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Exhibit 10.1    
    

 
 

SEVENTH AMENDMENT TO
  CREDIT AGREEMENT    
    

        SEVENTH AMENDMENT TO CREDIT AGREEMENT, dated as of October 29, 2004 (this "Amendment"), to the Credit
Agreement referred to below by and among APPLIED EXTRUSION TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"); the other Credit Parties
signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, "GE Capital"), for itself, as Lender, and as
Agent for Lenders; and the other Lenders signatory hereto. 

 
 

W I T N E S S E T H

        WHEREAS,
the Borrower, the other Credit Parties, the Agent, and the Lenders are parties to that certain Credit Agreement, dated as of October 3, 2003 (as amended, supplemented or
otherwise modified from time to time, prior to the date hereof, the "Credit Agreement"); 

        WHEREAS,
Borrower has requested that Agent and the Lenders agree to amend the Credit Agreement to provide, among other things, that failure to pay the interest on the Senior Notes due on
July 1, 2004 shall not constitute a Default or Event of Default, so long as such payment is made on or prior to the Waiver Termination Date (as defined below); and 

        WHEREAS,
the Borrower, the Agent and the Lenders have agreed to such request and agree to amend certain provisions of the Credit Agreement in the manner, and on the terms and conditions,
provided for herein. 

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

        1.    Certain Definitions.    Capitalized terms used herein and not otherwise defined shall have the meanings ascribed
to them in the Credit Agreement. 

        2.    Amendment to Annex A to the Credit Agreement.    As of the Seventh Amendment Effective Date, Annex A to the
Credit Agreement shall be amended as follows: 

	(a)
	by
deleting the definition of "Waiver Termination Date" therein and inserting the following definition in lieu thereof: 

        "Waiver Termination Date" shall mean December 15, 2004."; and 

	(b)
	by
inserting the following new definitions therein in appropriate alphabetical order: 

        "Seventh Amendment" means the Seventh Amendment to the Credit Agreement, dated as of October 29, 2004, among the Borrower, the
other Credit Parties, the Agent and the Lenders." 

        "Seventh Amendment Effective Date" means the date on which each of the conditions precedent to the effectiveness of the Seventh Amendment
have been satisfied or waived." 

        3.    Defaults; Conditions to Funding.    

        (a)   Agent
and Requisite Lenders agree that, notwithstanding the provisions of (i) Section 1.5(d) of the Credit Agreement,
(ii) Section 2.2(c) of the Credit Agreement, (iii) Section 8.2 of the Credit Agreement, and
(iv) clause (c) of Annex C to the Credit Agreement to the contrary, for purposes of
(i) Section 1.5(d) of the Credit Agreement, (ii) Section 2.2(c) of the Credit Agreement,
(iii) Section 8.2 of the Credit Agreement, and (iv) clause (c) of Annex C to
the Credit Agreement, the failure of the Borrower to make payment of interest on the Senior Notes due on July 1, 2004 shall not constitute a "Default" or "Event of Default" for the period
beginning from the Sixth Amendment Effective Date through the Waiver Termination Date), so long as such payment is made on or prior to the Waiver 

 

Termination
Date and, with respect to clause (iv) above, prior to the payment of such interest, Borrower and AET Canada transfers or cause to be transferred prior to the end of each business
day from the AET Canada Account and/or the Disbursement Accounts of AET Canada the aggregate balance in (or held for the benefit of) AET Canada in the AET Canada Account and such Disbursement Accounts
in excess of CDN$1,500,000 to a Blocked Account of Borrower (or, if established, the Concentration Account). 

        (b)   Agent
and Requisite Revolving Lenders agree that (i) with respect to the provisions of Section 2.2(a) of the Credit Agreement,
the failure of any representation or warranty to be true in any Loan Document, solely as a result of the Borrower's failure to make payment of interest on the Senior Notes due on July 1, 2004
shall not limit any Lender's obligations to fund any Advance, convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation and (ii) with respect to the provisions of
Section 2.2(b) of the Credit Agreement, Borrower's failure to make payment of interest on the Senior Notes due on July 1, 2004 shall not alone, without the
presence of any other facts, events or circumstances (whether arising as a result of such failure or otherwise), be deemed to create a Material Adverse Effect, in the case of each of clauses
(i) and (ii) of this sentence, for the period beginning from the Sixth Amendment Effective Date through the Waiver Termination Date and so long as such payment is made on or prior to the
Waiver Termination Date. 

        (c)   Agent
and Requisite Lenders agree that the execution and delivery of that certain Restructuring Agreement by and among Borrower and its Subsidiaries and the
Participating Holders, dated as of August 24, 2004 (the "Restructuring Agreement"), shall not alone, without the presence of any other facts,
events or circumstances, constitute an Event of Default under clause (iv) of Section 8.1(i) of the Credit Agreement, for the
period beginning on the Seventh Amendment Effective Date through the Waiver Termination Date, provided that nothing set forth herein shall be construed
to constitute the consent of Agent or any Lender to any action or transaction by any Credit Party pursuant to, or as contemplated by, such Restructuring Agreement, except as expressly provided to the
contrary herein. 

        (d)   Agent
and Requisite Lenders agree that the commencement by the Borrower of a solicitation of all of the beneficial holders of the Senior Notes to vote to accept the
Reorganization Plan (as such term is defined in the Restructuring Agreement) (the "Solicitation") pursuant to the terms of the Restructuring Agreement
and any actions undertaken by the Borrower in conjunction therewith, including, without limitation, the delivery by the Borrower to each such holder of the (i) Disclosure Statement (as such
term is defined in the Restructuring Agreement), including all schedules and exhibits thereto, (ii) Reorganization Plan, including all schedules and exhibits thereto, (iii) ballots to
vote to accept or reject the Reorganization Plan and (iv) other documents or materials that the Holder Representative (as such term is defined in the Restructuring Agreement) reasonably
requests be delivered in connection with the Solicitation shall not constitute an Event of Default under clause (iv) of
Section 8.1(i) of the Credit Agreement, during the period beginning on the Seventh Amendment Effective Date through the Waiver Termination Date. 

        (e)   This
Section 3 supercedes and replaces the provisions of Section 5 of the Sixth Amendment. 

        4.    Ratification of Credit Agreement; Remedies.    

        (a)   Except
as expressly provided for, and on the terms and conditions set forth, herein, the Credit Agreement and the other Loan Documents shall continue to be in full force
and effect in accordance with their respective terms and shall be unmodified. In addition, this Amendment shall not be deemed a waiver of any term or condition of any Loan Document by the Agent or the
Lenders with respect to any right or remedy which the Agent or the Lenders may now or in the future have under the Loan Documents, at law or in equity or otherwise or be deemed to prejudice any rights
or remedies which the Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document or under or in connection with any Default or Event of Default which may
now exist 

2

 

or
which may occur after the date hereof. The Credit Agreement and all other Loan Documents are hereby in all respects ratified and confirmed. 

        (b)   This
Amendment shall constitute a Loan Document. The breach by any Credit Party of any representation, warranty, covenant or agreement in this Amendment shall constitute
an immediate Event of Default hereunder and under the other Loan Documents. 

        5.    Representations and Warranties.    The Borrower and the Credit Parties hereby represent and warrant to the Agent
and Lenders that: 

        (a)   The
execution, delivery and performance of this Amendment and the performance of the Credit Agreement as amended by this Amendment (the "Amended
Credit Agreement") by the Borrower and the other Credit Parties: (i) are within their respective organizational powers; (ii) have been duly authorized by all
necessary corporate and shareholder action; (iii) are not in contravention of any provision of their respective certificates or articles of incorporation or by-laws or other
organizational documents; (iv) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to
which the Borrower or any Credit Party is a party or by which the Borrower or any Credit Party or any of its property is bound; (vi) do not result in the creation or imposition of any Lien upon
any of the property of the Borrower or any Credit Party other than those in favor of Agent pursuant to the Loan Documents; and (vii) do not require the consent or approval of any Governmental
Authority or any other Person. (a) 

        (b)   This
Amendment has been duly executed and delivered by or on behalf of the Borrower and the other Credit Parties. 

        (c)   Each
of this Amendment and the Amended Credit Agreement constitutes a legal, valid and binding obligation of the Borrower and the other Credit Parties enforceable
against each of them in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights
generally and general equitable principles (whether enforcement is sought by proceedings in equity or at law). 

        (d)   No
Default or Event of Default has occurred and is continuing both before and after giving effect to this Amendment. 

        (e)   No
action, claim or proceeding is now pending or, to the knowledge of the Borrower and the other Credit Parties, threatened against the Borrower or the other Credit
Parties, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any federal, state, or local government or of any agency or subdivision thereof, or before
any arbitrator or panel of arbitrators, (i) which challenges the Borrower's or the other Credit Parties' right, power, or competence to enter into this Amendment or, to the extent applicable,
perform any of its obligations under this Amendment, the Amended Credit Agreement or any other Loan Document, or the validity or enforceability of this Amendment, the Amended Credit Agreement or any
other Loan Document or any action taken under this Amendment, the Amended Credit Agreement or any other Loan Document or (ii) which, if determined adversely, is reasonably likely to have or
result in a Material Adverse Effect. To the knowledge of the Borrower and each Credit Party, there does not exist a state of facts which is reasonably likely to give rise to such proceedings. 

        (f)    The
representations and warranties of the Borrower and the other Credit Parties contained in the Amended Credit Agreement and each other Loan Document shall be true and
correct on and as of the date hereof and the Seventh Amendment Effective Date with the same effect as if such representations and warranties had been made on and as of such date, except that 

3

 

any
such representation or warranty which is expressly made only as of a specified date need be true only as of such date. 

        6.    Outstanding Indebtedness.    The Borrower and the other Credit Parties hereby acknowledge and agree that as of
October 28, 2004, (i) the aggregate outstanding amount of the Revolving Credit Advances is $49,596,191.40, (ii) the aggregate outstanding amount of Letter of Credit Obligations is
$825,000.00, and (iii) the aggregate outstanding principal amount of the Term Loan is $43,750,000.00, and that such principal amounts are payable pursuant to the Credit Agreement without
defense, offset, withholding, counterclaim or deduction of any kind. 

        7.    Fees and Expenses.    The Borrower hereby reconfirms its obligations pursuant to
Section 11.3(b) of the Credit Agreement to reimburse Agent for all out-of-pocket fees, costs and expenses, including the reasonable fees,
costs and expenses of counsel, consultants, auditors or other advisors, incurred in connection incurred with the negotiation, preparation, execution and delivery of this Amendment and all other
documents and instruments delivered in connection herewith. 

        8.    GOVERNING LAW.    THIS AMENDMENT, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. 

        9.    Effectiveness.    This Amendment shall become effective as of the date hereof (the
"Seventh Amendment Effective Date") only upon satisfaction in full in the judgment of the Agent or waiver of each of the following conditions on or
before October 31, 2004: 

        (a)    Amendment.    Agent shall have received facsimile copies of this Amendment duly executed and delivered by the
Agent, the Requisite Lenders, the Requisite Revolving Lenders, the Borrower and each Credit Party.(a) 

        (b)    Representations and Warranties.    All representations and warranties of or on behalf of the Borrower and each
Credit Party in this Amendment and all the other Loan Documents shall be true and correct in all respects with the same effect as though such representations and warranties had been made on
and as of the date hereof and on and as of the date that the other conditions precedent in this Section 9 have been satisfied, except to the extent that any such representation or warranty
expressly relates to an earlier date. 

        10.    Counterparts.    This Amendment may be executed in any number of counterparts, each of which shall be an
original with the same effect as if the signatures thereto and hereto were upon the same instrument. 

[SIGNATURE
PAGES FOLLOW] 

4

 

        IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of date and year first written above. 

	 	 	BORROWER
	

 	
 	
APPLIED EXTRUSION TECHNOLOGIES, INC.
	

 	
 	

By:	
 	

/s/  BRIAN P. CRESCENZO      
 Name:  Brian P. Crescenzo

Title:    Vice President, Secretary and Chief Financial

             Officer
	

 	
 	

AGENT
	

 	
 	
GENERAL ELECTRIC CAPITAL CORPORATION, 

as Agent and Lender
	

 	
 	

By:	
 	

/s/  CHRISTOPHER COX      
 Duly Authorized Signatory
	

 	
 	

By:	
 	

/s/  JAMES KAUFMAN      
 Duly Authorized Signatory

	

 	
 	

LENDERS
	

 	
 	
BLACK DIAMOND INTERNATIONAL FUNDING, LTD.
	

 	
 	

By:	
 	

/s/  DAVID DYER      

	 	 	Title:	 	Director/Authorized Signatory

	

 	
 	
TRS 1, LLC
	

 	
 	

By:	
 	

	 	 	Title:	 	 

	

 	
 	
MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.
	

 	
 	

By:	
 	

/s/  STEVE COLEY      

	 	 	Title:	 	Vice President, Group Credit MLC

5

 

        The
following Persons are signatories to this Agreement in their capacity as Credit Parties and not as Borrower. 

	 	 	APPLIED EXTRUSION TECHNOLOGIES (CANADA) INC.
	

 	
 	

By:	
 	

/s/  BRIAN P. CRESCENZO      
 Name:  Brian P. Crescenzo

Title:    Vice President and Treasurer
	

 	
 	
APPLIED EXTRUSION TECHNOLOGIES LIMITED
	

 	
 	

By:	
 	

/s/  BRIAN P. CRESCENZO      
 Name:  Brian P. Crescenzo

Title:    Vice President and Treasurer

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Exhibit 10.1

SEVENTH AMENDMENT TO CREDIT AGREEMENT

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Exhibit 10.2  

  
 

    THE TITAN CORPORATION
  FORM OF RESTRICTED STOCK GRANT NOTICE
  (2000 EMPLOYEE AND DIRECTOR STOCK OPTION AND INCENTIVE PLAN)

The
Titan Corporation (the "Company"), pursuant to its 2000 Employee and Director Stock Option and Incentive Plan (the "Plan"), hereby awards to Participant the number of shares of the Company's
Common Stock set forth below ("Award"). This Award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Agreement, the Plan, the form of Assignment Separate
from Certificate and the form of Joint Escrow Instructions, all of which are attached hereto and incorporated herein in their entirety. 

	Participant:	 	
	 	 
	Date of Grant:	 	
	 	 
	Vesting Commencement Date:	 	
	 	 
	Number of Shares Subject to Award:	 	
	 	 
	Consideration:	 	
	 	 

	

 	
 	

 	
 	

 
	Vesting Schedule:	 	
	 	 

Additional Terms/Acknowledgements:    The undersigned Participant acknowledges receipt of, and understands and agrees to, this Restricted
Stock Grant Notice, the Restricted Stock Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Grant Notice, the Restricted Stock Agreement and
the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject
with the exception of (i) Awards previously granted and delivered to Participant under the Plan, and (ii) the following agreements only: 

	

 	
 	

OTHER AGREEMENTS	
 	

    
    
	
 	

 

	
THE TITAN CORPORATION	
 	

PARTICIPANT:
	

By:	

                        Signature	
 	

                                Signature
	

Title:	

	
 	

Date:	

	

Date:	

	
 	

 	

 

	
 	
 	

 
	ATTACHMENTS	 	Restricted Stock Agreement, 2000 Employee and Director Stock Option and Incentive Plan, form of Assignment Separate from Certificate and form of Joint Escrow Instructions

 
 
 

ATTACHMENT I
  
    FORM OF RESTRICTED STOCK AGREEMENT

2

THE TITAN CORPORATION

2000 EMPLOYEE AND DIRECTOR

STOCK OPTION AND INCENTIVE PLAN  

Restricted Stock Agreement

        Pursuant
to the Restricted Stock Grant Notice ("Grant Notice") and this Restricted Stock Agreement (collectively, the "Award") and in consideration of your past services, The Titan
Corporation (the "Company") has awarded you a stock under its 2000 Employee and Director Stock Option and Incentive Plan (the "Plan") for the number of shares of the Company's Common Stock subject to
the Award as indicated in the Grant Notice. Defined terms not explicitly defined in this Restricted Stock Agreement but defined in the Plan shall have the same definitions as in the Plan. 

        The
details of your Award are as follows: 

        1.    Vesting.    Subject to the limitations contained herein, your Award will vest as provided in the Grant Notice,
provided that vesting will cease upon the termination of your Continuous Service. 

        2.    Number of Shares and Consideration.    The number of shares subject to your Award is set forth in your Grant
Notice and may be adjusted from time to time for capitalization adjustments, as provided in the Plan. As reflected in your Grant Notice, the Award is granted to you in consideration of your past
services. Accordingly, you are not required to make any payment to the Company in order to receive the shares subject to the Award. 

        3.    Securities Law Compliance.    You may not be issued any shares under your Award unless the shares are either
(i) then registered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award
must also comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance
with such laws and regulations. 

        4.    Right of First Refusal.    Shares that are received under your Award are subject to any right of first refusal
or repurchase right that may be described in the Company's bylaws in effect at such time the Company elects to exercise its right. 

        5.    Right of Reacquisition.    

        (a)   To the extent provided in the Company's bylaws, as amended from time to time, the Company shall have the right to
reacquire all or any part of the shares received pursuant to your Award (a "Reacquisition Right"). 

        (b)   To the extent a Reacquisition Right is not provided in the Company's bylaws, as amended from time to time, the Company
shall have a Reacquisition Right as to the shares you received pursuant to your Award that have not as yet vested in accordance with the Vesting Schedule on the Grant Notice ("Unvested Shares") on the
following terms and conditions: 

          (i)  The Company, shall simultaneously with termination of your Continuous Service automatically reacquire for no
consideration (that is, for $0.00) all of the Unvested Shares, unless the Company agrees to waive its Reacquisition Right as to some or all of the Unvested Shares. Any such waiver shall be exercised
by the Company by written notice to you or your representative (with a copy to the Escrow Holder as defined below) within ninety (90) days after the termination of your Continuous Service, and
the Escrow Holder may then release to you the number of Unvested Shares not being reacquired by the Company. If the Company does not waive its Reacquisition Right as to all of the Unvested Shares,
then upon such termination of your Continuous Service, the Escrow Holder shall transfer to the Company the number of shares the Company is reacquiring. 

         (ii)  The Company's right to reacquire the shares issued under your Award shall lapse at the rate set forth in your Grant
Notice. 

       (iii)  The shares issued under your Award shall be held in escrow pursuant to the terms of the Joint Escrow Instructions
attached to the Grant Notice as Attachment IV. You agree to execute two (2) Assignment Separate From Certificate forms (with date and number of shares blank) substantially in the form attached
to the Grant Notice as Attachment III and deliver the same, along with the certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the terms of the Joint Escrow
Instructions. 

        (iv)  Subject to the provisions of your Award, you shall, during the term of your Award, exercise all rights and privileges of
a shareholder of the Company with respect to the shares deposited in escrow. You shall be deemed to be the holder of the shares for purposes of receiving any dividends which may be 

 

paid
with respect to such shares and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested and been released from the Company's
Reacquisition Right. 

         (v)  If, from time to time, there is any stock dividend, stock split or other change in the character or amount of any of the
outstanding stock of the corporation the stock of which is subject to the provisions of your Award, then in such event any and all new, substituted or additional securities to which you is entitled by
reason of your ownership of the shares acquired under your Award shall be immediately subject to the Reacquisition Right with the same force and effect as the shares subject to this Reacquisition
Right immediately before such event. 

        6.    Restrictive Legends.    The shares issued under your Award shall be endorsed with appropriate legends determined
by the Company. 

        7.    Award not a Service Contract.    Your Award is not an employment or service contract, and nothing in your Award
shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an Affiliate to continue your
employment. In addition, nothing in your Award shall obligate the Company or an Affiliate, their respective shareholders, boards of directors, officers or employees to continue any relationship that
you might have as a director or consultant for the Company or an Affiliate. 

        8.    Withholding Obligations.    

        (a)   At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorize withholding
from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of
the Company or an Affiliate, if any, which arise in connection with your Award. 

        (b)   Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no
obligation to issue a certificate for such shares or release such shares from any escrow provided for herein. 

        9.    Tax Consequences.    The acquisition and vesting of the shares may have adverse tax consequences to you that may
avoided or mitigated by filing an election under Section 83(b) of the Internal Revenue Code, as amended (the "Code"). Such election must be filed within thirty (30) days after the date
of your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ON YOUR
BEHALF. 

        10.    Notices.    Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company. 

        11.    Miscellaneous.    

        (a)   The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities,
and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company. 

        (b)   You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination
of the Company to carry out the purposes or intent of your Award. 

        (c)   You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice
of counsel prior to executing and accepting your Award and fully understand all provisions of your Award. 

        12.    Governing Plan Document.    Your Award is subject to all the provisions of the Plan, the provisions of which
are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control. 

2

 
 

ATTACHMENT II    
    
    2000 Employee and Director Stock Option and Incentive Plan    
    

[Previously filed as Exhibit 4.2 to Registrant's Form S-8 (No. 333-41140)

dated July 11, 2000 and incorporated herein by this reference]  

 
 

ATTACHMENT III
  
  
  FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE

For Value Received and pursuant to that certain Restricted Stock Grant Notice and Restricted Stock Agreement (the "Award"),  [Recipient] hereby sells, assigns
and transfers unto The Titan Corporation, a Delaware corporation ("Assignee")                        
(                        ) shares of the common stock of the Assignee, standing in the undersigned's name on the books of said
corporation represented by Certificate No.            herewith and do hereby
irrevocably constitute and appoint                        as attorney-in-fact to transfer the said stock on the books of the
within named Company with full power of substitution in
the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of the Award, in connection with the reacquisition of shares of Common Stock of the
Corporation issued to the undersigned pursuant to the Award, and only to the extent that such shares remain subject to the Corporation's Reacquisition Right under the Award. 

Dated:

	

Signature:	

 
	 	

	 	                        , Recipient

[Instruction:    Please do not fill in any blanks other than the signature line. The purpose of this
Assignment is to enable the Company to exercise its Reacquisition Right set forth in the Award without requiring additional signatures on your part.] 

 
 

ATTACHMENT IV
  
  
  FORM OF JOINT ESCROW INSTRUCTIONS    
    

                    , 2004 

Corporate
Secretary

The Titan Corporation

3033 Science Park Drive

San Diego, California 92121-1199 

Dear
Sir/Madam: 

        As
Escrow Agent for both The Titan Corporation, a Delaware corporation (the "Company"), and the undersigned recipient of stock of the Company ("Recipient"), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Grant Notice (the "Grant Notice"), dated October 4, 2004 to which a copy of these Joint
Escrow Instructions is attached as Attachment IV, and pursuant to the terms of that certain Restricted Stock Agreement ("Agreement"), which is Attachment I to the Grant Notice, in accordance with the
following instructions: 

        1.     In
the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period set forth in the Grant Notice, the Company or its
assignee will give to Recipient and you a written notice specifying that the shares of stock shall be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you
to close the transaction contemplated by such notice in accordance with the terms of said notice. 

        2.     At
the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of shares being
transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company. 

        3.     Recipient
irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares as specified in the Grant Notice. Recipient does hereby irrevocably constitute and appoint you as Recipient's attorney-in-fact and agent for the
term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities
negotiable and complete any transaction herein contemplated. 

        4.     This
escrow shall terminate upon vesting of the shares or upon the earlier return of the shares to the Company. 

        5.     If
at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you shall deliver all
of same to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further obligations hereunder. 

        6.     Your
duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 

        7.     You
shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from
acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act
you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith. 

        8.     You
are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or
process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of
any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 

        9.     You
shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the
Grant Notice or any documents or papers deposited or called for hereunder. 

        10.   You
shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with
you. 

 

        11.   You
shall be entitled to employ such legal counsel, including but not limited to Cooley Godward LLP, and other experts as you may deem necessary properly to advise you
in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 

        12.   Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice to each party.
In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor
or successors as his attorney-in-fact and agent to the full extent of your appointment. 

        13.   If
you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto
shall join in furnishing such instruments. 

        14.   It
is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not
obligated to) retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever
to institute or defend any such proceedings. 

        15.   Any
notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in any United States
Post Box, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may
designate by ten (10) days' written notice to each of the other parties hereto: 

	 
	 	 

	COMPANY:	 	The Titan Corporation

3033 Science Park Drive

San Diego, California 92121-1199

Attn: General Counsel / Chief Financial Officer
	

RECIPIENT:	
 	

 
	 	 	

	

 	
 	

	

 	
 	

	

 	
 	

	

ESCROW AGENT:	
 	

The Titan Corporation

3033 Science Park Drive

San Diego, California 92121-1199

Attn: Corporate Secretary

        16.   By
signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Grant
Notice. 

2

 

        17.   This
instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed
that references to "you" or "your" herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to
time assign its rights under the Grant Notice and these Joint Escrow Instructions in whole or in part. 

	

 	
 	

Very truly yours,
	

 	
 	
THE TITAN CORPORATION
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	
RECIPIENT
	

 	
 	

	ESCROW AGENT:	 	 	 
	

         	
 	

 	

 
	

	
 	

 	

 

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QuickLinks

THE TITAN CORPORATION FORM OF RESTRICTED STOCK GRANT NOTICE (2000 EMPLOYEE AND DIRECTOR STOCK OPTION AND INCENTIVE PLAN)

ATTACHMENT I FORM OF RESTRICTED STOCK AGREEMENT

ATTACHMENT II 2000 Employee and Director Stock Option and Incentive Plan

ATTACHMENT III FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE

ATTACHMENT IV FORM OF JOINT ESCROW INSTRUCTIONS

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