Document:

exv10w36

 

EXECUTION COPY

Exhibit 10.36

CREDIT AGREEMENT

dated as of August 2, 2004,

among

ALION SCIENCE AND TECHNOLOGY CORPORATION,

THE LENDERS PARTY HERETO,

and

CREDIT SUISSE FIRST BOSTON,

as Administrative Agent and Collateral Agent

CREDIT SUISSE FIRST BOSTON,

as Sole Bookrunner and Sole Lead Arranger,

LASALLE BANK NATIONAL ASSOCIATION,

as Syndication Agent,

and

CREDIT SUISSE FIRST BOSTON,

as Documentation Agent

[CS&M Ref No. 5865-259]

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	ARTICLE I
	 	 	 	 
	Definitions
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Terms Generally
	 	 	25	 
	SECTION 1.03. Pro Forma Calculations
	 	 	26	 
	SECTION 1.04. Classification of Loans and Borrowings
	 	 	26	 
	SECTION 1.05. Senior Debt
	 	 	26	 
	ARTICLE II
	 	 	 	 
	The Credits
	 	 	 	 
	SECTION 2.01. Commitments
	 	 	26	 
	SECTION 2.02. Loans
	 	 	27	 
	SECTION 2.03. Borrowing Procedure
	 	 	28	 
	SECTION 2.04. Evidence of Debt; Repayment of Loans
	 	 	28	 
	SECTION 2.05. Fees
	 	 	29	 
	SECTION 2.06. Interest on Loans
	 	 	30	 
	SECTION 2.07. Default Interest
	 	 	31	 
	SECTION 2.08. Alternate Rate of Interest
	 	 	31	 
	SECTION 2.09. Termination and Reduction of Commitments
	 	 	31	 
	SECTION 2.10. Conversion and Continuation of Borrowings
	 	 	32	 
	SECTION 2.11. Repayment of Term Borrowings
	 	 	33	 
	SECTION 2.12. Optional Prepayment
	 	 	34	 
	SECTION 2.13. Mandatory Prepayments
	 	 	35	 
	SECTION 2.14. Reserve Requirements; Change in Circumstances
	 	 	36	 
	SECTION 2.15. Change in Legality
	 	 	38	 
	SECTION 2.16. Indemnity
	 	 	38	 
	SECTION 2.17. Pro Rata Treatment
	 	 	39	 
	SECTION 2.18. Sharing of Setoffs
	 	 	39	 
	SECTION 2.19. Payments
	 	 	40	 
	SECTION 2.20. Taxes
	 	 	40	 
	SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate
	 	 	42	 
	SECTION 2.22. Swingline Loans
	 	 	43	 
	SECTION 2.23. Letters of Credit
	 	 	44	 
	SECTION 2.24. Increase in Term Loan Commitments
	 	 	49	 
	ARTICLE III
	 	 	 	 
	Representations and Warranties
	 	 	 	 

i

 

	 	 	 	 	 
	 	 	Page

	SECTION 3.01. Organization; Powers
	 	 	51	 
	SECTION 3.02. Authorization
	 	 	51	 
	SECTION 3.03. Enforceability
	 	 	52	 
	SECTION 3.04. Governmental Approvals
	 	 	52	 
	SECTION 3.05. Financial Statements
	 	 	52	 
	SECTION 3.06. No Material Adverse Change
	 	 	53	 
	SECTION 3.07. Title to Properties; Possession Under Leases
	 	 	53	 
	SECTION 3.08. Subsidiaries
	 	 	53	 
	SECTION 3.09. Litigation; Compliance with Laws
	 	 	54	 
	SECTION 3.10. Agreements
	 	 	54	 
	SECTION 3.11. Federal Reserve Regulations
	 	 	54	 
	SECTION 3.12. Investment Company Act; Public Utility Holding Company Act
	 	 	54	 
	SECTION 3.13. Use of Proceeds
	 	 	55	 
	SECTION 3.14. Tax Returns
	 	 	55	 
	SECTION 3.15. No Material Misstatements
	 	 	55	 
	SECTION 3.16. Employee Benefit Plans
	 	 	55	 
	SECTION 3.17. Environmental Matters
	 	 	55	 
	SECTION 3.18. Insurance
	 	 	56	 
	SECTION 3.19. Security Documents
	 	 	56	 
	SECTION 3.20. Location of Real Property and Leased Premises
	 	 	57	 
	SECTION 3.21. Labor Matters
	 	 	57	 
	SECTION 3.22. Solvency
	 	 	57	 
	SECTION 3.23. Subchapter S Corporation Status; ESOT Tax-Exempt Status
	 	 	57	 
	SECTION 3.24. ESOP
	 	 	57	 
	SECTION 3.25. Subordinated Indebtedness
	 	 	59	 
	ARTICLE IV
	 	 	 	 
	Conditions of Lending
	 	 	 	 
	SECTION 4.01. All Credit Events
	 	 	59	 
	SECTION 4.02. First Credit Event
	 	 	60	 
	ARTICLE V
	 	 	 	 
	Affirmative Covenants
	 	 	 	 
	SECTION 5.01. Existence; Businesses and Properties
	 	 	63	 
	SECTION 5.02. Insurance
	 	 	63	 
	SECTION 5.03. Obligations and Taxes
	 	 	64	 
	SECTION 5.04. Financial Statements, Reports, etc
	 	 	64	 
	SECTION 5.05. Litigation and Other Notices
	 	 	66	 
	SECTION 5.06. Information Regarding Collateral
	 	 	67	 
	SECTION 5.07. Maintaining Records; Access to Properties
and Inspections; Maintenance of Ratings
	 	 	68	 
	SECTION 5.08. Use of Proceeds
	 	 	68	 
	SECTION 5.09. Further Assurances
	 	 	68	 

ii

 

	 	 	 	 	 
	 	 	Page

	SECTION 5.10. Interest Rate Protection
	 	 	69	 
	SECTION 5.11. Mezzanine Note Redemption
	 	 	69	 
	ARTICLE VI
	 	 	 	 
	Negative Covenants
	 	 	 	 
	SECTION 6.01. Indebtedness
	 	 	70	 
	SECTION 6.02. Liens
	 	 	72	 
	SECTION 6.03. Sale and Lease-Back Transactions
	 	 	74	 
	SECTION 6.04. Investments, Loans and Advances
	 	 	74	 
	SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions
	 	 	76	 
	SECTION 6.06. Restricted Payments; Restrictive Agreements
	 	 	76	 
	SECTION 6.07. Transactions with Affiliates
	 	 	77	 
	SECTION 6.08. Business of the Borrower and Subsidiaries
	 	 	78	 
	SECTION 6.09. Other Indebtedness and Agreements
	 	 	78	 
	SECTION 6.10. Assets as Plan Assets
	 	 	78	 
	SECTION 6.11. Prohibited Transaction
	 	 	78	 
	SECTION 6.12. Interest Coverage Ratio
	 	 	78	 
	SECTION 6.13. Maximum Leverage Ratio
	 	 	79	 
	SECTION 6.14. Fiscal Year
	 	 	79	 
	ARTICLE VII
	 	 	 	 
	Events of Default
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	The Administrative Agent and the Collateral Agent
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	Miscellaneous
	 	 	 	 
	SECTION 9.01. Notices
	 	 	85	 
	SECTION 9.02. Survival of Agreement
	 	 	86	 
	SECTION 9.03. Binding Effect
	 	 	86	 
	SECTION 9.04. Successors and Assigns
	 	 	86	 
	SECTION 9.05. Expenses; Indemnity
	 	 	91	 
	SECTION 9.06. Right of Setoff
	 	 	92	 
	SECTION 9.07. Applicable Law
	 	 	92	 
	SECTION 9.08. Waivers; Amendment
	 	 	93	 
	SECTION 9.09. Interest Rate Limitation
	 	 	94	 
	SECTION 9.10. Entire Agreement
	 	 	94	 
	SECTION 9.11. WAIVER OF JURY TRIAL
	 	 	94	 
	SECTION 9.12. Severability
	 	 	95	 

iii

 

	 	 	 	 	 
	 	 	Page

	SECTION 9.13. Counterparts
	 	 	95	 
	SECTION 9.14. Headings
	 	 	95	 
	SECTION 9.15. Jurisdiction; Consent to Service of Process
	 	 	95	 
	SECTION 9.16. Confidentiality
	 	 	96	 
	SECTION 9.17. USA Patriot Act Notice
	 	 	97	 

	 	 	 	 	 
	SCHEDULES
	 	 	 	 
	Schedule 1.01(a)

	 	-
	 	ESOP Plan Documents
	Schedule 1.01(b)

	 	-
	 	Existing Letters of Credit
	Schedule 1.01(c)

	 	-
	 	Subsidiary Guarantors
	Schedule 2.01

	 	-
	 	Lenders and Commitments
	Schedule 3.04(b)

	 	-
	 	Material Contracts
	Schedule 3.08

	 	-
	 	Subsidiaries
	Schedule 3.09

	 	-
	 	Litigation
	Schedule 3.17

	 	-
	 	Environmental Matters
	Schedule 3.18

	 	-
	 	Insurance
	Schedule 3.19(a)

	 	-
	 	UCC Filing Offices
	Schedule 3.20(a)

	 	-
	 	Owned Real Property
	Schedule 3.20(b)

	 	-
	 	Leased Real Property
	Schedule 3.24

	 	-
	 	Certain ESOP Plan Documents
	Schedule 6.01

	 	-
	 	Indebtedness Existing on the Closing Date
	Schedule 6.02

	 	-
	 	Liens Existing on the Closing Date

	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Administrative Questionnaire
	Exhibit B

	 	-
	 	Form of Assignment and Acceptance
	Exhibit C

	 	-
	 	Form of Borrowing Request
	Exhibit D

	 	-
	 	Form of Guarantee and Collateral Agreement
	Exhibit E

	 	-
	 	Form of Notice of Conversion/Continuation
	Exhibit F

	 	-
	 	Form of Notice of Prepayment
	Exhibit G

	 	-
	 	Form of Opinion of Baker & McKenzie
	Exhibit H-1

	 	 	 	Form of Revolving Promissory Note
	Exhibit H-2

	 	 	 	Form of Term Promissory Note

iv

 

     CREDIT AGREEMENT dated as of August 2, 2004, among
ALION SCIENCE AND TECHNOLOGY CORPORATION, a Delaware
corporation (the “Borrower”), the LENDERS (as defined in
Article I) and CREDIT SUISSE FIRST BOSTON, as
administrative agent (in such capacity, the “Administrative
Agent”) and as collateral agent (in such capacity, the
“Collateral Agent”) for the Lenders.

     The Borrower has requested the Lenders to extend credit in the form of (a)
Term Loans (such term and each other capitalized term used but not defined in
this introductory statement having the meaning given it in Article I) on the
Closing Date and on up to three other occasions occurring during the Delayed
Draw Availability Period in an aggregate principal amount not in excess of
$100,000,000, and (b) Revolving Loans at any time and from time to time prior
to the Revolving Credit Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $30,000,000. The Borrower also has requested
the Swingline Lender to extend credit, at any time and from time to time prior
to the Revolving Credit Maturity Date, in the form of Swingline Loans, in an
aggregate principal amount at any time outstanding not in excess of $5,000,000,
and the Issuing Bank to issue Letters of Credit, in an aggregate face amount at
any time outstanding not in excess of $5,000,000. The proceeds of the Term
Loans to be made on the Closing Date will be used on the Closing Date solely
(a) to repay all amounts due or outstanding under the Existing Credit
Agreement, including accrued interest and prepayment penalties (if any), and
(b) to pay related fees and expenses. The proceeds of the Term Loans made
during the Delayed Draw Availability Period will be used solely (a) to finance
Permitted Acquisitions, (b) to effect in whole or in part the Mezzanine Note
Redemption and (c) to pay related fees and expenses. The proceeds of
Incremental Term Loans made from time to time will be used solely to effect the
Mezzanine Note Redemption (to the extent not completed during the Delayed Draw
Availability Period), to finance Permitted Acquisitions and to effect the
payment and satisfaction of the Mezzanine Warrant Put Right, if it is
exercised, or for any other lawful purpose set forth in the applicable
Incremental Term Loan Assumption Agreement. The proceeds of the Revolving
Loans and the Swingline Loans are to be used solely for ongoing working capital
needs and other general corporate purposes, including to finance Permitted
Acquisitions. The Letters of Credit will be used solely to support payment
obligations incurred in the ordinary course of business by the Borrower and the
Subsidiaries.

     The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

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

 

 

     “ABR”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.

     “Acquired Entity” shall have the meaning assigned to such term in Section
6.04(g).

     “Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum equal to the product of (a)
the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

     “Administrative Agent Fees” shall have the meaning assigned to such term
in Section 2.05(b).

     “Administrative Questionnaire” shall mean an Administrative Questionnaire
in the form of Exhibit A, or such other form as may be supplied from time to
time by the Administrative Agent.

     “Affiliate” shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that, for purposes of Section 6.07, the term
“Affiliate” shall also include any person that directly or indirectly owns 5%
or more of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.

     “Aggregate Revolving Credit Exposure” shall mean the aggregate amount of
the Lenders’ Revolving Credit Exposures.

     “Agreement” shall mean this Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time, including the
Schedules and Exhibits hereto.

     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1⁄2 of 1%. If the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime Rate or
the Federal Funds Effective Rate, as the case may be.

     “Applicable Percentage” shall mean, except as otherwise provided in the
applicable Incremental Term Loan Assumption Agreement with respect to any Other
Term Loan, for any day, (a) with respect to any Eurodollar Term Loan, 2.75%,
(b) with

2

 

respect to any ABR Term Loan, 1.75%, (c) with respect to any Swingline
Loan, the applicable percentage set forth below under the caption “ABR Spread”,
based upon the Leverage Ratio as of the relevant date of determination, and (d)
with respect to any Eurodollar Loan or ABR Loan that is a Revolving Loan, the
applicable percentage set forth below under the caption “Eurodollar Spread” or
“ABR Spread”, as the case may be, based upon the Leverage Ratio as of the
relevant date of determination:

	 	 	 	 	 	 	 	 	 
	Leverage Ratio
	 	Eurodollar Spread
	 	ABR Spread

	Category 1
	 	 	2.75	%	 	 	1.75	%
	Greater than or equal
to 3.00 to 1.00
	 	 	 	 	 	 	 	 
	Category 2
	 	 	2.50	%	 	 	1.50	%
	Greater than or equal to
2.50 to 1.00 but less than
3.00 to 1.00
	 	 	 	 	 	 	 	 
	Category 3
	 	 	2.25	%	 	 	1.25	%
	Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00
	 	 	 	 	 	 	 	 
	Category 4
	 	 	2.00	%	 	 	1.00	%
	Less than 2.00 to 1.00
	 	 	 	 	 	 	 	 

     Each change in the Applicable Percentage resulting from a change in the
Leverage Ratio shall be effective with respect to all Revolving Loans,
Swingline Loans and Letters of Credit outstanding on and after the date of
delivery to the Administrative Agent of the financial statements required by
Section 5.04(a) or (b) and certificates required by Section 5.04(c) indicating
such change until the date immediately preceding the next date of delivery of
such financial statements and certificates indicating another such change.
Notwithstanding the foregoing, until the Borrower shall have delivered the
financial statements required by Section 5.04(b) and the certificate required
by Section 5.04(c) covering a period of at least six full months following the
Closing Date, the Leverage Ratio shall be deemed to be in Category 1 for
purposes of determining the Applicable Percentage with respect to Swingline
Loans, Revolving Loans and Letters of Credit. In addition, (a) if the Borrower
shall have failed to deliver the financial statements required by Section
5.04(a) or (b) or the certificate required by Section 5.04(c) when required,
and such failure shall continue for at least five days, or (b) at any time
after the occurrence of an Event of Default, the Leverage Ratio shall be deemed
to be in Category 1 for the purposes of determining the Applicable Percentage
with respect to Revolving Loans, Swingline Loans and Letters of Credit until
such time as (i) such

3

 

financial statements or certificate shall have been delivered or (ii) such
Event of Default shall have been cured or waived.

     “Asset Sale” shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by the Borrower or any of the
Subsidiaries to any person other than the Borrower or any Subsidiary Guarantor
of (a) any Equity Interests of any of the Subsidiaries (other than directors’
qualifying shares) or (b) any other assets of the Borrower or any of the
Subsidiaries (other than (i) inventory, damaged, obsolete or worn out assets,
scrap and Permitted Investments, in each case disposed of in the ordinary
course of business, (ii) non-exclusive licenses of intellectual property and
sale or discount of overdue accounts receivable in connection with collections,
in each case made in the ordinary course of business, and (iii) dispositions
between or among Foreign Subsidiaries); provided that any transaction or series
of related transactions described in clause (b) above having a value not in
excess of $350,000 shall be deemed not to be an “Asset Sale” for purposes of
this Agreement.

     “Assignment and Acceptance” shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.

     “Assignment of Claims Act” shall mean the Assignment of Claims Act of
1940, as amended from time to time.

     “Board” shall mean the Board of Governors of the Federal Reserve System of
the United States of America.

     “Borrowing” shall mean (a) Loans of the same Class and Type made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect, or (b) a Swingline Loan.

     “Borrowing Request” shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.

     “Business Day” shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

     “Capital Expenditures” shall mean, for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of the Borrower and its consolidated Subsidiaries that are (or
should be) set forth in a consolidated statement of cash flows of the Borrower
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations or Synthetic Lease Obligations incurred by the Borrower and its
consolidated Subsidiaries during such period, but excluding in each case any
such expenditure made to restore, replace or rebuild property to the condition
of such property immediately prior to any damage, loss, destruction or
condemnation of such

4

 

property, to the extent such expenditure is made with insurance proceeds,
condemnation awards or damage recovery proceeds relating to any such damage,
loss, destruction or condemnation.

     “Capital Lease Obligations” of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

     A “Change in Control” shall be deemed to have occurred if (a) prior to a
Qualified Public Offering, the ESOT shall fail to own, directly or indirectly,
beneficially and of record, shares representing at least 51% of each of the
aggregate ordinary voting power and aggregate equity value represented by the
issued and outstanding Equity Interests of the Borrower, (b) after a Qualified
Public Offering, any “person” or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) other than IIT or the ESOT becomes,
directly or indirectly, the beneficial owner of Equity Interests in the
Borrower representing more than 37.5% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower, (c)
a majority of the seats (other than vacant seats) on the board of directors of
the Borrower shall at any time be occupied by persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated, or (d) any change in control (or similar event, however
denominated) with respect to the Borrower shall occur under and as defined in
(i) any indenture or agreement in respect of Material Indebtedness to which the
Borrower or any Subsidiary is a party or (ii) any of the then existing and
effective Securities Purchase Agreements, Warrants or Rights Agreement.

     “Change in Law” shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14, by any lending office of such Lender or
by such Lender’s or Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

     “Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans, Other Term Loans or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Credit
Commitment, a Term Loan Commitment, an Incremental Term Commitment or a
Swingline Commitment.

     “Closing Date” shall mean August 2, 2004.

5

 

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.

     “Collateral” shall mean all the “Collateral” as defined in any Security
Document.

     “Commitment” shall mean, with respect to any Lender, such Lender’s
Revolving Credit Commitment, Term Loan Commitment, Incremental Term Commitment
and/or Swingline Commitment.

     “Commitment Fee” shall have the meaning assigned to such term in Section
2.05(a).

     “Confidential Information Memorandum” shall mean the Confidential
Information Memorandum of the Borrower dated July 2004.

     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization, including
amortization of goodwill and other intangible assets, for such period, (iv)
cash contributions to the ESOP during such period in respect of the repurchase
liability of the Borrower under the ESOP Plan Documents, (v) any non-cash
charges or expenses (other than the write-down of current assets) for such
period, including (A) non-cash expenses associated with the recognition of the
difference between the fair market value of the Warrants and the exercise price
of such Warrants, (B) non-cash expenses with respect to stock appreciation
rights, phantom stock plans, the Warrants and accretion of the Warrants and (C)
non-cash contributions to the ESOP, (vi) any extraordinary losses for such
period and (vii) any non-recurring charges and adjustments for such period
treated as such by the independent third-party valuation firm that prepares
valuation reports in connection with the ESOP and minus (b) without duplication
(i) all cash payments made during such period on account of reserves,
restructuring charges and other non-cash charges added to Consolidated Net
Income pursuant to clause (a)(v) above in a previous period and (ii) to the
extent included in determining such Consolidated Net Income, any extraordinary
gains and all non-cash items of income for such period, all determined on a
consolidated basis in accordance with GAAP. For purposes of determining the
Interest Coverage Ratio and the Leverage Ratio as of or for the periods ended
on September 30, 2004, December 31, 2004 and March 31, 2005, Consolidated
EBITDA will be deemed to be equal to (i) for the fiscal quarter ended December
31, 2003, $7,500,000, (ii) for the fiscal quarter ended March 31, 2004,
$7,000,000, and (iii) for the fiscal quarter ended June 30, 2004, $7,700,000.

     “Consolidated Interest Expense” shall mean, for any period, the sum of (a)
the interest expense (excluding fees but including imputed interest expense in
respect of Capital Lease Obligations and Synthetic Lease Obligations) of the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, plus (b) any interest accrued during such period
in respect of Indebtedness of the Borrower or any Subsidiary that is required
to be capitalized rather than included in

6

 

consolidated interest expense for such period in accordance with GAAP. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Borrower or any Subsidiary
with respect to interest rate Hedging Agreements. For purposes of determining
the Interest Coverage Ratio for the period of four consecutive quarters ended
September 30, 2004, December 31, 2004 and March 31, 2005, Consolidated Interest
Expense shall be deemed to be equal to (a) the Consolidated Interest Expense
payable in cash for the fiscal quarter ended September 30, 2004, multiplied by
4, (b) the Consolidated Interest Expense payable in cash for the two
consecutive fiscal quarters ended December 31, 2004, multiplied by 2 and (c)
the Consolidated Interest Expense payable in cash for the three consecutive
fiscal quarters ended March 31, 2005, multiplied by 4/3, respectively.

     “Consolidated Net Income” shall mean, for any period, the net income or
loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by the Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, statute, rule or governmental
regulation applicable to such Subsidiary, (b) the income or loss of any person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary or the date that such person’s
assets are acquired by the Borrower or any Subsidiary and (c) any gains or
losses attributable to sales of assets out of the ordinary course of business
and the transaction costs in connection with such sales.

     “Control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms “Controlling” and “Controlled” shall have meanings correlative
thereto.

     “Controlled Group” shall mean the group consisting of (a) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower, (b) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower,
and (c) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in
clause (a) above or any partnership or trade or business described in clause
(b) above.

     “Credit Event” shall have the meaning assigned to such term in Section
4.01.

     “Credit Facilities” shall mean the revolving credit and term loan
facilities provided for by this Agreement.

     “Current Assets” shall mean, at any time, the consolidated current assets
(other than cash and Permitted Investments) of the Borrower and the
Subsidiaries.

7

 

     “Current Liabilities” shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness and
(b) outstanding Revolving Loans and Swingline Loans.

     “Default” shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.

     “Defaulting Lender” shall mean any Revolving Credit Lender that has (a)
defaulted in its obligation to make a Revolving Loan or to fund its
participation in a Letter of Credit or Swingline Loan required to be made or
funded by it hereunder, (b) notified the Administrative Agent or a Loan Party
in writing that it does not intend to satisfy any such obligation or (c) become
insolvent or has been taken over by any Governmental Authority.

     “Delayed Draw Availability Period” shall mean the period commencing on and
including the first Business Day following the Closing Date and ending on and
including the date that is 60 days after the Closing Date.

     “dollars” or “$” shall mean lawful money of the United States of America.

     “Domestic Subsidiaries” shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.

     “Environmental Laws” shall mean all former, current and future Federal,
state, local and foreign laws (including common law), treaties, regulations,
rules, ordinances, codes, decrees, judgments, directives, orders (including
consent orders), and agreements in each case, relating to protection of the
environment, natural resources, human health and safety or the presence,
Release of, or exposure to, Hazardous Materials, or the generation,
manufacture, processing, distribution, use, treatment, storage, transport,
recycling or handling of, or the arrangement for such activities with respect
to, Hazardous Materials.

     “Environmental Liability” shall mean all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

     “Equity Interests” shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust, including the ESOT, or other equity interests in any
person.

8

 

     “Equity Issuance” shall mean any issuance or sale by the Borrower or any
Subsidiary of any Equity Interests of the Borrower or any such Subsidiary, as
applicable, except in each case for (a) any issuance or sale to the Borrower or
any Subsidiary, (b) any issuance of directors’ qualifying shares, and (c) sales
or issuances of common stock, options, warrants, stock appreciation rights,
phantom stock, or other incentive agreements of the Borrower (i) to the ESOT
Trustee (for the benefit of the ESOP) or (ii) to management or employees of the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan, stock appreciation rights plan, phantom stock plan or arrangement or
employee benefit plan or arrangement in existence from time to time.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.

     “ERISA Affiliate” shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

     “ERISA Event” shall mean (a) any “reportable event”, as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the Borrower
or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (e) the
receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the adoption of any
amendment to a Plan that would require the provision of security pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA; (g) the receipt by the
Borrower or any of its ERISA Affiliates of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the occurrence of
a “prohibited transaction” with respect to which the Borrower or any of the
Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of
the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; or (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could result in liability of the Borrower or any
Subsidiary.

     “ESOP” shall mean the employee benefit plan entitled “The Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Plan”
adopted and maintained by the Borrower.

9

 

     “ESOP Fiduciary” shall mean the named fiduciary of the ESOP under ERISA.
As of the Closing Date, the ESOP Fiduciary is the ESOP Committee of the
Borrower.

     “ESOP Plan Documents” shall mean collectively, the documents listed on
Schedule 1.01(a), each as may be amended, supplemented or modified from time to
time as permitted by Section 6.09.

     “ESOT” shall mean the trust entitled “The Alion Science and Technology
Corporation Employee Ownership, Savings and Investment Trust” and adopted and
maintained by the Borrower pursuant to the applicable ESOP Plan Documents.

     “ESOT Trustee” shall mean the trustee of the ESOT. As of the Closing
Date, the ESOT Trustee is State Street Bank and Trust Company.

     “Eurodollar”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

     “Event of Default” shall have the meaning assigned to such term in Article
VII.

     “Excess Cash Flow” shall mean, for any fiscal year of the Borrower, the
excess of (a) the sum, without duplication, of (i) Consolidated EBITDA for such
fiscal year and (ii) reductions to noncash working capital of the Borrower and
the Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current
Assets minus Current Liabilities from the beginning to the end of such fiscal
year) over (b) the sum, without duplication, of (i) the amount of any Taxes
payable in cash by the Borrower and the Subsidiaries with respect to such
fiscal year, (ii) Consolidated Interest Expense for such fiscal year, (iii)
Capital Expenditures made in cash during such fiscal year, except to the extent
financed with the proceeds of Indebtedness, equity issuances, casualty
proceeds, condemnation proceeds or other proceeds that would not be included in
Consolidated EBITDA, (iv) permanent repayments of Indebtedness (except any
mandatory prepayments of Loans under Section 2.13) made by the Borrower and the
Subsidiaries during such fiscal year, but only to the extent that such
prepayments by their terms cannot be reborrowed or redrawn and do not occur in
connection with a refinancing of all or any portion of such Indebtedness, (v)
additions to noncash working capital for such fiscal year (i.e., the increase,
if any, in Current Assets minus Current Liabilities from the beginning to the
end of such fiscal year), (vi) the purchase price of all Permitted Acquisitions
paid in cash during such fiscal year, (vii) cash contributions made to the
ESOP during such fiscal year and included in Consolidated EBITDA pursuant to
clause (a)(iv) of the definition of the term “Consolidated EBITDA”, and (viii)
extraordinary losses and non-recurring charges and adjustments during such
fiscal year, in each case to the extent included in Consolidated EBITDA
pursuant to clauses (a)(vi) and (a)(vii), respectively, of the definition of
the term “Consolidated EBITDA”.

     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes

10

 

imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure to comply with Section 2.20(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.20(a).

     “Existing Credit Agreement” shall mean the Credit Agreement dated as of
December 20, 2002, as amended, by and among the Borrower, the institutions from
time to time party thereto as lenders and LaSalle Bank National Association, as
Administrative Agent.

     “Existing Letters of Credit” shall mean each Letter of Credit previously
issued for the account of the Borrower that is (a) outstanding on the Closing
Date and (b) listed on Schedule 1.01(b).

     “Federal Funds Effective Rate” shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     “Fee Letter” shall mean the Fee Letter dated June 10, 2004, between the
Borrower and the Administrative Agent.

     “Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.

     “Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.

     “Foreign Lender” shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     “Foreign Ownership Control or Influence” has the meaning given to such
phrase in the Federal National Industrial Security Program Operating Manual and
any successor documentation or program thereto.

11

 

     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

     “GAAP” shall mean United States generally accepted accounting principles
applied on a basis consistent with the practices the Borrower has employed
historically in preparing its financial statements.

     “Government” shall mean the United States government or any department or
agency thereof.

     “Governmental Authority” shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

     “Government Contracts” shall mean written contracts between the Borrower
or any Subsidiary Guarantor and the Government.

     “Granting Lender” shall have the meaning assigned to such term in Section
9.04(i).

     “Guarantee” of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of
business.

     “Guarantee and Collateral Agreement” shall mean the Guarantee and
Collateral Agreement, substantially in the form of Exhibit D, among the
Borrower, the Subsidiaries party thereto and the Collateral Agent for the
benefit of the Secured Parties.

     “Hazardous Materials” shall mean (a) any petroleum products or byproducts
and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law.

     “Hedging Agreement” shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement.

12

 

     “IIT” shall mean Illinois Institute of Technology, an Illinois
not-for-profit corporation.

     “IITRI” shall mean IIT Research Institute, a not-for-profit Illinois
corporation controlled by IIT.

     “Incentive Arrangements” shall mean any stock ownership, restricted stock,
warrants, stock option, or stock appreciation rights plans, “phantom” stock
plans, deferred compensation arrangements, employment agreements,
non-competition agreements, subscription and stockholders agreements and other
incentive and bonus plans and similar arrangements made in connection with the
retention of directors, executives, officers or employees of the Borrower and
its Subsidiaries.

     “Incremental Term Commitment” shall mean the commitment of any Lender,
established pursuant to Section 2.24, to make Incremental Term Loans to the
Borrower.

     “Incremental Term Lender” shall mean a Lender with an Incremental Term
Commitment or an outstanding Incremental Term Loan.

     “Incremental Term Loan Amount” shall mean, at any time, the excess, if
any, of (a) the sum of (i) $50,000,000 plus (ii) the amount of unused Term Loan
Commitments upon the expiration of the Delayed Draw Availability Period over
(b) the aggregate amount of all Incremental Term Commitments established prior
to such time pursuant to Section 2.24.

     “Incremental Term Loan Assumption Agreement” shall mean an Incremental
Term Loan Assumption Agreement in form and substance reasonably satisfactory to
the Administrative Agent, among the Borrower, the Administrative Agent and one
or more Incremental Term Lenders.

     “Incremental Term Loan Maturity Date” shall mean the final maturity date
of any Incremental Term Loan, as set forth in the applicable Incremental Term
Loan Assumption Agreement.

     “Incremental Term Loan Repayment Dates” shall mean the dates scheduled for
the repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Term Loan Assumption Agreement.

     “Incremental Term Loans” shall mean Term Loans made by one or more Lenders
to the Borrower pursuant to Section 2.01(b). Incremental Term Loans may be
made in the form of additional Term Loans or, to the extent permitted by
Section 2.24 and provided for in the relevant Incremental Term Loan Assumption
Agreement, Other Term Loans.

     “Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are

13

 

customarily paid, (d) all obligations of such person under conditional
sale or other title retention agreements relating to property or assets
purchased by such person (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business), (e) all obligations
of such person issued or assumed as the deferred purchase price of property or
services (excluding trade accounts payable, accrued obligations incurred in the
ordinary course of business and contingent earn-out obligations), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (g) all Guarantees by such person of
Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease
Obligations of such person, (i) all obligations of such person as an account
party in respect of letters of credit and (j) all obligations of such person in
respect of bankers’ acceptances. The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general partner.

     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

     “Insignificant Subsidiary” shall mean any Subsidiary that either (a)(i)
does not conduct any business operations, (ii) has assets with a total book
value not in excess of $100,000 and (iii) does not have any Indebtedness
outstanding, or (b) is a direct or indirect Subsidiary of the Borrower formed
for purposes of effecting a Permitted Acquisition which Subsidiary is formed
with the intention of meeting, and within one year after the consummation of
such Permitted Acquisition meets, the criteria set forth in clause (a) above;
provided that at no time shall any Subsidiary otherwise satisfying the criteria
of this clause (b) be considered an “Insignificant Subsidiary” if such
Subsidiary and all other such Subsidiaries hold 5% or more of the consolidated
assets of the Borrower.

     “Interest Coverage Ratio” shall mean, for any period, the ratio of (a)
Consolidated EBITDA for such period minus Capital Expenditures for such period
to (b) Consolidated Interest Expense for such period payable in cash.

     “Interest Payment Date” shall mean (a) with respect to any ABR Loan
(including any Swingline Loan), the last Business Day of each March, June,
September and December, and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months’ duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months’ duration been applicable
to such Borrowing.

     “Interest Period” shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter (or 9 or 12 months thereafter if, at the time of the relevant
Borrowing, all Lenders participating therein agree to make an Interest Period
of such duration available), as the Borrower may elect; provided, however, that
if any Interest Period would end on a day other than a Business Day, such

14

 

Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business
Day. Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

     “Issuing Bank” shall mean, as the context may require, (a) Credit Suisse
First Boston, in its capacity as the issuer of Letters of Credit hereunder, (b)
with respect to the Existing Letters of Credit, LaSalle Bank National
Association and/or (c) any other Lender that may become an Issuing Bank
pursuant to Section 2.23(i) or (k), with respect to Letters of Credit issued by
such Lender. The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

     “Issuing Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).

     “L/C Commitment” shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.

     “L/C Disbursement” shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.

     “L/C Exposure” shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time and (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Revolving Credit Lender at any time shall
equal its Pro Rata Percentage of the aggregate L/C Exposure at such time.

     “L/C Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

     “Lenders” shall mean (a) the persons listed on Schedule 2.01 (other than
any such person that has ceased to be a party hereto pursuant to an Assignment
and Acceptance) and (b) any person that has become a party hereto pursuant to
an Assignment and Acceptance. Unless the context clearly indicates otherwise,
the term “Lenders” shall include the Swingline Lender.

     “Letter of Credit” shall mean any letter of credit issued or deemed issued
pursuant to Section 2.23.

     “Leverage Ratio” shall mean, on any date, the ratio of Total Debt on such
date to Consolidated EBITDA for the period of four consecutive fiscal quarters
most recently ended on or prior to such date.

15

 

     “LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rates for deposits in dollars (as set
forth by any service selected by the Administrative Agent that has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the
“LIBO Rate” shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in dollars are offered for such relevant Interest Period to major banks in the
London interbank market in London, England by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the beginning of such Interest Period.

     “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

     “Loan Documents” shall mean this Agreement, the Letters of Credit, the
Security Documents, the promissory notes, if any, executed and delivered
pursuant to Section 2.04(e), the Amended and Restated Master Letter of Credit
Agreement dated as of the Closing Date, between the Borrower and LaSalle Bank
National Association, in its capacity as an Issuing Bank, as the same may be
amended, restated, supplemented or otherwise modified from time to time, and
each Incremental Term Loan Assumption Agreement.

     “Loan Parties” shall mean the Borrower and the Subsidiary Guarantors.

     “Loans” shall mean the Revolving Loans, the Term Loans and the Swingline
Loans.

     “Margin Stock” shall have the meaning assigned to such term in Regulation
U.

     “Material Adverse Effect” shall mean (a) a materially adverse effect on
the business, assets, liabilities, operations or financial condition of the
Borrower and the Subsidiaries, taken as a whole, (b) a material impairment of
the ability of the Borrower or any other Loan Party to perform any of its
obligations under any Loan Document to which it is or will be a party or (c) a
material impairment of the rights of or benefits available to the Lenders under
any Loan Document.

     “Material Contract” shall mean each Government Contract that has a
remaining value of at least $5,000,000.

16

 

     “Material Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $10,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the
Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.

     “Mezzanine Note Redemption” shall mean the redemption or repayment by the
Borrower of all its outstanding Mezzanine Notes, including accrued interest and
prepayment penalties (if any), pursuant to the terms of the Mezzanine Note
Securities Purchase Agreement.

     “Mezzanine Note Securities Purchase Agreement” shall mean the Mezzanine
Note Securities Purchase Agreement dated as of December 20, 2002, by and
between the Borrower and IITRI (as subsequently assigned to IIT), as the same
may be amended, supplemented or modified from time to time as permitted by
Section 6.09.

     “Mezzanine Notes” shall mean the Borrower’s 12% Mezzanine Notes due
December 20, 2008 in an outstanding aggregate principal amount on the Closing
Date of approximately $20,343,435.

     “Mezzanine Warrant Put Right” shall mean the right of any holder of a
Warrant referred to in clauses (a) and (c) in the definition of the term
“Warrants” to cause the Borrower to repurchase such Warrant in accordance with
the terms of such Warrant.

     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor
thereto.

     “Multiemployer Plan” shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

     “Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of (i)
selling expenses (including reasonable broker’s fees or commissions, legal
fees, transfer and similar taxes and the Borrower’s good faith estimate of
income taxes paid or payable in connection with such sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations or purchase price adjustment associated with
such Asset Sale; provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds, and (iii) the principal amount, premium or penalty, if any, interest
and other amounts on any Indebtedness for borrowed money (other than
Indebtedness hereunder) which is secured by the asset sold in such Asset Sale
and which is required to be repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such asset); provided, however, that,
if (x) the Borrower shall deliver a certificate of a Financial Officer of the
Borrower to the Administrative Agent within five Business Days after receipt of
any such

17

 

Net Cash Proceeds setting forth the Borrower’s intent to reinvest such
proceeds in productive assets of a kind then used or usable in the business of
the Borrower and the Subsidiaries within one-year of receipt of such proceeds
and (y) no Default or Event of Default shall have occurred and be continuing at
the time such certificate is delivered, such proceeds shall not constitute Net
Cash Proceeds except to the extent not so used at the end of such one-year
period, at which time such proceeds shall be deemed to be Net Cash Proceeds;
and (b) with respect to any issuance or disposition of Indebtedness or any
Equity Issuance, the cash proceeds thereof, net of all taxes and customary
fees, commissions, costs and other expenses (including repurchase obligations
to the extent reserved in accordance with GAAP) incurred in connection
therewith.

     “Obligations” shall mean all obligations defined as “Obligations” in the
Guarantee and Collateral Agreement and the other Security Documents.

     “Officer Note” shall mean a promissory note of the Borrower dated February
11, 2004, issued to Gary Amstutz in the principal amount of $750,000.

     “Other Taxes” shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.

     “Other Term Loans” shall have the meaning assigned to such term in Section
2.24.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

     “Perfection Certificate” shall mean the Perfection Certificate
substantially in the form of Exhibit B to the Guarantee and Collateral
Agreement.

     “Permitted Acquisition” shall have the meaning assigned to such term in
Section 6.04(g).

     “Permitted Investments” shall mean:

     (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;

     (b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative

18

 

Agent or any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000;

     (d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria of clause (c) above;

     (e) investments in “money market funds” within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a) through
(d) above; and

     (f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.

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

     “Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

     “Prime Rate” shall mean the rate of interest per annum determined from
time to time by Credit Suisse First Boston as its prime rate in effect at its
principal office in New York City and notified to the Borrower.

     “Pro Forma Basis” shall mean, with respect to compliance with any test or
covenant hereunder, compliance with such covenant or test after giving effect
to (a) any proposed Permitted Acquisition or (b) any Asset Sale of a Subsidiary
or operating entity for which historical financial statements for the relevant
period are available (including (i) pro forma adjustments arising out of events
which are directly attributable to the proposed Permitted Acquisition or Asset
Sale, are factually supportable and are expected to have a continuing impact,
in each case as determined on a basis consistent with Article 11 of Regulation
S-X of the Securities Act of 1933, as amended, as interpreted by the Staff of
the Securities and Exchange Commission, and (ii) such other adjustments as are
satisfactory to the Administrative Agent, in each case as certified by a
Financial Officer of the Borrower) using, for purposes of determining such
compliance, the historical financial statements of all entities or assets so
acquired or sold and the consolidated financial statements of the Borrower and
the Subsidiaries which shall be reformulated as if such Permitted Acquisition
or Asset Sale, and all other Permitted Acquisitions and Asset Sales that have
been consummated during the period, and any Indebtedness or other liabilities
incurred in connection with any such Permitted Acquisitions had been
consummated and incurred at the beginning of such period.

19

 

     “Pro Forma Compliance” shall mean, at any date of determination, that the
Borrower shall be in pro forma compliance with the covenants set forth in
Sections 6.12 and 6.13 as of the date of such determination or the last day of
the most recently completed fiscal quarter, as the case may be (computed on the
basis of (a) balance sheet amounts as of such date and (b) income statement
amounts for the most recently completed period of four consecutive fiscal
quarters for which financial statements shall have been delivered to the
Administrative Agent and calculated on a Pro Forma Basis in respect of the
event giving rise to such determination).

     “Pro Rata Percentage” of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by
such Lender’s Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Pro Rata Percentages
shall be determined on the basis of the Revolving Credit Commitments most
recently in effect, giving effect to any subsequent assignments.

     “Qualified Public Offering” shall mean an underwritten public offering of
common stock of the Borrower pursuant to an effective registration statement
filed with the Securities and Exchange Commission in accordance with the
Securities Act of 1933, as amended, that results in at least $30,000,000 of Net
Cash Proceeds to the Borrower and results in the listing of the common stock of
the Borrower on a national securities exchange or the NASDAQ National Market
quotation system.

     “Register” shall have the meaning assigned to such term in Section
9.04(d).

     “Regulation T” shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

     “Regulation U” shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

     “Regulation X” shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

     “Related Fund” shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is
administered, advised or managed by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.

     “Related Parties” shall mean, with respect to any specified person, such
person’s Affiliates and the respective directors, officers, employees and
agents of such person and such person’s Affiliates.

     “Release” shall mean any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.

20

 

     “Repayment Date” shall have the meaning given such term in Section 2.11.
Unless the context otherwise requires, the term “Repayment Date” shall also
include each Incremental Term Loan Repayment Date.

     “Required Lenders” shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments and Term Loan Commitments representing more than
50% of the sum of all Loans outstanding (excluding Swingline Loans), L/C
Exposure, Swingline Exposure and unused Revolving Credit Commitments and Term
Loan Commitments at such time; provided, however, that the Revolving Loans, L/C
Exposure, Swingline Exposure and unused Revolving Credit Commitments of any
Defaulting Lender shall be disregarded in the determination of Required Lenders
at any time.

     “Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.

     “Restricted Indebtedness” shall mean Indebtedness of the Borrower or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(c).

     “Restricted Payment” shall mean any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation
or termination of or otherwise with respect to any Equity Interests in the
Borrower or any Subsidiary or any option, warrant or other right to acquire any
such Equity Interests in the Borrower or any Subsidiary.

     “Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving
Loans.

     “Revolving Credit Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans (and to participate in
Letters of Credit and Swingline Loans) hereunder as set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender assumed its
Revolving Credit Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.

     “Revolving Credit Exposure” shall mean, with respect to any Revolving
Credit Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender, plus the aggregate amount at such
time of such Lender’s L/C Exposure, plus the aggregate amount at such time of
such Lender’s Swingline Exposure.

21

 

     “Revolving Credit Lender” shall mean a Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.

     “Revolving Credit Maturity Date” shall mean August 2, 2009.

     “Revolving Loans” shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (a)(iii) of Section 2.01.

     “Rights Agreement” means the Rights Agreement dated as of December 20,
2002, by and among the Borrower, the ESOT and the other holders of Equity
Interests (or warrants or options therefor) issued by the Borrower.

     “Secured Parties” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

     “Securities Purchase Agreements” shall mean (a) the Mezzanine Note
Securities Purchase Agreement and (b) the Seller Note Securities Purchase
Agreement dated as of December 20, 2002, by and between the Borrower and IITRI
(as subsequently assigned to IIT), as the same may be amended, supplemented or
modified from time to time as permitted by Section 6.09.

     “Security Documents” shall mean the Guarantee and Collateral Agreement and
each of the security agreements, mortgages and other instruments and documents
executed and delivered pursuant to any of the foregoing or pursuant to Section
5.09.

     “Seller Subordinated Notes” shall mean the Borrower’s 6% Seller
Subordinated Notes due December 20, 2010 in an outstanding aggregate principal
amount on the Closing Date of approximately $39,900,000, together with
additional Seller Subordinated Notes issued in lieu of cash interest thereon in
accordance with the terms thereof.

     “SPC” shall have the meaning assigned to such term in Section 9.04(i).

     “S&P” shall mean Standard & Poor’s Ratings Service, or any successor
thereto.

     “Specified U.K. Company” shall mean a company organized under the laws of,
or conducting a substantial part of its business in, the United Kingdom, and
identified to the Administrative Agent prior to the Closing Date.

     “Specified U.K. Investment” shall mean an investment made by the Borrower
on or after the Closing Date to acquire up to 25% of the share capital via an
investment in equity and/or convertible debt of the Specified U.K. Company for
an aggregate amount not to exceed $3,000,000.

     “Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative

22

 

Agent or any Lender (including any branch, Affiliate or other fronting
office making or holding a Loan) is subject for Eurodollar Liabilities (as
defined in Regulation D of the Board). Eurodollar Loans shall be deemed to
constitute Eurodollar Liabilities as defined in Regulation D of the Board) and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

     “subsidiary” shall mean, with respect to any person (herein referred to as
the “parent”), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) that is, at the
time any determination is made, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.

     “Subsidiary” shall mean any subsidiary of the Borrower.

     “Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule
1.01(c), and each other Subsidiary that is or becomes a party to the Guarantee
and Collateral Agreement.

     “Swingline Commitment” shall mean the commitment of the Swingline Lender
to make loans pursuant to Section 2.22, as the same may be reduced from time to
time pursuant to Section 2.09.

     “Swingline Exposure” shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

     “Swingline Lender” shall mean Credit Suisse First Boston, in its capacity
as lender of Swingline Loans hereunder.

     “Swingline Loan” shall mean any loan made by the Swingline Lender pursuant
to Section 2.22.

     “Synthetic Lease” shall mean, as to any person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) having a value in excess of $100,000 (a) that
is accounted for as an operating lease under GAAP and (b) in respect of which
the lessee retains or obtains ownership of the property so leased for U.S.
federal income tax purposes, other than any such lease under which such person
is the lessor.

     “Synthetic Lease Obligations” shall mean, as to any person, an amount
equal to the capitalized amount of the remaining lease payments under any
Synthetic Lease that

23

 

would appear on a balance sheet of such person in accordance with GAAP if
such obligations were accounted for as Capital Lease Obligations.

     “Synthetic Purchase Agreement” shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which the Borrower or any
Subsidiary is or may become obligated to make (a) any payment in connection
with a purchase by any third party from a person other than the Borrower or any
Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment
(other than on account of a permitted purchase by it of any Equity Interest or
Restricted Indebtedness) the amount of which is determined by reference to the
price or value at any time of any Equity Interest or Restricted Indebtedness;
provided that no phantom stock plan, stock appreciation right plan or similar
plan providing for payments only to current or former directors, officers or
employees of the Borrower or the Subsidiaries (or to their heirs or estates)
shall be deemed to be a Synthetic Purchase Agreement.

     “Taxes” shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, liabilities or withholdings imposed by any
Governmental Authority.

     “Term Borrowing” shall mean a Borrowing comprised of Term Loans or
Incremental Term Loans.

     “Term Lenders” shall mean the Lenders with Term Loan Commitments or
outstanding Term Loans. Unless the context shall otherwise require, the term
“Term Lenders” shall also include the Incremental Term Lenders.

     “Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
Unless the context shall otherwise require, the term “Term Loan Commitments”
shall also include the Incremental Term Commitments.

     “Term Loan Maturity Date” shall mean August 2, 2009.

     “Term Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01. Unless the context shall otherwise require, the term
“Term Loans” shall also include Incremental Term Loans.

     “Total Debt” shall mean, at any time, the total Indebtedness of the
Borrower and the Subsidiaries at such time (excluding (i) the Seller
Subordinated Notes and (ii) Indebtedness of the type described in clause (i) of
the definition of such term, except to the extent of any unreimbursed drawings
thereunder).

     “Total Revolving Credit Commitment” shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The
initial Total Revolving Credit Commitment is $30,000,000.

24

 

     “Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party
and, in the case of the Borrower, the making of the Borrowings hereunder, (b)
the repayment of all amounts due or outstanding under, and the termination of,
the Existing Credit Agreement, and (c) the payment of related fees and
expenses.

     “Type”, when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term “Rate” shall
include the Adjusted LIBO Rate and the Alternate Base Rate.

     “USA Patriot Act” shall mean The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

     “Warrants” shall mean (a) an aggregate of 504,902 detachable redeemable
common stock warrants issued to the holders of the Mezzanine Notes, (b) an
aggregate of 1,080,437 detachable redeemable common stock warrants issued to
the holders of the Seller Subordinated Notes and (c) an aggregate of 22,062
redeemable common stock warrants issued to Dr. Bahman Atefi pursuant to the
Deferred Compensation Agreement dated as of December 20, 2002, by and between
the Borrower and Dr. Atefi.

     “wholly owned subsidiary” of any person shall mean a subsidiary of such
person of which securities (except for directors’ qualifying shares) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made, owned, Controlled or held by such person or
one or more wholly owned subsidiaries of such person or by such person and one
or more wholly owned subsidiaries of such person.

     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

     SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”.
The word “will” shall be construed to have the same meaning and effect as the
word “shall”; and the words “asset” and “property” shall be construed as having
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract
rights. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, (a) any reference in this
Agreement to any Loan Document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time and (b) all terms of an
accounting or financial nature shall be construed in accordance

25

 

with GAAP, as in effect from time to time; provided, however, that if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article VI or any related definition to eliminate the effect of
any change in GAAP occurring after the date of this Agreement on the operation
of such covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article VI or any related definition for such
purpose), then the Borrower’s compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.

     SECTION 1.03. Pro Forma Calculations. With respect to any period during
which any Permitted Acquisition or Asset Sale of the type described in clause
(b) of the definition of the term “Pro Forma Basis” occurs as permitted
pursuant to the terms hereof, the Leverage Ratio and the Interest Coverage
Ratio shall be calculated with respect to such period and such Permitted
Acquisition or Asset Sale on a Pro Forma Basis.

     SECTION 1.04. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type
(e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a
“Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving
Borrowing”).

     SECTION 1.05. Senior Debt. The Loans and other Obligations are hereby
designated as “Senior Debt” for all purposes of the Securities Purchase
Agreements.

ARTICLE II

The Credits

     SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a)(i) to make a Term Loan to the Borrower
on the Closing Date and (ii) to make Term Loans to the Borrower on no more than
three occasions during the Delayed Draw Availability Period, in an aggregate
principal amount for all such Term Loans not to exceed its Term Loan
Commitment, (b) to make Incremental Term Loans in an aggregate principal amount
for all such Incremental Term Loans not to exceed its Incremental Term Loan
Commitment and (c) to make Revolving Loans to the Borrower, at any time and
from time to time after the date hereof, and until the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in such Lender’s Revolving
Credit Exposure exceeding such Lender’s Revolving Credit Commitment. Within
the limits set forth in clause (c) of the preceding sentence and subject to the
terms, conditions and limitations set forth herein, the Borrower may borrow,
pay or prepay, without

26

 

premium or penalty (subject to Section 2.16), and reborrow Revolving
Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.

     SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans made pursuant
to Section 2.23(e), the Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) an integral multiple of $1,000,000 (except with
respect to any Incremental Term Borrowing, to the extent otherwise provided in
the related Incremental Term Loan Assumption Agreement) or (ii) equal to the
remaining available balance of the applicable Commitment.

     (b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than eight Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

     (c) Except with respect to Loans made pursuant to Section 2.23(e), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.
(New York City time), and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.

     (d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Revolving Credit Borrowing that such Lender
will not make available to the Administrative Agent such Lender’s portion of
such Revolving Credit Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date
of such Revolving Credit Borrowing in accordance with paragraph (c) of this
Section and the Administrative Agent may, in its sole discretion and in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding

27

 

amount together with interest thereon, for each day from the date such
amount is made available to the Borrower to but excluding the date such amount
is repaid to the Administrative Agent at (i) in the case of the Borrower, a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Revolving Credit Borrowing and (ii) in the case of such Lender,
a rate determined by the Administrative Agent to represent its cost of
overnight or short-term funds (which determination shall be conclusive absent
manifest error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender’s Loan as part
of such Revolving Credit Borrowing for purposes of this Agreement.

     (e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.

     SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan as to which this Section shall not apply), the
Borrower shall hand deliver or fax to the Administrative Agent (or give
telephonic notice promptly confirmed by written notice) a duly completed
Borrowing Request (a) in the case of a Eurodollar Borrowing, not later than
12:00 noon (New York City time) three Business Days before a proposed
Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon
(New York City time) one Business Day before a proposed Borrowing. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of the
Borrower and shall specify the following information: (i) whether the Borrowing
then being requested is to be a Term Borrowing, an Incremental Term Borrowing
or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day), (iii) the number and location of the account
to which funds are to be disbursed, (iv) the amount of such Borrowing, (v) if
such borrowing is to be a Term Borrowing during the Delayed Draw Availability
Period or an Incremental Term Borrowing, a statement as to the use of proceeds
thereof, and (vi) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto; provided, however, that, notwithstanding
any contrary specification in any Borrowing Request, each requested Borrowing
shall comply with the requirements set forth in Section 2.02. If no election
as to the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any
Eurodollar Borrowing is specified in any such notice, then the Borrower shall
be deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall promptly advise the applicable Lenders of any notice
given pursuant to this Section (and the contents thereof), and of each Lender’s
portion of the requested Borrowing.

     SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the principal amount of each Term Loan of such
Lender as provided in Section 2.11 and (ii) the then unpaid principal amount of
each Revolving Loan of such Lender on the Revolving Credit Maturity Date. The
Borrower hereby promises to pay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the Revolving Credit Maturity Date.

28

 

     (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.

     (c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and, if
applicable, the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower or any Subsidiary
Guarantor and each Lender’s share thereof.

     (d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loans in accordance with their terms. Upon request, the
Borrower may review the information contained in such accounts for purposes of
verifying the accuracy of same.

     (e) Any Lender may request that Loans made by it hereunder be evidenced
by a promissory note. In such event, the Borrower shall execute and deliver to
such Lender a promissory note payable to such Lender and its registered assigns
substantially in the form of Exhibit H-1 or H-2, as applicable.
Notwithstanding any other provision of this Agreement, in the event any Lender
shall request and receive such a promissory note, the interests represented by
such note shall at all times (including after any assignment of all or part of
such interests pursuant to Section 9.04) be represented by one or more
promissory notes payable to the payee named therein or its registered assigns.

     SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December in each year during the term hereof and on the date on
which the Commitments of such Lender shall expire or be terminated as provided
herein, a commitment fee (a “Commitment Fee”) equal to 0.50% per annum on the
daily unused amount of the Commitments of such Lender during the preceding
quarter (or shorter period commencing with the date hereof or ending with the
Revolving Credit Maturity Date (in the case of the Revolving Credit
Commitments), the last day of the Delayed Draw Availability Period (in the case
of the Term Loan Commitments) or the date on which such Commitments shall
otherwise expire or be terminated, as applicable). All Commitment Fees shall
be computed on the basis of the actual number of days elapsed in a year of 360
days. For purposes of calculating Commitment Fees only, no portion of the
Revolving Credit Commitments shall be deemed utilized under Section 2.17 as a
result of outstanding Swingline Loans. Notwithstanding any other provision of
this Agreement to the contrary and except to the extent otherwise provided for
in the applicable Incremental Term Loan Assumption Agreement, no Commitment
Fees shall be payable under this Agreement in respect of Incremental Term
Commitments. Notwithstanding any other

29

 

provision in this Agreement to the contrary, no Commitment Fee shall be
payable under this Agreement in respect of Swingline Commitments.

     (b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and
in the amounts specified therein (the “Administrative Agent Fees”).

     (c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an “L/C Participation Fee”), calculated on such Lender’s Pro Rata Percentage
of the daily aggregate L/C Exposure (excluding the portion thereof attributable
to unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Revolving Credit
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Revolving Credit Commitments of all Lenders shall have
been terminated), at a rate per annum equal to the Applicable Percentage from
time to time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing
Bank, with respect to each Letter of Credit, a fronting fee not in excess of
0.25% per annum on the outstanding face amount of the Letter of Credit issued,
together with the standard issuance and administrative fees specified from time
to time by the Issuing Bank (the “Issuing Bank Fees”). All L/C Participation
Fees and Issuing Bank Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.

     (d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.

     SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when the Alternate
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times and calculated from and including the date of such
Borrowing to but excluding the date of repayment thereof) at a rate per annum
equal to the Alternate Base Rate plus the Applicable Percentage in effect from
time to time.

     (b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage in effect from time to time.

     (c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable

30

 

Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.

     SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of any principal of or interest on any Loan or any other amount due
hereunder, by acceleration or otherwise, or under any other Loan Document,
then, or, if any other Event of Default shall have occurred and be continuing
and the Administrative Agent (acting at the direction of the Required Lenders)
so directs, until such defaulted amount shall have been paid in full or such
other Event of Default cured or waived, to the extent permitted by law, all
amounts outstanding under this Agreement and the other Loan Documents shall
bear interest (after as well as before judgment), payable on demand, at the
rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2% per
annum.

     SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, the Administrative
Agent shall, as soon as practicable thereafter, give written or fax notice of
such determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing.
Each determination by the Administrative Agent under this Section shall be
conclusive absent manifest error.

     SECTION 2.09. Termination and Reduction of Commitments. (a) The Term
Loan Commitments shall automatically be reduced pro tanto upon the making of
each Term Loan and shall automatically terminate at 5:00 p.m. (New York City
time) on the last day of the Delayed Draw Availability Period. The Revolving
Credit Commitments and the Swingline Commitment shall automatically terminate
at 5:00 p.m. (New York City time) on the Revolving Credit Maturity Date. The
L/C Commitment shall automatically terminate on the earlier to occur of (i) the
termination of the Revolving Credit Commitments and (ii) the date 30 days prior
to the Revolving Credit Maturity Date. Notwithstanding the foregoing, all
Commitments shall automatically terminate at 5:00 p.m. (New York City time) on
August 13, 2004, if the initial Credit Event shall not have occurred by such
time.

     (b) Upon at least three Business Days’ prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, any
Class of Commitments; provided, however, that (i) each partial reduction of any
Class of Commitments shall be in an integral multiple of $1,000,000 and in a
minimum amount of $2,000,000 and (ii) the

31

 

Total Revolving Credit Commitment shall not be reduced to an amount that
is less than the Aggregate Revolving Credit Exposure at the time.

     (c) Each reduction in any Class of Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective applicable
Commitments of such Class. The Borrower shall pay to the Administrative Agent
for the account of the applicable Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so terminated
or reduced accrued to but excluding the date of such termination or reduction,
and no Commitment Fee on the amount of Commitments so terminated or reduced
shall accrue thereafter.

     SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable written notice (or
telephonic notice promptly confirmed by written notice) to the Administrative
Agent (a) not later than 12:00 noon (New York City time) one Business Day prior
to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b)
not later than 12:00 noon (New York City time) three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 12:00 noon (New York City
time) three Business Days prior to conversion, to convert the Interest Period
with respect to any Eurodollar Borrowing to another permissible Interest
Period, subject in each case to the following:

     (i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Borrowing;

     (ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and (b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;

     (iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;

     (iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall
pay, upon demand, any amounts due to the Lenders pursuant to Section
2.16;

     (v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a
Eurodollar Borrowing;

32

 

     (vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;

     (vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or
after the first day of such Interest Period if, after giving effect to
such selection, the aggregate outstanding amount of (A) the Eurodollar
Term Borrowings with Interest Periods ending on or prior to such
Repayment Date and (B) the ABR Term Borrowings would not be at least
equal to the principal amount of Term Borrowings to be paid on such
Repayment Date; and

     (viii) upon notice to the Borrower from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no outstanding
Loan may be converted into, or continued as, a Eurodollar Loan.

     Each notice pursuant to this Section shall be irrevocable, shall be
substantially in the form of Exhibit E or such other form as shall be
acceptable to the Administrative Agent and shall refer to this Agreement and
specify (i) the identity and amount of the Borrowing that the Borrower requests
be converted or continued, (ii) whether such Borrowing is to be converted to or
continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. The Administrative Agent
shall advise the Lenders of any notice given pursuant to this Section and of
each Lender’s portion of any converted or continued Borrowing. If the Borrower
shall not have given notice in accordance with this Section to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into an ABR
Borrowing.

     SECTION 2.11. Repayment of Term Borrowings. (a) The Borrower shall pay
to the Administrative Agent, for the accounts of the Term Lenders, on the dates
set forth below, or if any such date is not a Business Day, on the immediately
preceding Business Day (each such date being called a “Repayment Date”), a
principal amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.12, 2.13(f) and 2.24(d)) equal to the percentage set forth below for
such date of the aggregate principal amount of Term Loans outstanding upon the
expiration of the Delayed Draw Availability Period, together in each case with
accrued and unpaid interest on the principal amount to be paid to but excluding
the date of such payment:

33

 

	 	 	 	 	 
	Repayment Date
	 	Amount

	December 31, 2004
	 	 	0.25	%
	March 31, 2005
	 	 	0.25	%
	June 30, 2005
	 	 	0.25	%
	September 30, 2005
	 	 	0.25	%
	December 31, 2005
	 	 	0.25	%
	March 31, 2006
	 	 	0.25	%
	June 30, 2006
	 	 	0.25	%
	September 30, 2006
	 	 	0.25	%
	December 31, 2006
	 	 	0.25	%
	March 31, 2007
	 	 	0.25	%
	June 30, 2007
	 	 	0.25	%
	September 30, 2007
	 	 	0.25	%
	December 31, 2007
	 	 	0.25	%
	March 31, 2008
	 	 	0.25	%
	June 30, 2008
	 	 	0.25	%
	September 30, 2008
	 	 	0.25	%
	December 31, 2008
	 	 	24.0	%
	March 31, 2009
	 	 	24.0	%
	June 30, 2009
	 	 	24.0	%
	Term Loan Maturity Date
	 	 	24.0	%

     (b) The Borrower shall pay to the Administrative Agent, for the account
of the Lenders, on each Incremental Term Loan Repayment Date, a principal
amount of the Other Term Loans (as adjusted from time to time pursuant to
Sections 2.12 and 2.13(f)) equal to the amount set forth for such date in the
applicable Incremental Term Loan Assumption Agreement, together in each case
with accrued and unpaid interest on the principal amount to be paid to but
excluding the date of such payment.

     (c) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date and all Incremental Term Loans shall be
due and payable on the applicable Incremental Term Loan Maturity Date, together
in each case with accrued and unpaid interest on the principal amount to be
paid to but excluding the date of payment.

     (d) All repayments pursuant to this Section shall be subject to Section
2.16, but otherwise shall be without premium or penalty.

     SECTION 2.12. Optional Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, (i) upon at least three Business Days’ prior written or fax notice (or
telephone notice promptly confirmed by written or fax notice) in the case of
Eurodollar Loans, or (ii) written or fax notice (or telephone notice promptly
confirmed by written or fax notice) at least one Business Day prior to the date
of prepayment in the case of ABR Loans, in each case to the Administrative
Agent before 12:00 noon (New York City time) on the relevant date; provided,
however, that each partial prepayment shall be in an amount that is an integral
multiple of $1,000,000.

34

 

     (b) Optional prepayments of Term Loans shall be allocated ratably between
the Term Loans and the Other Term Loans, if any, and shall be applied against
the remaining scheduled installments of principal due in respect of the Term
Loans and the Other Term Loans, if any, under Section 2.11 in a manner
determined at the discretion of the Borrower.

     (c) Each notice of prepayment shall be substantially in the form of
Exhibit F or such other form as shall be acceptable to the Administrative
Agent, shall specify the prepayment date and the principal amount of each
Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall
commit the Borrower to prepay such Borrowing by the amount stated therein on
the date stated therein. All prepayments under this Section shall be subject
to Section 2.16, but otherwise shall be without premium or penalty, and shall
be accompanied by accrued and unpaid interest on the principal amount to be
prepaid to but excluding the date of payment; provided, however, that in the
case of a prepayment of an ABR Revolving Loan or a Swingline Loan that is not
made in connection with a termination of the Revolving Credit Commitments, the
accrued and unpaid interest on the principal amount prepaid to but excluding
the date of prepayment shall be payable on the next scheduled Interest Payment
Date with respect to such ABR Revolving Loan or Swingline Loan.

     SECTION 2.13. Mandatory Prepayments. (a) In the event of the
termination of all the Revolving Credit Commitments by the Borrower pursuant to
Section 2.09, the Borrower shall, on the date of such termination, repay or
prepay all outstanding Revolving Credit Borrowings and all outstanding
Swingline Loans and replace or cause to be canceled (or make other arrangements
satisfactory to the Administrative Agent and the Issuing Bank with respect to)
all outstanding Letters of Credit. If, after giving effect to any partial
reduction of the Revolving Credit Commitments by the Borrower pursuant to
Section 2.09, the Aggregate Revolving Credit Exposure would exceed the Total
Revolving Credit Commitment, then the Borrower shall, on the date of such
reduction, repay or prepay Revolving Credit Borrowings or Swingline Loans (or a
combination thereof), and, after the Revolving Credit Borrowings and Swingline
Loans shall have been repaid or prepaid in full, replace or cause to be
canceled (or make other arrangements satisfactory to the Administrative Agent
and the Issuing Bank with respect to) Letters of Credit, in an amount
sufficient to eliminate such excess.

     (b) Not later than the fifth Business Day following any receipt of Net
Cash Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of
the Net Cash Proceeds received with respect thereto to prepay outstanding Term
Loans and Other Term Loans, if any, in accordance with paragraph (f) of this
Section.

     (c) In the event and on each occasion that an Equity Issuance occurs, the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% (or, if at the time of, and after giving effect to the use
of proceeds of, such Equity Issuance the Leverage Ratio shall have been less
than 2.0 to 1.0, 25%) of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans and Other Term Loans, if any, in accordance with paragraph (f) of
this Section.

35

 

     (d) No later than the earlier of (i) 90 days after the end of each fiscal
year of the Borrower, commencing with the fiscal year ending on September 30,
2005, and (ii) the third Business Day after the date on which the financial
statements with respect to such fiscal year are delivered pursuant to Section
5.04(a), the Borrower shall prepay outstanding Term Loans and Other Term Loans,
if any, in accordance with paragraph (f) of this Section in an aggregate
principal amount equal to 50% (or, if the Leverage Ratio at the end of such
fiscal year shall have been less than 2.0 to 1.0, 25%) of Excess Cash Flow for
such fiscal year.

     (e) In the event that any Loan Party or any subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than any cash proceeds from the issuance of Indebtedness for money
borrowed permitted pursuant to Section 6.01), the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day
next following) the receipt of such Net Cash Proceeds by such Loan Party or
such subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to
prepay outstanding Term Loans and Other Term Loans, if any, in accordance with
paragraph (f) of this Section.

     (f) Mandatory prepayments of outstanding Term Loans under this Agreement
shall be allocated ratably between the Term Loans and the Other Term Loans, if
any, and shall be applied first, in chronological order to the installments of
principal in respect of the Term Loans and Other Term Loans, if any, scheduled
to be paid within 24 months after such mandatory prepayment and second, pro
rata against the remaining scheduled installments of principal due in respect
of the Term Loans and Other Term Loans, if any, under Section 2.11.

     (g) The Borrower shall deliver to the Administrative Agent, at the time
of each prepayment required under this Section, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent
practicable, at least three days prior written notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid and shall be substantially in the form of Exhibit F or such other form
as shall be acceptable to the Administrative Agent. All prepayments of
Borrowings under this Section shall be subject to Section 2.16, but otherwise
shall be without premium or penalty, and shall be accompanied by accrued and
unpaid interest on the principal amount to be prepaid to but excluding the date
of payment.

     SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the

36

 

foregoing shall be to increase the cost to such Lender or the Issuing Bank
of making or maintaining any Eurodollar Loan or increase the cost to any Lender
of issuing or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or the Issuing Bank to be
material, then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, upon demand such additional amount or amounts as will compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.

     (b) If any Lender or the Issuing Bank shall have determined that any
Change in Law regarding capital adequacy has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or
on the capital of such Lender’s or the Issuing Bank’s holding company, if any,
as a consequence of this Agreement or the Loans made or participations in
Letters of Credit purchased by such Lender pursuant hereto or the Letters of
Credit issued by the Issuing Bank pursuant hereto to a level below that which
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies and the policies of
such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Bank to be
material, then from time to time the Borrower shall pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.

     (c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as applicable, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank the
amount shown as due on any such certificate delivered by it within 10 Business
Days after its receipt of the same.

     (d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) of this Section with respect to
increased costs or reductions with respect to any period prior to the date that
is 120 days prior to such request if such Lender or the Issuing Bank knew or
could reasonably have been expected to know of the circumstances giving rise to
such increased costs or reductions and of the fact that such circumstances
would result in a claim for increased compensation by reason of such increased
costs or reductions; provided further that the foregoing limitation shall not
apply to any increased costs or reductions arising out of the retroactive
application of any Change in Law within such 120-day period. The protection of
this Section shall be available to each Lender and the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the Change
in Law that shall have occurred or been imposed.

37

 

     SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if any Change in Law shall make it unlawful for
any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent:

     (i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar
Loans), whereupon any request for a Eurodollar Borrowing (or to convert
an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an
ABR Loan as such for an additional Interest Period or to convert a
Eurodollar Loan into an ABR Loan, as the case may be), unless such
declaration shall be subsequently withdrawn; and

     (ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) of this Section.

In the event any Lender shall exercise its rights under clause (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.

     (b) For purposes of this Section, a notice to the Borrower by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful,
on the last day of the Interest Period then applicable to such Eurodollar Loan;
in all other cases such notice shall be effective on the date of receipt by the
Borrower.

     SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence (other than as a result of the gross negligence or willful
misconduct of such Lender) of (a) any event, other than a default by such
Lender in the performance of its obligations hereunder, which results in (i)
such Lender receiving or being deemed to receive any amount on account of the
principal of any Eurodollar Loan prior to the end of the Interest Period in
effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or
the conversion of the Interest Period with respect to any Eurodollar Loan, in
each case other than on the last day of the Interest Period in effect therefor,
or (iii) any Eurodollar Loan to be made by such Lender (including any
Eurodollar Loan to be made pursuant to a conversion or continuation under
Section 2.10) not being made after notice of such Loan shall have been given by
the Borrower hereunder (any of the events referred to in this clause (a) being
called a “Breakage Event”) or (b) any default in the making of any payment or
prepayment required to be made hereunder. In the case of any Breakage

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Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (i) its cost of obtaining funds for
the Eurodollar Loan that is the subject of such Breakage Event for the period
from the date of such Breakage Event to the last day of the Interest Period in
effect (or that would have been in effect) for such Loan over (ii) the amount
of interest likely to be realized by such Lender in redeploying the funds
released or not utilized by reason of such Breakage Event for such period. A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.

     SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section with respect to Swingline Loans and as required under Section 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). For purposes of
determining the available Revolving Credit Commitments of the Lenders at any
time, each outstanding Swingline Loan shall be deemed to have utilized the
Revolving Credit Commitments of the Lenders (including those Lenders which
shall not have made Swingline Loans) pro rata in accordance with such
respective Revolving Credit Commitments. Each Lender agrees that in computing
such Lender’s portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender’s percentage of such Borrowing
to the next higher or lower whole dollar amount.

     SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim
against the Borrower or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans or L/C Disbursement as a result of which the
unpaid principal portion of its Loans and participations in L/C Disbursements
shall be proportionately less than the unpaid principal portion of the Loans
and participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Loans and L/C Exposure of such other Lender, so that the aggregate
unpaid principal amount of the Loans and L/C Exposure and participations in
Loans and L/C Exposure held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans and L/C Exposure then
outstanding as the principal amount of its Loans and L/C Exposure prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Loans and L/C Exposure outstanding prior to such
exercise of banker’s lien, setoff or counterclaim or other event; provided,
however, that if any such purchase

39

 

or purchases or adjustments shall be made pursuant to this Section and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have
been so purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim in accordance with the terms and conditions of this Agreement and
applicable law with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.

     SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not
later than 12:00 noon (New York City time) on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing
Bank, and (ii) principal of and interest on Swingline Loans, which shall be
paid directly to the Swingline Lender except as otherwise provided in Section
2.21(e)) shall be made to the Administrative Agent at its offices at Eleven
Madison Avenue, New York, New York 10010. The Administrative Agent shall
distribute any such payments received by it for the account of any other person
to the appropriate recipient following receipt thereof.

     (b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable, up
to but excluding the day of payment.

     SECTION 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower or any other Loan Party hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower or any other
Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower or such Loan
Party shall make such deductions and (iii) the Borrower or such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

     (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

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     (c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower or any other
Loan Party hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on behalf of itself or a Lender, shall be conclusive
absent manifest error.

     (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower or any other Loan Party to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

     (e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

     (f) If the Administrative Agent or a Lender determines that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.20, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.20 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority unless the Governmental Authority assessed such
penalties, interest or other charges due to the gross negligence or willful
misconduct of the Administrative Agent or such Lender) to the Administrative
Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to Governmental Authority. This Section shall
not be construed to require the Administrative Agent or any Lender to make
available its tax returns (or any other

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information relating to its taxes which it deems confidential) to the
Borrower or any other person.

     SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender
or the Issuing Bank delivers a notice described in Section 2.15, (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.20 or (iv) any Lender refuses to consent to any
amendment, waiver or other modification of any Loan Document requested by the
Borrower that requires the consent of a greater percentage of the Lenders than
the Required Lenders and such amendment, waiver or other modification is
consented to by the Required Lenders, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred
to in Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement (or, in the case of clause (iv) above, all of its interests,
rights and obligation with respect to the Class of Loans or Commitments that is
the subject of the related consent, amendment, waiver or other modification) to
an assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z)
the Borrower or such assignee shall have paid to the affected Lender or the
Issuing Bank in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the
outstanding Loans or L/C Disbursements of such Lender or the Issuing Bank,
respectively, plus all Fees and other amounts accrued for the account of such
Lender or the Issuing Bank hereunder (including any amounts under Sections 2.14
and 2.16); provided further that, if prior to any such transfer and assignment
the circumstances or event that resulted in such Lender’s or the Issuing Bank’s
claim for compensation under Section 2.14, notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or the Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, cease to have the
consequences specified in Section 2.15 or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or the Issuing Bank pursuant to paragraph (b) of
this Section), or if such Lender or the Issuing Bank shall waive its right to
claim further compensation under Section 2.14 in respect of such circumstances
or event, shall withdraw its notice under Section 2.15 or shall waive its right
to further payments under Section 2.20 in respect of such circumstances or
event or shall consent to the proposed amendment, waiver, consent or other
modification, as the case may be, then such Lender or the Issuing Bank shall
not thereafter be required to make any such transfer and assignment hereunder.
Each Lender hereby grants to the Administrative Agent an

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irrevocable power of attorney (which power is coupled with an interest) to
execute and deliver, on behalf of such Lender as assignor, any Assignment and
Acceptance necessary to effectuate any assignment of such Lender’s interests
hereunder in the circumstances contemplated by this paragraph.

     (b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14, enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender
or the Issuing Bank in connection with any such filing or assignment,
delegation and transfer.

     SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees to make loans to the Borrower at
any time and from time to time on and after the Closing Date and until the
earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Credit Commitments, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of all
Swingline Loans exceeding $5,000,000 in the aggregate or (ii) the Aggregate
Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding
the Total Revolving Credit Commitment. Each Swingline Loan shall be in a
principal amount that is an integral multiple of $50,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrower may borrow, pay or prepay and
reborrow Swingline Loans hereunder, subject to the terms, conditions and
limitations set forth herein.

     (b) Swingline Loans. The Borrower shall notify the Swingline Lender by
fax, or by telephone (promptly confirmed by fax), not later than 12:00 noon
(New York City time) on the day of a proposed Swingline Loan. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to
this Agreement and shall specify the requested date (which shall be a Business
Day) and amount of such Swingline Loan and the wire transfer instructions for
the account of the Borrower to which the proceeds of the Swingline Loan should
be transferred. The Swingline Lender shall make each Swingline Loan by wire
transfer to the account specified in such request.

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     (c) Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or fax notice (or telephone notice promptly confirmed by written, or
fax notice) to the Swingline Lender before 12:00 noon (New York City time) on
the date of prepayment at the Swingline Lender’s address for notices specified
herein.

     (d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).

     (e) Participations. The Swingline Lender may by written notice given to
the Administrative Agent not later than 12:00 noon (New York City time) on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Credit Lenders will participate. The Administrative Agent will, promptly upon
receipt of such notice, give notice to each Revolving Credit Lender, specifying
in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or
Loans. In furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Revolving Credit Lender’s Pro Rata Percentage of such Swingline
Loan or Loans. Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer
of immediately available funds, in the same manner as provided in Section
2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall
apply, mutatis mutandis, to the payment obligations of the Lenders) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.

     SECTION 2.23. Letters of Credit. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account or for the account of
any of its Subsidiaries (in which case the Borrower and such Subsidiary shall
be co-applicants with

44

 

respect to such Letter of Credit), in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
while the L/C Commitment remains in effect; provided that the Issuing Bank
shall not be required to issue, extend or renew any Letter of Credit after the
date that is 30 days prior to the Revolving Credit Maturity Date. On the
Closing Date, each Existing Letter of Credit will automatically, without any
action on the part of any person, be deemed to be a Letter of Credit issued
hereunder for all purposes of this Agreement and the other Loan Documents.
This Section shall not be construed to impose an obligation upon the Issuing
Bank to issue any Letter of Credit that is inconsistent with the terms and
conditions of this Agreement.

     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall hand
deliver or fax to the Issuing Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and
upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that, after giving effect to
such issuance, amendment, renewal or extension (i) the L/C Exposure shall not
exceed $5,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment.

     (c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; provided, however, that a Letter of Credit may, upon
the request of the Borrower, include a provision whereby such Letter of Credit
shall be renewed automatically for additional consecutive periods of 12 months
or less (but not beyond the date that is five Business Days prior to the
Revolving Credit Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 30 days prior to the then-applicable expiration
date that such Letter of Credit will not be renewed.

     (d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter
of Credit (or, in the case of the Existing Letters of Credit, effective upon
the Closing Date). In consideration and in furtherance of the foregoing, each
Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender’s
Pro Rata

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Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
obligations under any other Loan Document) forthwith on the date due as
provided in paragraph (e) below. Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

     (e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such L/C
Disbursement by paying to the Administrative Agent an amount equal to such L/C
Disbursement not later than 12:00 noon, New York City time, on the Business Day
following the date that such L/C Disbursement is made; provided that (i) if
notice of such L/C Disbursement is received by the Borrower later than 10:00
a.m., New York City time, on the Business Day on which such L/C Disbursement is
made, then such reimbursement shall not be required until the second Business
Day following the date such L/C Disbursement is made and (ii) the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.22 that such payment be financed with an ABR Revolving
Borrowing or a Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged
and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If
the Borrower fails to make such payment when due, the Administrative Agent
shall notify each Revolving Credit Lender of the applicable L/C Disbursement,
the payment then due from the Borrower in respect thereof and such Lender’s Pro
Rata Percentage thereof. Promptly following receipt of such notice, each
Revolving Credit Lender shall pay to the Administrative Agent its Pro Rata
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.02 with respect to Loans made by such Lender (and Section
2.02 shall apply, mutatis mutandis, to the payment obligations of the Revolving
Credit Lenders), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Revolving Credit Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Revolving Credit Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Revolving Credit Lenders and the Issuing Bank as their interests
may appear. Any payment made by a Revolving Credit Lender pursuant to this
paragraph to reimburse the Issuing Bank for any L/C Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such L/C Disbursement.

     (f) Obligations Absolute. The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:

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     (i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;

     (ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan
Document;

     (iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any
Letter of Credit, the Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;

     (iv) any draft or other document presented under a 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;

     (v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and

     (vi) any other act or omission to act or delay of any kind of the
Issuing Bank, any Lender, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower’s obligations
hereunder.

Without limiting the generality of the foregoing, it is expressly understood
and agreed that the absolute and unconditional obligation of the Borrower
hereunder to reimburse L/C Disbursements will not be excused by the gross
negligence or willful misconduct of the Issuing Bank. The foregoing shall not,
however, be construed to excuse the Issuing Bank from liability to the Borrower
to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are caused by the
Issuing Bank’s gross negligence or willful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. It is understood that the Issuing Bank 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, in
making any payment under any Letter of Credit (i) the Issuing Bank’s exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any
draft presented under such Letter of Credit, whether or not the amount due to
the beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or

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invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to constitute gross negligence or willful
misconduct of the Issuing Bank.

     (g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by fax, to the Administrative
Agent and the Borrower of such demand for payment and whether the Issuing Bank
has made or will make an L/C Disbursement thereunder; provided that (i) the
Issuing Bank shall use reasonable efforts to notify the Borrower prior to
making payment on a standby letter of credit and (ii) any failure to give or
delay in giving any notice referred to in this paragraph shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement.

     (h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of
the date of payment by the Borrower or the date on which such L/C Disbursement
is refinanced with a Revolving Loan or a Swingline Loan pursuant to paragraph
(e) above, at the rate per annum that would apply to such amount if such amount
were an ABR Revolving Loan.

     (i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 45 days’ prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent
and the Lenders. Upon the acceptance of any appointment as the Issuing Bank
hereunder by a Lender that shall agree to serve as successor Issuing Bank, such
successor shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective, the
Borrower shall pay all unpaid fees accrued pursuant to clause (ii) of Section
2.05(c). The acceptance of any appointment as the Issuing Bank hereunder by a
successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Administrative Agent,
and, from and after the effective date of such agreement, (i) such successor
Lender shall have all the rights and obligations of the previous Issuing Bank
under this Agreement and the other Loan Documents and (ii) references herein
and in the other Loan Documents to the term “Issuing Bank” shall be deemed to
refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
resignation or removal of the Issuing Bank hereunder, the retiring Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement and the other Loan
Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters
of Credit.

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     (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent
as collateral for the payment and performance of the Obligations. The
Collateral Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits in Permitted Investments, which
investments shall be made at the option and sole discretion of the Collateral
Agent, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account
shall (i) automatically be applied by the Administrative Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii)
be held for the satisfaction of the reimbursement obligations of the Borrower
for the L/C Exposure at such time and (iii) if the maturity of the Loans has
been accelerated (but subject to the consent of Revolving Credit Lenders
holding participations in outstanding Letters of Credit representing greater
than 50% of the aggregate undrawn amount of all outstanding Letters of Credit),
be applied to satisfy the Obligations. If the Borrower is required to provide
cash collateral hereunder as a result of the occurrence of an Event of Default,
the amount remaining on deposit in the account as described above (to the
extent not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.

     (k) Additional Issuing Banks. The Borrower may, at any time and from
time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate one or more additional
Lenders to act as an issuing bank under the terms of this Agreement. Any
Lender designated as an issuing bank pursuant to this paragraph shall be deemed
to be an “Issuing Bank” (in addition to being a Lender) in respect of Letters
of Credit issued or to be issued by such Lender, and, with respect to such
Letters of Credit, such term shall thereafter apply to the other Issuing Bank
and such Lender.

     SECTION 2.24. Increase in Term Loan Commitments. (a) The Borrower may,
by written notice to the Administrative Agent from time to time, request
Incremental Term Commitments in an amount not to exceed the Incremental Term
Loan Amount from one or more Incremental Term Lenders, which may include any
existing Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld or delayed). Such notice
shall set forth (i) the amount of the Incremental Term Commitments being
requested (which shall be in integral multiple of $1,000,000 and a minimum
amount of $5,000,000 or in an amount equal to the remaining Incremental Term
Loan Amount), (ii) the date on which such Incremental Term Commitments are
requested to become effective (which shall not be less than 10 Business Days
after the date of such notice) and (iii) whether such Incremental Term

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Commitments are to be Term Loan Commitments or commitments to make term
loans with terms different from the Term Loans (“Other Term Loans”). For the
avoidance of doubt, (i) no Lender shall have any obligation to make an
Incremental Term Loan and (ii) no approval from the Administrative Agent or the
Lenders shall be required with regard to, and neither the Administrative Agent
nor any Lender, shall have the right to object to, challenge or obstruct, any
request by the Borrower to the Administrative Agent to arrange for the making
of any Incremental Term Loan.

     (b) The Borrower and each Incremental Term Lender shall execute and
deliver to the Administrative Agent an Incremental Term Loan Assumption
Agreement and such other documentation as the Administrative Agent shall
reasonably specify to evidence the Incremental Term Commitment of such
Incremental Term Lender. Each Incremental Term Loan Assumption Agreement shall
specify the terms of the Incremental Term Loans to be made thereunder;
provided, however, that, without the prior written consent of the Required
Lenders, (i) the final maturity date of any Other Term Loans shall be no
earlier than (A) the final maturity date of any other Class of Term Loans and
(B) if the initial yield (determined as provided below) on such Other Term
Loans exceeds the Applicable Percentage then in effect for Eurodollar Term
Loans of any Class, the date falling six months after the final maturity date
of each such adversely affected Class; (ii) the average life to maturity of any
Other Term Loans shall be no shorter than (A) the average life to maturity of
any other Class of Term Loans and (B) if the initial yield (determined as
provided below) on such Other Term Loans exceeds the Applicable Percentage then
in effect for Eurodollar Term Loans of any Class, six months longer than the
average life to maturity of each such adversely affected Class; and (iii) if
the initial yield on any Other Term Loans (as determined by the Administrative
Agent to be equal to the sum of (A) the margin over the Adjusted LIBO Rate
applicable to the Other Term Loans and (B) if the Other Term Loans are
initially made at a discount or the lenders making the same receive an
“upfront” fee (as opposed to an “arrangement” or similar fee paid solely to the
arranger or arrangers of such Other Term Loans) from the Borrower or any
Subsidiary for doing so (the amount of such discount or fee, expressed as a
percentage of the Other Term Loans, being referred to herein as “OID”), the
amount of such OID divided by the lesser of (A) the average life to maturity of
such Other Term Loans and (B) four) exceeds by more than 50 basis points (the
amount of such excess above 50 basis points being referred to herein as the
“Yield Differential”) the Applicable Percentage for Eurodollar Term Loans of
any Class, then the Applicable Percentage for each adversely affected Class of
Term Loans shall automatically be increased by the Yield Differential,
effective upon the making of the Other Term Loans. The Administrative Agent
shall promptly notify each Lender as to the effectiveness of each Incremental
Term Loan Assumption Agreement. Each of the parties hereto hereby agrees that,
upon the effectiveness of any Incremental Term Loan Assumption Agreement, this
Agreement shall be deemed amended to the extent (but only to the extent)
necessary to reflect the existence and terms of the Incremental Term Commitment
evidenced thereby and any increase to the Applicable Percentages required by
the foregoing provisions of this Section 2.24(b). Any such deemed amendment
may be memorialized in writing by the Administrative Agent with the Borrower’s
consent (not to be unreasonably withheld or delayed) and furnished to the other
parties hereto.

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     (c) Notwithstanding the foregoing, no Incremental Term Commitment shall
become effective under this Section 2.24 unless (i) on or before the date of
such effectiveness, the conditions set forth in paragraphs (b) and (c) of
Section 4.01 shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated as of such date and executed by a
Financial Officer of the Borrower, (ii) the Administrative Agent shall have
received (with sufficient copies for each of the Incremental Term Lenders)
legal opinions, board resolutions and other closing certificates and
documentation consistent with those delivered on the Closing Date under Section
4.02 and (iii) the Borrower would be in Pro Forma Compliance after giving
effect to such Incremental Term Commitment and the Loans to be made thereunder
and the application of the proceeds therefrom as if made and applied on such
date.

     (d) Each of the parties hereto hereby agrees that the Administrative
Agent may take any and all action as may be reasonably necessary to ensure that
all Incremental Term Loans (other than Other Term Loans), when originally made,
are included in each Borrowing of outstanding Term Loans on a pro rata basis,
and the Borrower agrees that Section 2.16 shall apply to any conversion of
Eurodollar Term Loans to ABR Term Loans reasonably required by the
Administrative Agent to effect the foregoing. In addition, to the extent any
Incremental Term Loans are not Other Term Loans, the scheduled amortization
payments under Section 2.11(a) required to be made after the making of such
Incremental Term Loans shall be ratably increased by the aggregate principal
amount of such Incremental Term Loans.

ARTICLE III

Representations and Warranties

     The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender that:

     SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as
now conducted and as proposed to be conducted, (c) is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect, and (d) has the power and
authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contemplated thereby to
which it is or will be a party and, in the case of the Borrower, to borrow
hereunder.

     SECTION 3.02. Authorization. The Transactions (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) will not (i) violate (A) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of the Borrower or any Subsidiary Guarantor, (B) any order
of any Governmental Authority or (C) any provision of any indenture, agreement
or other instrument to which the Borrower or any Subsidiary

51

 

is a party or by which any of them or any of their property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or redemption of
any obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary (other than Liens created under the Security Documents).

     SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party thereto will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors’ rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding thereof may be brought.

     SECTION 3.04. Governmental Approvals. (a) No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required in connection with the
Transactions, except for (i) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States Copyright Office, (ii) filings under the Assignment of Claims
Act and (iii) such as have been made or obtained and are in full force and
effect.

     (b) No notice of suspension, debarment or termination for default has
been received by the Borrower or any Subsidiary and no cure notice has been
received by the Borrower or any Subsidiary in connection with any Government
Contract or other contract pursuant to which the Borrower or any Subsidiary is
directly or indirectly acting as a subcontractor under or in connection with a
Government Contract. Each Material Contract existing on the Closing Date is
listed on Schedule 3.04(b), and documentation necessary for compliance with the
Assignment of Claims Act has been executed and delivered to the Collateral
Agent by the Borrower or any Subsidiary, as applicable, with respect to each
such Material Contract.

     SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders (i) the consolidated balance sheets and related
statements of operations, shareholders’ equity and cash flows of the Borrower
and its consolidated subsidiaries as of and for the fiscal years ended
September 30, 2002 and 2003, each audited by and accompanied by the unqualified
opinion of KPMG LLP, independent public accountants, (ii) the unaudited
consolidated balance sheet and related statements of operations and cash flows
of the Borrower and its consolidated subsidiaries as of and for (A) each fiscal
quarter subsequent to September 30, 2003 ended at least 45 days before the
Closing Date and (B) each fiscal month subsequent to the date of the most
recent unaudited quarterly financial statements furnished under clause (A)
ended at least 30 days before the Closing Date. Such financial statements were
prepared in accordance with

52

 

GAAP and present fairly in all material respects the financial condition
and results of operations and cash flows of the Borrower and its consolidated
subsidiaries as of such dates and for such periods, subject to normal year-end
adjustments in the case of the documents provided pursuant to clause (ii).
Such balance sheets and the notes thereto disclose all material liabilities,
direct or contingent, of the Borrower and its consolidated Subsidiaries as of
the dates thereof.

     (b) The Borrower has heretofore delivered to the Lenders its unaudited
pro forma consolidated balance sheet and related statements of operations,
shareholders’ equity and cash flows as of and for the 12-month period ended
June 30, 2004, prepared giving effect to the Transactions as if they had
occurred, with respect to such balance sheet, as of such date and, with respect
to such other financial statements, as of the first day of the 12-month period
ending on such date. Such pro forma financial statements have been prepared in
good faith by the Borrower, based on the assumptions used to prepare the pro
forma financial information contained in the Confidential Information
Memorandum (which assumptions were, at the time made and at the time such
financial statements were delivered, believed by the Borrower to be
reasonable), are based on information available to the Borrower as of the date
of delivery thereof, accurately reflect in all material respects adjustments
required to be made to give effect to the Transactions and present fairly in
all material respects on a pro forma basis the estimated consolidated financial
position of the Borrower and its consolidated Subsidiaries as of such date and
for such period, assuming that the Transactions had actually occurred at such
date or at the beginning of such period, as the case may be.

     SECTION 3.06. No Material Adverse Change. No event, change or condition
has occurred that, individually or in the aggregate, has caused, or could
reasonably be expected to cause, a material adverse effect on the business,
assets, liabilities, operations or financial condition of the Borrower and the
Subsidiaries, taken as a whole, since September 30, 2003.

     SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
the Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.

     (b) Each of the Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such
leases are in full force and effect. Each of the Borrower and the Subsidiaries
enjoys peaceful and undisturbed possession under all such material leases,
subject to rights reserved by lessors under such leases.

     SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of the
Borrower or any Subsidiary therein. The shares of capital stock or other
ownership interests so indicated on Schedule 3.08 are fully paid and
non-assessable and are owned by the Borrower or

53

 

any Subsidiary, directly or indirectly, free and clear of all Liens (other
than Liens created under the Security Documents).

     SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth
on Schedule 3.09, there are no actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any business, property or rights of any such person (i) that
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

     (b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.09 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

     (c) None of the Borrower or any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits), or is
in default with respect to any judgment, writ, injunction, decree or order of
any Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.

     (d) To the Borrower’s knowledge, neither the ESOP Fiduciary nor the ESOT
Trustee has made any assertion with respect to the ESOP or the ESOT contrary to
or inconsistent with the accuracy of any representation or warranty set forth
herein that could reasonably be expected to result in a Material Adverse
Effect.

     SECTION 3.10. Agreements. Neither the Borrower nor any Subsidiary is in
default in any manner under any provision of any indenture or other agreement
or instrument evidencing Material Indebtedness, or any other material agreement
or instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.

     SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor
any Subsidiary is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying
Margin Stock.

     (b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation T, U or X.

     SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is (a) an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a “holding

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company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.

     SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans (other than any Incremental Term Loans) and will request the issuance of
Letters of Credit only for the purposes specified in the preliminary statement
to this Agreement. The Borrower will use the proceeds of any Incremental Term
Loans solely as set forth in the applicable Incremental Term Loan Assumption
Agreement.

     SECTION 3.14. Tax Returns. Each of the Borrower and the Subsidiaries has
filed or caused to be filed all Federal, state, local and foreign tax returns
or materials required to have been filed by it and has paid or caused to be
paid all taxes due and payable by it and all assessments received by it, except
for immaterial filings and amounts and taxes that are being contested in good
faith by appropriate proceedings and for which the Borrower or such Subsidiary,
as applicable, shall have set aside on its books adequate reserves.

     SECTION 3.15. No Material Misstatements. None of the Confidential
Information Memorandum, or reports, financial statements, exhibits and
schedules, taken as a whole, furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
contain or will contain any material misstatement of fact or omitted, omit or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, the Borrower represents only that it acted in good
faith and utilized reasonable assumptions and due care in the preparation of
such information, report, financial statement, exhibit or schedule.

     SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual valuation
date applicable thereto, exceed by more than $1,000,000 the fair market value
of the assets of such Plan, and the present value of all benefit liabilities of
all underfunded Plans (based on the assumptions used for purposes of Statement
of Financial Accounting Standards No. 87) did not, as of the last annual
valuation dates applicable thereto, exceed by more than $1,000,000 the fair
market value of the assets of all such underfunded Plans.

     SECTION 3.17. Environmental Matters. (a) Except as set forth in
Schedule 3.17 and except with respect to any other matters that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect,

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neither the Borrower nor any Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.

     (b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.17 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

     SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As
of each such date, such insurance is in full force and effect and all premiums
have been duly paid. The Borrower and the Subsidiaries have insurance in such
amounts and covering such risks and liabilities as are in accordance with
normal industry practice.

     SECTION 3.19. Security Documents. (a) The Guarantee and Collateral
Agreement, upon execution and delivery thereof by the parties thereto, will
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Guarantee and Collateral Agreement) and the proceeds thereof and
(i) when the Pledged Collateral (as defined in the Guarantee and Collateral
Agreement) is delivered to the Collateral Agent, the Lien created under the
Guarantee and Collateral Agreement shall constitute a fully perfected
first-priority Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Pledged Collateral, in each case prior and superior
in right to any other person, and (ii) when financing statements in appropriate
form are filed in the offices specified on Schedule 3.19(a), the Lien created
under the Guarantee and Collateral Agreement will constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral (other than Intellectual Property, as defined in the
Guarantee and Collateral Agreement), in which a security interest may be
perfected by filing in the United States of America and its territories and
possessions, in each case prior and superior in right to any other person,
other than with respect to Liens expressly permitted by Section 6.02.

     (b) Upon the recordation of the Guarantee and Collateral Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office, together with the financing statements in appropriate form filed in the
offices specified on Schedule 3.19(a), the Lien created under the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the Guarantee and Collateral Agreement) in
which a security interest may be perfected by filing in the United States of
America and its territories and possessions, in each case prior and superior in
right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a Lien on registered trademarks and patents,
trademark and patent applications and registered copyrights acquired by the
Loan Parties after the date hereof).

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     SECTION 3.20. Location of Real Property and Leased Premises. (a)
Schedule 3.20(a) lists completely and correctly as of the Closing Date all real
property owned by the Borrower and the Subsidiaries and the addresses thereof.
The Borrower and the Subsidiaries own in fee all the real property set forth on
Schedule 3.20(a).

     (b) Schedule 3.20(b) lists completely and correctly as of the Closing
Date all real property leased by the Borrower and the Subsidiaries and the
addresses thereof. The Borrower and the Subsidiaries have valid leases in all
the real property set forth on Schedule 3.20(b).

     SECTION 3.21. Labor Matters. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the knowledge of the Borrower, threatened. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in material violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such
matters. All material payments due from the Borrower or any Subsidiary, or for
which any claim may be made against the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have
been paid or accrued as a liability on the books of the Borrower or such
Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary is
bound.

     SECTION 3.22. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party, at a fair valuation,
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.

     SECTION 3.23. Subchapter S Corporation Status; ESOT Tax-Exempt Status.
As of the Closing Date, the Borrower is taxable as a Subchapter S corporation.
The ESOT is not subject to tax imposed under the Code with respect to any item
of income or loss of the Borrower or any Subsidiary of the Borrower.

     SECTION 3.24. ESOP. (a) As of the Closing Date and, to the best of
Borrower’s knowledge at all times thereafter, the ESOT has been duly organized
and is a validly existing trust. Except as set forth on Schedule 3.24, each of
the ESOP Plan Documents is in full force and effect and no term or condition
thereof has been amended, modified or waived from the terms and conditions
contained in the ESOP Plan

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Documents delivered to the Administrative Agent without the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), except
to the extent such amendment, modification or waiver could not reasonably be
anticipated to have a material adverse effect upon the Administrative Agent or
any of the Lenders or otherwise have a Material Adverse Effect. As of the
Closing Date and, to the best of Borrower’s knowledge at all times thereafter,
the ESOT has performed and complied with all the material terms, provisions,
agreements and conditions set forth therein and required to be performed or
complied with by the ESOT, and no unmatured default, default or breach of any
covenant by any such party exists thereunder.

     (b) As of the Closing Date and, to the best of the Borrower’s knowledge
at all times thereafter, the execution, delivery and performance of each of the
ESOP Plan Documents to which the ESOT is a party do not (i) conflict with the
ESOP Plan Documents, (ii) conflict with any requirement of law, or (iii) other
than with respect to ordinary course ESOP operations, require a registration
with, consent or approval of, or notices to, or other action to, with or by any
Governmental Authority.

     (c) As of the Closing Date and, to the best of the Borrower’s knowledge,
at all times thereafter, none of the assets of the Borrower constitute, for any
purpose of ERISA or Section 4975 of the Code, assets of the ESOP or any other
“plan” as defined in Section 3(3) of ERISA or Section 4975 of the Code.

     (d) As of the Closing Date and, to the best of the Borrower’s knowledge,
at all times thereafter, no non-exempt prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code has occurred with respect to
the ESOP, and no Loan hereunder constitutes or shall constitute or give rise to
any such non-exempt prohibited transaction.

     (e) The ESOP is qualified under Section 401(a) of the Code, and the ESOP
includes two components, one of which is a stock bonus plan that constitutes an
employee stock ownership plan as defined in Section 4975(e)(7) of the Code, and
the other is a profit sharing plan that includes a cash or deferred arrangement
under Section 401(k) of the Code.

     (f) The Borrower has provided the Administrative Agent with a complete
and true copy of each of the ESOP Plan Documents pursuant to which the ESOP and
the ESOT are maintained by the Borrower, or which concern the Borrower’s
obligations with respect to the ESOP and ESOT, as of the Closing Date and has
not subsequently amended or in any other way modified or replaced such ESOP
Plan Documents in any material manner without the prior written consent of the
Administrative Agent, except for any amendment, modification or replacement
required by the IRS or by applicable law (and the Borrower shall use its best
efforts to deliver a copy of any such amendment, modification or replacement to
the Administrative Agent prior to the execution thereof).

     (g) To the Borrower’s knowledge, no Loan hereunder is (for any purpose of
Section 406 of ERISA or Section 4975 of the Code) a direct or indirect loan or
other transaction between the Administrative Agent or any of the Lenders and
the ESOT

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which, if it is assumed that the Administrative Agent and the Lenders are
“parties in interest” and “disqualified persons” (as defined in Section 3(14)
of ERISA and Section 4975 of the Code), is a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code.

     (h) Neither the Borrower nor any of its Subsidiaries is or shall be
subject to the tax imposed by Section 4978 of the Code with respect to any
“disposition” by the ESOT of any shares of Equity Interests of the Borrower.

     (i) To the Borrower’s knowledge, there is no investigation or review by
any Governmental Agency, or action, suit, proceeding or arbitration, pending or
concluded, concerning any matter with respect to the ESOP or the ESOT relevant
as to whether any representation set forth herein was, or has or will at any
time become, inaccurate or breached or, if it were to be made at any time prior
to the satisfaction of all Obligations, would be inaccurate when made (other
than in respect of (i) periodic requests to the IRS to issue a favorable
determination letter to the effect that the ESOP is and continues to be a
qualified plan and an employee stock ownership plan, (ii) Annual Reports (IRS
Form 5500 Series) for the ESOP and (iii) routine claims for ESOP benefits), and
neither the ESOP Fiduciary nor, to the best of the Borrower’s knowledge, the
ESOT Trustee has made any assertion with respect to the ESOP or the ESOT
contrary to or inconsistent with the accuracy of any such representation which
assertion could reasonably be expected to have a Material Adverse Effect.

     SECTION 3.25. Subordinated Indebtedness. (a) The Loans and other
Obligations constitute “Senior Debt” for all purposes of the Mezzanine Notes,
the Seller Subordinated Notes and the Securities Purchase Agreements, and the
subordination provisions of the Mezzanine Notes, the Seller Subordinated Notes
and the Securities Purchase Agreements are enforceable by the Lenders against
the holders thereof, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
thereof may be brought.

     (b) On the Closing Date, to the Borrower’s knowledge, IIT is the sole
holder of each of the Mezzanine Notes and the Seller Subordinated Notes.

ARTICLE IV

Conditions of Lending

     The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:

     SECTION 4.01. All Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan and on the date of each issuance,
amendment,

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extension or renewal of a Letter of Credit (each such event being called a
"Credit Event”):

     (a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by Section
2.23(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline
Lender and the Administrative Agent shall have received a notice requesting
such Swingline Loan as required by Section 2.22(b).

     (b) The representations and warranties set forth in Article III and in
each other Loan Document shall be true and correct in all material respects on
and as of the date of such Credit Event with the same effect as though made on
and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.

     (c) The Borrower and each other Loan Party shall be in compliance with
all the terms and provisions set forth herein and in each other Loan Document
on its part to be observed or performed, and at the time of and immediately
after such Credit Event, no Default or Event or Default shall have occurred and
be continuing.

     Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section.

     SECTION 4.02. First Credit Event. On the Closing Date:

     (a) The Administrative Agent shall have received, on behalf of itself,
the Lenders, the Swingline Lender and the Issuing Bank, a favorable written
opinion of Baker & McKenzie LLP, counsel for the Borrower, substantially to the
effect set forth in Exhibit G, which opinion shall be (i) dated the Closing
Date and (ii) addressed to the Issuing Bank, the Administrative Agent and the
Lenders. The Borrower hereby requests such counsel to deliver such opinions.

     (b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.

     (c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto, of
each Loan Party, certified as of a recent date by the Secretary of State of the
State of its organization, and a certificate as to the good standing of each
Loan Party as of a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Loan Party dated
the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of such Loan Party as in effect on the Closing
Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the

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Board of Directors of such Loan Party authorizing the execution, delivery
and performance of the Loan Documents to which such person is a party and, in
the case of the Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan Party have
not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; and (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above.

     (d) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.

     (e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document.

     (f) The Security Documents shall have been duly executed by each Loan
Party that is to be a party thereto and shall be in full force and effect and
each document (including each Uniform Commercial Code financing statement and,
subject to the proviso to the first sentence of Section 5.09, each Assignment
of Claims Act notice) required by law or reasonably requested by the
Administrative Agent or the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent for the benefit of
the Secured Parties a valid, legal and perfected first-priority (except to the
extent otherwise provided therein) security interest in and lien on the
Collateral (subject to any Lien expressly permitted by Section 6.02) described
in the Security Documents shall have been prepared and delivered to the
Collateral Agent on the Closing Date.

     (g) The Collateral Agent shall have received a Perfection Certificate
with respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower, and shall have obtained the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the States (or other jurisdictions) of formation
of such persons, in which the chief executive office of each such person is
located and in the other jurisdictions in which such persons maintain property,
in each case as indicated on such Perfection Certificate, together with copies
of the financing statements (or similar documents) disclosed by such search,
and accompanied by evidence satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been or will be contemporaneously released
or terminated.

     (h) The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section
5.02 and the applicable

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provisions of the Security Documents, each of which shall be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement and
to name the Collateral Agent as additional insured, in form and substance
satisfactory to the Administrative Agent.

     (i) All principal, premium, if any, interest, fees and other amounts due
or outstanding under the Existing Credit Agreement shall have been, or
substantially simultaneously with the initial funding of Loans on the Closing
Date shall be, paid in full, the commitments thereunder terminated and all
guarantees and security in support thereof discharged and released, and the
Administrative Agent shall have received reasonably satisfactory evidence
thereof. Immediately after giving effect to the Transactions and the other
transactions contemplated hereby, the Borrower and the Subsidiaries shall have
outstanding no Indebtedness or preferred stock other than (a) Indebtedness
outstanding under this Agreement and (b) Indebtedness set forth on Schedule
6.01.

     (j) The Lenders shall have received the financial statements and opinion
referred to in Section 3.05, which financial statements shall not be materially
inconsistent with the financial statements or forecasts previously provided to
the Lenders.

     (k) The Lenders shall have received a certificate from the chief
financial officer of the Borrower certifying that the Borrower and the
Subsidiaries, on a consolidated basis after giving effect to the Transactions
to occur on the Closing Date, are solvent.

     (l) All Indebtedness in respect of the Mezzanine Notes and the Seller
Subordinated Notes shall have been fully subordinated to the Obligations and
each obligee in respect of the Mezzanine Notes and the Seller Subordinated
Notes shall have entered into subordination agreements in form and substance
reasonably acceptable to the Administrative Agent effecting such subordination.

     (m) There shall not be any pending or threatened litigation,
governmental, administrative or judicial action that could reasonably be
expected to restrain, prevent or impose burdensome conditions on the
Transactions or the other transactions contemplated hereby.

     (n) The Lenders shall have received, to the extent requested, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act.

ARTICLE V

Affirmative Covenants

     The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been

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reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower will, and will cause each Subsidiary to:

     SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
clause (b) below or Section 6.05; provided that, subject to Sections 5.06 and
5.09, the Borrower and any Subsidiary may convert the form of legal entity and
change the jurisdiction of incorporation or formation to any other jurisdiction
within the United States except that the Borrower shall not effect any
conversion which would prevent the Borrower from retaining the tax benefits
associated with being a disregarded entity for U.S. federal income tax
purposes.

     (b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated
(provided that nothing herein shall prevent the Board of Directors of the
Borrower or any Subsidiary from expanding or reducing a line of business that
it deems in its business judgment to be in the best interest of the Borrower or
such Subsidiary); comply in all material respects with all applicable laws,
rules, regulations and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time
make, or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that the foregoing shall not prevent the Borrower from
dissolving a Subsidiary or discontinuing the operation or maintenance of any of
its or any Subsidiary’s property if such discontinuance is, in the judgment of
the Borrower, desirable in the conduct of its business and could not reasonably
be expected to result in a Material Adverse Effect.

     SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it; and
maintain such other insurance as may be required by law.

     (b) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement, in
form and substance satisfactory to the Administrative Agent and the Collateral
Agent, which endorsement shall provide that, from and after the Closing Date,
if the insurance carrier shall have received written notice from the
Administrative Agent or the Collateral Agent

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of the occurrence of an Event of Default, the insurance carrier shall pay
all proceeds otherwise payable to the Borrower or any other Loan Party under
such policies directly to the Collateral Agent; cause all such policies to
provide that neither the Borrower, the Administrative Agent, the Collateral
Agent nor any other party shall be a coinsurer thereunder and to contain a
“Replacement Cost Endorsement”, without any deduction for depreciation, and
such other provisions as the Administrative Agent or the Collateral Agent may
reasonably require from time to time to protect their interests; deliver
original or certified copies of all such policies to the Collateral Agent;
cause each such policy to provide that it shall not be canceled, materially
modified or not renewed (i) by reason of nonpayment of premium upon not less
than 10 days’ prior written notice thereof by the insurer to the Administrative
Agent and the Collateral Agent (giving the Administrative Agent and the
Collateral Agent the right to cure defaults in the payment of premiums) or (ii)
for any other reason upon not less than 30 days’ prior written notice thereof
by the insurer to the Administrative Agent and the Collateral Agent; deliver to
the Administrative Agent and the Collateral Agent, prior to the cancellation,
material modification or nonrenewal of any such policy of insurance, a copy of
a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent and the Collateral Agent)
together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.

     (c) Notify the Administrative Agent and the Collateral Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section is taken out by
the Borrower; and promptly deliver to the Administrative Agent and the
Collateral Agent a duplicate original copy of such policy or policies.

     SECTION 5.03. Obligations and Taxes. Pay its Material Indebtedness and
other material obligations promptly and in accordance with their terms and pay
and discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend collection
of the contested obligation, tax, assessment or charge and enforcement of a
Lien.

     SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent for each Lender:

     (a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of operations,
shareholders’ equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, together with comparative

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figures for the immediately preceding fiscal year, all audited by
KPMG LLP or other independent public accountants of recognized national
standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP;

     (b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its unaudited consolidated balance sheet
and related statements of operations and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the
close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then
elapsed portion of the fiscal year, and comparative figures for the same
periods in the immediately preceding fiscal year, all certified by a
Financial Officer of the Borrower as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP, subject to
normal year-end audit adjustments;

     (c) concurrently with any delivery of financial statements under
paragraph (a) or (b) of this Section, a certificate of a Financial
Officer of the Borrower (i) certifying that no Default or Event of
Default has occurred or, if such a Default or an Event of Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.12 and 6.13 and, in the case of a certificate
delivered with the financial statements required by paragraph (a) of this
Section, setting forth the Borrower’s calculation of Excess Cash Flow;

     (d) within 90 days after the beginning of each fiscal year of the
Borrower, a detailed consolidated budget for such fiscal year (including
a projected consolidated balance sheet and related statements of
projected operations and cash flows as of the end of and for such fiscal
year and setting forth the assumptions used for purposes of preparing
such budget) and, promptly when available, any significant revisions of
such budget;

     (e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange,
or distributed to its shareholders, as the case may be;

     (f) promptly after the receipt thereof by the Borrower or any
Subsidiary, a copy of any “management letter” received by any such person
from its certified public accountants and the management’s response
thereto;

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     (g) as soon as practicable and in any event (i) within 10
Business Days after the receipt by the Borrower of the annual valuation
report prepared for the ESOP for each fiscal year, commencing with the
fiscal year ending September 30, 2004, deliver to the Administrative
Agent a copy of such report, and (ii) on the date that is the earlier of
(x) 180 days after the date of any Permitted Acquisition with a purchase
price in excess of $20,000,000 or for which the Acquired Entity shall
have 300 or more employees and (y) the second anniversary of the delivery
of the most recent repurchase liability study of the Borrower prepared
for the ESOP, deliver to the Administrative Agent (with sufficient copies
for each of the Lenders) copies of a repurchase liability study of the
Borrower prepared for the ESOP as of a recent date, in each case in form
and substance reasonably acceptable to the Administrative Agent.

     (h) within 45 days after the end of the first and third fiscal
quarters of the Borrower, a certificate of a Financial Officer of the
Borrower listing each new Material Contract entered into since the
Closing Date;

     (i) promptly after the request by any Lender, all documentation and
other information that such Lender reasonably requests in order to comply
with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA Patriot
Act; and

     (j) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender (acting through the Administrative
Agent) may reasonably request.

     SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
Agent, the Issuing Bank and each Lender prompt written notice of the following:

     (a) any Default or Event of Default, specifying the nature and
extent thereof and the corrective action, if any, taken or proposed to be
taken with respect thereto;

     (b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect;

     (c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected
to result in liability of the Borrower and the Subsidiaries in an
aggregate amount exceeding $1,000,000, together with a statement of a
Financial Officer of the Borrower setting forth the details of such ERISA
Event and the corrective action, if any, taken or proposed to be taken
with respect thereto;

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     (d) the occurrence of a material non-exempt prohibited transaction
(defined in Section 406 of ERISA and Section 4975 of the Code) with
respect to the ESOP or to any other Plan, or knowledge that the IRS or
any other Governmental Authority is investigating whether any such
material non-exempt prohibited transaction might have occurred, and a
statement of a Financial Officer of the Borrower describing such
transaction and the corrective action, if any, taken or proposed to be
taken with respect thereto;

     (e) the receipt of written notice (whether preliminary, final or
otherwise but excluding any notice of any proposed amendments) of any
unfavorable determination letter from the IRS regarding the qualification
of a Plan under Section 401(a) of the Code or the status of the ESOP as
an employee stock ownership plan (as defined in Section 4975(e)(7) of the
Code), together with copies of each such letter;

     (f) the receipt by the Borrower or any of its Subsidiaries of notice
of any audit, investigation, litigation or inquiry by the IRS or any
other Governmental Authority relating to the ESOP or the ESOT, which
could reasonably be expected to subject the Borrower or any of its
Subsidiaries to liability, individually or in the aggregate, in excess of
$1,000,000, together with copies of each such notice and copies of all
subsequent correspondence relating thereto;

     (g) the occurrence of any amendment to any of the ESOP Plan
Documents;

     (h) the Borrower’s knowledge that at any time on or after the
Closing Date the Borrower is not taxable as a Subchapter S corporation as
such term is defined in Section 1361 of the Code or that the ESOT is
subject to tax imposed under the Code with respect to any item of income
or loss of the Borrower or any Subsidiary of the Borrower; and

     (i) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

For purposes of this Section 5.05, the Borrower and the Subsidiaries shall be
deemed to know all facts known by the administrator of any Plan of which the
Borrower or any Subsidiary is the plan sponsor.

     SECTION 5.06. Information Regarding Collateral. (a) Furnish to the
Administrative Agent prompt written notice of any change in (i) any Loan
Party’s corporate name, (ii) the jurisdiction of organization or formation of
any Loan Party, (iii) any Loan Party’s identity or corporate structure or (iv)
any Loan Party’s Federal Taxpayer Identification Number. The Borrower agrees
not to effect or permit any change referred to in the preceding sentence unless
all filings have been made under the Uniform Commercial Code or otherwise that
are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral.

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     (b) In the case of the Borrower, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04(a), deliver to the Administrative Agent a certificate of a
Financial Officer of the Borrower supplementing the information required
pursuant to the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section.

     SECTION 5.07. Maintaining Records; Access to Properties and Inspections;
Maintenance of Ratings. (a) Keep proper books of record and account in which
full, true and correct entries in conformity with GAAP and all requirements of
law are made of all dealings and transactions in relation to its business and
activities. Each Loan Party will, and will cause each of its subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender
to visit and inspect the financial records and the properties of such person at
reasonable times and as often as reasonably requested (but no more than twice
per fiscal year of the Borrower, unless an Event of Default has occurred and is
continuing) and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent or any Lender
to discuss the affairs, finances and condition of such person with the officers
thereof and independent accountants therefor.

     (b) In the case of the Borrower, use commercially reasonable efforts to
cause the Credit Facilities to be continuously rated by S&P and Moody’s.

     SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preliminary statement to this Agreement (or, in the case of the Incremental
Term Loans, as set forth in the applicable Incremental Term Loan Assumption
Agreement); provided that, if the Borrower shall have irrevocably called the
Mezzanine Notes for redemption prior to the expiration of the Delayed Draw
Availability Period, but the redemption of the Mezzanine Notes would occur
after the expiration of the Delayed Draw Availability Period, then, subject to
the satisfaction of the conditions set forth in Section 4.01, the Borrower may,
prior to the expiration of the Delayed Draw Availability Period, request
Delayed Draw Term Loans sufficient to fund such redemption and deposit the
proceeds of such Delayed Draw Term Loans in a cash collateral account with the
Administrative Agent pending such redemption.

     SECTION 5.09. Further Assurances. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
fixture filings, mortgages and deeds of trust and preparing all documentation
relating to filings under the Assignment of Claims Act) that may be required
under applicable law, or that the Required Lenders, the Administrative Agent or
the Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Security Documents;
provided, however, that notwithstanding anything else to the contrary in the
Loan Documents, none of the

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Loan Parties shall be required to make filings under the Assignment of
Claims Act for the assignment of Government Contracts to the Collateral Agent
unless (a) such Government Contract constitutes a Material Contract and (b)
the Collateral Agent shall have requested, in its reasonable discretion, that a
filing under the Assignment of Claims Act be made with respect to such
Government Contract. The Borrower will cause each subsequently acquired or
organized Domestic Subsidiary (excluding any Insignificant Subsidiary) to
become a Loan Party by executing the Guarantee and Collateral Agreement and
each other applicable Security Document in favor of the Collateral Agent. In
addition, from time to time, the Borrower will, at its cost and expense,
promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of its
assets and properties as the Administrative Agent or the Required Lenders shall
designate (it being understood that it is the intent of the parties that the
Obligations shall be secured by substantially all the assets of the Borrower
and the Subsidiary Guarantors (other than any Insignificant Subsidiary)
(including real and other properties acquired subsequent to the Closing Date)).
Such security interests and Liens will be created under the Security Documents
and other security agreements, mortgages, deeds of trust and other instruments
and documents in form and substance satisfactory to the Collateral Agent, and
the Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrower agrees to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. In furtherance of the
foregoing, the Borrower will give prompt notice to the Administrative Agent of
the acquisition by it or any Subsidiary of any real property (or any interest
in real property) having a value in excess of $500,000.

     SECTION 5.10. Interest Rate Protection. No later than 180 days after the
Closing Date, the Borrower shall enter into, and for a minimum of two years
thereafter maintain, Hedging Agreements acceptable to the Administrative Agent
that result in at least 40% of the aggregate principal amount of its funded
long-term Indebtedness being effectively subject to a fixed or maximum interest
rate acceptable to the Administrative Agent.

     SECTION 5.11. Mezzanine Note Redemption. Cause the Mezzanine Note
Redemption to occur on or before December 31, 2004.

ARTICLE VI

Negative Covenants

     The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been cancelled or have expired and all amounts drawn
thereunder have been reimbursed

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in full, unless the Required Lenders shall otherwise consent in writing,
the Borrower will not, nor will it cause or permit any Subsidiary to:

     SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:

     (a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01;

     (b) Indebtedness created hereunder and under the other Loan
Documents;

     (c) intercompany Indebtedness of the Borrower and the Subsidiaries
to the extent permitted by Section 6.04(a);

     (d) Indebtedness incurred to extend, renew or refinance any
Indebtedness described in Section 6.01(a), (d), (e), (f), (h), (j) or (m)
(“Refinancing Indebtedness”); provided, however, that (i) such
Refinancing Indebtedness is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being extended,
renewed or refinanced, plus the amount of any interest, premiums or
penalties required to be paid thereon plus fees and expenses associated
therewith, (ii) such Refinancing Indebtedness has a later or equal final
maturity and a longer or equal weighted average life to maturity than the
Indebtedness being extended, renewed or refinanced, (iii) if the
Indebtedness being extended, renewed or refinanced is subordinated to the
Obligations, the Refinancing Indebtedness is subordinated to the
Obligations on terms no less favorable to the Lenders than the
Indebtedness being extended, renewed or refinanced, (iv) neither the
Borrower nor any Subsidiary Guarantor may become obligated in respect of
such Refinancing Indebtedness unless it was obligated in respect of the
Indebtedness being extended, renewed or refinanced and (v) the
non-economic covenants, events of default, remedies and other provisions
of the Refinancing Indebtedness, when taken as a whole, shall be
materially no less favorable to the Lenders than those contained in the
Indebtedness being extended, renewed or refinanced;

     (e) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this paragraph, when combined with the
aggregate principal amount of all Capital Lease Obligations and Synthetic
Lease Obligations incurred pursuant to paragraph (e) of this Section
shall not exceed $10,000,000 at any time outstanding;

     (f) Capital Lease Obligations and Synthetic Lease Obligations in an
aggregate principal amount, when combined with the aggregate principal
amount

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of all Indebtedness incurred pursuant to paragraph (d) of this
Section, not in excess of $10,000,000 at any time outstanding;

     (g) Indebtedness of the Borrower or any Subsidiary incurred under
any Hedging Agreement of the Borrower or any Subsidiary to the extent
relating to Indebtedness of the Borrower or such Subsidiary, as the case
may be (which Indebtedness (i) bears interest at fluctuating interest
rates and (ii) is otherwise permitted to be incurred pursuant to this
Agreement);

     (h) Indebtedness of any person that becomes a Subsidiary after the
date hereof; provided that (i) such Indebtedness exists at the time such
person becomes a Subsidiary and is not created in contemplation of or in
connection with such person becoming a Subsidiary and (ii) the aggregate
principal amount of Indebtedness permitted by this paragraph shall not
exceed $5,000,000 at any time outstanding;

     (i) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;

     (j) unsecured subordinated Indebtedness of the Borrower (which may
be Guaranteed by any Loan Party on a subordinated basis) the proceeds of
which are used to finance the cash consideration payable in a Permitted
Acquisition (including the refinancing of Indebtedness of the Acquired
Entity and the payment of related fees and expenses) in an aggregate
principal amount, when combined with the aggregate principal amount of
all Indebtedness incurred pursuant to Section 6.01(f), not in excess of
$150,000,000 at any time outstanding; provided that such Indebtedness (i)
matures after the first anniversary of the Term Loan Maturity Date, (ii)
requires no scheduled payment of principal prior to its maturity, (iii)
does not require the Borrower to maintain any specified financial
condition (other than as a condition to the taking of certain actions)
and (iv) contains subordination provisions, non-economic covenants,
events of default, remedies and other provisions, and is in form and
substance, reasonably satisfactory to the Administrative Agent;

     (k) Indebtedness under performance bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of
business;

     (l) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business, so long as such Indebtedness is extinguished within three
Business Days of the Borrower’s knowledge of such incurrence; and

     (m) Indebtedness arising as a result of (i) the redemption or
repurchase of any Equity Interests of the Borrower as a result of
distributions by the ESOT to participants in the ESOP pursuant to the
ESOP Plan Documents subsequent to their termination of employment with
the Borrower or any Controlled Group

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member or (ii) the requirements of Section 401(a)(28) of the Code or
any substantially similar requirement of law; and

     (n) other unsecured Indebtedness of the Borrower or the Subsidiaries
in an aggregate principal amount not exceeding $10,000,000 at any time
outstanding.

     (o) the Mezzanine Notes (subject to Section 5.11), the Seller
Subordinated Notes and the Officer Note;

     (p) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount not to exceed $2,500,000 at any time outstanding; and

     (q) Borrower’s deferred compensation agreements.

     SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including Equity Interests or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:

     (a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided that
such Liens shall secure only those obligations which they secure on the
date hereof;

     (b) any Lien created under the Loan Documents;

     (c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any person that becomes a Subsidiary after the date
hereof prior to the time such person becomes a Subsidiary, as the case
may be; provided that (i) such Lien is not created in contemplation of or
in connection with such acquisition or such person becoming a Subsidiary,
as the case may be, (ii) such Lien does not apply to any other property
or assets of the Borrower or any Subsidiary and (iii) such Lien secures
only those obligations which it secures on the date of such acquisition
or the date such person becomes a Subsidiary, as the case may be;

     (d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;

     (e) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or which
are being contested in compliance with Section 5.03;

     (f) pledges and deposits made in the ordinary course of business in
compliance with workmen’s compensation, unemployment insurance and other
social security laws or regulations;

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

     (h) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, do not materially
detract from the value of the property subject thereto or interfere with
the ordinary conduct of the business of the Borrower or any Subsidiary;

     (i) purchase money security interests in real property, improvements
thereto or equipment and other personal property hereafter acquired (or,
in the case of improvements, constructed) by the Borrower or any
Subsidiary; provided that (i) such security interests secure Indebtedness
permitted by Section 6.01, (ii) such security interests are incurred, and
the Indebtedness secured thereby is created, within 90 days after such
acquisition (or construction), (iii) the Indebtedness secured thereby
does not exceed 90% of the lesser of the cost or the fair market value of
such real property, improvements or equipment at the time of such
acquisition (or construction) and (iv) such security interests do not
apply to any other property or assets of the Borrower or any Subsidiary;

     (j) Liens arising out of judgments or awards in respect of which the
Borrower or any Subsidiary shall in good faith be prosecuting an appeal
or proceedings for review in respect of which there shall be secured a
subsisting stay of execution pending such appeal or proceedings; provided
that the aggregate amount of all such judgments or awards (and any cash
and the fair market value of any property subject to such Liens) does not
exceed $5,000,000 at any time outstanding;

     (k) any interest or title of a licensor, lessor or sublessor under
any license or lease agreement pursuant to which rights are granted to
the Borrower or any Subsidiary;

     (l) licenses, leases or subleases granted by the Borrower or any
Subsidiary to third persons in the ordinary course of business not
interfering in any material respect with the business of the Borrower or
any Subsidiary;

     (m) Liens in favor of customs or revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;

     (n) Liens in favor of any Governmental Authority in respect of (i)
any liability under Environmental Law or (ii) damages arising from, or
costs incurred by such Governmental Authority in response to, a Release
or a threatened Release of a Hazardous Material into the environment;
provided that the aggregate amount

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of such liabilities secured by such Liens does not exceed $1,000,000
at any one time; and

     (o) Liens that do not, individually or in the aggregate, secure
obligations (or encumber property with a fair market value) in excess of
$2,500,000 at any one time.

     SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred unless (a) the
sale of such property is permitted by Section 6.05 and (b) any Capital Lease
Obligations, Synthetic Lease Obligations or Liens arising in connection
therewith are permitted by Sections 6.01 and 6.02, as the case may be.

     SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:

     (a) (i) investments by the Borrower and the Subsidiaries existing on
the date hereof in the Equity Interests of the Subsidiaries and (ii)
additional investments by the Borrower and the Subsidiaries in the Equity
Interests of the Subsidiaries; provided that (A) any such Equity
Interests held by a Loan Party shall be pledged to the Collateral Agent
for the ratable benefit of the Secured Parties pursuant to the Guarantee
and Collateral Agreement or each other applicable Security Document
(subject to the limitations applicable to voting stock of a Foreign
Subsidiary referred to therein) and (B) the aggregate amount of
investments by Loan Parties in, and loans and advances by Loan Parties
to, Subsidiaries that are not Loan Parties (determined without regard to
any write-downs or write-offs of such investments, loans and advances)
shall not exceed $2,500,000 at any time outstanding;

     (b) Permitted Investments;

     (c) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to the Borrower or any other Subsidiary; provided
that (i) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged to the Collateral Agent for the
ratable benefit of the Secured Parties pursuant to the Guarantee and
Collateral Agreement and (ii) the amount of such loans and advances made
by Loan Parties to Subsidiaries that are not Loan Parties shall be
subject to the limitation set forth in paragraph (a) of this Section;

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

     (e) to the extent permitted by applicable law, the Borrower and the
Subsidiaries may make loans and advances in the ordinary course of
business to their respective directors, officers and employees so long as
the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $1,000,000;

     (f) the Borrower may enter into Hedging Agreements that (i) are
required by Section 5.10 or (ii) are not speculative in nature;

     (g) the Borrower or any Subsidiary may acquire all or substantially
all the assets of a person or line of business of such person, or not
less than 100% of the Equity Interests of a person (referred to herein as
the “Acquired Entity”); provided that (i) such acquisition was not
preceded by an unsolicited tender offer for such Equity Interests by, or
proxy contest initiated by, the Borrower or any Subsidiary; (ii) the
Acquired Entity shall be a going concern, shall be in a similar line of
business as that of the Borrower and the Subsidiaries as conducted during
the current and most recent calendar year; (iii) except for the Specified
U.K. Company, the Acquired Entity is located, and substantially all of
its operations are conducted, in the United States of America; (iv) at
the time of such transaction (A) both before and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing, (B) the Borrower would be in Pro Forma Compliance (assuming,
for purposes of making such determination with respect to the covenant
set forth in Section 6.14, that the maximum Leverage Ratio then permitted
by such covenant is 0.25 to 1.00 lower than the Leverage Ratio actually
set forth therein and in effect at the time such determination is made)
and (C) after giving effect to such acquisition, there must be at least
$5,000,000 of unused and available Revolving Credit Commitments, and (v)
the Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer of the Borrower confirming compliance
with clauses (i) through (iv) above, together with all relevant financial
information for the Acquired Entity and reasonably detailed calculations
demonstrating satisfaction of the requirements set forth in clause (v)
above (any acquisition of an Acquired Entity meeting all the criteria of
this paragraph being referred to herein as a “Permitted Acquisition”);

     (h) the Borrower and its Subsidiaries may acquire and hold non-cash
consideration issued by the purchaser of assets in connection with a sale
of such assets to the extent permitted by Section 6.05;

     (i) investments, loans and advances existing on the date hereof and
set forth in Schedule 6.04;

     (j) the Specified U.K. Investment; and

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     (k) in addition to investments permitted by paragraphs (a) through
(j) of this Section, additional investments, loans and advances by the
Borrower and the Subsidiaries so long as the aggregate amount invested,
loaned or advanced pursuant to this clause (determined without regard to
any write-downs or write-offs of such investments, loans and advances)
does not exceed $7,500,000 in the aggregate, and none of (i) any
investment specifically consented to by the Required Lenders, (ii) any
investment in a person that subsequently becomes a wholly-owned
Subsidiary in a transaction constituting a Permitted Acquisition or (iii)
any investment that is subsequently sold (to the extent of the net cash
proceeds of such sale) shall count toward such $7,500,000 amount.

     SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
(a) Merge into or consolidate with any other person, or permit any other
person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all the assets (whether now owned or hereafter acquired) of the
Borrower or less than all the Equity Interests of any Subsidiary, or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other person, except that (i) the
Borrower and any Subsidiary may purchase and sell inventory in the ordinary
course of business and (ii) if at the time thereof and immediately after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing (x) any wholly owned Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (y) any wholly
owned Subsidiary may merge into or consolidate with any other wholly owned
Subsidiary in a transaction in which the surviving entity is a wholly owned
Subsidiary and no person other than the Borrower or a wholly owned Subsidiary
receives any consideration (provided that if any party to any such transaction
is a Loan Party, the surviving entity of such transaction shall be a Loan
Party) and (z) the Borrower and the Subsidiaries may make Permitted
Acquisitions.

     (b) Engage in any Asset Sale otherwise permitted under paragraph (a) of
this Section unless (i) such Asset Sale is for consideration at least 75% of
which is cash, (ii) such consideration is at least equal to the fair market
value of the assets being sold, transferred, leased or disposed of and (iii)
the fair market value of all assets sold, transferred, leased or disposed of
pursuant to this paragraph shall not exceed (i) $5,000,000 in any fiscal year
or (ii) $10,000,000 in the aggregate.

     SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare
or make, or agree to declare or make, directly or indirectly, any Restricted
Payment (including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions ratably to
its equity holders, (ii) the Borrower may pay, satisfy and discharge the
Mezzanine Warrant Put Right if, when and to the extent exercised, (iii) so long
as no Default or Event of Default shall have occurred and be continuing or
would result therefrom, the Borrower may repurchase its Equity Interests owned
by directors, officers and employees of the Borrower or the Subsidiaries or
make payments to directors, officers and employees of the Borrower or the
Subsidiaries in connection with Warrants, stock options, stock appreciation
rights,

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“phantom” stock plans or similar equity incentives or equity based
incentives pursuant to management or other incentive plans or in connection
with the death or disability of such directors, officers and employees in an
aggregate amount not to exceed $10,000,000 and (iv) so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom (except with respect to subclauses (A), (B) and (D) below),
Restricted Payments may be made (A) in connection with the redemption or
repurchase for value of any Equity Interests of the Borrower as a result of
distributions by the ESOT of such Equity Interests to participants in the ESOP
pursuant to the ESOP Plan Documents subsequent to their termination of
employment with the Borrower or any Controlled Group member, (B) as required by
Section 401(a)(28) of the Code or any substantially similar requirement of law,
(C) in the form of administrative fees or expenses of the ESOP or the ESOT,
including the fees of the ESOT Trustee, or (D) as contributions to the ESOT as
required under the ESOP Plan Documents.

     (b) Enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (i) the
ability of the Borrower or any Subsidiary to create, incur or permit to exist
any Lien upon any of its property or assets to secure the Obligations, or (ii)
the ability of any Subsidiary to pay dividends or other distributions with
respect to any of its Equity Interests or to make or repay loans or advances to
any Loan Party or to Guarantee Indebtedness of any Loan Party; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, any Securities Purchase Agreement, the Warrants or the
Rights Agreement, (B) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (C) clause
(i) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, and (D) clause (i) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.

     SECTION 6.07. Transactions with Affiliates. Except for transactions by or
among Loan Parties, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that (a) the Borrower or any
Subsidiary may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, (b) Restricted Payments may be made to the extent
provided in Section 6.06, (c) loans, investments and advances may be made to
the extent permitted by Sections 6.01(c) and 6.04(a), (c) and (e), (d) officers
may be compensated as and in the manner they historically have been compensated
and officers hired after the Closing Date may be compensated in a manner
commensurate with the office held, and (e) so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom,
reasonable and customary fees may be paid to non-officer directors of the
Borrower in an aggregate amount not to exceed $250,000 in any fiscal year, it
being understood that payments to non-officer directors in connection with
stock options, stock appreciation rights, “phantom” stock plans or

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similar equity incentives or equity based incentives shall not count
toward such $250,000 limitation.

     SECTION 6.08. Business of the Borrower and Subsidiaries. Engage at any
time in any business or business activity other than the business currently
conducted by the Borrower and the Subsidiaries and business activities
reasonably related thereto.

     SECTION 6.09. Other Indebtedness and Agreements. (a) Permit any waiver,
supplement, modification, amendment, termination or release of any indenture,
instrument or agreement pursuant to which any Material Indebtedness of the
Borrower or any Subsidiary is outstanding if the effect of such waiver,
supplement, modification, amendment, termination or release would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner materially adverse to the Borrower,
any of the Subsidiaries or the Lenders.

     (b) Permit any waiver, supplement, modification or amendment of any ESOP
Plan Document in a manner materially adverse to the Lenders.

     (c) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly (including pursuant to any Synthetic Purchase Agreement)
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, any subordinated Indebtedness (other than
the Mezzanine Note Redemption), or (ii) pay in cash any amount in respect of
any Indebtedness or preferred Equity Interests that may at the obligor’s option
be paid in kind or in other securities, except that in either case the Borrower
may pay, satisfy and discharge the Mezzanine Warrant Put Right if, when and to
the extent exercised.

     SECTION 6.10. Assets as Plan Assets. Permit any of the assets of the
Borrower or any Subsidiary to constitute, for any purpose of ERISA or Section
4975 of the Code, assets of the ESOP or any other “plan” as defined in Section
3(3) of ERISA or Section 4975 of the Code.

     SECTION 6.11. Prohibited Transaction. Permit any material non-exempt
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code to occur with respect to the ESOP.

     SECTION 6.12. Interest Coverage Ratio. Permit the Interest Coverage Ratio
for any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending during any period set forth below to be less than the
ratio set forth opposite such date or period below:

	 	 	 	 	 
	Date or Period
	 	Ratio

	Closing Date through September 30, 2005
	 	 	3.75 to 1.00	 
	Thereafter
	 	 	4.00 to 1.00	 
	 
	 	 	
 	 

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     SECTION 6.13. Maximum Leverage Ratio. Permit the Leverage Ratio at the
end of any fiscal quarter during a period set forth below to be greater than
the ratio set forth opposite such period below:

	 	 	 	 	 
	Period
	 	Ratio

	Closing Date through March 31, 2005
	 	 	3.85 to 1.00	 
	April 1, 2005 through June 30, 2005
	 	 	3.75 to 1.00	 
	July 1, 2005 through March 31, 2006
	 	 	3.50 to 1.00	 
	April 1, 2006 through March 31, 2007
	 	 	3.25 to 1.00	 
	April 1, 2007 through March 31, 2008
	 	 	2.75 to 1.00	 
	Thereafter
	 	 	2.25 to 1.00	 

     SECTION 6.14. Fiscal Year. With respect to the Borrower, change its
fiscal year-end to a date other than September 30.

ARTICLE VII

Events of Default

     In case of the happening of any of the following events (“Events of
Default”):

     (a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty, statement
or information contained in any report, certificate, financial statement
or other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;

     (b) default shall be made in the payment of any principal of any
Loan or the reimbursement with respect to any L/C Disbursement when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;

     (c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (b) of this Article) due under any Loan Document, when and as
the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days with regard to interest
and ten Business Days with regard to Fees and other amounts;

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     (d) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a), 5.05, 5.08 or 5.11 or in Article VI;

     (e) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in paragraph
(b), (c) or (d) of this Article) and such default shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent or any Lender to the Borrower;

     (f) (i) the Borrower or any Subsidiary shall fail to pay any
principal or interest, regardless of amount, due in respect of any
Material Indebtedness, when and as the same shall become due and payable,
or (ii) any other event or condition occurs (and all relevant grace
periods have expired) that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits the holder
or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (ii) shall not
apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;

     (g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower or any Subsidiary (other than an
Insignificant Subsidiary), or of a substantial part of the property or
assets of the Borrower or any Subsidiary (other than an Insignificant
Subsidiary), under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary (other than an Insignificant
Subsidiary) or for a substantial part of the property or assets of the
Borrower or a Subsidiary (other than an Insignificant Subsidiary) or
(iii) the winding-up or liquidation of the Borrower or any Subsidiary
(other than an Insignificant Subsidiary); and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;

     (h) the Borrower or any Subsidiary (other than an Insignificant
Subsidiary) shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in paragraph (g)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary (other than an Insignificant
Subsidiary) or for a substantial part of the property or assets of the
Borrower or

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any Subsidiary (other than an Insignificant Subsidiary), (iv) file
an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;

     (i) one or more judgments shall be rendered against the Borrower,
any Subsidiary (other than an Insignificant Subsidiary) or any
combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
levy upon assets or properties of the Borrower or any Subsidiary (other
than an Insignificant Subsidiary) to enforce any such judgment and such
judgment either (i) is for the payment of money in an aggregate amount in
excess of $5,000,000 or (ii) is for injunctive relief and could
reasonably be expected to result in a Material Adverse Effect;

     (j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower and
its ERISA Affiliates in an aggregate amount exceeding $5,000,000;

     (k) any Guarantee under the Guarantee and Collateral Agreement for
any reason shall cease to be in full force and effect (other than in
accordance with its terms), or any Subsidiary Guarantor shall deny in
writing that it has any further liability under the Guarantee and
Collateral Agreement (other than as a result of the discharge of such
Subsidiary Guarantor in accordance with the terms of the Loan Documents);

     (l) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any
other Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in the securities, assets or properties covered
thereby, except to the extent that any such loss of perfection or
priority results from the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged under the
Guarantee and Collateral Agreement or other applicable Security Document
and except to the extent that such loss is covered by a lender’s title
insurance policy and the related insurer promptly after such loss shall
have acknowledged in writing that such loss is covered by such title
insurance policy;

     (m) the Indebtedness under the Seller Subordinated Notes, the
Mezzanine Notes and/or any Guarantees thereof shall cease, for any reason
other than the repayment thereof as permitted by this Agreement, to be
validly subordinated to the Obligations, as provided in the relevant
agreements, or any Loan Party or any Affiliate of any Loan Party shall so
assert;

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     (n) there shall have occurred a Change in Control;

     (o) (i) a notice of debarment, notice of suspension or notice of
termination for default shall have been issued under any Material
Contract; (ii) the Borrower is barred or suspended from contracting with
any part of the Government; (iii) a Government investigation shall have
resulted in a criminal or civil liability of the Borrower or any
Subsidiary in excess of $5,000,000; (iv) the actual termination of any
Material Contract due to alleged fraud, willful misconduct, neglect,
default or any other wrongdoing; or (v) a cure notice issued under any
Material Contract shall remain uncured (subject to expiration of
extensions that may have been received) beyond (A) the expiration of the
time period available to the Borrower pursuant to such Material Contract
and/or such cure notice to cure the noticed default or (B) the date on
which the other contracting party exercises its rights and remedies under
the Material Contract as a consequence of such default;

     (p) The ESOT shall be subject to tax imposed under the Code with
respect to any item of income or loss of the Borrower or any Subsidiary
of the Borrower at any time on or after the Closing Date that could
reasonably be expected to result in tax liability to the ESOT, the
Borrower or any of its Subsidiaries in an amount in excess of $5,000,000;

     (q) Any Loan hereunder shall, for any purpose of Section 406 of
ERISA or Section 4975 of the Code, be found to be a direct or indirect
loan or other transaction between the Administrative Agent or any of the
Lenders and the ESOT which, if it is assumed that the Administrative
Agent and the Lenders are “parties in interest” and “disqualified
persons” (as defined in Section 3(14) of ERISA and Section 4975 of the
Code), is a non-exempt prohibited transaction described in Section 406 of
ERISA or Section 4975 of the Code;

     (r) There shall be a finding, holding, ruling or other determination
not subject to cure made by any court or Governmental Authority, or an
assertion by the ESOP Fiduciary or the ESOT Trustee, concerning any
matter with respect to the ESOP or the ESOT contrary to or inconsistent
with any representation, warranty or covenant set forth herein, which
holding, ruling, determination or assertion could reasonably be expected
to have a Material Adverse Effect;

     (s) the IRS shall notify the Borrower in writing that it has made a
final determination not subject to cure that the ESOP is not a qualified
plan and an employee stock ownership plan within the meanings of Section
401(a) and 4975(e)(7), respectively, of the Code; or

     (t) the Borrower shall fail to be qualified as a Subchapter S
corporation, as such term is defined in Section 1361 of the Code.

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders

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shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate forthwith the Commitments and
(ii) declare the Loans then outstanding to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding; and in any event with respect to
the Borrower described in paragraph (g) or (h) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

ARTICLE VIII

The Administrative Agent and the Collateral Agent

     Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent and the Collateral Agent (for purposes of this Article,
the Administrative Agent and the Collateral Agent are referred to collectively
as the “Agents”) its agent and authorizes the Agents to take such actions on
its behalf and to exercise such powers as are delegated to such Agent by the
terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. Without limiting the generality of the
foregoing, the Agents are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Secured Parties with respect thereto, as contemplated by and in accordance
with the provisions of this Agreement and the Security Documents.

     The bank serving as the Administrative Agent and/or the Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent hereunder.

     Neither Agent shall have any duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) neither Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b)
neither Agent shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby that such Agent is instructed in writing to exercise by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08), and (c) except
as

83

 

expressly set forth in the Loan Documents, neither Agent shall have any
duty to disclose, nor shall it be liable for the failure to disclose, any
information relating to the Borrower or any Subsidiary that is communicated to
or obtained by the bank serving as Administrative Agent and/or Collateral Agent
or any of its Affiliates in any capacity. Neither Agent shall be liable for
any action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08) or in the
absence of its own gross negligence or willful misconduct. Neither Agent shall
be deemed to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and neither Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.

     Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

     Each Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by it. Each Agent
and any such sub-agent may perform any and all its duties and exercise its
rights and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Agent.

     Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such

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successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Agent’s resignation hereunder, the provisions of this Article and
Section 9.05 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while acting as Agent.

     Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.

     None of the Lenders or other persons identified on the facing page of this
Agreement as a “syndication agent” or “documentation agent” shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders. Without limiting the
foregoing, none of the Lenders or other persons 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 the Lenders
or other persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

ARTICLE IX

Miscellaneous

     SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:

     (a) if to the Borrower, to it at 1750 Tysons Boulevard, Suite 1300,
McLean, Virginia 22102, Attention of John M. Hughes (Fax No. (703)
714-6508 or (703) 714-6511);

     (b) if to the Administrative Agent, the Collateral Agent, the
Swingline Lender or the Issuing Bank, to Credit Suisse First Boston,
Eleven Madison Avenue, New York, New York 10010, Attention of Agency
Group (Fax No. (212) 325-8304); and

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     (c) if to a Lender or an Issuing Bank, to it at its address (or fax
number) set forth in its Administrative Questionnaire or in the
Assignment and Acceptance pursuant to which such Lender shall have become
a party hereto.

     All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section. As agreed to among the Borrower, the Administrative Agent and the
applicable Lenders from time to time, notices and other communications may also
be delivered by e-mail to the e-mail address of a representative of the
applicable person provided from time to time by such person.

     SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the
Issuing Bank or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not been terminated. The provisions of Sections 2.14,
2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank.

     SECTION 9.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto.

     SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors
and assigns.

     (b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its

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Commitments and the Loans at the time owing to it), with the prior written
consent of the Administrative Agent and, in the case of any assignment of a
Revolving Credit Commitment, the Issuing Bank and the Swingline Lender (in each
case, not to be unreasonably withheld or delayed); provided, however, that (i)
except in the case of an assignment to a Lender or an Affiliate or Related Fund
of a Lender, (A) unless an Event of Default shall have occurred and be
continuing, the Borrower must also give its prior written consent to such
assignment (not to be unreasonably withheld or delayed, it being understood
that the consent of the Borrower shall not be necessary in connection with any
assignment during the primary syndication of the Loans to any person on the
allocation list previously agreed to by the Administrative Agent and the
Borrower), and (B) the amount of the Commitments and/or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is recorded by the
Administrative Agent) shall not be less than $1,000,000 (or, if less, the
entire remaining amount of such Lender’s Commitment and/or Loans of the
relevant Class; provided that such minimum assignment amount shall be
aggregated for two or more simultaneous assignments by or to two or more
Related Funds), (ii) the parties to each such assignment shall (A)
electronically execute and deliver to the Administrative Agent an Assignment
and Acceptance via an electronic settlement system acceptable to the
Administrative Agent (which initially shall be ClearPar, LLC) or (B) if no such
system shall then be specified by the Administrative Agent, manually execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 (unless such fee is waived at
the discretion of the Administrative Agent) and (iii) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and all applicable tax forms. Upon acceptance and recording
pursuant to paragraph (e) of this Section, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.16, 2.20 and 9.05).

     (c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and
that its Term Loan Commitment and Revolving Credit Commitment, and the
outstanding balances of its Term Loans and Revolving Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any

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other instrument or document furnished pursuant hereto, or the financial
condition of the Borrower or any Subsidiary or the performance or observance by
the Borrower or any Subsidiary of any of its obligations under this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.05(a) or
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, the Collateral Agent, such
assigning Lender 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 this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the
Collateral Agent, respectively, by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.

     (d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall
be conclusive absent manifest error, and the Borrower, the Administrative
Agent, the Issuing Bank, the Collateral Agent and the Lenders may treat each
person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrower,
the Issuing Bank, the Collateral Agent and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

     (e) Upon its receipt of, and consent to, a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section, if applicable, the written consent of the
Administrative Agent and, if required, the Borrower, the Swingline Lender
and/or the Issuing Bank to such assignment and any applicable tax forms, the
Administrative Agent shall (i) accept such Assignment and Acceptance and (ii)
record the information contained therein in the Register. No assignment shall
be effective unless it has been recorded in the Register as provided in this
paragraph.

     (f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or

88

 

other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
owing to it); 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) the participating banks or other entities shall be entitled
to the benefit of the cost protection provisions contained in Sections 2.14,
2.16 and 2.20 to the same extent as if they were Lenders (but, with respect to
any particular participant, to no greater extent than the Lender that sold the
participation to such participant) and (iv) the Borrower, the Administrative
Agent, the Collateral Agent, the Issuing Bank and the Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to the Loans or
L/C Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans, increasing
or extending the Commitments or releasing any Subsidiary Guarantor or all or
any substantial part of the Collateral).

     (g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
subject to Section 9.16(b), disclose to the assignee or participant or proposed
assignee or participant any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 9.16.

     (h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in
support of obligations owed by such Lender; provided that no such assignment
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.

     (i) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an
"SPC”), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan
and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto

89

 

hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States of America or any State
thereof. In addition, notwithstanding anything to the contrary contained in
this Section, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
to the Granting Lender or to any financial institutions (consented to by the
Borrower and Administrative Agent) providing liquidity and/or credit support to
or for the account of such SPC to support the funding or maintenance of Loans
and (ii) subject to Section 9.16(b), disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC.

     (j) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.

     (k) In the event that (a) any Revolving Credit Lender shall become a
Defaulting Lender, (b) S&P, Moody’s and Thompson’s BankWatch (or InsuranceWatch
Ratings Service, in the case of Lenders that are insurance companies (or Best’s
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender becomes a Revolving
Credit Lender, downgrade the long-term certificate deposit ratings of such
Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in
the case of a Lender that is an insurance company (or B, in the case of an
insurance company not rated by InsuranceWatch Ratings Service)), or (c) with
respect to any Lender that is not rated by any such ratings service or
provider, the Issuing Banks or the Swingline Lender shall have reasonably
determined that there has occurred a material adverse change in the financial
condition of any such Lender, or a material impairment of the ability of any
such Lender to perform its obligations hereunder, as compared to such condition
or ability as of the date that any such Lender became a Revolving Credit
Lender, then the Issuing Banks shall have the right, but not the obligation, at
its own expense, upon notice to such Lender and the Administrative Agent, to
replace (or to request the Borrower to use its reasonable efforts to replace)
such Lender with an assignee (in accordance with and subject to the
restrictions contained in paragraph (b) of this Section), and such Lender
hereby agrees to transfer and assign without recourse (in accordance with and
subject to the restrictions contained in paragraph (b) of this Section) all its
interests, rights and obligations in respect of its Revolving Credit Commitment
to such assignee; provided, however, that (i) no such assignment shall conflict
with any law, rule and regulation or order of any Governmental Authority and
(ii) the Issuing Banks or such assignee, as the case may be, shall pay to such
Lender in immediately available funds on the date of such assignment

90

 

the principal of and interest accrued to the date of payment on the Loans
made by such Lender hereunder and all other amounts accrued for such Lender’s
account or owed to it hereunder.

     SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Swingline Lender in connection with the
syndication of the Credit Facilities and the preparation and administration of
this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents or in
connection with the Loans made or Letters of Credit issued hereunder, including
the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP,
counsel for the Administrative Agent and the Collateral Agent, and, in
connection with any such enforcement or protection, the reasonable fees,
charges and disbursements of any other counsel for the Administrative Agent,
the Collateral Agent or any Lender.

     (b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender, the Issuing Bank and each Related Party of any
of the foregoing persons (each such person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of
their respective obligations thereunder or the consummation of the Transactions
and the other transactions contemplated thereby, (ii) the use of the proceeds
of the Loans or issuance of Letters of Credit, (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto, or (iv) any actual or alleged presence or
Release of Hazardous Materials on any property currently or formerly owned or
operated by the Borrower or any Subsidiary, or any Environmental Liability
related in any way to the Borrower or the Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted primarily from the gross negligence or willful misconduct of such
Indemnitee.

     (c) To the extent that the Borrower fails to pay any amount required to be
paid by them to the Administrative Agent, the Collateral Agent, the Issuing
Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender’s pro rata share (determined, in the manner provided below, as of the
time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount; provided that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may

91

 

be, was incurred by or asserted against the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender in its capacity as
such. For purposes hereof, a Lender’s “pro rata share” shall be determined
based upon its share of the sum of the Aggregate Revolving Credit Exposure,
outstanding Term Loans and unused Commitments at the time.

     (d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

     (e) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the Loans, the expiration of the Commitments, the expiration of any Letter
of Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section shall be payable on written demand
therefor.

     SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, except to the extent prohibited by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

     SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE
DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE
(THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.

92

 

     SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.

     (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that (i) the
Borrower and the Administrative Agent may enter into an amendment to effect the
provisions of Section 2.24(b) upon the effectiveness of any Incremental Term
Loan Assumption Agreement (and any such amendment shall in any event be deemed
to have occurred upon such effectiveness), (ii) no such agreement shall (A)
decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or date for the payment of any interest on any Loan or
any date for reimbursement of an L/C Disbursement, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan or
L/C Disbursement, without the prior written consent of each Lender affected
thereby, (B) increase or extend the Commitment or decrease or extend the date
for payment of any Fees of any Lender without the prior written consent of such
Lender, (C) amend or modify the pro rata requirements of Section 2.17, the
provisions of Section 9.04(j) or the provisions of this Section or release any
Subsidiary Guarantor or all or substantially all of the Collateral, without the
prior written consent of each Lender, (D) change the provisions of any Loan
Document in a manner that by its terms adversely affects the rights in respect
of payments due to Lenders holding Loans of one Class differently from the
rights of Lenders holding Loans of any other Class without the prior written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each adversely affected Class, (E) modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(i) without the
written consent of such SPC, or (F) reduce the percentage contained in the
definition of the term “Required Lenders” without the prior written consent of
each Lender (it being understood that with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as
the Term Loan Commitments and Revolving Credit Commitments on the date hereof)
and (iii) any waiver, amendment or other modification referred to in subclauses
(ii)(A) or (B) above with respect to the Loans or Commitments of any Lender may
be made with the prior written consent of such Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or

93

 

duties of the Administrative Agent, the Collateral Agent, the Issuing Bank
or the Swingline Lender hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender.

     SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the “Charges”), shall
exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable
in respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.

     SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
person (other than the parties hereto and thereto, their respective successors
and assigns permitted hereunder (including any Affiliate of the Issuing Bank
that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders) any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.

     SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.

94

 

     SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

     SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 9.03. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

     SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

     SECTION 9.15. Jurisdiction; Consent to Service of Process. The Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the other Loan Documents, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against the Borrower or its properties in the
courts of any jurisdiction.

     (a) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

95

 

     (b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

     SECTION 9.16. Confidentiality. (a) Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ officers, directors, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority or quasi-regulatory authority (such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) in connection with
the exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder
or thereunder, (e) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any actual or prospective assignee of
or participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower or any
Subsidiary or any of their respective obligations, (f) with the consent of the
Borrower or (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section. For the purposes of this
Section, “Information” shall mean all information received from the Borrower
and related to the Borrower or its business, other than any such information
that was available to the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure
by the Borrower; provided that, in the case of Information received from the
Borrower after the date hereof, such information is clearly identified at the
time of delivery as confidential.

     (b) The Administrative Agent, the Lenders and all other persons who are or
who may become party to this Agreement or who may participate in the Loans
pursuant to Section 9.04(f) or are SPCs acknowledge that the Borrower and its
Subsidiaries perform classified contracts funded by or for the benefit of the
United States Federal government, and, accordingly, notwithstanding any other
provision of this Agreement, neither the Borrower nor any Subsidiary will be
obligated to release, disclose or otherwise make available: (i) any classified
information to any person including the Administrative Agent, the Lenders or
any other person not in possession of a valid security clearance and authorized
by the appropriate agency of the United States Federal government to receive
such material, or (ii) any material whatsoever to any person including the
Administrative Agent, the Lenders or any other person if such release,
disclosure or availability would not comply with the National Industrial
Security Program Operating Manual and associated laws and regulations. The
Administrative Agent and the Lenders agree that, in connection with any
exercise of a right or remedy, the United States Federal government may remove
classified information or government-issued property prior to any remedial
action implicating such classified information or government-issued property.
Upon

96

 

notice from the Borrower, the Administrative Agent and the Lenders shall
take such steps in accordance with this Agreement as may reasonably be
requested by the Borrower to enable the Borrower or any Subsidiary to comply
with the Foreign Ownership Control or Influence requirements of the United
States government imposed from time to time.

     SECTION 9.17. USA Patriot Act Notice. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act, it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the USA Patriot Act.

[Remainder of page intentionally blank]

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

	 	 	 	 	 	 	 
	 	 	ALION SCIENCE AND TECHNOLOGY CORPORATION,
	 
	 	 	 	 	 	 
	

	 	 	 	By
	 	/s/ John M. Hughes
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: John M. Hughes
	

	 	 	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON, acting through its
Cayman Islands Branch, individually and as
Administrative Agent, Collateral Agent, Swingline
Lender and Issuing Bank,
	 
	 	 	 	 	 	 
	

	 	 	 	By
	 	/s/ Jay Chah
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Jay Chah
	

	 	 	 	 	 	Title: Director
	 
	 	 	 	 	 	 
	

	 	 	 	By
	 	/s/ Vanessa Gomez
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION, as a Lender and
Issuing Bank
	 
	 	 	 	 	 	 
	

	 	 	 	By
	 	/s/ Robert W. Bolt
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Robert W. Bolt
	

	 	 	 	 	 	Title: Senior Vice President

98exv10w37

 

Exhibit 10.37

THE FIRST AMENDMENT TO THE MEZZANINE WARRANT

AGREEMENT

     THIS FIRST AMENDMENT TO THE MEZZANINE WARRANT AGREEMENT (the “Amendment”)
is made effective as of December 16, 2004, between Alion Science and
Technology Corporation, a Delaware corporation (the “Company”), and Illinois
Institute of Technology, an Illinois not-for-profit corporation (“IIT”).

     WHEREAS, the Company, IIT Research Institute, an Illinois not-for-profit
corporation affiliated with and controlled by IIT (“IITRI”), and Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Trust
(the “Trust”) entered into that certain Mezzanine Warrant Agreement dated as of
the 20th day of December 2002 (the “Mezzanine Warrant Agreement”), pursuant to
which the Company issued to IITRI warrants to purchase Five Hundred Twenty-Four
Thousand Two Hundred Twenty-Eight and Nine-Tenths (524,228.9) shares of the
Company’s $0.01 par value per share common stock (“Common Stock”), of which
warrants to purchase Five Hundred Four Thousand Nine Hundred One and
Nine-Tenths (504,901.9) shares of Common Stock remain outstanding as of the
date of this Amendment;

     WHEREAS, as of July 1, 2004, IITRI transferred to IIT all its rights and
interests in the Mezzanine Warrant Agreement;

     WHEREAS, the Company and IIT desire to amend Sections 3(l)(v) and 16(e) of
the Mezzanine Warrant Agreement;

     WHEREAS, the Trust is a party to the Mezzanine Warrant Agreement only for
the purposes of Sections 6, 7, 15 and 17 through 25 of the Mezzanine
Warrant Agreement, and pursuant to Section 18 of the Mezzanine Warrant
Agreement, Sections 3(l)(v) and 16(e) may be amended by the mutual written
agreement of the Company and IIT, without the need to obtain the Trust’s
consent; and

     WHEREAS, the Company and IIT desire to amend the Mezzanine Warrant
Agreement as set forth herein.

     NOW, THEREFORE, in consideration of the premises set forth above and the
respective covenants and agreements contained in this Amendment, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:

     1. Amendments to the Mezzanine Warrant Agreement.

First Amendment to the
Mezzanine Warrant Agreement

 

 

          (a) Section 3(l)(v) of the Mezzanine Warrant Agreement is hereby amended
by deleting the entire text of Section 3(l)(v) and substituting in lieu
thereof:

“interests or rights designated as phantom stock issued or granted
by the Company to employees, consultants, officers or directors of
the Company or any of its Subsidiaries in accordance with a
phantom stock plan to be adopted by the Company’s board of
directors after the Effective Date, except for such amount of
phantom stock that, at the time of issuance or grant, would cause
the aggregate number of shares of phantom stock then outstanding
(excluding any shares of phantom stock that have (x) expired,
terminated unexercised or become unexercisable, or (y) been
forfeited or otherwise terminated, surrendered or cancelled) to be
in excess of 225,000 shares of phantom stock.”

          (b) Section 16(e) of the Mezzanine Warrant Agreement is hereby amended by
deleting the entire text of Section 16(e) and substituting in lieu thereof:

“The Company will not issue shares of phantom stock that cause the
number of shares of outstanding phantom stock (excluding any
shares of phantom stock that have expired, terminated unexercised,
or become unexercisable, or that have been forfeited or otherwise
terminated, surrendered or cancelled), at the time of issuance, to
be in excess of 225,000 shares of phantom stock.”

     2. Waiver. IIT hereby irrevocably waives (i) any and all breaches
by the Company of the Company’s covenants set forth in Section 16(e) of the
Mezzanine Warrant Agreement, and (ii) any and all adjustments to the Exercise
Price (as defined in the Mezzanine Warrant Agreement), in each case based upon
or arising out of the issuance by the Company of shares of phantom stock on or
before the effective date of this Amendment, and hereby fully and forever,
effective as of the effective date of this Amendment, releases, discharges and
acquits the Company from any and all claims, demands, causes of action, and/or
damages, which IIT may now or hereafter have or claim to have against the
Company, based in whole or in part upon, or which may arise from the issuance
by the Company of shares of phantom stock on or before the effective date of
this Amendment.

     3. Remainder of the Mezzanine Warrant Agreement Not Affected.
Except as set forth in Section 1 hereof, the terms and provisions of the
Mezzanine Warrant Agreement remain in full force and effect without change,
amendment, waiver or modification.

     4. Ratification. As modified hereby, the Mezzanine Warrant
Agreement and its terms and provisions are hereby ratified for all purposes and
in all respects.

     5. Counterparts. This Amendment may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.

     6. References. From and after the date provided above, all
references to the Mezzanine Warrant Agreement shall be deemed to be references
to the Mezzanine Warrant Agreement as modified hereby.

2

 

     7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflict of laws principles thereof.

     8. Conflict. In the event of any conflict between the terms of
this Amendment and the Mezzanine Warrant Agreement, the terms of this Amendment
shall govern.

[Signatures follow on next page]

3

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by its officers thereunto duly authorized as of the date hereof.

	 	 	 	 	 	 	 	 	 	 	 
	Alion Science and Technology Corporation	 	Illinois Institute of Technology
	 
	 	 	 	 	 	 	 	 	 	 
	By:
/s/ Bahman Atefi
	 	By:/s/ Lew Collens

	 		 	 	 	 
	Name: Bahman Atefi	 	Name: Lew Collens
	Title: Chief Executive Officer	 	Title: President

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