Markets as designated Sole Arranger and
Sole Book Manager (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as
therein defined).

 

The Assignor identified on
Schedule 1 hereto (“Assignor”) and the Assignee identified on
Schedule 1 hereto (“Assignee”) agree as follows:

 

1.                                       Assignor hereby
irrevocably sells and assigns to Assignee without recourse to Assignor, and
Assignee hereby irrevocably purchases and assumes from Assignor without
recourse to Assignor, as of the Effective Date (as defined below), the interest
described in Schedule 1 hereto (the “Assigned Interest”) in and to Assignor’s rights and
obligations under the Agreement with respect to those Commitment(s) and
Outstanding Obligations contained in the Agreement as are set forth on Schedule
1 hereto (individually, an “Assigned Commitment”; collectively, the “Assigned
Commitments”), in
the principal amount for each Assigned Commitment as set forth on Schedule 1
hereto.

 

2.                                       Assignor (a)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Agreement or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement, any other
Loan Document or any other instrument or document furnished pursuant thereto,
other than that Assignor has not created any adverse claim upon the interest
being assigned by it hereunder and that such interest is free and clear of any
such adverse claim; and (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or any of
its Subsidiaries or any other obligor or the performance or observance by
Borrower or any of its Subsidiaries or any other obligor of any of its
respective obligations under the Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto.

 

3.                                       Assignee (a)
represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (b) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 4.1 or 6.2 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon Assignor, Administrative
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Agreement, the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto; (d)
appoints and authorizes Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto as are

 

D-1

 

delegated to Administrative
Agent by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Agreement are required to be performed by it as a
Lender.

 

4.                                       The effective
date of this Assignment and Acceptance shall be the Effective Date of
Assignment described in Schedule 1 hereto (the “Effective
Date”). Following the execution of this
Assignment and Acceptance, it will be delivered to Administrative Agent and to
Borrower for its consent (if such consent is required) and, if such consent is
granted, for acceptance and recording by Administrative Agent pursuant to the
Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by Administrative Agent, be earlier than five Business Days
after the date of such acceptance and recording by Administrative Agent.

 

5.                                       Upon such
consent, acceptance and recording, from and after the Effective Date, Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to Assignee whether
such amounts have accrued prior to or on or after the Effective Date. Assignor
and Assignee shall make all appropriate adjustments in payments by
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.

 

6.                                       From and after
the Effective Date, (a) Assignee shall be a party to the Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall
be bound by the provisions thereof and (b) Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.

 

7.                                       This Assignment
and Acceptance shall be governed by and construed in accordance with the laws
of the State of California.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Assignment and Acceptance to be executed as of
the date first above written by their respective duly authorized officers on
Schedule 1 hereto.

 

D-2

 

SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE

 

	
  Commitment Assigned

  	
   

  	
  Amount of Outstanding

  Obligations Assigned

  	
   

  	
  Pro Rata Share Assigned (set

  forth to at least 8 decimals)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Effective Date of Assignment:                                    ,
       

 

D-1

 

	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

The
undersigned hereby consent to the within assignment:

 

	
  WIRELESS
  FACILITIES, INC.

  a Delaware corporation

  

 

 

	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

	
  KEYBANK
  NATIONAL ASSOCIATION,

  as Administrative Agent

  

 

 

	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

D-2

 

SCHEDULE 5.1

 

MATERIAL DOMESTIC
SUBSIDIARIES AND 

FIRST-TIER MATERIAL FOREIGN SUBSIDIARIES

 

1.                                       Domestic Subsidiaries that are Material
Subsidiaries

 

a.                                        SecurePlanet, Inc., a Delaware corporation

b.                                       WFI Delaware Inc., a Delaware corporation

c.                                        WFI Georgia Inc., a Georgia corporation

d.                                       WFI Texas, Inc., a Texas corporation

e.                                        WFI NMC Corp., a Delaware corporation

f.                                          WFI Southwest L.P., a Texas limited
partnership

g.                                       WFI Government Services, Inc., a Delaware
corporation

h.                                       Defense Systems, Incorporated, a Virginia
corporation

i.                                           JMA Associates, Inc., a Delaware corporation

j.                                           Madison Research Corporation, an Alabama
corporation

 

2.                                       First-Tier Material Foreign Subsidiaries:

 

a.                                       Wireless Facilities International Limited, a
United Kingdom corporation

 

D-1

 

SCHEDULE 7.4

 

DISPOSITION OF PROPERTY

 

The Disposition of property made pursuant to the
Patent Purchase Agreement dated September 21, 2006, by and between Wireless
Facilities, Inc., as seller, and Yoshimi Ltd., Limited Liability Company, as
purchaser.

 

1-1

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