Document:

Exhibit 4.2

 

Execution Copy

 

STOCKHOLDERS AGREEMENT

 

THIS STOCKHOLDERS AGREEMENT, dated as of December 16, 2003 (this “Agreement”), is made by and between
Duratek, Inc., a Delaware corporation (the “Company”),
and the several holders of the Company’s 8% Cumulative Convertible Redeemable
Preferred Stock, par value $.01 per share (the “Convertible Preferred Stock”), named in the attached Schedule I (each individually, a “Stockholder” and collectively, the “Stockholders”).

 

RECITALS

 

WHEREAS,
simultaneously with entering into this Agreement, the Company and the
Stockholders are entering into a Share Repurchase Agreement (the “Repurchase Agreement”) pursuant to which
the Company is repurchasing from the Stockholders and one other stockholder an
aggregate of 151,467 shares of Convertible Preferred Stock (the “Repurchase Transaction”).

 

WHEREAS,
immediately following the Repurchase Transaction, each Stockholder is the
record and beneficial owner of the number of shares of Convertible Preferred
Stock set forth opposite such Stockholder’s name on Schedule I hereto; and

 

WHEREAS,
as an inducement and a condition to entering into the Repurchase Agreement, the
parties are entering into this Agreement.

 

NOW, THEREFORE,
in consideration of the foregoing and the mutual covenants, agreements and
warranties herein contained, the parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1                                      Definitions.  The following terms shall have the following
meanings for the purposes of this Agreement:

 

“Accrued Dividends” means all of the accrued
but unpaid dividends on each share of Convertible Preferred Stock (whether or
not declared) up to and including the date of repurchase of such share of
Convertible Preferred Stock by the Company.

 

“Acquisition Proposal” means any offer or
proposal for, or any indication of interest in, (i) a merger or other business
combination involving the Company, (ii) the acquisition of Voting Securities
if, as a result thereof, the Person offering or proposing to acquire such
Voting Securities, together with its Affiliates, would Beneficially Own in the
aggregate more than 15% of the outstanding Voting Securities, or (iii) the
acquisition, in one transaction or a series of related

 

 

transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries taken as a whole.

 

“Affiliate” means, with respect to any
specified Person, (1) any other Person which, directly or indirectly, owns or
controls, is under common ownership or control with, or is owned or controlled
by, such specified Person, and (2) any relative or spouse of the specified
Person or any of the Persons contemplated in this definition; provided, however,
that for purposes of this Agreement none of the Stockholders shall be deemed an
Affiliate of the Company and the Company shall not be deemed an Affiliate of
the Stockholders.

 

“Aggregate Purchase Price” means, with
respect to each Stockholder, the Per Share Purchase Price multiplied by the
number of shares of Convertible Preferred Stock to be repurchased from each
Stockholder pursuant to the terms hereof.

 

“Beneficial Ownership” and “Beneficially Own” shall be determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act.

 

“Business Day” means any day of the year
other than (i) any Saturday or Sunday or (ii) any other day on which commercial
banks located in the State of Maryland are generally closed for business.

 

“Carlyle Stockholders” means each
Stockholder that is an Affiliate of TC Group, L.L.C., TC Group II, L.L.C., TCG
Holdings, L.L.C, TC Group Investment Holdings LP or TCG Holdings II LP.

 

“Certificate of Designations” means the
Certificate of Designations of the Convertible Preferred Stock, as amended from
time to time.

 

“Common Stock” means the Company’s common
stock, par value $.01 per share.

 

“Control” or “control” means the possession, directly or indirectly, alone
or with others, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power,
by contract or otherwise; and “controlling” and “controlled” have meanings
correlative thereto.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Governmental Entity” means a court,
arbitral tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency.

 

2

 

“Investment Fund Affiliate” means any
investment fund, partnership, limited liability company or similar investment
vehicle (i) of which TC Group, L.L.C., one of its subsidiaries or any other
Person controlling TC Group, L.L.C. or under common control with TC Group,
L.L.C. is a general partner, managing member or acting in a similar capacity or
(ii) which is otherwise an Affiliate of any of the Carlyle Stockholders.

 

“Law” means any law, statute, ordinance,
rule, regulation, order, writ, judgment, injunction or decree of any
Governmental Entity.

 

“Lien” means any mortgage, lien, charge,
encumbrance, restriction, pledge, security interest, option, lease or sublease,
claim, proxy, or right or adverse claim of any third party.

 

“Majority Carlyle Stockholders” means the
Carlyle Stockholders holding a majority of the Voting Securities of the Company
held by all Carlyle Stockholders.

 

“Majority Stockholders” means the
Stockholders holding a majority of the Voting Securities of the Company held by
all Stockholders subject to this Agreement.

 

“Other Preferred Stockholders” means those
Persons that own shares of Convertible Preferred Stock that are not a party to
this Agreement.

 

“Per Share Purchase Price” means the greater
of (i) $324.67 per share of Convertible Preferred Stock and (ii) the highest
price per share, excluding Accrued Dividends, paid by the Company to any holder
of Convertible Preferred Stock not a party hereto to repurchase such share of
Convertible Preferred Stock, plus in each case Accrued Dividends.

 

“Person” means any individual, corporation,
proprietorship, firm, partnership, limited liability company, limited
partnership, trust, association or other entity, including a government or
government department, agency or instrumentality.

 

“Stockholder” means each Person named in the
attached Schedule I
and each Permitted Transferee to which such Person has Transferred any Voting
Securities.

 

“Subsequent Closing Date” means
September 29, 2005.

 

“Subsidiary” means any Person of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by any party.

 

3

 

“Transfer” means any sale, assignment, gift,
mortgage, pledge, exchange, disposition, or transfer, directly or indirectly,
including pursuant to judicial order, legal process, execution, attachment or
enforcement of a Lien or through grants of options or otherwise.

 

“Voting Securities” means the Common Stock,
the Convertible Preferred Stock and all other securities of the Company
entitled, in the ordinary course, to vote in the election of directors of the
Company.

 

Section 1.2                                      Other Interpretive Provisions.

 

(a)                                  Except as otherwise specified herein, all
references herein (i) to any Person shall be deemed to include such Person’s
successors and permitted assigns and (ii) to any applicable law defined or
referred to herein shall be deemed references to such applicable law or any
successor applicable law as the same may have been or may be amended or
supplemented from time to time.

 

(b)                                 When used in this Agreement, the words “herein”,
“hereof” and “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any provision of this Agreement, and the words
“Article”, “Section,” “Exhibit” and “Schedule” shall refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless otherwise
specified.

 

(c)                                  Whenever the context so requires, the neuter gender
includes the masculine or feminine, the masculine gender includes the feminine,
and the singular number includes the plural, and vice versa.

 

(d)                                 Any item or list of items set forth following the
word “including”, “include” or “includes” is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in
which such item or items are “included”, such item or items are in such
category, and shall not be construed as indicating that the items in the
category in which such item or items are “included” are limited to such items
or to items similar to such items.

 

(e)                                  Captions to Articles, Sections and subsections of,
and Exhibits and Schedules to, this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose or in any way affect the meaning or construction of any provision of
this Agreement.

 

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ARTICLE II

BOARD OF DIRECTORS

 

Section 2.1                                      Board Representation  The
Company agrees that it shall use its best efforts, subject to (i) fiduciary
duties under Delaware law, (ii) the applicable listing standards of Nasdaq or
any other any securities exchange on which any of the Company’s securities are
then traded or listed and (iii) any applicable Law, including without
limitation the Delaware General Corporation Law and the Exchange Act, to cause
one (1) individual designated by the Majority Carlyle Stockholders to be
nominated to the Company’s Board of Directors, provided that such individual is
reasonably acceptable to the Nominating Committee of the Company’s Board of
Directors (or the Company’s Board of Directors if there is no such Nominating
Committee) .  In the event of any
vacancy on the Company’s Board of Directors occurring by reason of the death,
resignation, removal or other termination of the director designated by the
Majority Carlyle Stockholders pursuant to this Section 2.1, the Company
agrees that it shall use its best efforts, subject to the limitations referred
to in the prior sentence, to cause an individual designated by the Majority
Carlyle Stockholders to be nominated to fill such vacancy.  The Majority Carlyle Stockholders may waive
the right contemplated by this Section 2.1 by giving written notice of
such waiver to the Company’s Board of Directors.  Unless waived in accordance with the previous sentence, the
rights pursuant to this Section 2.1 shall continue so long as the Carlyle
Stockholders Beneficially Own Voting Securities constituting in the aggregate
at least fifteen percent (15%) of the outstanding Voting Securities of the
Company (assuming conversion of all outstanding shares of Convertible Preferred
Stock).  The rights provided to the
Carlyle Stockholders pursuant to this Section 2.1 may be assigned by the
Carlyle Stockholders to any one or more of the Carlyle Stockholders.

 

Section 2.2                                      Board Observation Right.  The
Company agrees that the Carlyle Stockholders shall be permitted to send two (2)
representatives (the “Representatives”)
to attend, as nonvoting observers, all meetings of the Company’s Board of Directors
or committees thereof and, in this respect, the Company shall provide the
Representatives copies of all notices, minutes, consents and other materials
that it provides to its directors; provided, however, that the
Company reserves the right to exclude the Representatives from access to any
material or meeting or portion thereof if the Company in good faith believes
upon the advice of counsel that such exclusion is reasonably necessary to (i)
preserve the attorney-client privilege or (ii) comply with the listing
standards of Nasdaq or any other securities exchange on which any of the
Company’s securities are then listed or traded and any applicable Law,
including without limitation the need to hold periodic executive sessions of
the Company’s Board of Directors.  The
Majority Carlyle Stockholders may waive the rights contemplated by this
Section 2.2 by giving written notice of such waiver to the Company’s Board
of Directors.  Unless waived in
accordance with the previous sentence, the rights pursuant to this
Section 2.2 shall continue so long as the Carlyle Stockholders
Beneficially Own Voting Securities constituting in the aggregate at least five
percent (5%) of the outstanding Voting Securities of the Company (assuming
conversion of all outstanding shares of Convertible Preferred Stock).  The rights provided to the Carlyle
Stockholders pursuant to this Section 2.2 may be assigned by the Carlyle
Stockholders to any one or more of the Carlyle Stockholders.

 

5

 

Section 2.3                                      Review Rights.  Upon the receipt of a written
request, the Company and each of its Subsidiaries shall provide the Carlyle
Stockholders with reasonable access to all Books and Records during regular
business hours and allow the Carlyle Stockholders to make copies and abstracts
thereof, and the Company and each of its Subsidiaries shall cause any of its
respective Subsidiaries and Affiliates to do the same.  The Carlyle Stockholders shall hold in confidence
any information obtained in the course of such review and shall not use any
such information to the detriment of the Company, its Subsidiaries or their
respective Subsidiaries or Affiliates. 
The Carlyle Stockholders shall have the right to consult from time to
time with management of the Company and each of its Subsidiaries and any of
their respective Affiliates and Subsidiaries at their respective places of
business regarding operating and financial matters.  The rights contemplated by this Section 2.3 shall remain in
effect by and among the Company and the Carlyle Stockholders so long as the
Carlyle Stockholders Beneficially Own Voting Securities constituting in the
aggregate at least five percent (5%) of the outstanding Voting Securities of
the Company (assuming conversion of all outstanding shares of Convertible
Preferred Stock).  Unless earlier
terminated pursuant to the previous sentence, rights contemplated by this
Section 2.3 shall remain in effect with respect to each of the Company’s Subsidiaries,
respectively, so long as the Company Beneficially Owns (directly or indirectly)
shares of voting stock of such Subsidiary representing more than 50% of the
votes entitled to be cast for members of the board of directors of such
Subsidiary.  For purposes of this
Section 2.3, “Books and Records”
shall mean, collectively, the books and records of the Company and each of its
Subsidiaries and any of their respective Subsidiaries and Affiliates, including
without limitation financial data (including projections) and operating data
covering each of such entities, their businesses, operations and financial
performance.

 

ARTICLE III

AGREEMENT TO VOTE SECURITIES

 

Section 3.1                                      Agreement to Vote the Voting Securities.  Each
Stockholder, in its capacity as such, hereby agrees that during the term of
this Agreement, at any meeting of the holders of any class or classes of the
capital stock of the Company, however called, or in connection with any written
consent of the holders of any class or classes of the capital stock of the
Company, such Stockholder shall vote (or cause to be voted) the Voting
Securities then owned or over which it has voting control at such time to amend
the Certificate of Designations to eliminate paragraph (b) under
Article III Voting Rights thereof so that the right of the holders of the
Convertible Preferred Stock, voting as a separate class, to elect a majority of
the members of the Company’s Board of Directors will terminate upon the
effectiveness of such vote or consent. 
Each Stockholder hereby agrees that such Stockholder shall not enter
into any agreement or understanding with any Person the effect of which would
be to violate the provisions and agreements contained in this Agreement, it
being understood that any sale of shares of Common Stock by any Stockholder
shall not constitute a breach of this Section 3.1.

 

6

 

Section 3.2                                      Grant of Proxy.  Each Stockholder hereby appoints the Company
and any designee of the Company, each of them individually, such Stockholder’s
proxy and attorney-in-fact, with full power of substitution and resubstitution,
to vote or act by written consent during the term hereof with respect to its
Voting Securities in accordance with Section 3.1.  This proxy is given to secure the
performance of the duties of each Stockholder under this Agreement.  Each Stockholder affirms that this proxy is
coupled with an interest and shall be irrevocable.  Each Stockholder shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of this proxy.

 

Section 3.3                                      Other Proxies Revoked.  Each
Stockholder represents and warrants that any proxies heretofore given in
respect of such Stockholder’s Voting Securities are not irrevocable, and that
all such proxies have been or are hereby revoked.

 

Section 3.4                                      Waiver of Right to Elect a Majority of the Board of
Directors.  The Stockholders, constituting the holders of a majority of the
outstanding shares of Convertible Preferred Stock, hereby waive, pursuant to
Article XI of the Certificate of Designations, the right to elect a
majority of the Board of Directors of the Company pursuant to
Article III(b) of the Certificate of Designations.

 

ARTICLE IV

TRANSFER RESTRICTIONS; COMPANY OPTION

 

Section 4.1                                      Restriction on Transfer; Grant of Proxies; Waiver
of Conversion Right.  Subject to Section 4.6 below, no Stockholder shall (i)
Transfer any shares of Convertible Preferred Stock or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
Transfer of any shares of Convertible Preferred Stock or any interest therein,
except for permitted Transfers as provided in Section 4.2 or in accordance
with Sections 4.3 or 4.4, (ii) except as contemplated by this Agreement, grant
any proxies or powers of attorney, deposit any of the shares of Convertible
Preferred Stock into a voting trust or enter into a voting agreement with
respect to any shares of Convertible Preferred Stock, or (iii) take any action
that would have the effect of preventing or disabling such Stockholder from
performing such Stockholder’s obligations under this Agreement.  No Transfer of shares of Convertible
Preferred Stock in violation of this Agreement shall be made or recorded on the
books of the Company and any such Transfer shall be void and of no effect or
that would otherwise be inconsistent with the purpose and intent of this
Agreement.  Subject to Section 4.6
below, each Stockholder hereby waives its right to convert any shares of
Convertible Preferred Stock into Common Stock. 
Any attempted conversion of the Convertible Preferred Stock by the
Stockholders in violation of the previous sentence shall be void and of no
force and effect.

 

7

 

Section 4.2                                      Permitted Transfers.  A
Stockholder shall be permitted to Transfer its shares of Convertible Preferred
Stock to any Affiliate of such Stockholder. 
In connection with any Transfer under this Section 4.2 by a
Stockholder, the transferee shall hold the shares of Convertible Preferred
Stock subject to the same restrictions applicable to its transferor and, as a
condition of such Transfer, shall agree in writing to be bound by the terms of
this Agreement and to become a party to this Agreement as a “Stockholder”.  Any transferee of shares of Convertible
Preferred Stock permitted by this Section 4.2 that agrees in writing to be
bound by the terms of this Agreement and to become a party to this Agreement as
a “Stockholder” is referred to herein as a “Permitted
Transferee”.

 

Section 4.3                                      Company Option.  Subject to Section 4.6, each of the
Stockholders hereby grants an option to the Company (the “Company Option”) to purchase from such
Stockholder all or any of the shares Convertible Preferred Stock owned or held
by such Stockholder.  In the case of a
partial exercise of the Company Option, the number of shares of Convertible
Preferred Stock to be purchased from each Stockholder shall be pro rata based
on the number of shares of Convertible Preferred Stock then held by each
Stockholder or by some other allocation method as the Stockholders may
agree.  The purchase price per share at
which the Company Option may be exercised is the Per Share Purchase Price.  To exercise the Company Option, the Company
shall deliver a written notice (the “Company
Option Notice”) to the Stockholders, stating the Company’s desire to
exercise the Company Option and specifying the number of shares of Convertible
Preferred Stock to be purchased.  The
closing (the “Company Option Closing”)
for the Company Option shall occur at the Company’s principal office no later
than ten (10) Business Days after the Company gives the Company Option
Notice.  At the Company Option Closing,
the Company shall pay by wire transfer of immediately available funds to an
account specified by each selling Stockholder an amount equal to the Aggregate
Purchase Price for each selling Stockholder, and each selling Stockholder shall
deliver to the Company the certificate(s) representing the shares of
Convertible Preferred Stock to be purchased hereunder, each such certificate to
be duly and validly endorsed in favor of the Company or accompanied by stock
powers duly endorsed in blank. 
Notwithstanding the foregoing or anything herein to the contrary, the
Company may not exercise the Company Option if and to the extent that (i) it
would cause the Carlyle Stockholders to own less than a majority of the shares
of Convertible Preferred Stock outstanding after giving effect to such purchase
or (ii) it would violate or breach any applicable Law, including without limitation
the Delaware General Corporation Law and the Exchange Act.

 

Section 4.4                                      Company’s Obligation to Purchase.  (a) The
Company agrees to purchase from each Stockholder, and each Stockholder agrees
to sell to the Company, from time to time, that number of shares of Convertible
Preferred Stock as is equal to product of (x) the number of shares of
Convertible Preferred Stock that the Company purchases from the Other Preferred
Stockholders or that are converted by the Other Preferred Stockholders into
shares of Common Stock and (y) a fraction, the numerator of which is the number
of shares of Convertible Preferred

 

8

 

Stock then held by such Stockholder and the
denominator of which is the total number of shares of Convertible Preferred
Stock then held by all Stockholders, in each case rounded as appropriate to
address fractional shares.  The purchase
price per share at which the Company shall purchase the shares of Convertible
Preferred Stock pursuant to this Section 4.4(a) shall be the Per Share
Purchase Price.  At the closing of the
purchase and sale of shares of Convertible Preferred Stock contemplated by this
Section 4.4(a), the Company shall pay by wire transfer of immediately
available funds to an account specified by each selling Stockholder an amount
equal to the Aggregate Purchase Price for each selling Stockholder, and each
selling Stockholder shall deliver to the Company the certificate(s)
representing the shares of Convertible Preferred Stock to be purchased from
such Stockholder hereunder, each such certificate to be duly and validly
endorsed in favor of the Company or accompanied by stock powers duly endorsed
in blank.  The closing of the purchase
of the shares of Convertible Preferred Stock by the Company from the
Stockholders shall take place at the Company’s principal offices within five
(5) Business Days of the date that the Company purchases shares of Convertible
Preferred Stock from the Other Preferred Stockholders or the date that the
Other Preferred Stockholders have converted any of their shares of Convertible
Preferred Stock into Common Stock. 
Notwithstanding the foregoing or anything herein to the contrary, the
Company shall not be required to purchase shares of Convertible Preferred Stock
from the Stockholders to the extent it would cause the Stockholders to own less
than a majority of the shares of Convertible Preferred Stock outstanding.

 

(b)                                 The Company agrees to purchase from each
Stockholder and each Stockholder agrees to sell to the Company, on the
Subsequent Closing Date, all of the shares of Convertible Preferred Stock owned
or held by such Stockholder.  The
purchase price per share at which the Company shall purchase the shares of
Convertible Preferred Stock pursuant to this Section 4.4(b) shall be the
Per Share Purchase Price.  At the
closing of the purchase and sale of shares of Convertible Preferred Stock
contemplated by this Section 4.4(b), the Company shall pay by wire
transfer of immediately available funds to an account specified by each selling
Stockholder an amount equal to the Aggregate Purchase Price for each selling
Stockholder, and each selling Stockholder shall deliver to the Company the
certificate(s) representing the shares of Convertible Preferred Stock to be
purchased hereunder, each such certificate to be duly and validly endorsed in
favor of the Company or accompanied by stock powers duly endorsed in
blank.  The closing of the purchase of
the shares of Convertible Preferred Stock by the Company from the Stockholders
shall take place at the Company’s principal offices on the Subsequent Closing
Date.

 

Section 4.5                                      Non-Tender of Shares.  Each
Stockholder hereby agrees not to tender for acceptance by the Company any
shares of Convertible Preferred Stock owned by such Stockholder if the Company
initiates a tender offer for the outstanding shares of Convertible Preferred
Stock.  Each Stockholder agrees to
permit the Company to publish and disclose in the tender offer documents, in
any other filings with the Securities and Exchange Commission and in any other
public statements required by applicable Law its identity and intent with
respect to the shares of Convertible Preferred Stock and the nature of its
commitments under this Agreement.

 

9

 

Section 4.6                                      Breach by Company of Purchase Obligations Pursuant
to Section 4.4.  In the event that the Company breaches its obligations under
Section 4.4(a) hereof to purchase shares of Convertible Preferred Stock
from the Stockholders pursuant to the terms of such section and such
breach goes unremedied for 30 days following written notice of such breach by
any or all of the Stockholders, then the provisions of this Agreement set forth
in Sections 4.1 and 4.3 shall not apply until such time as the breach by the
Company of Section 4.4(a) hereof is fully cured and the Company Option set
forth in Section 4.3 shall terminate with respect to any shares of
Convertible Preferred Stock Transferred during the period that Section 4.3
did not apply.  In the event that the
Company breaches its obligations under Section 4.4(b) hereof to purchase
shares of Convertible Preferred Stock from the Stockholders pursuant to the
terms of such section, then the provisions of this Agreement set forth in
Sections 4.1 and 4.3 shall not apply and shall be of no further force and
effect.  All other obligations of the
Stockholders under this Agreement, including without limitation
Article III hereunder, shall remain in full force and effect regardless of
the breach by the Company of its obligations under Sections 4.4(a) or 4.4(b).

 

ARTICLE V

STANDSTILL

 

Section 5.1                                      Acquisition of Voting Securities.  Effective
on the date hereof and until the earlier of (i) October 1, 2005 and (ii)
the date on which there are no longer outstanding any shares of Convertible
Preferred Stock, the Stockholders will not, and will not permit any Investment
Fund Affiliate to purchase or otherwise acquire, or agree or offer to purchase
or otherwise acquire, Beneficial Ownership of any Voting Securities if, after
giving effect to such purchase or acquisition, the Stockholders and all
Investment Fund Affiliates would Beneficially Own in the aggregate more than
15% of the outstanding Voting Securities.

 

Section 5.2                                      Certain Actions.  Effective on the date hereof and until the
earlier of (i) October 1, 2005 and (ii) the date on which there are no
longer outstanding any shares of Convertible Preferred Stock, the Stockholders
will not, and will not permit any Investment Fund Affiliate to:

 

(a)                                  make, or take any action to solicit, initiate or
encourage, an Acquisition Proposal;

 

(b)                                 make, or in any way participate in, any
“solicitation” of “proxies” to vote (as such terms are defined in Rule 14a-1
under the Exchange Act), solicit any consent with respect to the voting of any
Voting Securities or nominate, or solicit any votes or proxies for the
nomination of, any directors with respect to the Company (other than as
contemplated by Section 2.1 hereof);

 

10

 

(c)                                  form, join or encourage the formation of any
“group” (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to the voting of any Voting Securities (other than any “group”
consisting only of the Stockholders and Investment Fund Affiliates);

 

(d)                                 call or seek to have called any meeting of the
stockholders of the Company;

 

(e)                                  solicit, seek to effect, negotiate with or
voluntarily provide any confidential information to any other Person with
respect to, or otherwise make any public announcement (except as required by
Law or the requirements of any relevant stock exchange) whatsoever with respect
to, (i) any merger or other business combination transaction involving the
Company, (ii) the acquisition of Voting Securities if, as a result thereof, the
Person acquiring such Voting Securities, together with its Affiliates, would
Beneficially Own in the aggregate more than 15% of the outstanding Voting
Securities, or (iii) the acquisition, in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the Company
and its subsidiaries taken as a whole (an “Acquisition
Transaction”);

 

(f)                                    enter into an agreement, arrangement or
understanding with respect to any Acquisition Transaction;

 

(g)                                 assist, advise or encourage any other Person in
doing any of the foregoing; or

 

(j)                                     request the Company to amend, waive or not to
enforce any provision of this section, in each case unless specifically invited
by the Company’s Board of Directors to do so.

 

ARTICLE VI

OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES

 

Section 6.1                                      Representations and Warranties of Each Stockholder.  Each
Stockholder, severally and not jointly, represents, warrants and covenants to
the Company, as of the date of this Agreement as follows:

 

(a)                                  Such Stockholder is the record and beneficial owner
of the shares of Convertible Preferred Stock listed beside such Stockholder’s
name on Schedule I
hereto.  The shares of Convertible
Preferred Stock listed on Schedule I
constitute all of the shares of Convertible Preferred Stock owned of record or
beneficially by such Stockholder as of the date hereof.  None of the shares of Convertible Preferred
Stock held by such Stockholder listed on Schedule I
is subject to any outstanding option, warrant, call or similar right of any
other Person to acquire the same and, except as contemplated by this Agreement,
none of such shares is subject to any restriction on the transfer thereof
(other than any restrictions on transfer imposed by federal or

 

11

 

state securities laws).  Such Stockholder has sole voting power, sole power to issue
instructions with respect to the matters set forth in this Agreement, sole
power of disposition, sole power of conversion and sole power to agree to all
of the matters set forth in this Agreement, in each case with respect to all of
the shares of Convertible Preferred Stock owned of record or beneficially by
it, with no limitations, qualifications or restrictions on such rights, subject
only to applicable Laws, the Company’s Certificate of Incorporation and the
terms of this Agreement (other than any restrictions on transfer imposed by
federal or state securities laws).

 

(b)                                 At the closing of each purchase of shares of
Convertible Preferred Stock by the Company from a Stockholder contemplated
hereby, such Stockholder will deliver to the Company valid title to such shares
of Convertible Preferred Stock free and clear of any and all Liens.

 

(c)                                  Such Stockholder understands and acknowledges that
the Company is entering into the Repurchase Agreement in reliance upon such
Stockholder’s execution and delivery of this Agreement.

 

Section 6.2                                      Further Assurances.  From time
to time, at the reasonable request of any party hereto and without further
consideration, each other party hereto shall execute and deliver such
additional documents and take all such further lawful action as may be
necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.

 

ARTICLE VII

TERMINATION

 

Section 7.1                                      Termination.  Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated (a) by mutual written consent
of the Company and the Majority Stockholders or (b) if not earlier terminated
pursuant to the preceding clause (a), upon the later to occur of (i) the date
on which there are no longer outstanding any shares of Convertible Preferred
Stock and (ii) the Carlyle Stockholders do not Beneficially Own Voting
Securities constituting in the aggregate at least five percent (5%) of the
outstanding Voting Securities of the Company (assuming conversion of all
outstanding shares of Convertible Preferred Stock).

 

Section 7.2                                      Effect of Termination.  If this
Agreement is terminated, this Agreement shall become void and of no further
force and effect.  Nothing in this
Article VII shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or to
impair the right of any party to compel specific performance by another party
of its obligations under this Agreement.

 

12

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.1                                      Expenses.  Each party shall pay its own expenses in
connection with this Agreement and the transaction contemplated hereby,
including without limitation legal fees and expenses.

 

Section 8.2                                      Amendment.  This Agreement may be amended, modified or
supplemented but only in writing signed by the Company and the Majority Stockholders.

 

Section 8.3                                      Notices.  Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in writing, shall be
sent by facsimile transmission (with a hard copy to follow by overnight
delivery) or overnight delivery and shall be deemed to have been given, when
received or when receipt is refused:

 

(a) If to
the Company, addressed as follows:

 

Duratek,
Inc.

10100 Old
Columbia Road

Columbia,
Maryland 21046

Attention:
Robert F. Shawver

Facsimile
No.: (410) 290-9112

 

with a
copy to (which shall not constitute notice):

 

Hogan
& Hartson L.L.P.

111 S.
Calvert Street, Suite 1600

Baltimore,
Maryland 21202

Attention:
Lawrence R. Seidman, Esquire

Facsimile
No.: (410) 539-6981

 

(b) If to
a Stockholder, addressed as follows:

 

T.C.
Group, L.L.C.

1001
Pennsylvania Avenue, N.W.

Washington,
D.C. 20004

Attention:
Daniel A. D’Aniello

Facsimile
No.: (202) 347-1818

 

with a
copy to (which shall not constitute notice):

 

13

 

Latham
& Watkins LLP

555
Eleventh Street, N.W.

Washington,
D.C. 20004

Attention:
Daniel T. Lennon, Esquire

Facsimile
No.: (202) 637-2201

 

or to
such other individual or address as a party hereto may designate for itself by
notice given as herein provided.

 

Section 8.4                                      Waivers.  The failure of a party hereto at any time or
times to require performance of any provision hereof shall in no manner affect
its right at a later time to enforce the same. No waiver by a party of any
condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any other
condition or breach of any other term, covenant, representation or warranty.

 

Section 8.5                                      Counterparts.  This Agreement may be executed in one or
more counterparts, and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

Section 8.6                                      Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Maryland without giving effect to the principles of conflicts of law thereof.

 

Section 8.7                                      Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective estates, heirs,
legal representatives, successors and assigns; provided, however, that no
assignment of any rights or obligations shall be made by any party hereto
without the written consent of each other party hereto.  No Stockholder shall be liable for breaches
of any obligation hereunder on the part of any other Stockholder.

 

Section 8.8                                      No Third-Party Beneficiaries.  This
Agreement is solely for the benefit of the parties hereto and, to the extent
provided herein, their respective estates, heirs, successors, Affiliates and
their respective directors, officers, employees, agents and representatives,
and no provision of this Agreement shall be deemed to confer upon other third
parties any remedy, claim, liability, reimbursement, cause of action or other
right.

 

Section 8.9                                      Publicity.  The parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and will not issue any
press release or make any such public

 

14

 

statement prior to such consultation; provided,
however, that, in the case of any press release or public statement that
may be required to be issued under any applicable Law or listing agreement with
any securities exchange or market, a party shall be deemed to have satisfied
its obligations under this Section 8.9 by using its reasonable best
efforts (after giving due regard to all the relevant circumstances) to consult
with the other parties hereto prior to issuing any such press release or public
statement.

 

Section 8.10                                Severability.  If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions hereof shall not be affected thereby.

 

Section 8.11                                Remedies.  The parties acknowledge and agree that the
breach of the provisions of this Agreement by the Company, on the one hand, or
a Stockholder, on the other hand, could not be adequately compensated with
monetary damages, and the parties hereto agree, accordingly, that injunctive
relief and specific performance shall be appropriate remedies to enforce the
provisions of this Agreement and waive any claim or defense that there is an
adequate remedy at law for such breach; provided, however, that
nothing herein shall limit the remedies herein, legal or equitable, otherwise
available and all remedies herein are in addition to any remedies available at
law or otherwise.

 

Section 8.12                                Entire Understanding.  This
Agreement sets forth the entire agreement and understanding of the parties
hereto and supersedes any and all prior correspondence, agreements,
arrangements and understandings among the parties.

 

Section 8.13                                Jurisdiction of Disputes; Waiver of Jury Trial.  In the
event any party to this Agreement commences any litigation, proceeding or other
legal action in connection with or relating to this Agreement, any related
agreement or any matters described or contemplated herein or therein, with
respect to any of the matters described or contemplated herein or therein, the
parties to this Agreement hereby (a) agree under all circumstances absolutely
and irrevocably to institute any litigation, proceeding or other legal action
in a court of competent jurisdiction located within the State of Maryland,
whether a state or federal court; (b) agree that in the event of any such
litigation, proceeding or action, such parties will consent and submit to
personal jurisdiction in any such court described in clause (a) of this
Section and to service of process upon them in accordance with the rules
and statutes governing service of process (it being understood that nothing in
this Section shall be deemed to prevent any party from seeking to remove
any action to a federal court in the State of Maryland); and (c) agree to waive
to the full extent permitted by law any objection that they may now or
hereafter have to the venue of any such litigation, proceeding or action in any
such court or that any such litigation, proceeding or action was brought in an
inconvenient forum.  EACH OF THE PARTIES
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING

 

15

 

ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

[Signature Page Follows]

 

16

 

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

 

	
   

  	
  DURATEK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert F. Shawver

  	
   

  
	
   

  	
  Name:  Robert F. Shawver

  
	
   

  	
  Title:
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARLYLE PARTNERS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARLYLE INTERNATIONAL

  PARTNERS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  

 

17

 

	
   

  	
  CARLYLE INTERNATIONAL

  PARTNERS III, L.P.

  
	
   

  	
   

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  C/S INTERNATIONAL PARTNERS

  
	
   

  	
   

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARLYLE SBC PARTNERS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  

 

18

 

	
   

  	
  CARLYLE-GTSD PARTNERS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: TC Group, L.L.C., its
  General Partner

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TC GROUP, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP II INVESTMENT HOLDINGS,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
  By: TC Group Investment
  Holdings LP, its General

  Managing Member

  
	
   

  	
  By: TCG Holdings II LP, its
  General Partner

  
	
   

  	
  By: DBD Investors V, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  

 

19

 

	
   

  	
  CRAYFISH
  HOLDINGS, LDC

  
	
   

  	
   

  
	
   

  	
  By: Carlyle
  Partners II, L.P., its Attorney-in-Fact

  
	
   

  	
  By: TC Group II, L.L.C., its
  General Partner

  
	
   

  	
  By: TC Group, L.L.C., its
  Managing Member

  
	
   

  	
  By: TCG Holdings, L.L.C., its
  Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  	
   

  
	
   

  	
  Name: Daniel A. D’Aniello

  
	
   

  	
  Title: Managing Director

  

 

20Exhibit 10.1

 

EXECUTION VERSION

 

 

CREDIT AGREEMENT

 

among

 

DURATEK, INC.,

 

VARIOUS LENDERS

 

and

 

CREDIT LYONNAIS NEW YORK BRANCH,

as ADMINISTRATIVE AGENT,

BOOK MANAGER and LEAD ARRANGER

 

 

Dated as of December 16, 2003

 

 

 

 

TABLE OF CONTENTS

 

 

	
  SECTION 1.
  Amount and Terms of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.01. The Commitments

  	
   

  
	
   

  	
  1.02.
  Minimum Amount of Each Borrowing

  	
   

  
	
   

  	
  1.03. Notice of Borrowing

  	
   

  
	
   

  	
  1.04. Disbursement of Funds

  	
   

  
	
   

  	
  1.05.
  Notes

  	
   

  
	
   

  	
  1.06.
  Conversions

  	
   

  
	
   

  	
  1.07.
  Pro Rata Borrowings

  	
   

  
	
   

  	
  1.08.
  Interest

  	
   

  
	
   

  	
  1.09.
  Interest Periods

  	
   

  
	
   

  	
  1.10. Increased Costs, Illegality, etc.

  	
   

  
	
   

  	
  1.11.
  Compensation

  	
   

  
	
   

  	
  1.12. Change of Lending Office

  	
   

  
	
   

  	
  1.13. Replacement of Lenders

  	
   

  
	
   

  	
  1.14. Limitation on Additional Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.
  Letters of Credit

  	
   

  
	
   

  	
   

  
	
   

  	
  2.01. Letters of Credit

  	
   

  
	
   

  	
  2.02. Maximum Letter of Credit
  Outstandings; Final Maturities

  	
   

  
	
   

  	
  2.03. Letter of Credit Requests; Minimum
  Stated Amount

  	
   

  
	
   

  	
  2.04. Letter of Credit Participations

  	
   

  
	
   

  	
  2.05. Agreement to Repay Letter of Credit
  Drawings

  	
   

  
	
   

  	
  2.06.
  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.
  Commitment Commission; Fees; Reductions of Commitment

  	
   

  
	
   

  	
   

  
	
   

  	
  3.01. Fees

  	
   

  
	
   

  	
  3.02. Voluntary Termination of Unutilized
  Revolving Loan Commitments

  	
   

  
	
   

  	
  3.03. Mandatory Reduction of Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  Prepayments; Payments; Taxes

  	
   

  
	
   

  	
   

  
	
   

  	
  4.01. Voluntary Prepayments

  	
   

  
	
   

  	
  4.02. Mandatory Repayments

  	
   

  
	
   

  	
  4.03. Method and Place of Payment

  	
   

  
	
   

  	
  4.04.
  Net Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5. Conditions Precedent to Credit Events on the Initial
  Borrowing Date

  	
   

  
	
   

  	
   

  
	
   

  	
  5.01. Effective Date; Notes

  	
   

  
	
   

  	
  5.02. Officer’s Certificate

  	
   

  
	
   

  	
  5.03. Opinions of Counsel

  	
   

  
	
   

  	
  5.04. Corporate Documents; Proceedings;
  etc.

  	
   

  

 

i

 

	
   

  	
  5.05.
  Employee Benefit Plans; Shareholders’ Agreements; Management Agreements;
  Employment Agreements; Non-Compete Agreements; Collective Bargaining
  Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements;
  Affiliate Contracts; Material Contracts

  	
   

  
	
   

  	
  5.06. Existing Preferred Stock Redemption

  	
   

  
	
   

  	
  5.07.
  Refinancing

  	
   

  
	
   

  	
  5.08.
  Adverse Change, Approvals

  	
   

  
	
   

  	
  5.09.
  Litigation

  	
   

  
	
   

  	
  5.10. Subsidiaries Guaranty

  	
   

  
	
   

  	
  5.11. Pledge Agreement

  	
   

  
	
   

  	
  5.12. Security Agreement

  	
   

  
	
   

  	
  5.13. Intercompany Subordination Agreement

  	
   

  
	
   

  	
  5.14. Minimum Ratings Condition

  	
   

  
	
   

  	
  5.15. Business Plan; Financial Statements;
  Pro Forma Balance Sheet; Projections

  	
   

  
	
   

  	
  5.16. Solvency Certificate; Insurance
  Certificates

  	
   

  
	
   

  	
  5.17. Fees,
  etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6A.
  Conditions Precedent to All Credit Events

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6A.01 No Default; Representations and Warranties

  	
   

  
	
   

  	
  6A.02 Notice of Borrowing; Letter of Credit Request

  	
   

  
	
   

  	
  6A.03
  Regulation U

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6B.
  Special Condition Precedent to Incurrence of Revolving Loans and Swingline
  Loans

  	
   

  
	
   

  	
   

  
	
   

  	
  6B.01 Limitation on Cash on Hand

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.
  Representations, Warranties and Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.01. Organizational Status

  	
   

  
	
   

  	
  7.02. Power and Authority

  	
   

  
	
   

  	
  7.03.
  No Violation

  	
   

  
	
   

  	
  7.04.
  Approvals

  	
   

  
	
   

  	
  7.05. Financial Statements; Financial
  Condition; Undisclosed Liabilities; Projections

  	
   

  
	
   

  	
  7.06.
  Litigation

  	
   

  
	
   

  	
  7.07. True and Complete Disclosure

  	
   

  
	
   

  	
  7.08. Use of Proceeds; Margin Regulations

  	
   

  
	
   

  	
  7.09. Tax Returns and Payments

  	
   

  
	
   

  	
  7.10. Compliance with ERISA

  	
   

  
	
   

  	
  7.11. The Security Documents

  	
   

  
	
   

  	
  7.12.
  Properties

  	
   

  
	
   

  	
  7.13.
  Capitalization

  	
   

  
	
   

  	
  7.14.
  Subsidiaries

  	
   

  
	
   

  	
  7.15. Compliance with Statutes, etc.

  	
   

  
	
   

  	
  7.16. Investment Company Act

  	
   

  

 

ii

 

	
   

  	
  7.17. Public Utility Holdings Company Act

  	
   

  
	
   

  	
  7.18. Environmental Matters

  	
   

  
	
   

  	
  7.19. Labor Relations

  	
   

  
	
   

  	
  7.20. Intellectual Property, etc.

  	
   

  
	
   

  	
  7.21.
  Indebtedness

  	
   

  
	
   

  	
  7.22.
  Insurance

  	
   

  
	
   

  	
  7.23.
  Legal Names; Type of Organization (and Whether a Registered Organization);
  Jurisdiction of Organization; etc.

  	
   

  
	
   

  	
  7.24.
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.
  Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.01. Information Covenants

  	
   

  
	
   

  	
  8.02. Books, Records and Inspections;
  Annual Meetings

  	
   

  
	
   

  	
  8.03. Maintenance of Property; Insurance

  	
   

  
	
   

  	
  8.04. Existence; Franchises

  	
   

  
	
   

  	
  8.05. Compliance with Statutes, etc.

  	
   

  
	
   

  	
  8.06. Compliance with Environmental Laws

  	
   

  
	
   

  	
  8.07.
  ERISA

  	
   

  
	
   

  	
  8.08. End of Fiscal Years; Fiscal Quarters

  	
   

  
	
   

  	
  8.09. Performance of Obligations

  	
   

  
	
   

  	
  8.10. Payment of Taxes

  	
   

  
	
   

  	
  8.11.
  Use of Proceeds

  	
   

  
	
   

  	
  8.12. Additional Security; Further
  Assurances; etc.

  	
   

  
	
   

  	
  8.13. Foreign Subsidiaries Security

  	
   

  
	
   

  	
  8.14. Ownership of Subsidiaries; etc.

  	
   

  
	
   

  	
  8.15. Interest Rate Protection

  	
   

  
	
   

  	
  8.16. Corporate Separateness

  	
   

  
	
   

  	
  8.17. Permitted Acquisitions

  	
   

  
	
   

  	
  8.18. Margin Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.
  Negative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9.01.
  Liens

  	
   

  
	
   

  	
  9.02.
  Consolidation, Merger, Purchase or Sale of Assets, etc.

  	
   

  
	
   

  	
  9.03.
  Dividends; etc.

  	
   

  
	
   

  	
  9.04.
  Indebtedness

  	
   

  
	
   

  	
  9.05.
  Advances, Investments and Loans

  	
   

  
	
   

  	
  9.06. Transactions with Affiliates

  	
   

  
	
   

  	
  9.07. Capital Expenditures

  	
   

  
	
   

  	
  9.08. Consolidated Interest Coverage Ratio

  	
   

  
	
   

  	
  9.09. Minimum Consolidated EBITDA

  	
   

  
	
   

  	
  9.10. Net Leverage Ratio

  	
   

  
	
   

  	
  9.11. Consolidated Fixed Charge Coverage
  Ratio

  	
   

  
	
   

  	
  9.12. Limitations on Payments of Additional
  Permitted Subordinated Debt; Modifications of Additional Permitted
  Subordinated Debt Documents, Certificate of Incorporation, By-Laws and
  Certain Other Agreements, etc.

  	
   

  

 

iii

 

	
   

  	
  9.13. Limitation on Certain Restrictions on
  Subsidiaries

  	
   

  
	
   

  	
  9.14. Limitation on Issuance of Capital
  Stock

  	
   

  
	
   

  	
  9.15.
  Business, etc.

  	
   

  
	
   

  	
  9.16. Limitation on Creation of
  Subsidiaries

  	
   

  
	
   

  	
  9.17. Change of Legal Names; Type of
  Organization (and Whether a Registered Organization); Jurisdiction of
  Organization; etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.01.
  Payments

  	
   

  
	
   

  	
  10.02. Representations, etc.

  	
   

  
	
   

  	
  10.03.
  Covenants

  	
   

  
	
   

  	
  10.04. Default Under Other Agreements

  	
   

  
	
   

  	
  10.05.
  Bankruptcy, etc.

  	
   

  
	
   

  	
  10.06.
  ERISA

  	
   

  
	
   

  	
  10.07. Security Documents

  	
   

  
	
   

  	
  10.08. Subsidiaries Guaranty

  	
   

  
	
   

  	
  10.09. Intercompany Subordination Agreement

  	
   

  
	
   

  	
  10.10.
  Judgments

  	
   

  
	
   

  	
  10.11. Change of Control

  	
   

  
	
   

  	
  10.12. Material Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.
  Definitions and Accounting Terms

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.01.
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.
  The Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.01.
  Appointment

  	
   

  
	
   

  	
  12.02. Nature of Duties

  	
   

  
	
   

  	
  12.03. Lack of Reliance on the
  Administrative Agent

  	
   

  
	
   

  	
  12.04. Certain Rights of the Administrative
  Agent

  	
   

  
	
   

  	
  12.05.
  Reliance

  	
   

  
	
   

  	
  12.06. Indemnification

  	
   

  
	
   

  	
  12.07. The Administrative Agent in its
  Individual Capacity

  	
   

  
	
   

  	
  12.08.
  Holders

  	
   

  
	
   

  	
  12.09. Resignation by the Administrative
  Agent

  	
   

  
	
   

  	
  12.10. Collateral Matters

  	
   

  
	
   

  	
  12.11. Delivery of Information

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  13.01. Payment of Expenses, etc.

  	
   

  
	
   

  	
  13.02.
  Right of Setoff

  	
   

  
	
   

  	
  13.03.
  Notices

  	
   

  
	
   

  	
  13.04. Benefit of Agreement; Assignments;
  Participations

  	
   

  
	
   

  	
  13.05. No Waiver; Remedies Cumulative

  	
   

  
	
   

  	
  13.06. Payments Pro Rata

  	
   

  
	
   

  	
  13.07. Calculations; Computations

  	
   

  

 

iv

 

	
   

  	
  13.08. GOVERNING LAW; SUBMISSION TO
  JURISDICTION; VENUE; WAIVER OF JURY TRIAL

  	
   

  
	
   

  	
  13.09.
  Counterparts

  	
   

  
	
   

  	
  13.10.
  Effectiveness

  	
   

  
	
   

  	
  13.11. Headings Descriptive

  	
   

  
	
   

  	
  13.12. Amendment or Waiver; etc.

  	
   

  
	
   

  	
  13.13.
  Survival

  	
   

  
	
   

  	
  13.14. Domicile of Loans

  	
   

  
	
   

  	
  13.15.
  Register

  	
   

  
	
   

  	
  13.16. Confidentiality

  	
   

  

 

 

	
  SCHEDULE I

  	
  Commitments

  
	
  SCHEDULE II

  	
  Lender Addresses

  
	
  SCHEDULE III

  	
  Plans

  
	
  SCHEDULE IV

  	
  Real Property

  
	
  SCHEDULE V

  	
  Subsidiaries

  
	
  SCHEDULE VI

  	
  Existing Indebtedness

  
	
  SCHEDULE VII

  	
  Insurance

  
	
  SCHEDULE VIII

  	
  Legal Names; Type of Organization (and Whether a Registered
  Organization); Jurisdiction of Organization; etc.

  
	
  SCHEDULE IX

  	
  Existing Liens

  
	
  SCHEDULE X

  	
  Existing Investments

  
	
  EXHIBIT A-1

  	
  Notice of Borrowing

  
	
  EXHIBIT A-2

  	
  Notice of Conversion/Continuation

  
	
  EXHIBIT B-1

  	
  Term Note

  
	
  EXHIBIT B-2

  	
  Revolving Note

  
	
  EXHIBIT B-3

  	
  Swingline Note

  
	
  EXHIBIT C

  	
  Letter of Credit Request

  
	
  EXHIBIT D

  	
  Section 4.04(b)(ii) Certificate

  
	
  EXHIBIT E-1

  	
  Opinion of Hogan & Hartson L.L.P.

  
	
  EXHIBIT E-2

  	
  Opinion of Wyatt, Tarrant & Combs LLP

  
	
  EXHIBIT F

  	
  Officers’ Certificate

  
	
  EXHIBIT G

  	
  Subsidiaries Guaranty

  
	
  EXHIBIT H

  	
  Pledge Agreement

  
	
  EXHIBIT I

  	
  Security Agreement

  
	
  EXHIBIT J

  	
  Intercompany Subordination Agreement

  
	
  EXHIBIT K

  	
  Solvency Certificate

  
	
  EXHIBIT L

  	
  Compliance Certificate

  
	
  EXHIBIT M

  	
  Joinder Agreement

  
	
  EXHIBIT N

  	
  Assignment and Assumption Agreement

  
	
  EXHIBIT O

  	
  Intercompany Note

  

 

v

 

CREDIT AGREEMENT, dated as of December 16, 2003, among DURATEK,
INC., a Delaware corporation (the “Borrower”), the Lenders party hereto
from time to time, and CREDIT LYONNAIS NEW YORK BRANCH, as Administrative Agent
(in such capacity, the “Administrative Agent”).  All capitalized terms used herein and
defined in Section 11 are used herein as therein defined.

 

W I T N E S S E T H:

 

WHEREAS, subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrower the respective credit
facilities provided for herein;

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1.  Amount and Terms of Credit.

 

1.01. 
The Commitments.  (a) 
Subject to and upon the terms and conditions set forth herein, each
Lender with a Term Loan Commitment severally agrees to make a term loan or term
loans (each a “Term Loan” and, collectively, the “Term Loans”) to
the Borrower, which Term Loans (i) shall be incurred pursuant to a single
drawing on the Initial Borrowing Date, (ii) shall be denominated in Dollars,
(iii) except as hereinafter provided, shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or LIBOR
Loans, provided that (A) except as otherwise specifically provided in
Section 1.10(b), all Term Loans comprising the same Borrowing shall at all
times be of the same Type, and (B) unless either the Administrative Agent
otherwise agrees in its sole discretion or has determined that the Syndication
Date has occurred (at which time this clause (B) shall no longer be
applicable), (x) prior to the third Business Day after the Initial Borrowing
Date, Term Loans may only be incurred and maintained as Base Rate Loans and (y)
thereafter and prior to the 90th day following the Initial Borrowing Date, Term
Loans may only be incurred and maintained as, and/or converted into, LIBOR
Loans so long as all such outstanding LIBOR Loans, together with all other
outstanding Term Loans that are maintained as LIBOR Loans, are subject to an
Interest Period of one month which begins and ends on the same day, and (iv)
shall be made by each such Lender in that aggregate principal amount which does
not exceed the Term Loan Commitment of such Lender on the Initial Borrowing
Date.  Once repaid, Term Loans incurred
hereunder may not be reborrowed.

 

(b)           Subject to and upon
the terms and conditions set forth herein, each Lender with a Revolving Loan
Commitment severally agrees to make, at any time and from time to time on or
after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date,
a revolving loan or revolving loans (each a “Revolving Loan” and,
collectively, the “Revolving Loans”) to the Borrower, which Revolving
Loans (i) shall be denominated in Dollars, (ii) shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or LIBOR Loans, provided that (A) except as otherwise specifically
provided in Section 1.10(b), all Revolving Loans comprising the same
Borrowing shall at all times be of the same Type, and (B) unless either the
Administrative Agent otherwise agrees in its sole discretion or has determined
that the Syndication Date has occurred (at which time this clause (B) shall no

 

 

longer be applicable), (x)
prior to the third Business Day after the Initial Borrowing Date, Revolving
Loans may only be incurred and maintained as Base Rate Loans and (y) thereafter
and prior to the 90th day following the Initial Borrowing Date, Revolving Loans
may only be incurred and maintained as, and/or converted into, LIBOR Loans so
long as all such outstanding LIBOR Loans, together with all other outstanding
Revolving Loans that are maintained as LIBOR Loans, are subject to an Interest
Period of one month which begins and ends on the same day, (iii)may be repaid
and reborrowed in accordance with the provisions hereof, and (iv)shall not
exceed for any such Lender at any time outstanding that aggregate principal
amount which, when added to the product of (x) such Lender’s RL Percentage and
(y) the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Revolving Loan Commitment of such Lender at
such time.

 

(c)           Subject to and upon
the terms and conditions set forth herein, the Swingline Lender agrees to make,
at any time and from time to time on or after the Initial Borrowing Date and
prior to the Swingline Expiry Date, a revolving loan or revolving loans (each a
“Swingline Loan” and, collectively, the “Swingline Loans”) to the
Borrower, which Swingline Loans (i) shall be incurred and maintained as Base
Rate Loans, (ii) shall be denominated in 
Dollars, (iii) may be repaid and reborrowed in accordance with the
provisions hereof, (iv) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans then outstanding and the aggregate amount of all Letter of
Credit Outstandings at such time, an amount equal to the Total Revolving Loan
Commitment at such time, and (v) shall not exceed in aggregate principal amount
at any time outstanding the Maximum Swingline Amount.  Notwithstanding anything to the contrary contained in this
Section 1.01(c), (i) the Swingline Lender shall not be obligated to make
any Swingline Loans at a time when a Lender Default exists with respect to an
RL Lender unless the Swingline Lender has entered into arrangements satisfactory
to it and the Borrower to eliminate the Swingline Lender’s risk with respect to
the Defaulting Lender’s or Defaulting Lenders’ participation in such Swingline
Loans, including by cash collateralizing such Defaulting Lender’s or Defaulting
Lenders’ RL Percentage of the outstanding Swingline Loans, and (ii) the
Swingline Lender shall not make any Swingline Loan after it has received
written notice from the Borrower, any other Credit Party or the Required
Lenders stating that a Default or an Event of Default exists and is continuing
until such time as the Swingline Lender shall have received written notice (A)
of rescission of all such notices from the party or parties originally
delivering such notice or notices or (B) of the waiver of such Default or Event
of Default by the Required Lenders.

 

(d)           On any Business Day,
the Swingline Lender may, in its sole discretion, give notice to the RL Lenders
that the Swingline Lender’s outstanding Swingline Loans shall be funded with
one or more Borrowings of Revolving Loans (provided that such notice
shall be deemed to have been automatically given upon the occurrence of a
Default or an Event of Default under Section 10.05 or upon the exercise of
any of the remedies provided in the last paragraph of Section 10), in
which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made

 

3

 

on the immediately succeeding
Business Day by all RL Lenders pro  rata based on each such RL
Lender’s RL Percentage (determined before giving effect to any termination of
the Revolving Loan Commitments pursuant to the last paragraph of
Section 10) and the proceeds thereof shall be applied directly by the Swingline
Lender to repay the Swingline Lender for such outstanding Swingline Loans.  Each RL Lender hereby irrevocably agrees to
make Revolving Loans upon one Business Day’s notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Lender notwithstanding
(i)the amount of the Mandatory Borrowing may not comply with the Minimum
Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified
in Sections 6A and 6B are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv)the date of such Mandatory Borrowing, and (v) the
amount of the Total Revolving Loan Commitment at such time.  In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower), then each RL Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause the RL Lenders to share in such Swingline Loans ratably
based upon their respective RL Percentages (determined before giving effect to
any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10), provided that (x)all interest payable on
the Swingline Loans shall be for the account of the Swingline Lender until the
date as of which the respective participation is required to be purchased and,
to the extent attributable to the purchased participation, shall be payable to
the participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing RL
Lender shall be required to pay the Swingline Lender interest on the principal
amount of participation purchased for each day from and including the day upon
which the Mandatory Borrowing would otherwise have occurred to but excluding
the date of payment for such participation, at the overnight Federal Funds Rate
for the first three days and at the interest rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day
thereafter.

 

1.02. 
Minimum Amount of Each Borrowing.  The aggregate principal amount of each Borrowing
of Loans under a respective Tranche shall not be less than the Minimum
Borrowing Amount applicable to such Tranche. 
More than one Borrowing may occur on the same date, but at no time shall
there be outstanding more than six Borrowings of LIBOR Loans in the aggregate
for all Tranches of Loans.

 

1.03. 
Notice of Borrowing.  (a) 
Whenever the Borrower desires to incur (x) LIBOR Loans hereunder, it
shall give the Administrative Agent at the Notice Office at least three
Business Days’ prior notice of each LIBOR Loan to be incurred hereunder and (y)
Base Rate Loans hereunder (excluding Swingline Loans and Revolving Loans made
pursuant to a Mandatory Borrowing), it shall give the Administrative Agent at
the Notice Office at least one Business Day’s prior notice of each Base Rate
Loan to be incurred hereunder, provided that (in each case) any such
notice shall be deemed to have been given on a certain day only if given before
12:00 Noon (New York time) on such day. 
Each such notice (each a “Notice of Borrowing”), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and

 

4

 

shall be in writing, or by
telephone promptly confirmed in writing, in the form of Exhibit A-1,
appropriately completed to specify:  (i)
the aggregate principal amount of the Loans to be incurred pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) whether the Loans being incurred pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans and (iv) whether the Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or, to the extent permitted hereunder, LIBOR Loans and, if LIBOR Loans,
the initial Interest Period to be applicable thereto.  The Administrative Agent shall promptly give each Lender which is
required to make Loans of the Tranche specified in the respective Notice of
Borrowing, notice of such proposed Borrowing, of such Lender’s proportionate
share thereof and of the other matters required by the immediately preceding
sentence to be specified in the Notice of Borrowing.

 

(b)           (i)  Whenever the Borrower desires to incur
Swingline Loans hereunder, the Borrower shall give the Swingline Lender no
later than 1:00 P.M. (New York time) on the date that a Swingline Loan is to be
incurred, written notice or telephonic notice promptly confirmed in writing of
each Swingline Loan to be incurred hereunder. 
Each such notice shall be irrevocable and specify in each case (A) the
date of Borrowing (which shall be a Business Day), and (B) the aggregate
principal amount of the Swingline Loans to be incurred pursuant to such
Borrowing.

 

(ii)           Mandatory
Borrowings shall be made upon the notice specified in Section 1.01(d),
with the Borrower irrevocably agreeing, by its incurrence of any Swingline
Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).

 

(c)           Without in any way
limiting the obligation of the Borrower to confirm in writing any telephonic
notice of any Borrowing or prepayment of Loans, the Administrative Agent or the
Swingline Lender, as the case may be, may act without liability upon the basis
of telephonic notice of such Borrowing or prepayment, as the case may be,
believed by the  Administrative Agent or
the Swingline Lender, as the case may be, in good faith to be from the
President, the Chief Executive Officer, the Chief Financial Officer, the
Treasurer or any Assistant Treasurer of the Borrower, or from any other
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation.  In each such
case, the Borrower hereby waives the right to dispute the Administrative
Agent’s or Swingline Lender’s record of the terms of such telephonic notice of
such Borrowing or prepayment of Loans, as the case may be, absent manifest
error.

 

1.04. 
Disbursement of Funds.  No later than 1:00 P.M. (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, no later than 4:00 P.M. (New York time) on the date specified pursuant
to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later
than 1:00 P.M. (New York time) on the date specified in Section 1.01(d)),
each Lender with a Commitment of the respective Tranche will make available its
pro rata portion (determined in accordance with Section 1.07) of
each such Borrowing requested to be made on such date (or in the case of
Swingline Loans, the Swingline Lender will make available the full amount
thereof).  All such amounts will be made
available in Dollars and in immediately available funds at the Payment Office,
and the Administrative Agent will, except in the case of Revolving Loans made
pursuant to a Mandatory Borrowing, make available to the

 

5

 

Borrower at the Payment Office
the aggregate of the amounts so made available by the Lenders.  Unless the Administrative Agent shall have
been notified by any Lender prior to the date of Borrowing that such Lender
does not intend to make available to the Administrative Agent such Lender’s
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount.  If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender. If such Lender does not
pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent.  The Administrative Agent also
shall be entitled to recover on demand from such Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, the overnight Federal Funds Rate for the first three days and at
the interest rate otherwise applicable to such Loans for each day thereafter and
(ii)if recovered from the Borrower, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve any Lender from its
obligation to make Loans hereunder or to prejudice any rights which the
Borrower may have against any Lender as a result of any failure by such Lender
to make Loans hereunder.

 

1.05. 
Notes. 
(a)  The Borrower’s obligation to
pay the principal of, and interest on, the Loans made by each Lender shall be
evidenced in the Register maintained by the Administrative Agent pursuant to
Section 13.15 and shall, if requested by such Lender, also be evidenced
(i) in the case of Term Loans, by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B-1, with blanks
appropriately completed in conformity herewith (each a “Term Note” and,
collectively, the “Term Notes”), (ii) in the case of  Revolving Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit
B-2, with blanks appropriately completed in conformity herewith (each a “Revolving
Note” and, collectively, the “Revolving Notes”), and (iii) in the
case of Swingline Loans, by a promissory note duly executed and delivered by
the Borrower substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith (the “Swingline Note”).

 

(b)           The Term Note issued
to each Lender that has a Term Loan Commitment or outstanding Term Loans shall
(i) be executed by the Borrower, (ii) be payable to such Lender or its
registered assigns and be dated the Initial Borrowing Date (or, if issued after
the Initial Borrowing Date, be dated the date of issuance thereof), (iii) be in
a stated principal amount equal to the Term Loans made by such Lender on the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a
stated principal amount equal to the outstanding Term Loans of such Lender at
such time) and be payable in the outstanding principal amount of Term Loans
evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and LIBOR Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in

 

6

 

Section 4.01, and
mandatory repayment as provided in Section 4.02, and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.

 

(c)           The Revolving Note
issued to each Lender that has a Revolving Loan Commitment or outstanding
Revolving Loans shall (i) be executed by the Borrower, (ii) be payable to such
Lender or its registered assigns and be dated the Initial Borrowing Date (or,
if issued after the Initial Borrowing Date, be dated the date of the issuance
thereof), (iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Lender (or, if issued after the termination thereof, be in a
stated principal amount equal to the outstanding Revolving Loans of such Lender
at such time) and be payable in the outstanding principal amount of the
Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and LIBOR Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in
Section 4.02, and (vii) be entitled to the benefits of this Agreement and
the other Credit Documents.

 

(d)           The Swingline Note
issued to the Swingline Lender shall (i) be executed by the Borrower, (ii) be
payable to the Swingline Lender or its registered assigns and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Maximum
Swingline Amount and be payable in the outstanding principal amount of the
Swingline Loans evidenced thereby from time to time, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi)
be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02, and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.

 

(e)           Each Lender will
note on its internal records the amount of each Loan made by it and each
payment in respect thereof and prior to any transfer of any of its Notes will
endorse on the reverse side thereof the outstanding principal amount of Loans
evidenced thereby.  Failure to make any
such notation or any error in such notation shall not affect the Borrower’s
obligations in respect of such Loans.

 

(f)            Notwithstanding
anything to the contrary contained above in this Section 1.05 or elsewhere
in this Agreement, Notes shall only be delivered to Lenders which at any time
specifically request the delivery of such Notes.  No failure of any Lender to request or obtain a Note evidencing
its Loans to the Borrower shall affect or in any manner impair the obligations
of the Borrower to pay the Loans (and all related Obligations) incurred by the
Borrower which would otherwise be evidenced thereby in accordance with the
requirements of this Agreement, and shall not in any way affect the security or
guaranties therefor provided pursuant to the various Credit Documents.  Any Lender which does not have a Note
evidencing its outstanding Loans shall in no event be required to make the
notations otherwise described in preceding clause (e).  At any time when any Lender requests the
delivery of a Note to evidence any of its Loans, the Borrower shall promptly
execute and deliver to the respective Lender the requested Note in the
appropriate amount or amounts to evidence such Loans.

 

1.06. 
Conversions.  The Borrower shall have the option to convert, on any Business
Day, all or a portion equal to at least the Minimum Borrowing Amount of the

 

7

 

outstanding principal amount of
Loans (other than Swingline Loans which may not be converted pursuant to this
Section 1.06) made pursuant to one or more Borrowings (so long as of the
same Tranche) of one or more Types of Loans into a Borrowing (of the same
Tranche) of another Type of Loan, provided that, (i) except as otherwise
provided in Section 1.10(b), LIBOR Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Loans being
converted and no such partial conversion of LIBOR Loans shall reduce the
outstanding principal amount of such LIBOR Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
unless the Required Lenders otherwise agree, Base Rate Loans may only be converted
into LIBOR Loans if no Default or Event of Default is in existence on the date
of the conversion, (iii) unless the Administrative Agent otherwise agrees in
its sole discretion or has determined that the Syndication Date has occurred
(at which time this clause (iii) shall no longer be applicable), prior to the
90th day following the Initial Borrowing Date, conversions of Base Rate Loans
into LIBOR Loans shall be subject to the provisions of clause (B) of the
proviso in each of Sections 1.01(a)(iii) and 1.01(b)(ii), and (iv) no
conversion pursuant to this Section 1.06 shall result in a greater number
of Borrowings of  LIBOR Loans than is
permitted under Section 1.02.  Each
such conversion shall be effected by the Borrower by giving the Administrative
Agent at the Notice Office prior to 12:00 Noon (New York time) at least three
Business Days’ prior notice (each a “Notice of Conversion/Continuation”)
in the form of Exhibit A-2, appropriately completed to specify the Loans to be
so converted, the Borrowing or Borrowings pursuant to which such Loans were
incurred and, if to be converted into LIBOR Loans, the Interest Period to be
initially applicable thereto.  The
Administrative Agent shall give each Lender prompt notice of any such proposed
conversion affecting any of its Loans. 
Upon any such conversion the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.

 

1.07. 
Pro Rata Borrowings.  All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be incurred from the Lenders pro  rata
on the basis of their Term Loan Commitments or Revolving Loan Commitments, as
the case may be, provided that all Mandatory Borrowings shall be
incurred from the RL Lenders pro rata on the basis of their RL
Percentages.  It is understood that no
Lender shall be responsible for any default by any other Lender of its
obligation to make Loans hereunder and that each Lender shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to make its Loans hereunder.

 

1.08. 
Interest. 
(a)  The Borrower agrees to pay
interest in respect of the unpaid principal amount of each Base Rate Loan from
the date of Borrowing thereof until the earlier of (i) the maturity thereof
(whether by acceleration or otherwise) and (ii) the conversion of such Base
Rate Loan to a  LIBOR Loan pursuant to
Section 1.06 or 1.09, as applicable, at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Base Rate each as in effect
from time to time.

 

(b)           The Borrower agrees
to pay interest in respect of the unpaid principal amount of each LIBOR Loan
from the date of Borrowing thereof until the earlier of (i) the maturity
thereof (whether by acceleration or otherwise) and (ii) the conversion of such
LIBOR Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the

 

8

 

Applicable Margin as in effect
from time to time during such Interest Period plus the LIBOR Rate for such
Interest Period.

 

(c)           Overdue principal
and, to the extent permitted by law, overdue interest in respect of each Loan
shall, in each case, bear interest at a rate per annum equal to the rate which
is 2% in excess of the rate then borne by such Loans from time to time, and all
other overdue amounts payable hereunder and under any other Credit Document
shall bear interest at a rate per annum equal to the rate which is 2% in excess
of the rate applicable to Revolving Loans that are maintained at Base Rate
Loans from time to time.  Interest that
accrues under this Section 1.08(c) shall be payable on demand.

 

(d)           Accrued (and
theretofore unpaid) interest shall be payable (i) in respect of each Base Rate
Loan, (x) quarterly in arrears on each Quarterly Payment Date, (y) on the date
of any repayment or prepayment in full of all outstanding Base Rate Loans of
any Tranche, and (z) at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand, and (ii) in respect of each LIBOR Loan, (x) on
the last day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period, and (y) on the date of
any repayment or prepayment (on the amount repaid or prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.

 

(e)           Upon each Interest
Determination Date, the Administrative Agent shall determine the LIBOR Rate for
each Interest Period applicable to the respective LIBOR Loans and shall
promptly notify the Borrower and the Lenders thereof.  Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.

 

1.09. 
Interest Periods.  At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of, or
conversion into, any LIBOR Loan (in the case of the initial Interest Period
applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to such
LIBOR Loan (in the case of any subsequent Interest Period), the Borrower shall
have the right to elect the interest period (each an “Interest Period”)
applicable to such LIBOR Loan, which Interest Period shall, at the option of
the Borrower (but otherwise subject to the provisions of clause (B) of the
proviso in each of Sections 1.01(a)(iii) and 1.01(b)(ii)), be a one, two, three
or six month period, provided that (in each case):

 

(i)            all
LIBOR Loans comprising a Borrowing shall at all times have the same Interest
Period;

 

(ii)           the
initial Interest Period for any LIBOR Loan shall commence on the date of
Borrowing of such LIBOR Loan (including the date of any conversion thereto from
a Base Rate Loan) and each Interest Period occurring thereafter in respect of
such LIBOR Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;

 

9

 

(iii)          if
any Interest Period for a LIBOR Loan begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month;

 

(iv)          if
any Interest Period for a LIBOR Loan would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, however, that if any Interest Period for
a LIBOR Loan would otherwise expire on a day which is not a Business Day but is
a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

 

(v)           unless
the Required Lenders otherwise agree, no Interest Period may be selected at any
time when a Default or an Event of Default is then in existence;

 

(vi)          no Interest Period
in respect of any Borrowing of any Tranche of Loans shall be selected which
extends beyond the applicable Maturity Date for such Tranche of Loans; and

 

(vii)         no
Interest Period in respect of any Borrowing of Term Loans shall be selected
which extends beyond any date upon which a mandatory repayment of such Term
Loans will be required to be made under Section 4.02(b) if the aggregate
principal amount of such Term Loans which have Interest Periods which will expire
after such date will be in excess of the aggregate principal amount of such
Term Loans then outstanding less the aggregate amount of such required
repayment.

 

If by 12:00 Noon (New York time) on the third Business Day prior to the
expiration of any Interest Period applicable to a Borrowing of LIBOR Loans, the
Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such LIBOR Loans as provided above, the Borrower
shall be deemed to have elected to convert such LIBOR Loans into Base Rate
Loans effective as of the expiration date of such current Interest Period.

 

1.10. 
Increased Costs, Illegality, etc.  (a) 
In the event that any Lender shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):

 

(i)            on
any Interest Determination Date that, by reason of any changes arising after
the date of this Agreement affecting the London interbank market, adequate and
fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of LIBOR Rate; or

 

(ii)           at
any time, that such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder with respect to any LIBOR Loan because
of (x) any change since the Effective Date in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
order, guideline or request, such as, but not limited to:  (A)a change in the basis of taxation of
payment to any Lender of the principal of or

 

10

 

interest on the Loans or the Notes or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by reference
to, the net income or net profits of such Lender pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein) or
(B) a change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the computation
of the LIBOR Rate and/or (y) other circumstances arising since the Effective
Date affecting such Lender, the London interbank market or the position of such
Lender in such market; or

 

(iii)          at
any time, that the making or continuance of any LIBOR Loan has been made (x)
unlawful by any law or governmental rule, regulation or order, (y) impossible
by compliance by any Lender in good faith with any governmental request (whether
or not having force of law) or (z) impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely affects the
London interbank market;

 

then, and in any such event,
such Lender (or the Administrative Agent, in the case of clause (i) above)
shall promptly give notice (by telephone promptly confirmed in writing) to the
Borrower and, except in the case of clause (i) above, to the Administrative
Agent of such determination (which notice the Administrative Agent shall
promptly transmit to each of the other Lenders).  Thereafter (x) in the case of clause (i) above, LIBOR Loans shall
no longer be available until such time as the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or Notice
of Conversion/Continuation given by the Borrower with respect to LIBOR Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower agrees to pay to such Lender, upon such Lender’s written request
therefor, but subject to Section 1.14, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.

 

(b)           At any time that any
LIBOR Loan is affected by the circumstances described in
Section 1.10(a)(ii), the Borrower may, and in the case of a LIBOR Loan
affected by the circumstances described in Section 1.10(a)(iii), the
Borrower shall, either (x) if the affected LIBOR Loan is then being made initially
or pursuant to a conversion, cancel such Borrowing by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that the
Borrower was notified by the affected Lender or the Administrative Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected LIBOR Loan
is then outstanding, upon at least three Business Days’ written notice to the
Administrative Agent, require the affected Lender to convert such LIBOR Loan
into a Base Rate Loan, provided that, if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 1.10(b).

 

11

 

(c)           If any Lender
determines that after the Effective Date the introduction of or any change in
any applicable law or governmental rule, regulation, order, guideline,
directive or request (whether or not having the force of law) concerning
capital adequacy, or any change in interpretation or administration thereof by
the NAIC or any governmental authority, central bank or comparable agency, will
have the effect of increasing the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender based on
the existence of such Lender’s Commitments hereunder or its obligations
hereunder, then the Borrower agrees to pay to such Lender, upon its written
demand therefor, but subject to Section 1.14, such additional amounts as
shall be required to compensate such Lender or such other corporation for the increased
cost to such Lender or such other corporation or the reduction in the rate of
return to such Lender or such other corporation as a result of such increase of
capital.  In determining such additional
amounts, each Lender will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that
such Lender’s determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.  Each
Lender, upon determining that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for
calculation of such additional amounts.

 

1.11. 
Compensation.  The Borrower agrees to compensate each Lender, upon its written
request (which request shall set forth in reasonable detail the basis for
requesting such compensation), for all losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its LIBOR Loans but excluding loss of anticipated profits) which such
Lender may sustain:  (i) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of, or conversion from or into, LIBOR Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment or
repayment (including any prepayment or repayment made pursuant to
Section 4.01, Section 4.02 or as a result of an acceleration of the
Loans pursuant to Section 10) or conversion of any of its LIBOR Loans
occurs on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of its LIBOR Loans is not made on any
date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay LIBOR Loans when
required by the terms of this Agreement or any Note held by such Lender or (y)
any election made pursuant to Section 1.10(b).

 

1.12. 
Change of Lending Office.  Each Lender agrees that on the occurrence of
any event giving rise to the operation of Section1.10(a)(ii) or (iii),
Section1.10(c), Section2.06 or Section4.04 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this Section1.12
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Sections1.10, 2.06 and 4.04.

 

12

 

1.13. 
Replacement of Lenders.  (x) 
If any Lender becomes a Defaulting Lender or otherwise defaults in its
obligations to make Loans, (y) upon the occurrence of an event giving rise to
the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 2.06 or Section 4.04 with respect to any Lender which results
in such Lender charging to the Borrower increased costs in excess of those
being generally charged by the other Lenders or (z) in the case of a refusal by
a Lender to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b), the
Borrower shall have the right, if no Default or Event of Default then exists
(or, in the case of preceding clause (z), will exist immediately after giving
effect to such replacement), to replace such Lender (the “Replaced Lender”)
with one or more other Eligible Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the “Replacement
Lender”) and each of whom shall be required to be reasonably acceptable to
the Administrative Agent or, in the case of a replacement as provided in
Section 13.12(b) where the consent of the respective Lender is required
with respect to less than all Tranches of its Loans or Commitments, at the
option of the Borrower, to replace only the Commitments and/or outstanding
Loans of such Lender in respect of each Tranche where the consent of such
Lender would otherwise be individually required, with identical Commitments
and/or Loans of the respective Tranche provided by the Replacement Lender, provided
that (i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable
pursuant to said Section 13.04(b) to be paid by the Replacement Lender
and/or the Replaced Lender (as may be agreed to at such time by and among the
Borrower, the Replacement Lender and the Replaced Lender)) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans (or, in the case of the replacement of less than all the Tranches of
Commitments and outstanding Loans of the respective Replaced Lender, all of the
Commitments and all then outstanding Loans relating to the Tranche or Tranches
with respect to which such Lender is being replaced) of, and in each case
participations in Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (I) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender under each Tranche
with respect to which such Replaced Lender is being replaced, (II) in the case
of the replacement of the Revolving Loan Commitment of such Replaced Lender an
amount equal to all Unpaid Drawings that have been funded by (and not
reimbursed to) such Replaced Lender, together with all then unpaid interest
with respect thereto at such time, and (III) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to
the relevant Tranche or Tranches, in the case of the replacement of less than
all Tranches of Loans then held by the respective Replaced Lender) pursuant to
Section 3.01, (y) in the case of the replacement of any Revolving Loan
Commitment, the respective Issuing Lender an amount equal to such Replaced
Lender’s RL Percentage (in each case for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Lender) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender to such Issuing Lender and (z) in
the case of the replacement of any Revolving Loan Commitment, the Swingline
Lender an amount equal to such Replaced Lender’s RL Percentage of any Mandatory
Borrowing (determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such Replaced
Lender) to the extent such

 

13

 

amount was not theretofore funded by such Replaced Lender to the
Swingline Lender and (ii) all obligations of the Borrower due and owing to the
Replaced Lender at such time (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender concurrently
with such replacement.  Upon the
execution of the respective Assignment and Assumption Agreement, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
12.06 and 13.01), which shall survive as to such Replaced Lender and (y) in the
case of the replacement of any Revolving Loan Commitment pursuant to this
Section 1.13, the RL Percentages of the Lenders shall be automatically
adjusted at such time to give effect to such replacement.

 

1.14. 
Limitation on Additional
Amounts.  Notwithstanding
anything to the contrary contained in Section 1.10 or 2.06, unless a
Lender gives notice to the Borrower that the Borrower is obligated to pay any
amount under Section 1.10 or 2.06 within 180 days after the later of (x)
the date such Lender incurs the respective increased costs, reduction in the
amounts received or receivable hereunder or reduction in return of capital or
(y) the date such Lender has actual knowledge of its incurrence of the
respective increased costs, reduction in the amounts received or receivable
hereunder or reduction in return of capital, 
such Lender shall only be entitled to be compensated for any such amount
by the Borrower pursuant to Section 1.10 or 2.06 to the extent that any
such amounts are incurred or suffered on or after the date which occurs 180
days prior to such Lender giving notice to the Borrower that it is obligated to
pay the respective amounts pursuant to Section 1.10 or 2.06; provided,
however, that if the circumstances giving rise to such claims have a
retroactive effect, such 180-day period shall be extended to include the period
of such retroactive effect.  This
Section 1.14 shall have no applicability to any Section of this
Agreement other than Sections 1.10 and 2.06.

 

SECTION 2.  Letters of Credit.

 

2.01.  Letters
of Credit.  (a)  Subject to and upon the terms and conditions
set forth herein, the Borrower may request that an Issuing Lender issue, at any
time and from time to time on and after the Initial Borrowing Date and prior to
the 60th day prior to the Revolving Loan Maturity Date, for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations, an
irrevocable standby letter of credit, in a form customarily used by such
Issuing Lender or in such other form as is reasonably acceptable to such
Issuing Lender (each such letter of credit, a “Letter of Credit” and,
collectively, the “Letters of Credit”). 
All Letters of Credit shall be denominated in Dollars and shall be
issued on a sight basis only.

 

(b)           Subject to and upon
the terms and conditions set forth herein, each Issuing Lender agrees that it
will, at any time and from time to time on and after the Initial Borrowing Date
and prior to the 60th day prior to the Revolving Loan Maturity Date, following
its receipt of the respective Letter of Credit Request, issue for account of
the Borrower, one or more Letters of Credit as are permitted to remain
outstanding hereunder without giving rise to a Default or an

 

14

 

Event of Default, provided
that no Issuing Lender shall be under any obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:

 

(i)            any
order, judgment or decree of any governmental authority or arbitrator shall
purport by its terms to enjoin or restrain such Issuing Lender from issuing
such Letter of Credit or any requirement of law applicable to such Issuing
Lender or any request or directive (whether or not having the force of law)
from any governmental authority with jurisdiction over such Issuing Lender shall
prohibit, or request that such Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated hereunder) not in effect with respect to such Issuing
Lender on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable or in effect with respect to such Issuing Lender as of the date
hereof and which such Issuing Lender reasonably and in good faith deems
material to it; or

 

(ii)           such
Issuing Lender shall have received from the Borrower, any other Credit Party or
the Required Lenders prior to the issuance of such Letter of Credit notice of
the type described in the second sentence of Section 2.03(b).

 

2.02. 
Maximum Letter of Credit
Outstandings; Final Maturities. 
Notwithstanding anything to the contrary contained in this Agreement,
(i) no Letter of Credit shall be issued the Stated Amount of which, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) at such time would exceed either (x) $15,000,000 or (y) when added to
the sum of (I) the aggregate principal amount of all Revolving Loans then
outstanding and (II) the aggregate principal amount of all Swingline Loans then
outstanding, an amount equal to the Total Revolving Loan Commitment at such
time, and (ii) each Letter of Credit shall by its terms terminate on or before
the earlier of (A) the date which occurs 12 months after the date of the
issuance thereof (although any such Letter of Credit shall be extendible for
successive periods of up to 12 months, but, in each case, not beyond the fifth
Business Day prior to the Revolving Loan Maturity Date, on terms acceptable to
the respective Issuing Lender) and (B) five Business Days prior to the
Revolving Loan Maturity Date.

 

2.03. 
Letter of Credit Requests;
Minimum Stated Amount.  (a)  Whenever the Borrower desires that a Letter
of Credit be issued for its account, the Borrower shall give the Administrative
Agent and the respective Issuing Lender at least five Business Days’ (or such
shorter period as is acceptable to such Issuing Lender) written notice thereof
(including by way of facsimile).  Each
notice shall be in the form of Exhibit C, appropriately completed (each a “Letter
of Credit Request”).

 

(b)           The making of each
Letter of Credit Request shall be deemed to be a representation and warranty by
the Borrower to the Lenders that such Letter of Credit may be issued in
accordance with, and will not violate the requirements of,
Section 2.02.  Unless the
respective Issuing Lender has received notice from the Borrower, any other
Credit Party or the Required Lenders before it issues a Letter of Credit that
one or more of the conditions specified in Section 5 or 6 are not then
satisfied, or that the issuance of such Letter of Credit would violate

 

15

 

Section 2.02, then such
Issuing Lender shall, subject to the terms and conditions of this Agreement,
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Lender’s usual and customary practices.  Upon the issuance of or modification or
amendment to any Letter of Credit, each Issuing Lender shall promptly notify
the Borrower and the Administrative Agent, in writing of such issuance,
modification or amendment and such notice shall be accompanied by a copy of
such Letter of Credit or the respective modification or amendment thereto, as
the case may be.  Promptly after receipt
of such notice the Administrative Agent shall notify the Participants, in
writing, of such issuance, modification or amendment.  Notwithstanding anything to the contrary contained in this
Agreement, in the event that a Lender Default exists with respect to an RL
Lender, no Issuing Lender shall be required to issue any Letter of Credit unless
such Issuing Lender has entered into arrangements satisfactory to it and the
Borrower to eliminate such Issuing Lender’s risk with respect to the
participation in Letters of Credit by the Defaulting Lender or Lenders,
including by cash collateralizing such Defaulting Lender’s or Lenders’ RL
Percentage of the Letter of Credit Outstandings.

 

(c)           The initial Stated
Amount of each Letter of Credit shall not be less than $10,000 or such lesser
amount as is acceptable to the respective Issuing Lender.

 

2.04. 
Letter of Credit Participations.  (a) 
Immediately upon the issuance by an Issuing Lender of any Letter of
Credit, such Issuing Lender shall be deemed to have sold and transferred to
each RL Lender, and each such RL Lender (in its capacity under this Section 2.04,
a “Participant”) shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuing Lender, without recourse or warranty,
an undivided interest and participation, to the extent of such Participant’s RL
Percentage, in such Letter of Credit, each drawing or payment made thereunder
and the obligations of the Borrower under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto.  Upon any change in the Revolving Loan
Commitments or RL Percentages of the Lenders pursuant to Section 1.13 or
13.04(b), it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings relating thereto, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04 to reflect
the new RL Percentages of the assignor and assignee Lender, as the case may be.

 

(b)           In determining
whether to pay under any Letter of Credit, no Issuing Lender shall have any
obligation relative to the other Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to substantially comply on their face with
the requirements of such Letter of Credit. 
Any action taken or omitted to be taken by an Issuing Lender under or in
connection with any Letter of Credit issued by it shall not create for such
Issuing Lender any resulting liability to the Borrower, any other Credit Party,
any Lender or any other Person unless such action is taken or omitted to be
taken with gross negligence or willful misconduct on the part of such Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).

 

(c)           In the event that an
Issuing Lender makes any payment under any Letter of Credit issued by it and
the Borrower shall not have reimbursed such amount in full to such Issuing
Lender pursuant to Section 2.05(a), such Issuing Lender shall promptly
notify the Administrative Agent, which shall promptly notify each Participant
of such failure, and each

 

16

 

Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant’s RL
Percentage of such unreimbursed payment in Dollars and in same day funds.  If the Administrative Agent so notifies,
prior to 12:00 Noon (New York time) on any Business Day, any Participant
required to fund a payment under a Letter of Credit, such Participant shall
make available to the respective Issuing Lender in Dollars such Participant’s
RL Percentage of the amount of such payment on such Business Day in same day
funds.  If and to the extent such
Participant shall not have so made its RL Percentage of the amount of such payment
available to the respective Issuing Lender, such Participant agrees to pay to
such Issuing Lender, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to such
Issuing Lender at the overnight Federal Funds Rate for the first three days and
at the interest rate applicable to Revolving Loans that are maintained as Base
Rate Loans for each day thereafter.  The
failure of any Participant to make available to an Issuing Lender its RL
Percentage of any payment under any Letter of Credit issued by such Issuing
Lender shall not relieve any other Participant of its obligation hereunder to
make available to such Issuing Lender its RL Percentage of any payment under
any Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to such Issuing Lender such other Participant’s RL Percentage of
any such payment.

 

(d)           Whenever an Issuing
Lender receives a payment of a reimbursement obligation as to which it has
received any payments from the Participants pursuant to clause (c)above, such
Issuing Lender shall pay to each such Participant which has paid its RL
Percentage thereof, in Dollars and in same day funds, an amount equal to such Participant’s
share (based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the
principal amount of such reimbursement obligation and interest thereon accruing
after the purchase of the respective participations.

 

(e)           Upon the request of
any Participant, each Issuing Lender shall furnish to such Participant copies
of any standby Letter of Credit issued by it and such other documentation as
may reasonably be requested by such Participant.

 

(f)            The obligations of
the Participants to make payments to each Issuing Lender with respect to
Letters of Credit shall be irrevocable and not subject to any qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:

 

(i)            any
lack of validity or enforceability of this Agreement or any of the other Credit
Documents;

 

(ii)           the
existence of any claim, setoff, defense or other right which the Borrower or
any of its Subsidiaries may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Administrative Agent, any
Participant, or any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction

 

17

 

between the Borrower or any Subsidiary of the Borrower and the
beneficiary named in any such Letter of Credit);

 

(iii)          any
draft, certificate or any other document presented under any 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;

 

(iv)          the
surrender or impairment of any security for the performance or observance of
any of the terms of any of the Credit Documents; or

 

(v)           the
occurrence of any Default or Event of Default.

 

2.05. 
Agreement to Repay Letter of
Credit Drawings.  (a)  The Borrower agrees to reimburse each
Issuing Lender, by making payment to the Administrative Agent in immediately
available funds at the Payment Office, for any payment or disbursement made by
such Issuing Lender under any Letter of Credit issued by it (each such amount,
so paid until reimbursed, an “Unpaid Drawing”), on the same Business Day
on which the Borrower receives notice of such payment or disbursement (provided
that no such notice shall be required to be given if a Default or an Event of
Default under Section 10.05 shall have occurred and be continuing, in
which case the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by the Borrower)), with interest on the amount so paid or disbursed by
such Issuing Lender, to the extent not reimbursed prior to 12:00 Noon (New York
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but excluding the date such Issuing Lender was reimbursed
by the Borrower therefor at a rate per annum equal to the Base Rate in effect
from time to time plus the Applicable Margin as in effect from time to time for
Revolving Loans that are maintained as Base Rate Loans; provided, however,
to the extent such amounts are not reimbursed prior to 12:00 Noon (New York
time) on the third Business Day following the receipt by the Borrower of notice
of such payment or disbursement or following the occurrence of a Default or an
Event of Default under Section 10.05, interest shall thereafter accrue on
the amounts so paid or disbursed by such Issuing Lender (and until reimbursed
by the Borrower) at a rate per annum equal to the Base Rate in effect from time
to time plus the Applicable Margin for Revolving Loans that are maintained as
Base Rate Loans as in effect from time to time plus 2%, with such interest to
be payable on demand.  Each Issuing Lender
shall give the Borrower prompt written notice of each Drawing under any Letter
of Credit issued by it, provided that the failure to give any such
notice shall in no way affect, impair or diminish the Borrower’s obligations
hereunder.

 

(b)           The obligations of
the Borrower under this Section 2.05 to reimburse each Issuing Lender with
respect to drafts, demands and other presentations for payment under Letters of
Credit issued by it (each a “Drawing”) (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or any Subsidiary of the Borrower may have or have
had against any Lender (including in its capacity as an Issuing Lender or as a
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit to conform to the terms of the Letter
of Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the

 

18

 

Borrower shall not be obligated
to reimburse any Issuing Lender for any wrongful payment made by such Issuing
Lender under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).

 

2.06. 
Increased Costs.  If at any time after the Effective Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Lender or any Participant with any
request or directive by the NAIC or by any such governmental authority (whether
or not having the force of law), shall either (i)impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by any Issuing Lender or participated in by
any Participant, or (ii) impose on any Issuing Lender or any Participant any
other conditions relating, directly or indirectly, to this Agreement or any
Letter of Credit; and the result of any of the foregoing is to increase the
cost to any Issuing Lender or any Participant of issuing, maintaining or
participating in any Letter of Credit, or reduce the amount of any sum received
or receivable by any Issuing Lender or any Participant hereunder or reduce the
rate of return on its capital with respect to Letters of Credit (except for
changes in the rate of tax on, or determined by reference to, the net income or
profits of such Issuing Lender or such Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon the delivery of the certificate referred to below to the Borrower by
any Issuing Lender or any Participant (a copy of which certificate shall be
sent by such Issuing Lender or such Participant to the Administrative Agent),
the Borrower agrees to pay to such Issuing Lender or such Participant, subject
to Section 1.14, such additional amount or amounts as will compensate such
Issuing Lender or such Participant for such increased cost or reduction in the
amount receivable or reduction on the rate of return on its capital.  Any Issuing Lender or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 2.06, will give prompt written notice thereof to the Borrower,
which notice shall include a certificate submitted to the Borrower by such Issuing
Lender or such Participant (a copy of which certificate shall be sent by the
Issuing Lender or such Participant to the Administrative Agent), setting forth
in reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate such Issuing Lender or such Participant.  The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the Borrower.

 

SECTION 3.  Commitment Commission; Fees; Reductions
of Commitment.

 

3.01. 
Fees. 
(a)  The Borrower agrees to pay
to the Administrative Agent for distribution to each Non-Defaulting RL Lender a
commitment commission (the “Commitment Commission”) for the period from
and including the Effective Date to and including the Revolving Loan Maturity
Date (or such earlier date on which the Total Revolving Loan Commitment has
been terminated) computed at a rate per annum equal to the Applicable
Commitment Commission Percentage on the daily average Unutilized Revolving Loan
Commitment of such Non-Defaulting RL Lender as in effect from time to
time.  Accrued Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the date upon which the Total Revolving Loan Commitment is terminated.

 

19

 

(b)           The Borrower agrees
to pay to the Administrative Agent for distribution to each RL Lender (based on
each such RL Lender’s respective RL Percentage) a fee in respect of each Letter
of Credit (the “Letter of Credit Fee”) for the period from and including
the date of issuance of such Letter of Credit to and including the date of
termination or expiration of such Letter of Credit, computed at a rate per
annum equal to the Applicable Margin as in effect from time to time during such
period with respect to Revolving Loans that are maintained as LIBOR Loans on
the daily Stated Amount of each such Letter of Credit.  Accrued Letter of Credit Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.

 

(c)           The Borrower agrees
to pay to each Issuing Lender, for its own account, a fronting fee in respect
of each Letter of Credit issued by it (the “Fronting Fee”) for the
period from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to 1/4 of 1% on the daily Stated Amount of
such Letter of Credit.  Accrued Fronting
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and upon the first day on or after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.

 

(d)           The Borrower agrees
to pay to each Issuing Lender, for its own account, upon each payment under,
issuance of, or amendment to, any Letter of Credit issued by it, such amount as
shall at the time of such event be the customary administrative, issuance,
amendment, payment and/or negotiation charges and the reasonable expenses which
such Issuing Lender is generally imposing in connection with such occurrence
with respect to letters of credit.

 

(e)           The Borrower agrees
to pay to the Administrative Agent for the pro  rata distribution
to each Lender with outstanding Term Loans (based on the outstanding principal
amount of each such Lender’s outstanding Term Loans at such time), concurrently
with any prepayment or repayment, in each case in full, of all outstanding Term
Loans on or prior to December 16, 2004, a fee in an aggregate amount equal
to 1.0% of the aggregate principal amount of Term Loans so prepaid or so repaid
in full.

 

(f)            The Borrower agrees
to pay to the Administrative Agent such fees as may be agreed to in writing
from time to time by the Borrower or any of its Subsidiaries and the
Administrative Agent.

 

3.02. 
Voluntary Termination of
Unutilized Revolving Loan Commitments.  (a)  Upon at least one
Business Day’s prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each
of the Lenders), the Borrower shall have the right, at any time or from time to
time, without premium or penalty to terminate the Total Unutilized Revolving
Loan Commitment in whole, or reduce it in part, pursuant to this
Section 3.02(a), in an integral multiple of $1,000,000 in the case of
partial reductions to the Total Unutilized Revolving Loan Commitment, provided
that each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each RL Lender.

 

20

 

(b)           In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b), the
Borrower may, subject to its compliance with the requirements of Sections
4.01(b) and/or 13.12(b), upon five Business Days’ prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders) terminate all of the Commitments
of such Lender, so long as all Loans, together with accrued and unpaid
interest, Fees and all other amounts, owing to such Lender (other than amounts
owing in respect of outstanding Term Loans maintained by such Lender, if such
Term Loans are not being repaid pursuant to Section 13.12(b)) are repaid
concurrently with the effectiveness of such termination pursuant to
Section 4.01(b) (at which time Schedule I shall be deemed modified to
reflect such changed amounts) and such Lender’s RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory
to the Administrative Agent and the respective Issuing Lenders, and at such
time, unless the respective Lender continues to have outstanding Term Loans
hereunder, such Lender shall no longer constitute a “Lender” for
purposes of this Agreement, except with respect to indemnifications under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
12.06 and 13.01), which shall survive as to such repaid Lender.

 

3.03. 
Mandatory Reduction of Commitments.  (a) 
The Total Commitment (and the Commitments of each Lender) shall
terminate in its entirety on December 19, 2003, unless the Initial
Borrowing Date has occurred on or prior to such date.

 

(b)           In addition to any
other mandatory commitment reductions pursuant to this Section 3.03, the
Total Term Loan Commitment (and the Term Loan Commitment of each Lender) shall
terminate in its entirety on the Initial Borrowing Date (after giving effect to
the incurrence of Term Loans on such date).

 

(c)           In addition to any
other mandatory commitment reductions pursuant to this Section 3.03, the
Total Revolving Loan Commitment (and the Revolving Loan Commitment of each
Lender) shall terminate in its entirety upon the earlier of (i) the Revolving
Loan Maturity Date and (ii) unless the Required Lenders otherwise agree in
writing, the date on which a Change of Control occurs.

 

SECTION 4.  Prepayments; Payments; Taxes.

 

4.01. 
Voluntary Prepayments.  (a) 
The Borrower shall have the right to prepay the Loans, without premium
or penalty (except as otherwise provided in Section 3.01(e)), in whole or
in part at any time and from time to time on the following terms and
conditions:  (i) the Borrower shall give
the Administrative Agent prior to 12:00 Noon (New York time) at the Notice
Office (x) at least one Business Day’s prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Base Rate Loans
(or same day notice in the case of a prepayment of Swingline Loans) and (y) at
least three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay LIBOR Loans, which notice (in
each case) shall specify whether Term Loans, Revolving Loans or Swingline Loans
shall be prepaid, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of LIBOR Loans, the specific Borrowing or Borrowings
pursuant to which such LIBOR

 

21

 

Loans were made, and which
notice the Administrative Agent shall, except in the case of a prepayment of
Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each
partial prepayment of Term Loans pursuant to this Section 4.01(a) shall be
in an aggregate principal amount of at least $500,000 (or such lesser amount as
is acceptable to the Administrative Agent), (y) each partial prepayment of
Revolving Loans pursuant to this Section 4.01(a) shall be in an aggregate
principal amount of at least $250,000 (or such lesser amount as is acceptable
to the Administrative Agent) and (z) each partial prepayment of Swingline Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount
of at least $100,000 (or such lesser amount as is acceptable to the
Administrative Agent), provided that if any partial prepayment of LIBOR
Loans made pursuant to any Borrowing shall reduce the outstanding principal
amount of LIBOR Loans made pursuant to such Borrowing to an amount less than
the Minimum Borrowing Amount applicable thereto, then such Borrowing may not be
continued as a Borrowing of LIBOR Loans (and same shall automatically be
converted into a Borrowing of Base Rate Loans) and any election of an Interest
Period with respect thereto given by the Borrower shall have no force or
effect; (iii) each prepayment pursuant to this Section 4.01(a) in respect
of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans, provided that at the Borrower’s election in connection
with any prepayment of Revolving Loans pursuant to this Section 4.01(a),
such prepayment shall not, so long as no Default or Event of Default then
exists, be applied to any Revolving Loan of a Defaulting Lender; and (iv) each
voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall
be applied to reduce the then remaining Scheduled Repayments on a pro rata
basis (based upon the then remaining unpaid principal amounts of such Scheduled
Repayments after giving effect to all prior reductions thereto).

 

(b)           In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b), the
Borrower may, upon five Business Days’ prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders) repay all Loans, together
with accrued and unpaid interest, Fees, and other amounts owing to such Lender
(or owing to such Lender with respect to each Tranche which gave rise to the
need to obtain such Lender’s individual consent) in accordance with, and
subject to the requirements of, said Section13.12(b) so long as (I) in the case
of the repayment of Revolving Loans of any Lender pursuant to this clause (b),
the Revolving Loan Commitment of such Lender is terminated concurrently with
such repayment pursuant to Section 3.02(b) (at which time Schedule I
shall be deemed modified to reflect the changed Revolving Loan Commitments) and
(II) the consents required by Section 13.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained.  Each prepayment of any Term Loans pursuant
to this Section 4.01(b) shall be applied to reduce the then remaining
Scheduled Repayments of the Term Loans on a pro rata basis (based upon
the then remaining unpaid principal amounts of such Scheduled Repayments after
giving effect to all prior reductions thereto).

 

4.02. 
Mandatory Repayments.  (a) 
On any day on which the sum of (I) the aggregate outstanding principal
amount of all Revolving Loans (after giving effect to all other repayments
thereof on such date), (II) the aggregate outstanding principal amount of all
Swingline Loans (after giving effect to all other repayments thereof on such
date) and (III) the aggregate amount of all Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment at such time, the Borrower shall
prepay on such day the principal of Swingline

 

22

 

Loans and, after all Swingline
Loans have been repaid in full or if no Swingline Loans are outstanding,
Revolving Loans in an amount equal to such excess.  If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans, the aggregate amount of the Letter of
Credit Outstandings exceeds the Total Revolving Loan Commitment at such time,
the Borrower shall pay to the Administrative Agent at the Payment Office on
such day an amount of cash and/or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Lenders and the Lenders hereunder in
a cash collateral account to be established by the Administrative Agent.

 

(b)           In addition to any
other mandatory repayments pursuant to this Section 4.02, on each date set
forth below (each, a “Scheduled Repayment Date”), the Borrower shall be
required to repay that principal amount of Term Loans, to the extent then
outstanding, as is set forth opposite each such date below (each such
repayment, as the same may be reduced as provided in Section 4.01(a), 4.01(b)
or 4.02(j), a “Scheduled Repayment”):

 

	
  Scheduled Repayment Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2004

  	
   

  	
  $

  	
   383,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  383,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  383,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  287,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  27,312,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  27,312,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  27,312,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  $

  	
  27,312,501

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

23

 

(c)           In addition to any
other mandatory repayments pursuant to this Section 4.02, except as
otherwise provided below in this Section 4.02(c), on each date on or after
the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries
receives any cash proceeds from any capital contribution or any sale or
issuance of its equity (other than any capital contributions made to any
Subsidiary of the Borrower to the extent made by the Borrower or another
Subsidiary of the Borrower), an amount equal to 50% of the Net Equity Proceeds
of such capital contribution or sale or issuance of equity shall be applied on
such date as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.02(j) and (k); provided, however,
an amount equal to 50% of all Net Equity Proceeds received by the Borrower from
the sale of its equity (including from the sale, issuance or exercise of
options, warrants or rights to purchase any equity) to officers, employees or
directors of the Borrower or any of its Subsidiaries (including, without
limitation, pursuant to an equity incentive plan of the Borrower or any of its
Subsidiaries) shall not be required to be so applied on the date of receipt
thereof (unless such date is a Scheduled Repayment Date), but instead shall be
applied on the Scheduled Repayment Date immediately following the date of such
receipt.

 

(d)           In addition to any
other mandatory repayments pursuant to this Section 4.02, on each date on
or after the Initial Borrowing Date upon which the Borrower or any of its
Subsidiaries receives any cash proceeds from any issuance or incurrence by the
Borrower or any of its Subsidiaries of Indebtedness for borrowed money (other
than Indebtedness for borrowed money permitted to be incurred pursuant to
Section 9.04 as in effect on the Effective Date), an amount equal to 100%
of the Net Debt Proceeds of the respective incurrence of Indebtedness shall be
applied on such date as a mandatory repayment of principal of outstanding Loans
in accordance with the requirements of Sections 4.02(j) and (k); provided,
however, that notwithstanding the foregoing, the Net Debt Proceeds from
the issuance or incurrence of Additional Permitted Subordinated Debt that are
not used within the 90-day period specified (and for the purposes described) in
Section 9.04(vi) (or such earlier date, if any, on which the Borrower
elects not to use such Net Debt Proceeds for such purposes) shall be applied on
the last

 

24

 

day of such period (or such
earlier date, as the case may be) as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Sections 4.02(j) and
(k).

 

(e)           In addition to any
other mandatory repayments pursuant to this Section 4.02, on each date on
or after the Initial Borrowing Date upon which the Borrower or any of its
Subsidiaries receives any cash proceeds from any Asset Sale, an amount equal to
100% of the Net Sale Proceeds therefrom shall be applied on such date as a
mandatory repayment of principal of outstanding Loans in accordance with the
requirements of Sections 4.02(j) and (k); provided, however, (A)
that an amount equal such Net Sale Proceeds shall not be required to be so
applied on such date so long as no Default or Event of Default then exists or
would result from such Asset Sale and such Net Sale Proceeds shall be used to
purchase replacement assets and/or make other Capital Expenditures in each case
within 180 days following the date of such Asset Sale, and (B) that if all or
any portion of such Net Sale Proceeds not required to be so applied as provided
above in this Section 4.02(e) are not so reinvested within such 180-day
period (or such earlier date, if any, as the Borrower or the relevant
Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset
Sale as set forth above), an amount equal to such remaining portion shall be
applied on the last day of such period (or such earlier date, as the case may
be) as provided above in this Section 4.02(e) without regard to this
proviso.

 

(f)            In addition to any
other mandatory repayments pursuant to this Section 4.02, on each Excess
Cash Payment Date, an amount equal to the Applicable Excess Cash Prepayment
Percentage of the Excess Cash Flow for the relevant Excess Cash Payment Period
shall be applied as a mandatory repayment of the principal of outstanding Loans
in accordance with the requirements of Sections 4.02(j) and (k).

 

(g)           In addition to any
other mandatory repayments pursuant to this Section 4.02, within 10
Business Days following each date on or after the Initial Borrowing Date upon
which the Borrower or any of its Subsidiaries receives any cash proceeds from
any Recovery Event (other than Recovery Events where the Net Insurance Proceeds
therefrom do not exceed $50,000), an amount equal to 100% of the Net Insurance
Proceeds from such Recovery Event shall be applied within such 10 Business Day
period as a mandatory repayment of principal of outstanding Loans in accordance
with the requirements of Sections 4.02(j) and (k); provided, however,
(x) so long as no Default or Event of Default then exists and such Net
Insurance Proceeds do not exceed $10,000,000, such Net Insurance Proceeds shall
not be required to be so applied within such 10 Business Day period to the
extent that the Borrower has delivered a certificate to the Administrative
Agent within such 10 Business Day period stating that such Net Insurance
Proceeds shall be used to replace or restore any properties or assets in
respect of which such Net Insurance Proceeds were paid within 360 days following
the date of the receipt of such Net Insurance Proceeds (which certificate shall
set forth the estimates of the Net Insurance Proceeds to be so expended), and
(y) so long as no Default or Event of Default then exists and if (i) the amount
of such Net Insurance Proceeds are greater than $10,000,000, but do not exceed
$35,000,000, (ii) the amount of such Net Insurance Proceeds, together with
other cash available to the Borrower and its Subsidiaries and permitted to be
spent by them on Capital Expenditures during the relevant period pursuant to
Section 9.07 (including through the incurrence of Revolving Loans and
Swingline Loans), equals at least 100% of the cost of replacement or
restoration of the properties or assets in respect of which such Net Insurance
Proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or

 

25

 

subcontractors or such other
supporting information as the Administrative Agent may reasonably request,
(iii) the Borrower has delivered to the Administrative Agent a certificate on
or prior to the date the application would otherwise be required pursuant to
this Section 4.02(g) in the form described in clause (x) above and also
certifying its determination as required by preceding clause (ii) and
certifying the sufficiency of business interruption insurance and/or other
funds from operations as required by succeeding clause (iv), and (iv) the
Borrower has delivered to the Administrative Agent such evidence as the
Administrative Agent may reasonably request in form and substance reasonably
satisfactory to the Administrative Agent establishing that the Borrower and its
Subsidiaries have sufficient business interruption insurance and that the Borrower
and/or the applicable Subsidiary thereof will receive payment thereunder and/or
will have sufficient cash flow from operations and/or cash reserves available,
in such amounts and at such times as are necessary to satisfy all obligations
and expenses of the Borrower and its Subsidiaries (including, without
limitation, all debt service requirements, including pursuant to this
Agreement), without any delay or extension thereof, for the period from the
date of the respective casualty, condemnation or other event giving rise to the
Recovery Event and continuing through the completion of the replacement or
restoration of respective properties or assets, then the entire amount of the
proceeds of such Recovery Event and not just the portion in excess of $10,000,000
shall be deposited with the Administrative Agent pursuant to a cash collateral
arrangement reasonably satisfactory to the Administrative Agent whereby such
proceeds shall be disbursed to the Borrower and/or its applicable Subsidiary
from time to time for a period not to exceed 360 days from the date of receipt
of such Net Insurance Proceeds as needed to pay actual costs incurred by it or
its applicable Subsidiary in connection with the replacement or restoration of
the respective properties or assets (pursuant to such certification
requirements as may be reasonably established by the Administrative Agent) (it
being understood that at any time while an Event of Default has occurred and is
continuing, the Required Lenders may direct the Administrative Agent (in which
case the Administrative Agent shall, and is hereby authorized by the Borrower
to, follow said directions) to apply any or all proceeds then on deposit in
such collateral account to the repayment of Obligations hereunder); and provided
further, that if all or any portion of such Net Insurance Proceeds not
required to be so applied pursuant to the preceding proviso (whether pursuant
to clause (x) or (y) thereof) are not so used within 360 days after the date of
the receipt of such Net Insurance Proceeds (or such earlier date, if any, as
the Borrower or the relevant Subsidiary determines not to reinvest the Net
Insurance Proceeds relating to such Recovery Event as set forth above), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as provided above in this
Section 4.02(g) (without regard to the preceding proviso).

 

(h)           In addition to any
other mandatory repayments pursuant to this Section 4.02, on each date on
or after the Initial Borrowing Date upon which the Borrower or any of its
Subsidiaries receives (x) any cash proceeds from any post-closing non-compete,
consulting or purchase price adjustments or from any cash refund, claim,
indemnity or credit in either case arising from a Permitted Acquisition, or (y)
any cash receipts or cash payments derived from operations of the Borrower or
any of its Subsidiaries outside of the ordinary course of business (excluding
(i) tax refunds received by the Borrower or any of its Subsidiaries and (ii)
those cash receipts or cash payments that are otherwise the subject of a
mandatory repayment event described in the other clauses of this
Section 4.02), an amount (in each case) equal to 100% of such amounts
described in preceding clauses (x) and/or (y) (net of the reasonable costs and
expenses incurred by the Borrower or the relevant Subsidiary directly
associated with any of the

 

26

 

events set forth in such
clauses) shall be applied on such date as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Sections 4.02(j) and
(k).

 

(i)            In addition to any
other mandatory repayments pursuant to this Section 4.02, in the event
that the Borrower and its Subsidiaries hold cash and Cash Equivalents for a
period of at least two consecutive Business Days in an aggregate amount in
excess of the sum of (I) $10,000,000 plus (II) the aggregate outstanding amount
of the Barnwell Obligations at such time, the Borrower shall be required to
make a mandatory repayment of principal of outstanding Revolving Loans and/or
Swingline Loans on the third consecutive Business Day in an amount equal to the
lesser of (x) that amount necessary to reduce the aggregate amount of cash and
Cash Equivalents held by the Borrower and its Subsidiaries to an amount equal
to the sum of (I) $10,000,000 and (II) the aggregate outstanding amount of the
Barnwell Obligations at such time and (y) that amount necessary to reduce the
outstanding principal amount of all Revolving Loans and Swingline Loans to $0,
in each case in accordance with the requirements of Sections 4.02(j) and (k).

 

(j)            The amount of each
principal repayment of Loans made as required by Sections 4.02(c), (d), (e),
(f), (g) and (h) shall be applied by or on behalf of the Borrower (i) first, to
repay the outstanding principal amount of Term Loans, (ii) second, to the
extent in excess of the amounts required to be applied pursuant to the
preceding clause (i), to repay the outstanding principal amount of Swingline
Loans, and (iii) third, to the extent in excess of the amounts required to be
applied pursuant to preceding clauses (i) and (ii), to repay the outstanding
principal amount of Revolving Loans. 
The amount of each principal repayment of Revolving Loans and/or
Swingline Loans required by Section 4.02(i) shall be applied (I) first, to
repay the outstanding principal amount of Swingline Loans, and (II) second, to
the extent in excess of the amount required pursuant to the preceding clause (I),
to repay the outstanding principal amount of Revolving Loans.

 

(k)           With respect to each
repayment of Loans required by this Section 4.02, the Borrower may
designate the Types of Loans of the respective Tranche which are to be repaid
and, in the case of LIBOR Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which such LIBOR Loans were made, provided
that:  (i) repayments of LIBOR Loans
pursuant to this Section 4.02 may only be made on the last day of an
Interest Period applicable thereto unless all LIBOR Loans of the respective
Tranche with Interest Periods ending on such date of required repayment and all
Base Rate Loans of the respective Tranche have been paid in full; (ii) if any
repayment of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding LIBOR Loans made pursuant to such Borrowing to an amount less than
the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
automatically converted into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied pro
rata among such Loans.  In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such designation
in its sole discretion.

 

(l)            In addition to any
other mandatory repayments pursuant to this Section 4.02, (i) all then
outstanding Revolving Loans shall be repaid in full on the Revolving Loan
Maturity Date, (ii) all then outstanding Swingline Loans shall be repaid in
full on the Swingline Expiry Date, (iii) all then outstanding Term Loans shall
be repaid in full on the Term Loan

 

27

 

Maturity Date and (iv) unless
the Required Lenders otherwise agree in writing, all then outstanding Loans
shall be repaid in full on the date on which a Change of Control occurs.

 

4.03. 
Method and Place of Payment.  Except as otherwise specifically provided
herein, all payments under this Agreement and under any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 2:00P.M. (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office.  Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.

 

4.04. 
Net Payments.  (a)  All payments made by
the Borrower hereunder and under any Note will be made without setoff,
counterclaim or other defense.  Except
as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income or net profits of a Lender
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the Borrower agrees to pay
the full amount of such Taxes, and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement or under any
Note, after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note.  If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the Borrower shall be obligated to
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located and for any withholding
of taxes as such Lender shall determine are payable by, or withheld from, such
Lender, in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence.  The Borrower will furnish to the Administrative Agent within 45
days after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by such Borrower.  The Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender.

 

(b)           Each Lender that is
not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for U.S. Federal income tax purposes agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Effective Date or, in
the case of a

 

28

 

Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04(b) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or successor
forms) certifying to such Lender’s entitlement as of such date to a complete
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, or (ii) if the Lender is not a
“bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or any successor
forms) pursuant to clause (i) above, (x)a certificate substantially in the form
of Exhibit D (any such certificate, a “Section 4.04(b)(ii) Certificate”)
and (y)two accurate and complete original signed copies of Internal Revenue
Service Form W-8BEN (with respect to the portfolio interest exemption) (or
successor form) certifying to such Lender’s entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note.  In addition, each Lender agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, such Lender will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of any income tax treaty), or Form W-8BEN (with respect to the portfolio
interest exemption) and a Section 4.04(b)(ii) Certificate, as the case may
be, and such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement and
any Note, or such Lender shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Lender shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b).  Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence,
(x)the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or similar taxes imposed by the United States
(or any political subdivision or taxing authority thereof or therein) from
interest, Fees or other amounts payable hereunder for the account of any Lender
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Lender has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction
or withholding and (y)the Borrower shall not be obligated pursuant to
Section 4.04(a) to gross-up payments to be made to a Lender in respect of
income or similar taxes imposed by the United States if (I) such Lender has not
provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case
of a payment, other than interest, to a Lender described in clause (ii) above,
to the extent that such forms do not establish a complete exemption from
withholding of such taxes. 
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in
Section 13.04(b), the Borrower agrees to pay any additional amounts and to
indemnify each Lender in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any

 

29

 

changes that are effective
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar taxes.

 

SECTION 5.  Conditions Precedent to
Credit Events on the Initial Borrowing Date.  The obligation of each Lender to make Loans,
and the obligation of each Issuing Lender to issue Letters of Credit, on the
Initial Borrowing Date, is subject at the time of the making of such Loans or
the issuance of such Letters of Credit to the satisfaction of the following
conditions:

 

5.01. 
Effective Date; Notes.  On or prior to the Initial Borrowing Date,
(i) the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each of the Lenders
that has requested same the appropriate Term Note and/or Revolving Note
executed by the Borrower and, if requested by the Swingline Lender, the
Swingline Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.

 

5.02. 
Officer’s Certificate.  On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Borrower by the Chief Executive
Officer, the Chief Financial Officer, the President or the Treasurer of the
Borrower, certifying on behalf of the Borrower that all of the conditions in
Sections 5.06, 5.07, 5.08, 5.09 and 6A.01 have been satisfied on such date.

 

5.03. 
Opinions of Counsel.  On the Initial Borrowing Date, the
Administrative Agent shall have received (i) from Hogan & Hartson L.L.P.,
counsel to the Credit Parties, an opinion addressed to the Administrative
Agent, the Collateral Agent and each of the Lenders and dated the Initial
Borrowing Date covering the matters set forth in Exhibit E-1 and such other
matters incident to the transactions contemplated herein as the Administrative
Agent may reasonably request and (ii) from Wyatt, Tarrant & Combs LLP,
counsel to Duratek Services, Inc., a Tennessee corporation, an opinion
addressed to the Administrative Agent, the Collateral Agent and each of the
Lenders and dated the Initial Borrowing Date covering the matters set forth in
Exhibit E-2 and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request.

 

5.04. 
Corporate Documents; Proceedings;
etc.(a)  On the Initial Borrowing
Date, the Administrative Agent shall have received a certificate from each
Credit Party, dated the Initial Borrowing Date, signed by the Chief Executive
Officer, the Chief Financial Officer, the President or the Treasurer of such
Credit Party, and attested to by the Secretary or any Assistant Secretary of
such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate or articles of incorporation and
by-laws (or equivalent organizational documents), as applicable, of such Credit
Party and the resolutions of such Credit Party referred to in such certificate,
and each of the foregoing shall be satisfactory in form and substance to the
Administrative Agent.

 

(b)           On the Initial
Borrowing Date, all corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be satisfactory in form and substance to
the Administrative

 

30

 

Agent, and the Administrative
Agent shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate, limited
liability company or governmental authorities.

 

5.05. 
Employee Benefit Plans;
Shareholders’ Agreements; Management Agreements; Employment Agreements;
Non-Compete Agreements; Collective Bargaining Agreements; Tax Sharing
Agreements; Existing Indebtedness Agreements; Affiliate Contracts; Material
Contracts.  On or prior to the
Initial Borrowing Date, there shall have been delivered or made available to
the Administrative Agent true and correct copies of the following documents:

 

(i)            all
Plans (and for each Plan that is required to file an annual report on Internal
Revenue Service Form 5500-series, a copy of the most recent such report
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a “single-employer plan,”
as defined in Section 4001(a)(15) of ERISA, the most recently prepared
actuarial valuation therefor) and any other “employee benefit plans,” as
defined in Section 3(3) of ERISA, and any other material agreements, plans
or arrangements, with or for the benefit of current or former employees of the
Borrower or any of its Subsidiaries or ERISA Affiliates (provided that
the foregoing shall apply in the case of any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, only to the extent that any document
described therein is in the possession of the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate, or reasonably available thereto from the
sponsor or trustee of any such Plan) (collectively, the “Employee Benefits
Plans”);

 

(ii)           all
agreements entered into by the Borrower or any of its Subsidiaries governing
the terms and relative rights of its Equity Interests and any agreements
entered into by its shareholders relating to any such entity with respect to
its Equity Interests  to which the
Borrower or any of its Subsidiaries is a party (collectively, the “Shareholders’
Agreements”);

 

(iii)          all
material agreements with members of, or with respect to, the management of the
Borrower or any of its Subsidiaries (collectively, the “Management
Agreements”);

 

(iv)          all
material employment agreements entered into by the Borrower or any of its
Subsidiaries (collectively, the “Employment Agreements”);

 

(v)           all
non-compete agreements entered into by the Borrower or any of its Subsidiaries
which restrict the activities of the Borrower or any of its Subsidiaries
(collectively, the “Non-Compete Agreements”);

 

31

 

(vi)          all
collective bargaining agreements applying or relating to any employee of the
Borrower or any of any of its Subsidiaries (collectively, the “Collective
Bargaining Agreements”);

 

(vii)         all
tax sharing, tax allocation and other similar agreements entered into by the
Borrower or any of its Subsidiaries (collectively, the “Tax Sharing
Agreements”);

 

(viii)        all
agreements evidencing or relating to Indebtedness of the Borrower or any of its
Subsidiaries which is to remain outstanding after giving effect to the
Transaction (the “Existing Indebtedness Agreements”);

 

(ix)           all
material contracts, agreements or understandings entered into between the
Borrower or any of its Subsidiaries on the one hand, and any Person (other than
the Borrower and its Subsidiaries) who is an Affiliate of the Borrower or any
of its Subsidiaries, on the other hand (collectively, the “Affiliate
Contracts”); and

 

(x)            all
material contracts and licenses of the Borrower or any of its Subsidiaries that
are to remain in effect after giving effect to the consummation of the
Transaction (collectively, the “Material Contracts”);

 

all of which Employee Benefit
Plans, Shareholders’ Agreements, Management Agreements, Employment Agreements,
Non-Compete Agreements, Collective Bargaining Agreements, Tax Sharing
Agreements, Existing Indebtedness Agreements, Affiliate Contracts and Material
Contracts shall be in form and substance satisfactory to the Administrative
Agent and shall be in full force and effect on the Initial Borrowing Date.

 

5.06. 
Existing Preferred Stock
Redemption.  On the Initial
Borrowing Date, (x) the Borrower shall have repurchased or redeemed, for not
more than $49,175,794 in aggregate cash consideration (exclusive of accrued and
unpaid dividends thereon), at least 151,467 shares of outstanding Existing
Preferred Stock, (y) concurrently with such repurchase or redemption of such
outstanding Existing Preferred Stock, accrued and unpaid preferred dividends of
not more than $2,800,000 in the aggregate shall be paid to the holders of all
Existing Preferred Stock (and not just the portion being repurchased or
redeemed pursuant to this Section 5.06) and (z) all outstanding Existing
Preferred Stock so repurchased or redeemed shall be authorized but unissued
shares of preferred stock generally of the Borrower (as opposed to being shares
of Existing Preferred Stock) (the transactions described in preceding clauses
(x), (y) and (z) of this Section 5.06 are collectively referred to as the
“Existing Preferred Stock Redemption”).

 

5.07. 
Refinancing.  On or prior to the Initial Borrowing Date, the total commitments
pursuant to the Existing Credit Agreement shall have been terminated, and all
loans and notes with respect thereto shall have been repaid in full (together
with interest thereon), all letters of credit issued thereunder (except for
letters of credit that are supported by a Letter of Credit) shall have been
terminated and all other amounts owing pursuant to the Existing Credit Agreement
shall have been repaid in full.  The
creditors in respect of the Existing Credit Agreement shall have terminated and
released all security interests in and Liens on the assets of the Borrower and
its Subsidiaries created pursuant to the security documentation relating to the
Existing Credit Agreement, and such creditors shall have returned all capital
stock pledged under

 

32

 

the Existing Credit Agreement
to the Borrower, and the Administrative Agent shall have received evidence, in
form and substance reasonably satisfactory to it, that the matters set forth in
this Section 5.07 have been satisfied as of the Initial Borrowing Date.

 

5.08. 
Adverse Change, Approvals.  (a) 
On or prior to the Initial Borrowing Date, nothing shall have occurred
(and neither the Administrative Agent nor any Lender shall have become aware of
any facts or conditions not previously known) which the Administrative Agent or
the Required Lenders shall determine, either individually or in the aggregate,
has had, or could reasonably be expected to have, (i) a Material Adverse Effect
or (ii) a material adverse effect on the Transaction.

 

(b)           On or prior to the
Initial Borrowing Date, all necessary governmental (domestic and foreign) and
third party approvals and/or consents in connection with the Transaction, the
other transactions contemplated hereby and the granting of Liens under the
Credit Documents shall have been obtained and remain in effect, and all
applicable waiting periods with respect thereto shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the Transaction
or the other transactions contemplated by the Credit Documents or otherwise
referred to herein or therein.  On the
Initial Borrowing Date, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Transaction or the other transactions contemplated by the
Credit Documents.

 

5.09. 
Litigation.  On the Initial Borrowing Date, there shall be no actions, suits
or proceedings pending or threatened (i) with respect to the Transaction, this
Agreement or any other Credit Document or (ii) which the Administrative Agent
or the Required Lenders shall determine, either individually or in the
aggregate, has had, or could reasonably be expected to have, a Material Adverse
Effect.

 

5.10. 
Subsidiaries Guaranty.  On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit G (as amended, modified or
supplemented from time to time, the “Subsidiaries Guaranty”), and the
Subsidiaries Guaranty shall be in full force and effect.

 

5.11. 
Pledge Agreement.  On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Pledge Agreement
in the form of Exhibit H (as amended, modified or supplemented from time to
time, the “Pledge Agreement”) and shall have delivered to the Collateral
Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any,
referred to therein and then owned by such Credit Party, (x) endorsed in blank
in the case of promissory notes constituting Pledge Agreement Collateral and
(y) together with executed and undated endorsements for transfer in the case of
Equity Interests constituting certificated Pledge Agreement Collateral, along
with evidence that all other actions necessary or, in the reasonable opinion of
the Collateral Agent, desirable, to perfect the security interests purported to
be created by the Pledge Agreement have been taken and the Pledge Agreement
shall be in full force and effect.

 

33

 

5.12. 
Security Agreement.  On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Security Agreement
in the form of Exhibit I (as amended, modified or supplemented from time to
time, the “Security Agreement”) covering all of such Credit Party’s
Security Agreement Collateral, together with:

 

(i)            proper
financing statements (Form UCC-1 or the equivalent) fully executed for filing
under the UCC or other appropriate filing offices of each jurisdiction as may
be necessary or, in the reasonable opinion of the Collateral Agent, desirable,
to perfect the security interests purported to be created by the Security Agreement;

 

(ii)           certified
copies of requests for information or copies (Form UCC-11), or equivalent
reports as of a recent date, listing all effective financing statements that
name the Borrower or any of its Subsidiaries as debtor and that are filed in
the jurisdictions referred to in clause (i) above and in such other
jurisdictions in which Collateral is located on the Initial Borrowing Date,
together with copies of such other financing statements that name the Borrower
or any of its Subsidiaries as debtor (none of which shall cover any of the
Collateral except (x)to the extent evidencing Permitted Liens or (y)those in
respect of which the Collateral Agent shall have received termination
statements (Form UCC-3) or such other termination statements as shall be
required by local law fully executed for filing);

 

(iii)          evidence
of the completion of all other recordings and filings of, or with respect to,
the Security Agreement as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect the security interests intended to be
created by the Security Agreement;

 

(iv)          to
the extent required by the Security Agreement, executed Control Agreements in
respect of any Deposit Account maintained by any Credit Party in the United
States on the Initial Borrowing Date; and

 

(v)           evidence
that all other actions necessary or, in the opinion of the Collateral Agent,
desirable (including the receipt of the respective control agreements referred
to in the Security Agreement) to perfect and protect the security interests
purported to be created by the Security Agreement have been taken, and the
Security Agreement shall be in full force and effect.

 

5.13. 
Intercompany Subordination
Agreement.  On the Initial Borrowing
Date, the Borrower and each of its Subsidiaries shall have duly authorized,
executed and delivered the Intercompany Subordination Agreement substantially
in the form of Exhibit J (as modified, amended or supplemented from time to
time, the “Intercompany Subordination Agreement”), and the Intercompany
Subordination Agreement shall be in full force and effect.

 

5.14. 
Minimum Ratings Condition.  On or prior to the Initial Borrowing Date,
the Administrative Agent shall have received evidence that the Borrower has
obtained long-term senior secured debt ratings in respect of the Loans of BB-
or better from S&P and B1 or better from Moody’s, each of which ratings
shall remain in effect on the Initial Borrowing Date.

 

34

 

5.15. 
Business Plan; Financial
Statements; Pro Forma Balance Sheet; Projections.  (a)  On or prior to the
Initial Borrowing Date, the Administrative Agent shall have received (i)a
business plan for the Borrower and its Subsidiaries for the years 2003 through
2009, together with a written analysis of such business plan, both in form and
substance satisfactory to the Administrative Agent and the Required Lenders,
(ii)true and correct copies of the historical financial statements, the pro
forma financial statements and the Projections referred to in
Sections7.05(a) and (d), which historical financial statements, pro forma
financial statements and Projections shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders and (iii)a
certificate of the Chief Financial Officer or Treasurer of the Borrower dated
the Initial Borrowing Date and certifying, as of the Initial Borrowing Date,
(x) as to the accuracy of the Projections as of the Initial Borrowing Date or,
in the event that there have been changes to such Projections, describing any
changes thereto in reasonable detail (which changes shall be reasonably
acceptable to the Administrative Agent and the Required Lenders) and (y) that
the pro forma financial statements referred to in Section 7.05(a)
accurately present the pro forma financial position of the Borrower and
its Subsidiaries, as of September 28, 2003, in accordance with generally
accepted accounting principles or, in the event that there have been changes to
such pro forma financial statements, describing any changes thereto in
reasonable detail (which changes shall be reasonably acceptable to the
Administrative Agent and the Required Lenders).

 

(b)           On the Initial
Borrowing Date, the Administrative Agent and the Required Lenders shall be
satisfied that the historical financial statements referred to in
Section 5.15(a) in respect of the Borrower’s fiscal quarter ended
September 28, 2003 and the Projections (after giving effect to any changes
thereto as set forth in the certificate delivered pursuant to
Section 5.15(a)(iii)), in each case, do not, either individually or in the
aggregate, differ from the projected results of operations for the related
periods contained in the Projections in any respect that is materially adverse
to the Lenders.

 

5.16. 
Solvency Certificate; Insurance
Certificates.  On the Initial
Borrowing Date, the Administrative Agent shall have received:

 

(i)            a
solvency certificate substantially in the form of Exhibit K (appropriately
completed) from the Chief Financial Officer or Treasurer of the Borrower, dated
the Initial Borrowing Date, and supporting the conclusion that, after giving
effect to the Transaction and the incurrence of all financings contemplated
herein, the Borrower and its Subsidiaries (on a consolidated basis) are not
insolvent and will not be rendered insolvent by the indebtedness incurred in
connection herewith, will not be left with unreasonably small capital with
which to engage in its or their respective businesses and will not have
incurred debts beyond its or their ability to pay such debts as they mature and
become due; and

 

(ii)           certificates
of insurance complying with the requirements of Section 8.03 for the
business and properties of the Borrower and its Subsidiaries, in form and
substance reasonably satisfactory to the Administrative Agent and naming the
Collateral Agent as an additional insured and/or as loss payee, and stating
that such insurance shall not be canceled without at least 30 days’ prior
written notice by the insurer to the Collateral Agent.

 

35

 

5.17. 
Fees, etc. 
On the Initial Borrowing Date, the Borrower shall have paid to the
Administrative Agent and each Lender all costs, fees and expenses (including,
without limitation, legal fees and expenses) and other compensation
contemplated hereby payable to the Administrative Agent or such Lender to the
extent then due.

 

SECTION 6.

 

SECTION 6A.  Conditions Precedent to All Credit Events.  The obligation of each Lender to make Loans
(including Loans made on the Initial Borrowing Date), and the obligation of
each Issuing Lender to issue Letters of Credit (including Letters of Credit
issued on the Initial Borrowing Date), is subject, at the time of each such
Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:

 

6A.01 
No Default; Representations
and Warranties.  At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).

 

6A.02 
Notice of Borrowing; Letter
of Credit Request.  (a)  Prior to the making of each Loan (other than
a Swingline Loan or a Revolving Loan made pursuant to a Mandatory Borrowing),
the Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03(a). 
Prior to the making of each Swingline Loan, the Swingline Lender shall
have received the notice referred to in Section 1.03(b)(i).

 

(b)           Prior to the
issuance of each Letter of Credit, the Administrative Agent and the respective
Issuing Lender shall have received a Letter of Credit Request meeting the
requirements of Section 2.03(a).

 

6A.03 
Regulation U.  If at any time any Margin Stock is pledged or required to be
pledged pursuant to any Security Document, all actions required to be taken
pursuant to Section 8.18 shall have been taken to the satisfaction of the
Administrative Agent.

 

SECTION 6B.  Special Condition Precedent to Incurrence
of Revolving Loans and Swingline Loans. 
The obligation of each RL Lender to make Revolving Loans and the
Swingline Lender to make Swingline Loans is subject, at the time of each such
making of a Revolving Loan or Swingline Loan, to the satisfaction of the
following condition:

 

6B.01      Limitation on Cash on Hand.  The aggregate amount of cash and Cash
Equivalents owned or held by the Borrower and its Subsidiaries (determined
after giving pro forma effect to the making of each such Revolving Loan
and/or Swingline Loan and the application of proceeds therefrom and from any
other cash and Cash Equivalents on hand (to the extent such proceeds and/or
other cash and Cash Equivalents are actually utilized by the Borrower and/or
any other Subsidiary of the Borrower on the date of the incurrence of the
respective such Revolving Loan and/or Swingline Loan for a permitted purpose
under this

 

36

 

Agreement other than an
investment in Cash Equivalents)) shall not exceed the sum of (I) $10,000,000
plus (II) the aggregate outstanding amount of the Barnwell Obligations at such
time.

 

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and
each of the Lenders that all the conditions specified in Section 5 (with
respect to Credit Events on the Initial Borrowing Date) and in Sections 6A and
6B (with respect to Credit Events on or after the Initial Borrowing Date) and
applicable to such Credit Event are satisfied as of that time.  All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in
Sections 6A and 6B, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts or copies for
each of the Lenders and shall be in form and substance reasonably satisfactory
to the Administrative Agent and the Required Lenders.

 

SECTION 7.  Representations, Warranties and
Agreements.  In order to induce the
Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements, in each case after
giving effect to the Transaction, all of which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans and the
issuance of the Letters of Credit, with the occurrence of each Credit Event on
or after the Initial Borrowing Date being deemed to constitute a representation
and warranty that the matters specified in this Section 7 are true and
correct in all material respects on and as of the Initial Borrowing Date and on
the date of each such other Credit Event (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).

 

7.01. 
Organizational Status.  Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where
the ownership, leasing or operation of its property or the conduct of its
business requires such qualifications except for failures to be so qualified
which, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

7.02. 
Power and Authority.  Each Credit Party has the corporate,
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents.  Each Credit Party has duly executed
and delivered each of the Credit Documents to which it is party, and each of
such Credit Documents constitutes its legal, valid and binding obligation
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar

 

37

 

laws generally affecting
creditors’ rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).

 

7.03. 
No Violation.  Neither the execution, delivery or performance by any Credit
Party of the Credit Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of any material indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, in each case to which any Credit Party or any of its
Subsidiaries is a party or by which it or any its property or assets is bound
or to which it may be subject, or (iii) will violate any provision of the
certificate or articles of incorporation, certificate of formation, limited
liability company agreement or by-laws (or equivalent organizational
documents), as applicable, of any Credit Party or any of its Subsidiaries.

 

7.04. 
Approvals. 
No order, consent, approval, license, authorization or validation of, or
filing, recording or registration with (except for (i) those that have
otherwise been obtained or made on or prior to the Initial Borrowing Date and
which remain in full force and effect on the Initial Borrowing Date and (ii)
filings which are necessary to perfect the security interests created under the
Security Documents (to the extent that such filings are required by the terms
of the respective Security Document or this Agreement), which filings (to the
extent that this representation or warranty is made or deemed made after the
10th day following the Initial Borrowing Date) have been made), or exemption
by, any governmental or public body or authority, or any subdivision thereof,
is required to be obtained or made by, or on behalf of, any Credit Party to
authorize, or is required to be obtained or made by, or on behalf of, any
Credit Party in connection with, (i) the execution, delivery and performance of
any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any such Credit Document.

 

7.05. 
Financial Statements; Financial
Condition; Undisclosed Liabilities; Projections.  (a)  (i) (x) The audited
consolidated balance sheets of the Borrower and its Subsidiaries for each of
the Borrower’s fiscal years ended December 31, 2000, December 31,
2001 and December 31, 2002, respectively, and the related statements of
income, cash flows and retained earnings of the Borrower and its Subsidiaries
for such fiscal years ended on such dates and (y) the unaudited consolidated
balance sheets of the Borrower and its Subsidiaries for the Borrower’s fiscal
quarters ended March 30, 2003, June 29, 2003 and September 28,
2003, respectively, and the related statements of income, cash flows and
retained earnings of the Borrower and its Subsidiaries for such fiscal quarters
ended on such dates, copies of each of which have been furnished to the Lenders
prior to the Initial Borrowing Date, present fairly in all material respects
the consolidated financial position of the Borrower at the dates of such
balance sheets and the consolidated results of the operations of the Borrower
for the periods covered thereby.  All of
the foregoing historical financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied (except, in
the case of the aforementioned quarterly financial statements, for normal
year-end audit adjustments and the absence of notes).

 

38

 

(ii)           The pro forma
consolidated balance sheet of the Borrower and its Subsidiaries as of
September 28, 2003 (after giving effect to the Transaction and the
financing therefor), a copy of which has been furnished to the Lenders prior to
the Initial Borrowing Date, presents fairly in all material respects the pro
forma consolidated financial position of the Borrower and its Subsidiaries
as of September 28, 2003.

 

(b)           On and as of the
Initial Borrowing Date and after giving effect to the Transaction and to all
Indebtedness (including the Loans) being incurred and Liens created by the
Credit Parties in connection therewith (i) the sum of the assets, at a fair
valuation, of the Borrower and its Subsidiaries taken as a whole will exceed
their respective debts, (ii) the Borrower and its Subsidiaries taken as a whole
have not incurred and do not intend to incur, and do not believe that they will
incur, debts beyond their respective ability to pay such debts as such debts
mature, and (iii) the Borrower and its Subsidiaries taken as a whole will have
sufficient capital with which to conduct their respective businesses.  For purposes of this Section 7.05(b),
“debt” means any liability on a claim, and “claim” means (a) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (b) right to an equitable remedy for breach of performance
if such breach gives rise to a payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured. 
The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

 

(c)           Except as fully
disclosed in the financial statements delivered pursuant to
Section 7.05(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, could reasonably be expected to be material to the Borrower or any
of its Subsidiaries.  As of the Initial
Borrowing Date the Borrower does not know of any basis for the assertion
against it or any of its Subsidiaries of any liability or obligation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or referred to in the immediately
preceding sentence which, either individually or in the aggregate, could
reasonably be expected to be material to the Borrower or any of its
Subsidiaries.

 

(d)           The Projections
delivered to the Administrative Agent and the Lenders prior to the Initial
Borrowing Date have been prepared in good faith and are based on reasonable
assumptions, and there are no statements or conclusions in the Projections
which are based upon or include information known to the Borrower to be
misleading in any material respect or which fail to take into account material
information known to the Borrower regarding the matters reported therein.  On the Initial Borrowing Date, the Borrower
believes that the Projections are reasonable and attainable, it being
recognized by the Lenders, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
such differences may be material.

 

39

 

(e)           After giving effect
to the Transaction (but for this purpose assuming that the Transaction and the
related financing had occurred prior to December 31, 2002), since
December 31, 2002, there has been no change in the business, assets,
property, liabilities (fixed or contingent), condition (financial or otherwise)
or operations of the Borrower or any of its Subsidiaries that has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

7.06. 
Litigation.  There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened (i) with respect to
the Transaction except for any such action, suit or proceeding whereby the
Borrower and/or any of its Subsidiaries seeks to assert any rights against any
other party to the Transaction, (ii) with respect to any Credit Document or
(iii) that could reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect.

 

7.07. 
True and Complete Disclosure.  All factual information (taken as a whole)
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender (including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any fact
necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.

 

7.08. 
Use of Proceeds; Margin
Regulations.  (a)  All proceeds of the Term Loans will be used
by the Borrower to finance, in part, the Refinancing and the Existing Preferred
Stock Redemption and to pay the fees and expenses relating to the Transaction; provided
that up to $6,500,000 of proceeds of Term Loans in the aggregate shall be
permitted to be held as cash on hand of the Borrower to be used for the working
capital and general corporate purposes of the Borrower and its Subsidiaries.

 

(b)           All proceeds of the
Revolving Loans and the Swingline Loans will be used for the working capital
and general corporate purposes of the Borrower and its Subsidiaries; provided
that, up to, but no more than, $2,000,000 of Revolving Loans and Swingline
Loans in the aggregate may be used for the purposes described in clause (a) of
this Section 7.08.

 

(c)           Except as otherwise
permitted by Section 9.03(iii), no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of any Loan, nor the use
of the proceeds thereof, nor the occurrence of any other Credit Event, will
violate or be inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

 

(d)           Except as otherwise
permitted by Section 8.18, the fair market value of all Margin Stock (if
any) owned by the Borrower and its Subsidiaries (other than the capital stock
of the Borrower held in treasury) does not exceed $2,000,000.  Except as otherwise permitted by

 

40

 

Section 8.18, at the time
of each Credit Event and both before and after giving thereto, not more than
25% of the value of the assets of the Borrower and its Subsidiaries taken as a
whole (including all capital stock of the Borrower held in treasury) will
constitute Margin Stock.

 

7.09. 
Tax Returns and Payments.  Each of the Borrower and each of its
Subsidiaries has timely filed or caused to be timely filed with the appropriate
taxing authority all federal and state income tax returns and all other
material tax returns, domestic and foreign (the “Returns”) required to
be filed by, or with respect to the income, properties or operations of, the
Borrower and its Subsidiaries.  The
Returns accurately reflect in all material respects all liability for taxes of
the Borrower and its Subsidiaries for the periods covered thereby.  Each of the Borrower and each of its
Subsidiaries has paid all taxes and assessments payable by it which have become
due, other than those that are being contested in good faith and adequately
disclosed and fully provided for on the financial statements of the Borrower
and its Subsidiaries in accordance with generally accepted accounting
principles.  There is no action, suit,
proceeding, investigation, audit or claim now pending or, to the best knowledge
of the Borrower, threatened by any authority regarding any taxes relating to
the Borrower or any of its Subsidiaries that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.  As of the Initial Borrowing Date, neither
the Borrower nor any of its Subsidiaries has entered into an agreement or
waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of the
Borrower or any of its Subsidiaries, or is aware of any circumstances that
would cause the taxable years or other taxable periods of the Borrower or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations, provided, however, that the Borrower has waived the
statute of limitations as to years 2000 and 2001 for an existing Internal
Revenue Service audit.  Neither the
Borrower nor any of its Subsidiaries has incurred, nor will any of them incur,
any material tax liability in connection with the Transaction or any other
transactions contemplated hereby (it being understood that the representation
contained in this sentence does not cover any future tax liabilities of the
Borrower or any of its Subsidiaries arising as a result of the operation of
their businesses in the ordinary course of business).

 

7.10. 
Compliance with ERISA.  Schedule III sets forth, as of the
Initial Borrowing Date, the name of each Plan existing on the Initial Borrowing
Date.  Each Plan (and each related
trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including, without limitation, ERISA and the
Code; each Plan (and each related trust, if any) which is intended to be
qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has
occurred; neither the Borrower nor any of its Subsidiaries or ERISA Affiliates
has ever maintained or contributed to, or had any obligation to maintain or
contribute to (or borne any liability with respect to) any Foreign Pension
Plan; no Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan
has an Unfunded Current Liability which, when added to the aggregate amount of
Unfunded Current Liabilities with respect to all other Plans, exceeds $500,000;
no Plan which is subject to Section 412 of the Code or Section 302 of
ERISA has an accumulated funding deficiency, within the meaning of such
Sections of the Code or ERISA, or has applied for or received a waiver of an
accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304
of ERISA; all contributions required to be made with

 

41

 

respect to a Plan have been
timely made; neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects
to incur any such material liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring
a material liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened except as would not result in a material liability to the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate to all Plans which are multiemployer plans
(as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $750,000; each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered
employees or former employees of the Borrower, any Subsidiary of the Borrower,
or any ERISA Affiliate has at all times been operated in compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B
of the Code except to the extent that any noncompliance would not result in a
material liability to the Borrower, any Subsidiary of the Borrower, or any
ERISA Affiliate; each group health plan (as defined in 45 Code of Federal
Regulations Section 160.103) which covers or has covered employees or
former employees of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate, has at all times been operated in compliance with the provisions of
the Health Insurance Portability and Accountability Act of 1996 and the
regulations promulgated thereunder except to the extent that any noncompliance
would not result in a material liability to the Borrower, any Subsidiary of the
Borrower, or any ERISA Affiliate; no lien imposed under the Code or ERISA on
the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan with respect to
an amount that does not exceed $100,000; and the Borrower and its Subsidiaries
may cease contributions to or terminate any employee benefit plan maintained by
any of them without incurring any material liability.

 

7.11. 
The Security Documents.  (a) 
The provisions of the Security Agreement are effective to create in
favor of the Collateral Agent for the benefit of the Secured Creditors a legal,
valid and enforceable security interest in all right, title and interest of the
Credit Parties in the Security Agreement Collateral described therein, and the
Collateral Agent, for the benefit of the Secured Creditors, has a fully
perfected security interest in all right, title and interest in all of the
Security Agreement Collateral described therein, subject to no other Liens
other than Permitted Liens.  The
recordation of (x) the Grant of Security Interest in U.S. Patents, if
applicable, and (y) the Grant of Security Interest in U.S. Trademarks, if
applicable, in the respective form attached to the Security Agreement, in each
case in the United States Patent and Trademark Office, together with filings on
Form UCC-1 made pursuant to the Security Agreement, will create, as may be
perfected by such filings and recordation, a perfected security interest in the
United States trademarks and patents covered by the Security Agreement, and the

 

42

 

recordation of the Grant of
Security Interest in U.S. Copyrights, if applicable, in the form attached to
the Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, as
may be perfected by such filings and recordation, a perfected security interest
in the United States copyrights covered by the Security Agreement.

 

(b)           Insofar as the UCC
applies thereto, the security interests created under the Pledge Agreement in
favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors, constitute perfected security interests in the Pledge Agreement
Collateral described in the Pledge Agreement, subject to no security interests
of any other Person.  No filings or
recordings are required in order to perfect (or maintain the perfection or
priority of) the security interests created in the Pledge Agreement Collateral
under the Pledge Agreement other than with respect to that portion of the
Pledge Agreement Collateral constituting a “general intangible” under the UCC.

 

7.12. 
Properties.  All Real Property owned or leased by the Borrower or any of its
Subsidiaries as of the Initial Borrowing Date, and the nature of the interest
therein, is correctly set forth in Schedule IV.  Each of the Borrower and each of its Subsidiaries has good and
indefeasible title to all material properties owned by it, including all
material property reflected in the most recent historical balance sheets
referred to in Section 7.05(a) (except as sold or otherwise disposed of
since the date of such balance sheet in the ordinary course of business or as permitted
by the terms of this Agreement), free and clear of all Liens, other than
Permitted Liens.

 

7.13. 
Capitalization.  On the Initial Borrowing Date and
immediately after giving effect to the Transaction, the authorized capital
stock of the Borrower shall consist of (i) 35,000,000 shares of common stock,
$0.01 par value per share (such authorized shares of common stock, together
with any subsequently authorized shares of common stock of the Borrower, the “Borrower
Common Stock”), 13,594,362 of which shares shall be issued and outstanding
and (ii) 6,005 shares of Existing Preferred Stock, all of which shares shall be
issued and outstanding.  All such
outstanding shares of Borrower Common Stock have been duly and validly issued,
are fully paid and nonassessable and have been issued free of preemptive
rights.  The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character relating
to, its capital stock, except for (x) options, rights or warrants that have
been issued or may be hereafter be issued from time to time to purchase shares
of Borrower Common Stock and/or Qualified Preferred Stock and (y) shares of
Existing Preferred Stock and/or Qualified Preferred Stock that pursuant to the
terms thereof are convertible into shares of Borrower Common Stock.

 

7.14. 
Subsidiaries.  On and as of the Initial Borrowing Date, the
Borrower has no Subsidiaries other than those Subsidiaries listed on
Schedule V.  Schedule V sets
forth, as of the Initial Borrowing Date, the percentage ownership (direct and
indirect) of the Borrower in each class of capital stock or other Equity
Interests of each of its Subsidiaries and also identifies the direct owner
thereof.  All outstanding shares of
capital stock or other Equity Interests of each Subsidiary of the Borrower have
been duly and validly issued, are fully paid and non-assessable

 

43

 

and have been issued free of
preemptive rights.  No Subsidiary of the
Borrower has outstanding any securities convertible into or exchangeable for
its capital stock or other Equity Interests or outstanding any right to
subscribe for or to purchase, or any options or warrants for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of or any
calls, commitments or claims of any character relating to, its capital stock or
other Equity Interests or any stock appreciation or similar rights.

 

7.15. 
Compliance with Statutes, etc.  Each of the Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

7.16. 
Investment Company Act.  Neither the Borrower nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

 

7.17. 
Public Utility Holdings Company
Act.  Neither the Borrower nor any
of its Subsidiaries is a “holding company,” or a “subsidiary company” of a
“holding company,” or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company” within the meaning of the Public Utility
Holdings Company Act of 1935, as amended.

 

7.18. 
Environmental Matters.  (a) 
Each of the Borrower and each of its Subsidiaries is in compliance with
all applicable Environmental Laws and has obtained and is in compliance with
all permits required under such Environmental Laws.  There are no pending or, to the knowledge of the Borrower,
threatened Environmental Claims against the Borrower or any of its Subsidiaries
or any Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries (including any such claim arising out of the ownership, lease or
operation by the Borrower or any of its Subsidiaries of any Real Property
formerly owned, leased or operated by the Borrower or any of its
Subsidiaries).  There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of the Borrower or any of its Subsidiaries, or any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries (including
any Real Property formerly owned, leased or operated by the Borrower or any of
its Subsidiaries that could be reasonably expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property currently owned, leased or operated by the Borrower or any of its
Subsidiaries or (ii) to cause any Real Property currently owned, leased or
operated by the Borrower or any of its Subsidiaries to be subject to any
restrictions on the ownership, lease, occupancy or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.

 

(b)           Hazardous Materials
have not at any time been generated, used, treated or stored on, or transported
to or from, or Released on or from, any Real Property owned, leased or operated
by the Borrower or any of its Subsidiaries or, to the actual knowledge of the
Borrower (without any duty to investigate), any other property, where such
generation, use, treatment,

 

44

 

storage, transportation or
Release has violated or could be reasonably expected to violate any applicable
Environmental Law or give rise to an Environmental Claim.

 

(c)           Notwithstanding
anything to the contrary in this Section 7.18, the representations and
warranties made in this Section 7.18 shall be untrue only if the effect of
any or all conditions, violations, claims, restrictions, failures and
noncompliances of the types described above could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

7.19. 
Labor Relations.  Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect.  There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the knowledge of the Borrower, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii)no union representation question exists with respect to
the employees of the Borrower or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a
Material Adverse Effect.

 

7.20. 
Intellectual Property, etc.  Each of the Borrower and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, permits,
domain names, service marks, trade names, copyrights, licenses, franchises,
inventions, trade secrets, proprietary information and know-how of any type, whether
or not written (including, but not limited to, rights in computer programs and
databases) and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases, licenses and other rights of whatever
nature, necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain which, as
the case may be, could reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect.

 

7.21. 
Indebtedness.  Schedule VI sets forth a list of all Indebtedness (including
Contingent Obligations) of the Borrower and its Subsidiaries as of the Initial
Borrowing Date (after giving effect to the Refinancing, but excluding the Loans
and the Letters of Credit, the “Existing Indebtedness”) and which is to
remain outstanding after giving effect to the Transaction, in each case showing
the aggregate principal amount thereof and the name of the respective borrower
and any Credit Party or any of its Subsidiaries which directly or indirectly
guarantees such debt.

 

7.22. 
Insurance. 
Schedule VII sets forth a list of all insurance maintained by the
Borrower and its Subsidiaries as of the Initial Borrowing Date, with the
amounts insured (and any deductibles) set forth therein.

 

7.23. 
Legal Names; Type of Organization
(and Whether a Registered Organization); Jurisdiction of Organization; etc.  Schedule VIII sets forth, as of the
Initial

 

45

 

Borrowing Date, the exact legal name of each Credit Party, the type of
organization of each Credit Party, whether each Credit Party is a registered
organization, the jurisdiction of organization of each Credit Party, the
address of the chief executive office of each Credit Party and the
organizational identification number (if any) of each Credit Party, in each
case, after giving effect to the Transaction. 
To the extent that any Credit Party does not have an organizational
identification number on the Initial Borrowing Date and later obtains one, such
Credit Party shall promptly thereafter notify the Collateral Agent of such
organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted
hereby fully perfected and in full force and effect.

 

7.24.  Subordination.  After the issuance thereof, the
subordination provisions contained in any Additional Permitted Subordinated
Debt Documents are enforceable against each Credit Party thereto and the
holders thereof, and all Obligations hereunder and under the other Credit
Documents are within the definitions of “Designated Senior Indebtedness” and
“Senior Indebtedness” (or any similar terms) included in such subordination
provisions.

 

SECTION 8.  Affirmative Covenants.  The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
each case together with interest thereon), Fees and all other Obligations
(other than indemnities described in Section 13.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:

 

8.01.  Information
Covenants.  The Borrower will
furnish to each Lender:

 

(a)           Quarterly Financial Statements.  Within 45 days after the close of each of
the first three quarterly accounting periods in each fiscal year of the
Borrower (or, if such date is earlier, on the date of any required public
filing thereof with the SEC), (i) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarterly accounting period
and the related consolidated statement of income and statement of cash flows
for such quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the corresponding quarterly accounting period
in the prior fiscal year, all of which shall be certified by the Chief
Financial Officer or Treasurer of the Borrower that they fairly present in all
material respects in accordance with generally accepted accounting principles
the financial condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes, and
(ii) management’s discussion and analysis of the important operational and
financial developments during such quarterly accounting period.

 

(b)           Annual Financial Statements.  Within 90 days after the close of each
fiscal year of the Borrower (or, if such date is earlier, on the date of any
required public filing thereof with the SEC), (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income and retained earnings and
statement of cash flows for such fiscal year setting forth (commencing with the
Borrower’s fiscal year ending December31, 2003) comparative figures for the
preceding fiscal year, certified by KPMG LLP or such other independent
certified public accountants of recognized national

 

46

 

standing reasonably acceptable to the Administrative Agent, together
with a report of such accounting firm that is not qualified with respect to (x)
scope limitations imposed by the Borrower or any of its Subsidiaries, (y)
accounting principles followed by the Borrower or any of its Subsidiaries not
in accordance with generally accepted accounting principles or (z) whether the
Borrower and its Subsidiaries, taken as a whole, are a going concern, and (ii)
management’s discussion and analysis of the important operational and financial
developments during such fiscal year.

 

(c)           Management Letters.  Promptly after the Borrower’s or any of its
Subsidiaries’ receipt thereof, a copy of any “management letter” received from
its certified public accountants and management’s response thereto.

 

(d)           Annual Business Plans and Budgets.  No later than 30 days following the first
day of each fiscal year of the Borrower, (i) a business plan of the Borrower
and its Subsidiaries in form and scope reasonably satisfactory to the
Administrative Agent for such fiscal year and (ii) a budget in form and scope
reasonably satisfactory to the Administrative Agent (including budgeted
statements of income, sources and uses of cash and balance sheets for the
Borrower and its Subsidiaries on a consolidated basis) for each of the four
fiscal quarters of such fiscal year prepared in detail setting forth, with
appropriate discussion, the principal assumptions upon which such budget is
based, which budgets shall be, in each case, certified by the Chief Financial
Officer or Treasurer of the Borrower that, to the best of such officer’s
knowledge, such budgets are good faith estimates of the projected financial
condition and results of operations of the Borrower and its Subsidiaries for
the periods covered thereby.

 

(e)           Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Sections 8.01(a) and (b), a compliance certificate
from the Chief Financial Officer or Treasurer of the Borrower in the form of
Exhibit L certifying on behalf of the Borrower that, to such officer’s
knowledge after due inquiry, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof, which certificate shall (i) set forth
in reasonable detail the calculations required to establish whether the
Borrower and its Subsidiaries were in compliance with the provisions of
Sections 4.02(c), 4.02(e), 4.02(g), 8.15, 8.17(a)(vii)(B), 8.18, 9.01(x),
9.01(xii) (y), 9.01(xv), 9.02(iv), 9.02(xiii), 9.03(iii), 9.03 (iv), 9.03(vi),
9.04(v), 9.04(vi), 9.04(vii), 9.04(ix), 9.04(x), 9.04(xii), 9.05(v), 9.05(vii),
9.05(viii), 9.05(xiii) and 9.07 through 9.11, inclusive, at the end of such
fiscal quarter or year, as the case may be, (ii) if delivered with the
financial statements required by Section 8.01(b) (commencing with the
Borrower’s fiscal year ending December 31, 2004), set forth in reasonable
detail the amount of (and the calculations required to establish the amount of)
Excess Cash Flow for the respective Excess Cash Payment Period, (iii) set
forth, commencing with the certificate to be delivered in respect of the
Borrower’s fiscal year ending December 31, 2004, the amount of the
Cumulative Retained Excess Cash Amount at the end of such fiscal quarter or
year, as the case may be, and (iv) (A) certify that there have been no changes
to Schedule VIII, Annexes A through F, and Annexes H through K, in each
case of the Security Agreement and Annexes A through G of the Pledge Agreement,
in each case since the Initial Borrowing Date or (B) to the extent that such
information is no longer accurate and complete as of such date, list in
reasonable detail all information necessary to make such Schedules and Annexes
referred to in the preceding clause (A) accurate and complete (at which time
such Schedules and Annexes, as the case may

 

47

 

be, shall be deemed modified to reflect such information) and
certifying that the Borrower and the other Credit Parties have otherwise taken
all actions required to be taken by them pursuant to such Security Documents in
connections with any such changes.

 

(f)            Notice of Default, Litigation and
Material Adverse Effect.  Promptly,
and in any event within five Business Days after any senior or executive
officer of the Borrower or any of its Subsidiaries obtains knowledge thereof,
notice of (i) the occurrence of any event which constitutes a Default or an
Event of Default, (ii) any litigation or governmental investigation or
proceeding pending against the Borrower or any of its Subsidiaries (x) which,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or (y) with respect to any Credit Document, or (iii)
any other event, change or circumstance that has had, or could reasonably be
expected to have, a Material Adverse Effect.

 

(g)           Other Reports and Filings.  Promptly after the filing or delivery thereof,
copies of all financial information, proxy materials and reports, if any, which
the Borrower or any of its Subsidiaries shall publicly file with the Securities
and Exchange Commission or any successor thereto (the “SEC”) or deliver
to holders (or any trustee, agent or other representative therefor) of its
material Indebtedness (including, without limitation, any issue of Additional
Permitted Subordinated Debt) pursuant to the terms of the documentation
governing such Indebtedness.

 

(h)           Environmental Matters.  (a) 
Promptly after any senior or executive officer of the Borrower or any of
its Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters to the extent that such environmental matters,
either individually or when aggregated with all other such environmental
matters, could reasonably be expected to have a Material Adverse Effect:

 

(i)            any pending or
threatened Environmental Claim against the Borrower or any of its Subsidiaries
or any Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries;

 

(ii)           any condition or
occurrence on or arising from any Real Property owned, leased or operated by
the Borrower or any of its Subsidiaries that (a) results in noncompliance by
the Borrower or any of its Subsidiaries with any applicable Environmental Law
or (b) could reasonably be expected to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real Property;

 

(iii)          any condition or
occurrence on any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, lease, occupancy,
use or transferability by the Borrower or any of its Subsidiaries of such Real
Property under any Environmental Law; and

 

(iv)          the taking of any
removal or remedial action in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries as required by any Environmental

 

48

 

Law or any governmental or other
administrative agency; provided that in any event the Borrower shall
deliver to each Lender all notices received by the Borrower or any of its
Subsidiaries from any government or governmental agency under, or pursuant to,
CERCLA which identifies the Borrower or any of its Subsidiaries as potentially
responsible parties for remediation costs or which otherwise notify the
Borrower or any of its Subsidiaries of potential liability under CERCLA.

 

All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Borrower’s or such Subsidiary’s response thereto.

 

(i)            Hazardous Material Processing Facilities.  (i) 
At the time of the opening of any new facility owned or leased by the
Borrower or any of its Subsidiaries at which Hazardous Materials will be
processed for disposal or reclamation, written notice of the existence and
location of such new facility, together with copies of all state inspections
and all environmental audits (internally prepared or otherwise) relating to any
such new facility and (ii) to the extent reasonably requested by the
Administrative Agent from time to time, copies of all updates to state
inspections and environmental audits (internally prepared or otherwise)
received by the Borrower or any of its Subsidiaries to the extent relating to
any facility owned or leased by the Borrower or any of its Subsidiaries at
which Hazardous Materials are processed for disposal or reclamation, provided
that, notwithstanding the foregoing, any such inspection or audit which has not
been prepared by, or at the direction and/or request of, the Borrower or any of
its Subsidiaries, shall not be required to be provided pursuant to clauses (i)
and (ii) of this Section 8.01(i) to the extent that (x) the Borrower or
the relevant Subsidiary of the Borrower does not have access to such inspection
or audit (and such inspection or audit cannot reasonably be made available to
the Borrower or the relevant Subsidiary of the Borrower) or (y) the Borrower or
the relevant Subsidiary are otherwise not permitted to deliver such inspection
or audit to the Administrative Agent.

 

(j)            Other Information.  From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.

 

8.02.  Books, Records
and Inspections; Annual Meetings. 
(a)  The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities.  The Borrower will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Lender to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of account of the
Borrower or such Subsidiary and discuss the affairs, finances and accounts of
the Borrower or such Subsidiary with, and be advised as to the same by, its and
their officers and independent accountants, all upon reasonable prior notice
and at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any such Lender may reasonably request.

 

49

 

(b)           At a date to be mutually agreed upon between
the Administrative Agent and the Borrower occurring on or prior to the 120th
day after the close of each fiscal year of the Borrower, the Borrower will, at
the request of the Administrative Agent, hold a meeting with all of the Lenders
at which meeting will be reviewed the financial results of the Borrower and its
Subsidiaries for the previous fiscal year and the budgets presented for the
current fiscal year of the Borrower.

 

(c)           Following the delivery to the Administrative
Agent of a notice pursuant to clause (i) of Section 8.01(i), the Borrower
will promptly take all actions necessary to facilitate the Administrative Agent
in obtaining a risk portfolio or environmental database report for each such
facility, each of which such portfolio or report shall (x) be obtained at the Borrower’s
expense upon notice of each new facility and (y) be prepared by an entity and
in detail satisfactory to the Administrative Agent.

 

8.03.  Maintenance
of Property; Insurance. 
(a)  The Borrower will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of the Borrower and its Subsidiaries in good working order and
condition, ordinary wear and tear excepted, (ii) maintain with financially
sound and reputable insurance companies insurance on all such property and against
all such risks as is consistent and in accordance with industry practice for
companies similarly situated owning similar properties and engaged in similar
businesses as the Borrower and its Subsidiaries (including, without limitation,
general liability insurance policies and American Nuclear Insurance policies)
and (iii) furnish to the Administrative Agent, upon its request therefor, full
information as to the insurance carried. 
In addition to the requirements of the immediately preceding sentence,
the Borrower will at all times cause insurance of the types described in
Schedule VII to be maintained (with the same scope of coverage as that
described in Schedule VII) at levels which are consistent with their
practices immediately before the Initial Borrowing Date.  Such insurance shall include physical damage
insurance on all real and personal property (whether now owned or hereafter
acquired) on an all risk basis and business interruption insurance.  The provisions of this Section 8.03
shall be deemed supplemental to, but not duplicative of, the provisions of any
Security Documents that require the maintenance of insurance.

 

(b)           The Borrower will, and will cause each of
its Subsidiaries to, at all times keep its property insured in favor of the
Collateral Agent, and all policies or certificates (or certified copies
thereof) with respect to all property insurance and general liability and
excess liability insurance (i) shall be endorsed to the Collateral Agent’s
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured, as applicable), (ii) shall state that such insurance policies shall
not be canceled without at least 30 days’ prior written notice thereof (or 10
days’ prior written notice thereof in the case of non-payment of premium) by
the respective insurer to the Collateral Agent, and (iii) shall, in the case of
such certificates, be deposited with the Collateral Agent (provided that
such policies shall also be required to be deposited with the Collateral Agent
upon the request of the Collateral Agent).

 

(c)           If the Borrower or any of its Subsidiaries
shall fail to maintain insurance in accordance with this Section 8.03, or
if the Borrower or any of its Subsidiaries shall fail to so endorse and deposit
all policies or certificates with respect thereto as required by this Section

 

50

 

8.03, the Administrative Agent shall have the right (but shall be under
no obligation) to procure such insurance and the Borrower agrees to reimburse
the Administrative Agent for all reasonable costs and expenses of procuring
such insurance; provided, however, that the Borrower shall first
have a reasonable period of time (not to exceed 10 days) upon notice by the
Administrative Agent of any failure to endorse and deposit such policies and
certificates, and effect such coverage.

 

(d)           If the Administrative Agent or the
Collateral Agent receives any insurance proceeds directly from the respective
insurer or insurers as a result of the Collateral Agent being named as loss
payee on any property insurance, the Administrative Agent or the Collateral
Agent shall promptly deliver such proceeds to the Borrower or the relevant
Subsidiary thereof to the extent that (i) the Borrower or such Subsidiary
otherwise would have had the right to retain such proceeds pursuant to
Section 4.02(g) and would not have been required to use the Net Insurance
Proceeds thereof to repay the Loans and/or deposit same with the Administrative
Agent in accordance with the requirements of such Section 4.02(g) or (ii)
such proceeds shall not otherwise be required to be applied in accordance with
the terms of Article VII of the Security Agreement.

 

(e)           To the extent that the Collateral Agent, in
its capacity as loss payee under the property insurance policies referred to
above in this Section 8.03, has the authority to direct the respective
insurer or insurers to withhold payment of any property insurance proceeds to
the Collateral Agent, the Collateral Agent agrees that it will not take any
affirmative action not to have such proceeds paid directly to it as permitted
above unless the Collateral Agent (acting at the direction of the Required
Lenders) has a reasonable basis therefore.

 

8.04.  Existence;
Franchises.  The Borrower will,
and will cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses, permits, copyrights, trademarks and
patents; provided, however, that nothing in this
Section 8.04 shall prevent (i) sales of assets and other transactions by
the Borrower or any of its Subsidiaries in accordance with Section 9.02 or
(ii) the withdrawal by the Borrower or any of its Subsidiaries of its
qualification as a foreign corporation, partnership or limited liability
company, as the case may be, in any jurisdiction if such withdrawal could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

8.05.  Compliance
with Statutes, etc. 
(a)  The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)           In addition to the requirements of
Section 8.05(a), the Borrower will, and will cause each of its
Subsidiaries to, comply with (i) the Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), (ii) Executive
Order No 13224 of

 

51

 

September 23, 2001 Blocking Property and Prohibiting Transactions
with Person Who Commit, Threaten, or Support Terrorism (66 Fed. Reg. 49079) and
(iii) the Uniting And Strengthening America By Providing Appropriate Tools
Required To Intercept And Obstruct Terrorism Act of 2001 (USA PATRIOT ACT of
2001), and (in the case of each of the foregoing clauses (i), (ii) and (iii))
any regulations, enabling legislation or executive order relating thereto,
except such noncompliances (in the case of each of the foregoing clauses (i),
(ii) and (iii)) as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

8.06.  Compliance
with Environmental Laws. 
(a)  The Borrower will comply,
and will cause each of its Subsidiaries to comply, with all Environmental Laws
and permits applicable to, or required by, the ownership, lease or use of its
Real Property now or hereafter owned, leased or operated by the Borrower or any
of its Subsidiaries, except such noncompliances as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, and will keep or cause to
be kept all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws except for Permitted Liens relating thereto.  Except as could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect,
neither the Borrower nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment,
storage, Release or disposal of Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by the Borrower or any of its Subsidiaries,
or transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for Hazardous Materials generated, used, treated,
stored, Released or disposed of at any such Real Properties as required in
connection with the normal operation, use and maintenance of the business or
operations of the Borrower or any of its Subsidiaries in accordance with all
applicable Environmental Laws.

 

(b)           (i) 
After the receipt by the Administrative Agent or any Lender of any
notice of the type described in Section 8.01(h), (ii) at any time that the
Borrower or any of its Subsidiaries are not in compliance with
Section 8.06(a) or (iii) in the event that the Administrative Agent or the
Lenders have exercised any of the remedies pursuant to the last paragraph of
Section 10, the Borrower will (in each case) provide as promptly as
practicable, at the sole expense of the Borrower and at the request of the
Administrative Agent, an environmental site assessment report concerning any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in
connection with such Hazardous Materials on such Real Property.  If the Borrower fails to provide the same
within 90 days after such request was made, the Administrative Agent may order
the same, the cost of which shall be borne by the Borrower, and the Borrower
shall grant and hereby grant to the Administrative Agent and the Lenders and
their respective agents access to such Real Property and specifically grant the
Administrative Agent and the Lenders an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment at any
reasonable time upon reasonable notice to the Borrower, all at the sole expense
of the Borrower, and the Administrative Agent will provide the Borrower with a
copy of any such assessment.

 

52

 

8.07.  ERISA.  As soon as possible and, in any event,
within ten (10) days after the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Lenders a certificate of
the Chief Financial Officer or the Treasurer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given or filed by the
Borrower, such Subsidiary, the Plan administrator or such ERISA Affiliate to or
with the PBGC or any other governmental agency, or a Plan participant and any
notices received by the Borrower, such Subsidiary or such ERISA Affiliate from
the PBGC or any other government agency, or a Plan participant with respect
thereto:  that a Reportable Event has
occurred (except to the extent that the Borrower has previously delivered to
the Lenders a certificate and notices (if any) concerning such event pursuant
to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is
subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an
event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to
such Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application may be or has been made for a waiver
or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect
to a Plan; that any contribution required to be made with respect to a Plan or
Foreign Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be
or have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
will or may incur any material liability (including any indirect, contingent,
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or
4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect
to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that the Borrower or any Subsidiary of the Borrower may incur any material
liability for retiree benefits pursuant to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or any Plan or any Foreign Pension Plan.  The Borrower will deliver to each of the Lenders copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA.  At the request of any Lender, the Borrower
will also deliver to such Lender a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions
and other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service.  In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, copies of
annual reports and any records, documents or other information required to be
furnished to the PBGC, and any material notices received by the Borrower, any
Subsidiary of the Borrower or

 

53

 

any ERISA Affiliate with respect to any Plan or Foreign Pension Plan or
received from any governmental agency or plan administrator or sponsor or
trustee with respect to any multiemployer plan (as defined in
Section 4001(a)(3) of ERISA), shall be delivered to the Lenders no later
than ten (10) days after the date such records, documents and/or information
has been furnished to the PBGC or any other governmental agency or such notice
has been received by the Borrower, the respective Subsidiary or the ERISA
Affiliate, as applicable.  The Borrower
will ensure, and cause each of its applicable Subsidiaries to ensure, that all
Foreign Pension Plans administered by it or into which it makes payments
obtains or retains (as applicable) registered status under and as required by
applicable law and is administered in a timely manner in all respects in
compliance with all applicable laws except where the failure to do any of the
foregoing would not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

8.08.  End of Fiscal
Years; Fiscal Quarters.  The Borrower will cause (i) each of its, and each of its
Subsidiaries’, fiscal years to end on December 31 of each year and (ii)
each of its, and each of its Subsidiaries’, first three fiscal quarters of each
fiscal year to end on the Sunday nearest to, but not later than, the last day
of the first three calendar quarters, respectively, of each calendar year and
the last fiscal quarter of each fiscal year to end on December 31.

 

8.09.  Performance
of Obligations.  The Borrower
will, and will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, indenture, security agreement,
loan agreement or credit agreement and each other agreement, contract or
instrument by which it is bound, except such non-performances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

8.10.  Payment of Taxes.  The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits or upon any properties belonging to it, as they become due, and all
lawful claims which, if unpaid, might become a Lien or charge upon any
properties of the Borrower or any of its Subsidiaries not otherwise permitted
under Section 9.01(i); provided that neither the Borrower nor any
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith and by proper proceedings
if it has maintained adequate reserves with respect thereto in accordance with
generally accepted accounting principles.

 

8.11.  Use of Proceeds.  The Borrower will use the proceeds of the
Loans only as provided in Section 7.08.

 

8.12.  Additional
Security; Further Assurances; etc.(a)  The Borrower will, and will cause each other Credit Party to,
grant to the Collateral Agent for the benefit of the Secured Creditors security
interests and Mortgages in such assets and properties of the Borrower and such
other Credit Parties as are not covered by the original Security Documents and
as may be reasonably requested from time to time by the Administrative Agent or
the Required Lenders (collectively, the “Additional Security Documents”).  All such security interests and Mortgages
shall be granted pursuant to documentation satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable
perfected security interests and Mortgages superior to and prior to the rights of
all third Persons and subject to no other Liens

 

54

 

except for Permitted Liens.  The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the
Collateral Agent required to be granted pursuant to the Additional Security
Documents and all taxes, fees and other charges payable in connection therewith
shall have been paid in full.

 

(b)           The Borrower will, and will cause each other
Credit Party to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports, landlord waivers, bailee agreements, control
agreements and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. 
Furthermore, the Borrower will, and will cause each other Credit Party
to, deliver to the Collateral Agent such opinions of counsel, title insurance
and other related documents as may be requested by the Administrative Agent to
assure itself that this Section 8.12 has been complied with.

 

(c)           The Borrower will cause each Wholly-Owned
Domestic Subsidiary and, to the extent required by Section 8.13, each
Wholly-Owned Foreign Subsidiary that is established, created or acquired, as
the case may be, in accordance with Sections 8.17 and/or 9.16 to execute and
deliver (to the extent required by such Sections to execute and deliver) a
counterpart (and if requested by the Administrative Agent or Collateral Agent,
an assumption agreement or a Joinder Agreement substantially in the form of
Exhibit M in respect) of the Subsidiaries Guaranty, the Pledge Agreement and
the Security Agreement.

 

(d)           The Borrower will pledge and (to the extent
certificated) deliver, or cause to be pledged and (to the extent certificated)
delivered, all of the capital stock or other Equity Interests (accompanied, if
certificated, by executed and undated powers) of each new Subsidiary
(excluding, except as provided in Section 8.13, that portion of the voting
stock of any Foreign Subsidiary which would be in excess of 65% of the total
outstanding voting stock of such Foreign Subsidiary) established, created or
acquired after the Initial Borrowing Date, to the extent owned by the Borrower
or another Credit Party, to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Pledge Agreement.

 

(e)           If the Administrative Agent or the Required
Lenders reasonably determine that they are required by law or regulation to
have appraisals prepared in respect of any Real Property of the Borrower or any
of the other Credit Parties constituting Collateral, the Borrower will, at its
own expense, provide to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended,
and which shall otherwise be in form and substance reasonably satisfactory to
the Administrative Agent.

 

(f)            The Borrower will cause each Subsidiary
that is established, created or acquired after the Initial Borrowing Date to
execute and deliver to the Administrative Agent a Joinder Agreement
substantially in the form of Exhibit M in respect of the Intercompany

 

55

 

Subordination Agreement and, in connection therewith, promptly execute
and deliver all further instruments, and take all further action, that the
Administrative Agent may reasonably require.

 

(g)           The Borrower agrees that each action
required by clauses (a) through (c) of this Section 8.12 shall be
completed as soon as possible, but in no event later than 30 days after such
action is requested to be taken by the Administrative Agent or the Required
Lenders; provided, however, that such 30-day period shall be
extended as necessary if the Administrative Agent determines, in the exercise
of its reasonable judgment, that the Borrower has attempted to comply and
continues to attempt to comply with the applicable requirements of this
Section 8.12 with reasonable diligence. 
The Borrower further agrees that each action required by
Section 8.12(a), (b), (c) or (d) with respect to the establishment,
creation or acquisition of a new Subsidiary shall be completed
contemporaneously with (or in the case of any documents or instruments to be
registered or filed, within 10 days of) the establishment, creation or
acquisition of such Subsidiary.

 

8.13.  Foreign
Subsidiaries Security.  If,
following a change in the relevant sections of the Code or the regulations,
rules, rulings, notices or other official pronouncements issued or promulgated
thereunder, the Borrower does not within 30 days after a request from the
Administrative Agent or the Required Lenders deliver evidence, in form and
substance reasonably satisfactory to the Administrative Agent (which may
consist of an opinion of tax counsel of the Borrower), with respect to any
Foreign Subsidiary of the Borrower which has not already had all of its stock
pledged pursuant to the Pledge Agreement that (i) a pledge of more than 66 2/3%
of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign
Subsidiary of a security agreement in substantially the form of the Security
Agreement and (iii) the entering into by such Foreign Subsidiary of a guaranty
in substantially the form of the Subsidiaries Guaranty, in any such case could
reasonably be expected to cause (I) any undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary’s United States parent for Federal
income tax purposes or (II) other Federal income tax consequences to the Credit
Parties having an adverse financial consequence to any Credit Party in any
material respect, then in the case of a failure to deliver the evidence
described in clause (i) above, that portion of such Foreign Subsidiary’s
outstanding capital stock not theretofore pledged pursuant to the Pledge
Agreement shall be promptly pledged to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
prepared in compliance with applicable local law, if needed), and in the case
of a failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary shall promptly execute and deliver the Security Agreement
and Pledge Agreement (or another security agreement or pledge agreement
prepared in compliance with applicable local law, if needed), granting the
Collateral Agent for the benefit of the Secured Creditors a security interest
in all of such Foreign Subsidiary’s assets and securing the obligations of  the Borrower under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement entered
into with a Secured Creditor and, in the event the Subsidiaries Guaranty shall
have been executed by such Foreign Subsidiary, the obligations of such Foreign
Subsidiary thereunder, and in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary shall promptly execute
and deliver the Subsidiaries Guaranty (or another guaranty prepared in
compliance with applicable local law, if needed), guaranteeing the obligations
of the Borrower under the Credit Documents and under any Interest Rate
Protection

 

56

 

Agreement or Other Hedging Agreement entered into with a Secured
Creditor, in each case to the extent that the entering into of the Security
Agreement, Pledge Agreement or Subsidiaries Guaranty is permitted by the laws
of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 8.13 to be in form and substance reasonably
satisfactory to the Administrative Agent.

 

8.14.  Ownership
of Subsidiaries; etc. 
Except as otherwise permitted by Section 9.05(xiii) and the
definition of Permitted Acquisition, the Borrower will, and will cause each of
its Subsidiaries to, own, individually or collectively, 100% of the capital
stock and other Equity Interests of each of their Subsidiaries (other than
directors’ qualifying shares to the extent required by applicable law).

 

8.15.  Interest
Rate Protection.  The Borrower
will maintain at all times on and after the Initial Borrowing Date and prior to
June 30, 2006, Interest Rate Protection Agreements reasonably acceptable
to the Administrative Agent, which Interest Rate Protection Agreements shall
maintain a fixed or maximum interest rate reasonably acceptable to the
Administrative Agent for an aggregate notional amount equal to at least 40% of
the aggregate outstanding principal amount of Term Loans from time to time
prior to June 30, 2006.

 

8.16.  Corporate
Separateness.  The Borrower
will, and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors’ and
shareholders’ meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records.  Neither the Borrower nor any of its Subsidiaries will take any
action, or conduct its affairs in a manner, which is likely to result in the
corporate existence of the Borrower or any of its Subsidiaries being ignored,
or in the assets and liabilities of the Borrower or any of its Subsidiaries
being substantively consolidated with one another or with those of any other
such Person in a bankruptcy, reorganization or other insolvency proceeding.

 

8.17.  Permitted
Acquisitions.  (a)  Subject to the provisions of this
Section 8.17 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and each Wholly-Owned Domestic Subsidiary of the
Borrower which is a Subsidiary Guarantor may from time to time effect Permitted
Acquisitions, so long as (in each case except to the extent the Required
Lenders otherwise specifically agree in writing in the case of a specific
Permitted Acquisition):  (i) no Default
or Event of Default shall have occurred and be continuing at the time of the
consummation of the proposed Permitted Acquisition or immediately after giving
effect thereto; (ii) the Borrower shall have given to the Administrative Agent
and the Lenders at least 30 days’ prior written notice of any Permitted
Acquisition (or such shorter period of time as may be reasonably acceptable to
the Administrative Agent), which notice shall describe in reasonable detail the
principal terms and conditions of such Permitted Acquisition; (iii) the
Administrative Agent and the Lenders shall have received audited year end
financial statements for at least the previous fiscal year and, to the extent
available, interim unaudited quarterly financial statements for the then
current fiscal year of the Acquired Entity or Business being acquired pursuant
to such proposed Permitted Acquisition (provided that, in the case of
such audited year end financial statements, if same are not available, the
Administrative Agent shall be reasonably satisfied with the financial due
diligence of such Acquired Entity or Business performed by the Borrower and/or
such Wholly-Owned Domestic Subsidiary of the Borrower

 

57

 

which is a Subsidiary Guarantor); (iv) calculations are made by the
Borrower with respect to the financial covenants contained in Sections 9.08
through 9.11, inclusive, for the respective Calculation Period on a Pro
Forma Basis as if the respective Permitted Acquisition (as well as all
other Permitted Acquisitions theretofore consummated after the first day of
such Calculation Period) had occurred on the first day of such Calculation
Period, and such calculations shall show that such financial covenants would
have been complied with if the Permitted Acquisition had occurred on the first
day of such Calculation Period; (v) based on good faith projections prepared by
the Borrower for the period from the date of the consummation of the respective
Permitted Acquisition to the date which is one year thereafter, the level of
financial performance measured by the financial covenants set forth in Sections
9.08 through 9.11, inclusive, shall be better than or equal to such level as
would be required to provide that no Default or Event of Default would exist
under the financial covenants contained in such Sections 9.08 through 9.11,
inclusive, as compliance with such financial covenants would be required
through the date which is one year from the date of the consummation of the respective
Permitted Acquisition; (vi) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Permitted Acquisition (both before and
after giving effect thereto), unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; (vii) the Maximum
Permitted Consideration payable for the proposed Permitted Acquisition (A) does
not exceed $10,000,000 or (B) when added to the aggregate consideration paid or
payable for all other Permitted Acquisitions theretofore consummated, does not
exceed $20,000,000; (viii) the Total Unutilized Revolving Loan Commitment
immediately after giving effect to the proposed Permitted Acquisition (and all
payments to be made in connection therewith) shall equal or exceed $10,000,000;
(ix) the Acquired Entity or Business proposed to be acquired pursuant to such
Permitted Acquisition shall be engaged in a Substantially Similar Line of
Business; (x) the Acquired EBITDA for the Acquired Entity or Business proposed
to be acquired pursuant to such Permitted Acquisition shall be greater than
$1,000,000 for the most recently ended 12 month period for which financial
statements are available for such Acquired Entity or Business; and (xi) the
Borrower shall have delivered to the Administrative Agent and each Lender a
certificate executed by its Chief Financial Officer or Treasurer, certifying on
behalf of the Borrower and to the best of such officer’s knowledge, compliance
with the requirements of preceding clauses (i) through (x), inclusive, and containing
the calculations (in reasonable detail) required by preceding clauses (iv),
(v), (vii), (viii) and (x).

 

(b)           At the time of each Permitted Acquisition
involving the establishment, creation or acquisition of a Subsidiary, or the
acquisition of capital stock or other Equity Interest of any Person, the
capital stock or other Equity Interests thereof created or acquired in
connection with such Permitted Acquisition shall be pledged for the benefit of
the Secured Creditors pursuant to (and to the extent required by) the Pledge
Agreement.

 

(c)           The Borrower will cause each Wholly-Owned
Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted
Acquisition to comply with, and to execute and deliver all of the documentation
as and to the extent required by, Sections 8.12 and 9.16, to the reasonable
satisfaction of the Administrative Agent.

 

58

 

(d)           The consummation of each Permitted
Acquisition shall be deemed to be a representation and warranty by the Borrower
that the certifications pursuant to this Section 8.17 are true and correct
and that all conditions thereto have been satisfied and that same is permitted
in accordance with the terms of this Agreement, which representation and warranty
shall be deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 7 and10.

 

8.18.  Margin
Regulations.  Except as
otherwise permitted below in this Section 8.18, the Borrower will take all
actions so that at all times the fair market value of all Margin Stock owned by
the Borrower and its Subsidiaries (other than capital stock of the Borrower
held in treasury) shall not exceed the lesser of (x) $2,000,000 and (y) 25% of
the value of the assets of the Borrower and its Subsidiaries taken as a whole
(including all capital stock of the Borrower held in treasury).  So long as the covenant contained in the
immediately preceding sentence is complied with, all Margin Stock at any time
owned by the Borrower and its Subsidiaries will not constitute Collateral and
no security interest shall be granted therein pursuant to any Credit Document, provided
that if at any time the fair market value of all Margin Stock owned by the
Borrower and its Subsidiaries (other than capital stock of the Borrower held in
treasury) exceeds the lesser of (x) $2,000,000 and (y) 25% of the value of the
assets of the Borrower and its Subsidiaries taken as a whole (including all
capital stock of the Borrower held in treasury), then (I) all Margin Stock
owned by the Credit Parties (other than capital stock of the Borrower held in
treasury) shall be pledged, and delivered for pledge, pursuant to the Pledge
Agreement and (II) the Borrower will execute and deliver to the Lenders
appropriate completed forms (including, without limitation, Forms G-3 and U-1,
as appropriate) establishing compliance with Regulations T, U and X.  If at any time any Margin Stock is required
to be pledged as a result of the provisions of the immediately preceding
sentence, repayments of outstanding Obligations shall be required, and
subsequent Credit Events shall be permitted, only in compliance with the
applicable provisions of Regulations T, U and X.

 

SECTION 9.  Negative Covenants.  The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in
each case, together with interest thereon), Fees and all other Obligations
(other than any indemnities described in Section 13.13 which are not then
due and payable) incurred hereunder and thereunder, are paid in full:

 

9.01.  Liens.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to the
Borrower or any of its Subsidiaries), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute; provided
that the provisions of this Section 9.01 shall not prevent the creation,
incurrence, assumption or existence of the following (Liens described below are
herein referred to as “Permitted Liens”):

 

(i)            inchoate Liens for
taxes, assessments or governmental charges or levies not yet due or Liens for
taxes, assessments or governmental charges or levies being

 

59

 

contested in good faith and by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles;

 

(ii)           Liens in respect of
property or assets of the Borrower or any of its Subsidiaries imposed by law,
which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers’, warehousemen’s,
materialmen’s and mechanics’ liens and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate materially
detract from the value of the Borrower’s or such Subsidiary’s property or
assets or materially impair the use thereof in the operation of the business of
the Borrower or such Subsidiary or (y)which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;

 

(iii)          Liens in existence on
the Initial Borrowing Date which are listed, and the property subject thereto
described, in Schedule IX, but only to the respective date, if any, set
forth in such Schedule IX for the removal, replacement and termination of
any such Liens, plus renewals, replacements and extensions of such Liens to the
extent set forth on such Schedule IX, provided that (x) the
aggregate principal amount of the Indebtedness, if any, secured by such Liens
does not increase from that amount outstanding at the time of any such renewal,
replacement or extension and (y) any such renewal, replacement or extension
does not encumber any additional assets or properties of the Borrower or any of
its Subsidiaries;

 

(iv)          Liens created pursuant
to the Security Documents;

 

(v)           licenses, sublicenses,
leases or subleases granted to other Persons not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;

 

(vi)          Liens upon assets of the
Borrower or any of its Subsidiaries acquired after the Initial Borrowing Date
and subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 9.04(v), provided that
(x) such Liens only serve to secure the payment of Indebtedness arising under
such Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset of
the Borrower or any Subsidiary of the Borrower;

 

(vii)         Liens placed upon
equipment or machinery acquired after the Initial Borrowing Date and used in
the ordinary course of business of the Borrower or any of its Subsidiaries and
placed at the time of the acquisition thereof by the Borrower or such
Subsidiary or within 180 days thereafter to secure Indebtedness incurred to pay
all or a portion of the purchase price thereof or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of any such
equipment or machinery or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that (x) the
Indebtedness secured by such Liens is permitted by Section 9.04(v) and (y)
in all events, the Lien encumbering the equipment or machinery so acquired does
not encumber any other asset of the Borrower or such Subsidiary;

 

60

 

(viii)        easements, rights-of-way,
restrictions, encroachments and other similar charges or encumbrances, and
minor title deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the Borrower or any
of its Subsidiaries;

 

(ix)           Liens arising from
precautionary UCC financing statement filings regarding operating leases
entered into in the ordinary course of business;

 

(x)            Liens arising out of
the existence of judgments or awards in respect of which the Borrower or any of
its Subsidiaries shall in good faith be prosecuting an appeal or proceedings
for review and in respect of which there shall have been secured a subsisting
stay of execution pending such appeal or proceedings, provided that the
aggregate amount of all cash (including the stated amount of all letters of
credit) and the fair market value of all other property subject to such Liens
does not exceed $2,500,000 at any time outstanding;

 

(xi)           statutory and common
law landlords’ liens under leases to which the Borrower or any of its
Subsidiaries is a party;

 

(xii)          (x) Liens (other than
Liens imposed under ERISA) incurred in the ordinary course of business in
connection with workers compensation claims, unemployment insurance and social
security benefits and (y) deposits securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory obligations,
surety bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business and consistent with past practice (exclusive
of obligations in respect of the payment for borrowed money), provided
that the aggregate amount of all cash and the fair market value of all other
property subject to all Liens permitted by sub-clause (y) of this clause (xii)
shall not at any time exceed $2,500,000;

 

(xiii)         Permitted Encumbrances;

 

(xiv)        Liens on property or
assets acquired pursuant to a Permitted Acquisition, or on property or assets
of a Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to a Permitted Acquisition, provided that (x) any
Indebtedness that is secured by such Liens is permitted to exist under
Section 9.04(vii), and (y) such Liens are not incurred in connection with,
or in contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries; and

 

(xv)         Liens not otherwise
permitted by clauses (i) through (xiv) of this Section 9.01 that (i) are
incidental to the conduct of the business of the Borrower or any of its
Subsidiaries, (ii) were not incurred in connection with Indebtedness of a
Credit Party, (iii) do not encumber any Collateral or any Real Property owned
by a Credit Party and do not materially detract from the value of the assets
subject to such Liens or materially impair the use thereof in the operation of
such business and (iv) do not at any time for all such

 

61

 

Liens encumber cash and other property having
an aggregate value in excess of, or secure outstanding obligations in the
aggregate in excess of, $250,000.

 

In connection with the granting of Liens of the type described in
clauses (vi), (vii) and (xiv) of this Section 9.01 by the Borrower of any
of its Subsidiaries, the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate by it in connection therewith
(including, without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).

 

9.02.  Consolidation,
Merger, Purchase or Sale of Assets, etc. 
The Borrower will not, and will not permit any of its Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any partnership, joint
venture, or transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of all or any part of its property or assets, or enter into
any sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the ordinary
course of business) of any Person (or agree to do any of the foregoing at any
future time), except that:

 

(i)            Capital Expenditures
by the Borrower and its Subsidiaries shall be permitted to the extent not in
violation of Section 9.07;

 

(ii)           each of the Borrower
and its Subsidiaries may make sales of inventory in the ordinary course of
business;

 

(iii)          Investments may be made
to the extent permitted by Section 9.05;

 

(iv)          the Borrower and its
Subsidiaries may sell assets (other than the capital stock or other Equity
Interests of any Subsidiary), so long as (v) no Default or Event of Default
then exists or would result therefrom, (w)each such sale is in an arm’s-length
transaction and the Borrower or the respective Subsidiary receives at least
fair market value (as determined in good faith by the Chief Financial Officer
or Treasurer of the Borrower or such Subsidiary, as the case may be), (x)the
consideration received by the Borrower or such Subsidiary consists of at least
80% cash and is paid at the time of the closing of such sale, (y) the Net Sale
Proceeds therefrom are applied as (and to the extent) required by
Section 4.02(e) and (z)the aggregate amount of the proceeds received from
all assets sold pursuant to this clause (iv)shall not exceed $100,000 in any
fiscal year of the Borrower;

 

(v)           each of the Borrower
and its Subsidiaries may lease (as lessee) or license (as licensee) real or
personal property (so long as any such lease or license does not create a
Capitalized Lease Obligation except to the extent permitted by Section9.04(v));

 

(vi)          each of the Borrower and
its Subsidiaries may sell or discount, in each case without recourse and in the
ordinary course of business, accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof
and not as part of any financing transaction;

 

62

 

(vii)         each of the Borrower and
its Subsidiaries may grant licenses, sublicenses, leases or subleases to other
Persons not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries, in each case so long as no such grant
otherwise affects the Collateral Agent’s security interest in the asset or
property subject thereto;

 

(viii)        any Subsidiary of the
Borrower may merge with and into, or be dissolved or liquidated into, the
Borrower or any Wholly-Owned Domestic Subsidiary of the Borrower which is a
Subsidiary Guarantor so long as (i) in the case of any such merger, dissolution
or liquidation involving the Borrower, the Borrower is the surviving
corporation of any such merger, dissolution or liquidation, (ii) in all other
cases, the Wholly-Owned Domestic Subsidiary which is a Subsidiary Guarantor is
the surviving corporation of any such merger, dissolution or liquidation, and
(iii) in all cases, the security interests granted to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Subsidiary shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such merger,
dissolution or liquidation);

 

(ix)           any Subsidiary of the
Borrower may transfer assets to the Borrower or to any Subsidiary Guarantor and
the Borrower may transfer assets to any Subsidiary Guarantor, so long as the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets so
transferred shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such transfer);

 

(x)            Permitted Acquisitions
may be made to the extent permitted by Section 8.17;

 

(xi)           so long as no Default
or Event of Default then exists or would result therefrom, Inactive
Subsidiaries of the Borrower may be liquidated or dissolved from time to time,
so long as (x) the Borrower determines that such liquidation is not adverse to
the interests of the Lenders and (y) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents shall remain in full force and effect (to at least the same
extent as in effect immediately prior to such dissolution or liquidation);

 

(xii)          each of the Borrower and
its Subsidiaries may sell or otherwise dispose of obsolete, uneconomic or
worn-out equipment in the ordinary course of business; and

 

(xiii)         the Borrower and its
Subsidiaries may sell equipment and machinery acquired on and after the Initial
Borrowing Date pursuant to Sale and Leaseback Transactions, so long as (v) no
Default or Event of Default then exists or would result therefrom, (w) each
such sale is in an arm’s-length transaction and the Borrower or the respective
Subsidiary receives at least fair market value (as determined in good faith by
the Chief Financial Officer or Treasurer of the Borrower or such Subsidiary, as
the case may be), (x) the consideration received by the Borrower or such
Subsidiary consists of 100% cash and is paid at the time of the closing of such
sale, (y) if such Sale and

 

63

 

Leaseback Transaction results in an operating
lease pursuant to which the Borrower and/or any of its Subsidiaries is the
lessee and such equipment or machinery shall have been owned by the Borrower
and/or the applicable Subsidiary for more than 180 days, then the aggregate
amount of the proceeds received from all assets sold pursuant to this clause
(xiii)(y) shall not exceed (A) $2,000,000 during the term of this Agreement or
(B) $500,000 in any fiscal year of the Borrower, and (z) if such Sale and
Leaseback Transaction results in Capitalized Lease Obligations of the Borrower
or any of its Subsidiaries, such Capitalized Lease Obligations are permitted
under Section 9.04(v).

 

To the extent the Required Lenders waive the provisions of this
Section 9.02 with respect to the sale of any Collateral, or any Collateral
is sold as permitted by this Section 9.02 (other than to the Borrower or a
Subsidiary thereof), such Collateral shall be sold free and clear of the Liens
created by the Security Documents, and the Administrative Agent and the
Collateral Agent shall be authorized to take any actions deemed appropriate in
order to effect the foregoing.

 

9.03.  Dividends;
etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, authorize, declare or pay any
Dividends with respect to the Borrower or any of its Subsidiaries, except that:

 

(i)            (x)  any Subsidiary of the Borrower may pay cash
Dividends to the Borrower or any 
Subsidiary Guarantor and (y) any Subsidiary of the Borrower which is not
a Subsidiary Guarantor may also pay cash Dividends to any Wholly-Owned
Subsidiary of the Borrower;

 

(ii)           the Transaction shall
be permitted;

 

(iii)          so long as there shall
exist no Default or Event of Default (both before and after giving effect to
the payment thereof), the Borrower may make Dividends consisting of redemptions
and/or repurchases of Borrower Common Stock or options to purchase Borrower
Common Stock (whether pursuant to the employee stock purchase plan of the
Borrower in existence on the Initial Borrowing Date or otherwise) with amounts
which, at the time of the payment of such Dividends, do not exceed the
Cumulative Retained Excess Cash Flow Amount as then in effect, so long as,
immediately after giving effect to the payment of any such Dividend, (x) the
Total Unutilized Revolving Loan Commitment shall equal or exceed $15,000,000
and (y) the Total Leverage Ratio shall be less than or equal to 1.50:1.00;

 

(iv)          so long as there shall
exist no Default or Event of Default (both before and after giving effect to
the payment thereof), the Borrower may make Dividends consisting of redemptions
and/or repurchases of Borrower Common Stock or options to purchase Borrower
Common Stock (whether pursuant to the employee stock purchase plan of the
Borrower in existence on the Initial Borrowing Date or otherwise) in an
aggregate amount equal to 50% of the aggregate Net Equity Proceeds received by
the Borrower after the Initial Borrowing Date from the sale or issuance by the
Borrower of Borrower Common Stock or options, warrants or rights to purchase
Borrower Common Stock, or upon the exercise thereof, in each case to officers,
employees or directors of the Borrower or any of its Subsidiaries;

 

64

 

(v)           the Borrower may pay
regularly accruing Dividends with respect to Qualified Preferred Stock through
the issuance of additional shares of Qualified Preferred Stock (but not in
cash) in accordance with the terms of the documentation governing same;

 

(vi)          so long as there shall
exist no Default or Event of Default (both before and after giving effect to
the payment thereof), the Borrower may pay regularly accruing Dividends with
respect to Existing Preferred Stock in accordance with the documentation
governing same (as such documentation is in effect on the Initial Borrowing
Date) in an aggregate amount not to exceed $50,000 in any fiscal year of the
Borrower;

 

(vii)         so long as there shall
exist no Default or Event of Default (both before and after giving effect
thereto), the Borrower may (x) repurchase or redeem Existing Preferred Stock
not redeemed or repurchased pursuant to the Existing Preferred Stock Redemption
for not more than $2,500,000 in aggregate cash consideration (exclusive of
accrued and unpaid Dividends thereon) and (y) concurrently with the repurchase
or redemption of such Existing Preferred Stock, make payments of accrued and
unpaid preferred dividends thereon (in accordance with the documentation
governing same (as such documentation is in effect on the Initial Borrowing
Date)), provided that all such Existing Preferred Stock shall become
authorized but unissued shares of preferred stock generally of the Borrower (as
opposed to being shares of Existing Preferred Stock);

 

(viii)        so long as there shall
exist no Default or Event of Default (both before and after giving effect to
the payment thereof), the Borrower may purchase shares of Borrower Common Stock
in the open market for the account of its and its Subsidiaries’ employees and
officers pursuant to, and in accordance with the terms of, the employee stock
purchase plan of the Borrower in existence on the Initial Borrowing Date (or
pursuant to a replacement plan approved by the Borrower’s Board of Directors)
so long as (x) substantially all of the cash used by the Borrower to make such
purchases shall be cash withheld or deducted from such employees or officers’
paychecks and (y) with respect to that portion of the purchase price that is
paid from the Borrower’s own funds, such purchase is treated as an expense and
reduces the Consolidated Net Income of the Borrower in accordance with
generally accepted accounting principles; and

 

(ix)           any non-Wholly-Owned
Subsidiary of the Borrower may pay cash Dividends to its shareholders generally
so long as the Borrower or its respective Subsidiary which owns the equity
interest in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holding of the equity
interest in the Subsidiary paying such Dividends and taking into account the
relative preferences, if any, of the various classes of equity interests of
such Subsidiary).

 

9.04.  Indebtedness.  The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:

 

(i)            Indebtedness incurred
pursuant to this Agreement and the other Credit Documents;

 

65

 

(ii)           Existing Indebtedness
outstanding on the Initial Borrowing Date and listed on Schedule VI (as
reduced by any permanent repayments of principal thereof), without giving
effect to any subsequent extension, renewal or refinancing thereof except to
the extent set forth on Schedule VI, provided that the aggregate
principal amount of the Indebtedness to be extended, renewed or refinanced does
not increase from that amount outstanding at the time of any such extension,
renewal or refinancing;

 

(iii)          Indebtedness of the
Borrower and its Subsidiaries under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 9.04
so long as the entering into of such Interest Rate Protection Agreements are bona
fide hedging activities and are not for speculative purposes;

 

(iv)          Indebtedness of the
Borrower or any of its Subsidiaries under Other Hedging Agreements providing
protection to the Borrower and its Subsidiaries against fluctuations in
currency values or commodity prices in connection with the Borrower’s or any of
its Subsidiaries’ operations so long as the entering into of such Other Hedging
Agreements are bona fide hedging activities and are not for speculative
purposes;

 

(v)           Indebtedness of the
Borrower and its Subsidiaries (other than Indebtedness of the type acquired or
assumed in accordance with Section 9.04(vii)) evidenced by Capitalized
Lease Obligations (to the extent permitted pursuant to Section 9.07) and
purchase money Indebtedness described in Section 9.01(vii)), provided
that in no event shall the sum of the aggregate principal amount of all
Capitalized Lease Obligations and purchase money Indebtedness permitted by this
clause (v) exceed $15,000,000 at any time outstanding;

 

(vi)          so long as no Default or
Event of Default then exists or would result therefrom, Additional Permitted
Subordinated Debt of the Borrower to the extent that (i) such Additional
Permitted Subordinated Debt is issued to the seller as all or part of the
consideration for any Permitted Acquisition or (ii) the Net Debt Proceeds
thereof are used within 90 days after the date of issuance thereof to finance
all or a part of any Permitted Acquisition (including to refinance any
Indebtedness of the Acquired Entity or Business) and to pay the related fees
and expenses, provided that (x) the sum of (I) the aggregate principal
amount of all Additional Permitted Subordinated Debt incurred pursuant to this
clause (vi) plus (II) the aggregate principal amount of all Indebtedness
incurred pursuant to Section 9.04(vii) shall not exceed $10,000,000 at any
time outstanding, and (y) if all or any portion of the Net Debt Proceeds of
such Additional Subordinated Debt are not so used within such 90-day period (or
such earlier date, if any, as the Borrower determines not to (or that it
cannot) consummate a Permitted Acquisition within such 90-day period), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as a mandatory repayment of principal of outstanding
Loans in accordance with Section 4.02(d);

 

(vii)         Indebtedness of a
Subsidiary of the Borrower acquired pursuant to a Permitted Acquisition (or
Indebtedness assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness), provided that (x) such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
Permitted

 

66

 

Acquisition, (y) such Indebtedness does not
constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (y) and (z) the
aggregate principal amount of all Indebtedness permitted by this clause (vii)
shall not exceed at any time outstanding the lesser of (A) $2,500,000 and (B)
that aggregate principal amount which, when added to the aggregate principal
amount of all Indebtedness then outstanding pursuant to clause (vi) of this
Section 9.04, equals $10,000,000;

 

(viii)        intercompany Indebtedness
to the extent permitted by Section 9.05(vii);

 

(ix)           Indebtedness of the
Borrower under Supplemental Letters of Credit, provided that the
aggregate stated amount of all Supplemental Letters of Credit permitted by this
clause(ix) (together with the aggregate amount of all unpaid drawings
thereunder) shall not exceed at any one time outstanding the lesser of (i)
$10,000,000 and (ii) when added to the sum of the aggregate amount of all
obligations of the Borrower and its Subsidiaries outstanding under
Section 9.04(x), $35,000,000;

 

(x)            obligations of the
Borrower and its Subsidiaries incurred with respect to performance bonds and/or
fidelity bonds required to be furnished by the Borrower or such Subsidiary in connection
with contracts entered into by the Borrower or such Subsidiary in the ordinary
course of its business in an aggregate amount at any one time outstanding not
to exceed, when added to the sum of all such obligations outstanding as
Existing Indebtedness and the aggregate amount of all Indebtedness outstanding
under Section 9.04(ix), $35,000,000;

 

(xi)           Contingent Obligations
of the Borrower or any Subsidiary Guarantor in respect of any Indebtedness of
the Borrower or any Subsidiary Guarantor otherwise permitted under this
Section 9.04; and

 

(xii)          so long as no Default or
Event of Default then exists or would result therefrom, additional Indebtedness
incurred by the Borrower and its Subsidiaries not to exceed an aggregate
principal amount of $250,000 at any one time outstanding, which Indebtedness
shall, unless incurred by a Subsidiary of the Borrower that is not a Credit
Party, be unsecured.

 

9.05.  Advances,
Investments and Loans.  The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, lend money or credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or purchase or own a
futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract, or hold any cash or Cash Equivalents (each of the foregoing an “Investment”
and, collectively, “Investments”), except that the following shall be
permitted:

 

(i)            the Borrower and its
Subsidiaries may acquire and hold accounts receivables owing to any of them, if
created or acquired in the ordinary course of

 

67

 

business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such Subsidiary;

 

(ii)           the Borrower and its
Subsidiaries may acquire and hold cash and Cash Equivalents, provided
that during any time that Revolving Loans or Swingline Loans are outstanding,
the aggregate amount of cash and Cash Equivalents permitted to be held by the
Borrower and its Subsidiaries shall not exceed the sum of (I) $10,000,000 plus
(II) the aggregate outstanding amount of the Barnwell Obligations at such time
for any period of two consecutive Business Days;

 

(iii)          the Borrower and its
Subsidiaries may hold the Investments held by them on the Initial Borrowing
Date and described on Schedule X, provided that any additional
Investments made with respect thereto shall be permitted only if independently
justified under the other provisions of this Section 9.05;

 

(iv)          the Borrower and its
Subsidiaries may acquire and own investments (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in good faith settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business;

 

(v)           the Borrower and its
Subsidiaries may make loans and advances to their officers and employees for
moving, relocation and travel expenses and other similar expenditures, in each
case in the ordinary course of business in an aggregate amount not to exceed
$2,000,000 at any time (determined without regard to any write-downs or
write-offs of such loans and advances);

 

(vi)          the Borrower and its
Subsidiaries may enter into Interest Rate Protection Agreements to the extent
permitted by Section 9.04(iii);

 

(vii)         the Borrower and its
Wholly-Owned Subsidiaries may make intercompany loans and advances between and
among one another (collectively, the “Intercompany Loans”), provided
that (i) the aggregate principal amount of all Intercompany Loans made by the
Credit Parties pursuant to this Section 9.05(vii) to Wholly-Owned Subsidiaries
of the Borrower that are not Subsidiary Guarantors, when added to the aggregate
amount of capital contributions made to such Wholly-Owned Subsidiaries of the
Borrower that are not Subsidiary Guarantors pursuant to clause (viii) of this
Section 9.05 (using the fair market value of property, if other than cash,
as determined in good faith by the Borrower), shall not exceed $500,000 in any
fiscal year of the Borrower (determined without regard to any write-downs or
write-offs thereof), (ii) no Intercompany Loans may be made by a Credit Party
to a Wholly-Owned Subsidiary of the Borrower that is not a Credit Party at a
time that any Default or Event of Default exists and is continuing, (iii) to
the extent any such Intercompany Loan made by a Credit Party is evidenced by an
Intercompany Note, such Intercompany Note shall be pledged to the Collateral
Agent pursuant to, and to the extent required by, the Pledge Agreement, and
(iv) each obligor and obligee in respect of each such Intercompany Loan shall
have executed and delivered to the Administrative Agent a counterpart of the
Intercompany Subordination Agreement;

 

68

 

(viii)        the Borrower and the
Subsidiary Guarantors may make capital contributions to their respective
Wholly-Owned Subsidiaries, provided that the aggregate amount of all
capital contributions made by Credit Parties pursuant to this
Section 9.05(viii) to Wholly-Owned Subsidiaries of the Borrower that are
not Subsidiary Guarantors (using the fair market value of property, if other
than cash, as determined in good faith by the Borrower), when added to the
aggregate principal amount of all Intercompany Loans made to such Wholly-Owned
Subsidiaries of the Borrower that are not Subsidiary Guarantors by Credit
Parties pursuant to clause (vii) of this Section 9.05, shall not exceed
$500,000 in any fiscal year of the Borrower (determined without regard to any
write-downs or write-offs thereof);

 

(ix)           Permitted Acquisitions
shall be permitted in accordance with Section 8.17;

 

(x)            the Borrower and its
Subsidiaries may (x) establish Subsidiaries in compliance with
Section 9.16 and (y) make Investments in such Subsidiaries as, and to the
extent, permitted by the other applicable clauses of this Section 9.05;

 

(xi)           the Borrower and its
Subsidiaries may enter into Other Hedging Agreements to the extent permitted by
Section 9.04(iv);

 

(xii)          the Borrower and its
Subsidiaries may acquire and hold promissory notes and other non-cash
consideration issued by the purchaser of assets in connection with a sale of
such assets to the extent permitted by Section 9.02(iv); and

 

(xiii)         so long as no Default or
Event of Default then exists or would result therefrom, the Borrower and its
Subsidiaries may make Investments (including, without limitation, Investments
in joint ventures, partnerships and other similar arrangements) not otherwise
permitted by clauses (i) through (xii) of this Section 9.05 in an
aggregate amount not to exceed $500,000 in any fiscal year of the Borrower
(determined without regard to any write-downs or write-offs thereof).

 

9.06.  Transactions
with Affiliates.  The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
transaction or series of related transactions with any Affiliate of the
Borrower or any of its Subsidiaries, other than in the ordinary course of
business and on terms and conditions substantially as favorable to the Borrower
or such Subsidiary as would reasonably be obtained by the Borrower or such
Subsidiary at that time in a comparable arm’s-length transaction with a Person
other than an Affiliate, except that (i) Dividends may be paid to the extent
provided in Section 9.03, (ii) loans may be made and other transactions
may be entered into by the Borrower and its Subsidiaries to the extent
permitted by Sections 9.02, 9.04 and 9.05 and (iii) customary fees may be paid
to non-officer directors of the Borrower and its Subsidiaries.

 

9.07.  Capital
Expenditures.  (a)  The Borrower will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that (i)
during the period from the Initial Borrowing Date through and including
December 31, 2003, the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of all such Capital Expenditures
does not exceed $1,000,000, and (ii) during any fiscal year of the Borrower set

 

69

 

forth below (taken as one accounting period), the Borrower and its
Subsidiaries may make Capital Expenditures so long as the aggregate amount of
all such Capital Expenditures does not exceed in any fiscal year of the
Borrower set forth below the amount set forth opposite such fiscal year below:

 

	
  Fiscal Year Ending Closest To

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2004

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  6,500,000

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  6,500,000

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  5,000,000

  	
   

  

 

(b)           In addition to the foregoing, the Borrower
and its Subsidiaries may make Capital Expenditures with the amount of Net Sale
Proceeds received by the Borrower or any of its Subsidiaries from any Asset
Sale so long as such Net Sale Proceeds are not otherwise required to be applied
to repay Loans pursuant to Section 4.02(e).

 

(c)           In addition to the foregoing, the Borrower
and its Subsidiaries may make Capital Expenditures with the amount of Net
Insurance Proceeds received by the Borrower or any of its Subsidiaries from any
Recovery Event so long as such Net Insurance Proceeds are used to replace or
restore any properties or assets in respect of which such Net Insurance
Proceeds were paid within 360 days following the date of receipt of such Net
Insurance Proceeds from such Recovery Event, but only to the extent that such
Net Insurance Proceeds are not otherwise required to be applied to repay Loans
pursuant to Section 4.02(g).

 

(d)           In addition to the foregoing, the Borrower
and its Wholly-Owned Domestic Subsidiaries that are Subsidiary Guarantors may
consummate Permitted Acquisitions in accordance with the requirements of
Section 8.17.

 

(e)           In addition to the foregoing, commencing on
January 1, 2007, the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed the Cumulative Retained
Excess Cash Flow Amount at the time of such Capital Expenditures; provided,
however, in no event shall the aggregate amount of Capital Expenditures
made pursuant to this Section 9.07(e) exceed $1,500,000 in any fiscal year
of the Borrower.

 

9.08.  Consolidated
Interest Coverage Ratio.  The
Borrower will not permit the Consolidated Interest Coverage Ratio for any Test
Period ending on the last day of a fiscal quarter of the Borrower (beginning
with the fiscal quarter of the Borrower ending closest to March 31, 2004)
to be less than 4.00:1.00.

 

9.09.  Minimum
Consolidated EBITDA.  The
Borrower will not permit Consolidated EBITDA for any Test Period ending on the
last day of a fiscal quarter of the Borrower set forth below to be less than
the amount set forth opposite such fiscal quarter below:

 

70

 

	
  Fiscal Quarter Ending Closest To

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2004

  	
   

  	
  $

  	
  39,000,000

  	
   

  
	
  June 30,
  2004

  	
   

  	
  $

  	
  34,500,000

  	
   

  
	
  September 30,
  2004

  	
   

  	
  $

  	
  32,000,000

  	
   

  
	
  December 31,
  2004

  	
   

  	
  $

  	
  32,000,000

  	
   

  
	
  March 31,
  2005

  	
   

  	
  $

  	
  32,000,000

  	
   

  
	
  June 30,
  2005

  	
   

  	
  $

  	
  32,000,000

  	
   

  
	
  September 30,
  2005

  	
   

  	
  $

  	
  32,000,000

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  33,000,000

  	
   

  
	
  March 31,
  2006

  	
   

  	
  $

  	
  33,000,000

  	
   

  
	
  June 30,
  2006

  	
   

  	
  $

  	
  33,000,000

  	
   

  
	
  September 30,
  2006

  	
   

  	
  $

  	
  33,000,000

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  35,000,000

  	
   

  

 

9.10.  Net Leverage
Ratio.  The Borrower will not
permit the Net Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:

 

71

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From the
  Initial Borrowing Date through and including December 30, 2004

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2004 through and including the day before the last day of the fiscal quarter
  of the Borrower ending closest to September 30, 2005

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The last day
  of the fiscal quarter of the Borrower ending closest to September 30,
  2005 through and including December 30, 2005

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2005 through and including the day before the last day of the fiscal quarter
  of the Borrower ending closest to September 30, 2006

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The last day
  of the fiscal quarter of the Borrower ending closest to September 30,
  2006 through and including December 30, 2006

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2006 through and including the day before the last day of the fiscal quarter
  of the Borrower ending closest to September 30, 2007

  	
   

  	
  2.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The last day
  of the fiscal quarter of the Borrower ending closest to September 30,
  2007 through and including December 30, 2007

  	
   

  	
  1.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2007 and thereafter

  	
   

  	
  1.50:1.00

  	
   

  

 

9.11.  Consolidated Fixed Charge Coverage
Ratio.  The Borrower will not
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period ending
on the last day of any fiscal quarter of the Borrower (beginning with the
fiscal quarter of the Borrower ending closest to March 31, 2004) on or
prior to December 31, 2008 to be less than 2.00:1.00.

 

9.12.  Limitations
on Payments of Additional Permitted Subordinated Debt; Modifications
of Additional Permitted Subordinated Debt Documents, Certificate of
Incorporation, By-Laws and Certain Other Agreements, etc.  The Borrower will not, and will not permit
any of its Subsidiaries to:

 

(i)            make (or give any
notice in respect of) any voluntary or optional payment or prepayment on or
redemption or acquisition for value of, or any prepayment or redemption as a
result of any asset sale, change of control or similar event of (including, in
each case without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying when
due), any Additional Permitted Subordinated Debt;

 

(ii)           amend, modify or change
any term or provision of any Additional Permitted Subordinated Debt Document
unless such amendment, modification or change is approved in advance by the
Administrative Agent and same could not reasonably be expected to be adverse to
the interests of the Lenders; or

 

(iii)          amend, modify or change
its certificate or articles of incorporation (including, without limitation, by
the filing or modification of any certificate of designation (including with
respect to the Existing Preferred Stock) other than any

 

72

 

certificate of designation relating to
Qualified Preferred Stock), certificate of formation, limited liability company
agreement or by-laws (or the equivalent organizational documents), as
applicable, or any agreement entered into by it with respect to its capital
stock or other Equity Interests (including any Shareholders’ Agreement), or
enter into any new agreement with respect to its capital stock or other Equity
Interests, unless such amendment, modification, change or other action
contemplated by this clause (iii) could not reasonably be expected to be
adverse to the interests of the Lenders;

 

provided that,
notwithstanding anything to the contrary contained in this Section 9.12,
the Borrower may amend its certificate of incorporation to eliminate the
ability of the holders of a majority of the Existing Preferred Stock to elect a
majority of the members of the Board of Directors of the Borrower.

 

9.13.  Limitation
on Certain Restrictions on Subsidiaries.  The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits owned by
the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the
Borrower or any of its Subsidiaries, (b) make loans or advances to the Borrower
or any of its Subsidiaries or (c) transfer any of its properties or assets to
the Borrower or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) the Additional Permitted
Subordinated Debt Documents, (iv) customary provisions restricting subletting
or assignment of any lease governing any leasehold interest of the Borrower or
any of its Subsidiaries, (v) customary provisions restricting assignment of any
licensing agreement (in which the Borrower or any of its Subsidiaries is the
licensee) or other contract entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, (vi)restrictions on the
transfer of any asset pending the close of the sale of such asset, and
(vii)restrictions on the transfer of any asset subject to a Lien permitted by
Section 9.01(iii), (vi), (vii) or (xiv).

 

9.14.  Limitation
on Issuance of Capital Stock. 
(a)  The Borrower will not, and
will not permit any of its Subsidiaries to, issue (i) any preferred stock or
other preferred Equity Interests (other than (x) Existing Preferred Stock that
will remain outstanding on the Initial Borrowing Date after giving effect to
the Existing Preferred Stock Redemption (but no further or additional issuance
thereof) and (y) Qualified Preferred Stock issued pursuant to clause (c) below)
or (ii) any redeemable common stock or other redeemable common Equity Interests
other than common stock or other redeemable common Equity Interests that is
redeemable at the sole option of the Borrower or such Subsidiary, as the case
may be.

 

(b)           The Borrower will not permit any of its
Subsidiaries to issue any capital stock or other Equity Interests (including by
way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock or other Equity Interests, except
(i) for transfers and replacements of then outstanding shares of capital stock
or other Equity Interests, (ii) for stock splits, stock dividends and issuances
which do not decrease the percentage ownership of the Borrower or any of its
Subsidiaries in any class of the capital stock or other Equity Interests of
such Subsidiary, (iii) to qualify directors to the extent required by
applicable

 

73

 

law or (iv) for issuances by Subsidiaries of the Borrower which are
newly created or acquired in accordance with the terms of this Agreement.

 

(c)           The Borrower may from time to time (i) issue
Qualified Preferred Stock, so long as (x) no Default or Event of Default shall
exist at the time of any such issuance or immediately after giving effect
thereto, and (y) with respect to each issuance of Qualified Preferred Stock,
the gross cash proceeds therefrom (or in the case of Qualified Preferred Stock
directly issued as consideration for a Permitted Acquisition, the fair market
value thereof of the assets received therefor) shall be at least equal to 100%
of the liquidation preference thereof at the time of issuance and (ii) issue
additional shares of Qualified Preferred Stock to pay in-kind regularly
scheduled Dividends on Qualified Preferred Stock theretofore issued in
compliance with this Section 9.14(c).

 

9.15.  Business, etc.  (a) 
The Borrower will not, and will not permit any of its Subsidiaries to,
engage in any businesses other than (i) the businesses of the Borrower and its
Subsidiaries, as the case may be, conducted on the Initial Borrowing Date or
(ii) a Substantially Similar Line of Business.

 

(b)           Notwithstanding anything to the contrary
contained in this Agreement, the Borrower will not permit any Excluded
Subsidiary to own any assets, incur any liabilities (other than liabilities
arising as a matter of law), conduct any business or have any expenses (other
than administrative and similar expenses that arise in connection with the
maintenance of their existence).

 

9.16.  Limitation
on Creation of Subsidiaries. 
The Borrower will not, and will not permit any of its Subsidiaries to,
establish, create or acquire after the Initial Borrowing Date any Subsidiary, provided
that the Borrower and its Wholly-Owned Subsidiaries may (x) establish, create
and, to the extent permitted by this Agreement, acquire Wholly-Owned
Subsidiaries and (y) establish, create and acquire non-Wholly-Owned
Subsidiaries to the extent permitted by Section 9.05(xiii) or by the
definition of Permitted Acquisition, in each case, so long as (i) all of the
capital stock and other Equity Interests of such new Subsidiary are (to the
extent owned by a Credit Party) pledged to the Collateral Agent pursuant to,
and to the extent required by, the terms and conditions of the Pledge Agreement,
(ii) each new Wholly-Owned Domestic Subsidiary (and to the extent required by
Section 8.13, each new Wholly-Owned Foreign Subsidiary) executes and
delivers to the Administrative Agent a Joinder Agreement substantially in the
form of Exhibit M in respect of the Subsidiaries Guaranty, the Security
Agreement and the Pledge Agreement, (iii) each new Wholly-Owned Domestic
Subsidiary (and to the extent required by Section 8.13, each new
Wholly-Owned Foreign Subsidiary) executes and delivers to the Administrative
Agent a counterpart (or a Joinder Agreement substantially in the form of
Exhibit M in respect) of such Additional Security Documents as the
Administrative Agent or the Required Lenders may require pursuant to
Section 8.12 and (iv) each new Wholly-Owned Domestic Subsidiary (and to
the extent required by Section 8.13, each new Wholly-Owned Foreign
Subsidiary) executes and delivers all other relevant documentation (including
opinions of counsel, resolutions, officers’ certificates and UCC financing statements)
of the type described in Section 5 as such new Subsidiary would have had
to deliver if it were a Credit Party on the Initial Borrowing Date.

 

74

 

9.17.  Change
of Legal Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; etc. 
The Borrower will not, and will not permit any other Credit Party to
change (i) its legal name, (ii) its type of organization, (iii) its status as a
registered organization (in the case of a registered organization), (iv) its
jurisdiction of organization, (v) its location (as determined pursuant to
Section 9-307 of the UCC), (vi) the address of its chief executive office
or (vii) its organizational identification number (if any), except that any
such changes shall be permitted (so long as not in violation of the applicable
requirements of the Security Documents and so long as same do not involve (x) a
registered organization ceasing to constitute the same or (y) a Credit Party
located in the United States changing its jurisdiction of organization or
location from the United States or a State thereof to a jurisdiction of
organization or location, as the case may be, outside the United States or a
State thereof) if (I) such Credit Party shall have given to the Collateral
Agent not less than 15 days’ prior written notice of each change to the
information listed on Schedule VIII (as adjusted for any subsequent
changes thereto previously made in accordance with this sentence), together with
a supplement to Schedule VIII which shall correct all information
contained therein for the respective Credit Party, and (II) in connection with
the respective such change or changes, such Credit Party shall have taken all
action reasonably requested by the Collateral Agent to maintain the security
interests of the Collateral Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect.

 

SECTION 10.  Events of Default.  Upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

10.01.  Payments.  The Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or (ii) default, and
such default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Loan or Note, any Unpaid Drawing or any
Fees or any other amounts owing hereunder or under any other Credit Document;
or

 

10.02.  Representations,
etc.  Any representation, warranty
or statement made or deemed made by any Credit Party herein or in any other
Credit Document or in any certificate delivered to the Administrative Agent or
any Lender pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or

 

10.03.  Covenants.  The Borrower or any of its Subsidiaries
shall (i) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 8.01(f)(i), 8.01(i), 8.08,
8.11, 8.17 or 8.18 or Section 9 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or in any other Credit Document (other than those set forth in
Sections 10.01 and 10.02) and such default shall continue unremedied for a
period of 30 days after written notice thereof to the defaulting party by the
Administrative Agent or the Required Lenders; or

 

10.04.  Default
Under Other Agreements. 
(i)  The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in an instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any

 

75

 

instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice is required), any
such Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries shall be declared to be (or shall become) due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that it shall not be a
Default or an Event of Default under this Section 10.04 unless the
aggregate principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $750,000; or

 

10.05.  Bankruptcy,
etc.  The Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled “Bankruptcy,” as now or hereafter in
effect, or any successor thereto (the “Bankruptcy Code”); or an
involuntary case is commenced against the Borrower or any of its Subsidiaries,
and the petition is not controverted within 10 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower or any of its Subsidiaries, or the Borrower or
any of its Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries (other than a
liquidation or dissolution of a Subsidiary in accordance with
Section 9.02(viii) or (xi)), or there is commenced against the Borrower or
any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Borrower or any of its Subsidiaries
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or the Borrower or any of its Subsidiaries makes a general assignment for
the benefit of creditors; or any corporate, limited liability company or
similar action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or

 

10.06.  ERISA.  Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under
Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable
Event shall have occurred, a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall
be subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an
event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect
to such Plan within the following 30 days, any Plan which is subject to Title
IV of ERISA shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan which is subject to Title IV of ERISA is, shall
have been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made with respect to a Plan or a Foreign Pension
Plan has not been timely made, the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate has incurred or is likely to incur any liability to or
on account

 

76

 

of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or on account of a group health plan (as defined in
Section 607(1) of ERISA, Section 4980B(g)(2) of the Code or 45 Code
of Federal Regulations Section 160.103) under Section 4980B of the
Code and/or the Health Insurance Portability and Accountability Act of 1996, or
the Borrower or any Subsidiary of the Borrower has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or Plans or Foreign Pension Plans, a “default” within the meaning of
Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any
applicable law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the
date hereof, by any governmental authority or agency or by any court (a “Change
of Law”), or, as a result of a Change in Law, an event occurs following a
Change in Law, with respect to or otherwise affecting any Plan; (b) there shall
result from any such event or events the imposition of a lien, the granting of
a security interest, or a liability or a material risk of incurring a
liability; and (c) such lien, security interest or liability, either
individually and/or in the aggregate, has had, or could reasonably be expected to
have, in the opinion of the Required Lenders, a Material Adverse Effect; or

 

10.07.  Security
Documents.  Any of the Security
Documents shall cease to be in full force and effect, or shall cease to give
the Collateral Agent for the benefit of the Secured Creditors the Liens,
rights, powers and privileges purported to be created thereby (including,
without limitation, a perfected security interest in, and Lien on, all of the
Collateral, in favor of the Collateral Agent, superior to and prior to the rights
of all third Persons (except as permitted by Section 9.01), and subject to
no other Liens (except as permitted by Section 9.01), or any Credit Party
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any such Security
Document and such default shall continue beyond the period of grace, if any,
specifically applicable thereto pursuant to the terms of such Security Document
(or if no period of grace is specifically applicable thereto, such default (if
other than a payment default) shall continue for a period of 30 days after
notice thereof to the Borrower by the Administrative Agent or the Required
Lenders); or

 

10.08.  Subsidiaries
Guaranty.  The Subsidiaries
Guaranty or any provision thereof shall cease to be in full force or effect as
to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting
for or on behalf of such Subsidiary Guarantor shall deny or disaffirm such
Guarantor’s obligations under the Subsidiaries Guaranty to which it is a party
or any Subsidiary Guarantor shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to the Subsidiaries Guaranty to which it is a party, provided
that (x) if the default derives from a failure by the Borrower to perform or
comply with Section 10.01(ii), such default shall continue unremedied for
three or more Business Days and (y) if the default derives from a failure by
such Subsidiary to perform or comply with any provision, covenant or agreement
contained in Section 8 (other than Section 8.01(f)(i), 8.01(i), 8.08,
8.11, 8.17 or 8.18), such default shall continue unremedied for a period of 30
days after written notice thereof to the Borrower or such Subsidiary by the
Administrative Agent or the Required Lenders; or

 

77

 

10.09.  Intercompany
Subordination Agreement.  The
Intercompany Subordination Agreement or any provision thereof shall cease to be
in full force and effect, or any party thereto (other than the Administrative
Agent or any Lender) shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Intercompany Subordination Agreement; or

 

10.10.  Judgments.  One or more judgments or decrees shall be
entered against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments equals or exceeds
$2,500,000; or

 

10.11.  Change of Control.  A Change of Control shall occur; or

 

10.12.  Material
Contracts.  The Borrower or any
Subsidiary thereof shall default in the payment when due, or in the performance
or observance, of any obligation or condition of (x) any contract or other
agreement, written or oral, of the Borrower or any of its Subsidiaries
involving monetary liability of or to any Person in an amount in excess of
$15,000,000 per annum, or (y) any other contract or agreement, written or oral,
of the Borrower or any of its Subsidiaries the failure to comply with which
could reasonably be expected to have a Material Adverse Effect, if (in the case
of clauses (x) or (y) of this Section 10.12) the effect of such default is
to permit the other party to terminate such contract or other agreement, and
such termination is reasonably likely to occur, except where any such
occurrence could not reasonably be expected to have a Material Adverse Effect;

 

then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Lenders, shall by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note to enforce its
claims against any Credit Party (provided that, if an Event of Default
specified in Section 10.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice):  (i) declare the Total Commitment terminated, whereupon all
Commitments of each Lender shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect
to the Borrower, it will pay) to the Collateral Agent at the Payment Office
such additional amount of cash or Cash Equivalents, to be held as security by
the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters
of Credit issued for the account of the Borrower and then outstanding; (v)
enforce, as Collateral Agent, all of the Liens and security interests created
pursuant to the Security Documents; and (vi) apply any cash

 

78

 

collateral held by the Administrative Agent pursuant to
Section 4.02 to the repayment of the Obligations.

 

SECTION 11.  Definitions and Accounting Terms.

 

11.01.  Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Acquired EBITDA” shall mean, for any
Acquired Entity or Business for any period, the Consolidated EBITDA as
determined for such Acquired Entity or Business on a basis substantially the
same (with necessary reference changes) as provided in the first sentence of
the definition of Consolidated EBITDA contained herein.

 

“Acquired Entity or Business” shall
mean either (x) the assets constituting a business, division or product line of
any Person not already a Subsidiary of the Borrower or (y)100% of the Equity
Interests of any such Person, which Person shall, as a result of such equity
acquisition, become a Wholly-Owned Subsidiary of the Borrower (or shall be merged
with and into the Borrower or a Subsidiary Guarantor, with the Borrower or such
Subsidiary Guarantor being the surviving Person).

 

“Additional Permitted Subordinated Debt”
shall mean Indebtedness of the Borrower that (i) is unsecured, (ii) is not
guaranteed by any Subsidiary of the Borrower, (iii) matures no earlier than 180
days after the Term Loan Maturity Date, (iv) requires no payment of principal
(whether by way of scheduled amortization, mandatory redemption, mandatory
prepayment, sinking fund or otherwise) prior to its maturity, except upon the
occurrence of a change of control (the definition of which shall be acceptable
to the Administrative Agent) so long as the terms thereof do not require any
such redemption or other action unless (and until) all Obligations have been
paid in full and the Total Commitment and all Letters of Credit have been
terminated or the requisite consents under this Agreement have been obtained to
permit such redemption or other action upon the occurrence of a change of control,
(v) does not require the Borrower or any of its Subsidiaries to maintain any
specified financial condition, and (vi) contains subordination and other
provisions that are reasonably satisfactory to the Administrative Agent.

 

“Additional Permitted Subordinated Debt
Documents” shall mean all indentures, purchase agreements, notes,
guarantees and related documents entered into in connection with the issuance
or incurrence of any Additional Permitted Subordinated Debt.

 

“Additional Security Documents” shall
have the meaning provided in Section 8.12.

 

“Adjusted Consolidated Net Income”
shall mean, for any period, Consolidated Net Income for such period plus,
without duplication, the sum of the amount of all net non-cash charges
(including, without limitation, depreciation, amortization, deferred tax
expense and non-cash interest expense) and net non-cash losses which were
included in arriving at Consolidated Net Income for such period, less the
amount of all net non-cash gains (exclusive of items

 

79

 

reflected in Adjusted Consolidated Working Capital) which were included
in arriving at Consolidated Net Income for such period.

 

“Adjusted Consolidated Working Capital”
shall mean, at any time, Consolidated Current Assets (but excluding therefrom
all cash and Cash Equivalents) less Consolidated Current Liabilities at such
time.

 

“Administrative Agent” shall mean
CLNY, in its capacity as Administrative Agent for the Lenders hereunder, and
shall include any successor to the Administrative Agent appointed pursuant to
Section 12.09.

 

“Affiliate” shall mean, with respect
to any Person, any other Person directly or indirectly controlling (including,
but not limited to, all directors and officers of such Person), controlled by,
or under direct or indirect common control with, such Person.  A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power (i) to vote
5% or more of the securities having ordinary voting power for the election of
directors (or equivalent governing body) of such Person or (ii) to direct or
cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise; provided,
however, that, for purposes of this Agreement, neither the
Administrative Agent nor any Affiliate thereof shall be considered an Affiliate
of the Borrower or any Subsidiary thereof.

 

“Affiliate Contracts” shall have the
meaning provided in Section 5.05(ix).

 

“Agreement” shall mean this Credit
Agreement, as modified, supplemented, amended, restated (including any
amendment and restatement hereof), extended or renewed from time to time.

 

“Applicable Commitment Commission
Percentage” shall mean, for any day, (i) in the event the Total Unutilized
Revolving Loan Commitment in effect on such day is greater than or equal to 50%
of the Total Revolving Loan Commitment as in effect on such day, 0.625%, and
(ii) in the event the Total Unutilized Revolving Loan Commitment in effect on
such day is less than 50% of the Total Revolving Loan Commitment as in effect
on such day, 0.50%.  For purposes of
this definition, the Total Unutilized Revolving Loan Commitment and the Total
Revolving Loan Commitment as in effect on any day shall be determined after the
close of business (New York time) on such day, following adjustments to such
amounts for activity on such day.

 

“Applicable Excess Cash Prepayment
Percentage” shall mean, at any date of determination, 75%, provided
that so long as no Default or Event of Default is then in existence, if the
Total Leverage Ratio for the Test Period then most recently ended (as
established pursuant to the officer’s certificate last delivered (or required
to be delivered) pursuant to Section 8.01(e)) is less than or equal to
2.00:1.00, the Applicable Excess Cash Prepayment Percentage shall instead be
50%.

 

“Applicable Margin” initially shall
mean a percentage per annum equal to (i) in the case of Term Loans maintained
as (A) Base Rate Loans, 2.75%, and (B) LIBOR Loans, 4.00%; (ii) in the case of
Revolving Loans maintained as (A) Base Rate Loans, 2.50%, and (B)

 

80

 

LIBOR Loans, 3.75%; and (iii) in the case of Swingline Loans,
2.50%.  Notwithstanding the foregoing,
from and after any Start Date to and including the corresponding End Date, the
respective percentage per annum set forth below under the respective Type and
Tranche of Loan and opposite the respective Level (i.e., Level 1, Level
2 or Level 3, as the case may be) indicated to have been achieved on the
applicable Test Date for such Start Date (as shown in the respective officer’s
certificate delivered pursuant to Section 8.01(e) or the first proviso
below):

 

	
  Level

  	
   

  	
  Total Leverage Ratio

  	
   

  	
  Swingline Loans

  and Revolving

  Loans maintained as Base

  Rate Loans

  	
   

  	
  Revolving Loans maintained

  as LIBOR Loans

  	
   

  
	
  1

  	
   

  	
  Less than 2.50:1.00

  	
   

  	
  2.00

  	
  %

  	
  3.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Greater than or equal to 2.50:1.00 but less
  than 3.00:1.00

  	
   

  	
  2.25

  	
  %

  	
  3.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Greater than or equal to 3.00:1.00

  	
   

  	
  2.50

  	
  %

  	
  3.75

  	
  %

  

 

; provided, however, that if the Borrower fails to
deliver the financial statements required to be delivered pursuant to
Section 8.01(a) or (b) (accompanied by the officer’s certificate required
to be delivered pursuant to Section 8.01(e) showing the applicable Total
Leverage Ratio on the relevant Test Date) on or prior to the respective date
required by such Sections, then Level 3 pricing shall apply until such time, if
any, as the financial statements required as set forth above and the
accompanying officer’s certificate have been delivered showing the pricing for
the respective Margin Reduction Period is at a Level below Level 3 (it being
understood that, in the case of any late delivery of the financial statements and
officer’s certificate as so required, any reduction in the Applicable Margin
shall apply only from and after the date of the delivery of the complying
financial statements and officer’s certificate); provided  further,
that Level 3 pricing shall apply at all times when any Default or Event of
Default is in existence.

 

“Asset Sale” shall mean any sale,
transfer or other disposition by the Borrower or any of its Subsidiaries to any
Person (including by way of redemption by such Person) other than to the Borrower
or a Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of, or Equity Interests in,
another Person) other than sales of assets pursuant to Sections 9.02(ii), (vi),
(vii), (xii) and (xiii).

 

“Assignment and Assumption Agreement”
shall mean an Assignment and Assumption Agreement substantially in the form of
Exhibit K (appropriately completed).

 

“Attributable Debt” shall mean, as of
any date of determination thereof, without duplication, (i) in connection with
a Sale and Leaseback Transaction, the net present value (discounted according
to generally accepted accounting principles at the cost of debt implied in the
lease) of the obligations of the lessee for rental payments during the then
remaining term of any applicable lease, and (ii)the principal balance
outstanding under any synthetic lease, tax

 

81

retention operating lease, off-balance sheet loan or similar
off-balance sheet financing (including an off-balance sheet receivables
financing) product to which such Person is a party.

 

“Bankruptcy Code” shall have the meaning provided in
Section 10.05.

 

“Barnwell Legislation” shall mean the Atlantic Interstate
Low-Level Radioactive Waste Compact Implementation Act (Sections 48-46-10 to
48-46-90 of the South Carolina Code of Laws), as in effect from time to time.

 

“Barnwell Obligations” shall mean, at any time, the aggregate
amount of the payment obligations of Chem-Nuclear (and, in the event the
Borrower or any other Subsidiary thereof becomes subject to the Barnwell
Legislation, the Borrower and/or such other Subsidiary) under the Barnwell
Legislation, as of the last day of the then most recently ended month for which
Chem-Nuclear’s (and/or the Borrower’s or such other Subsidiary’s, as
applicable) books have been closed, to the extent accrued and owing to the
State of South Carolina in connection with the operation by Chem-Nuclear
(and/or the Borrower or any other Subsidiary thereof, as applicable) of its
low-level radioactive waste disposal facility in Barnwell, South Carolina.

 

“Base Rate” shall mean, at any time, the higher of (i) the Prime
Lending Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal
Funds Rate at such time.

 

“Base Rate Loan” shall mean each Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.

 

“Borrower” shall have the meaning set forth in the first
paragraph of this Agreement.

 

“Borrower Common Stock” shall have the meaning provided in
Section 7.13.

 

“Borrowing” shall mean the borrowing of one Type of Loan of a
single Tranche from all the Lenders having Commitments of the respective
Tranche (or from the Swingline Lender in the case of Swingline Loans) on a
given date (or resulting from a conversion or conversions on such date) having
in the case of LIBOR Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part
of the related Borrowing of LIBOR Loans.

 

“Business Day” shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, LIBOR Loans, any day which is
a Business Day described in clause (i) above and which is also a day for
trading by and between banks in U.S. dollar deposits in the London interbank
market.

 

“Calculation Period” shall mean, in the case of any Permitted
Acquisition, the Test Period most recently ended prior to the date of any such
Permitted Acquisition for which financial statements are available.

 

82

 

“Capital Expenditures” shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount
of Capitalized Lease Obligations incurred by such Person.

 

“Capitalized Lease Obligations” shall mean, with respect to any
Person, all rental obligations of such Person which, under generally accepted
accounting principles, are or will be required to be capitalized on the books
of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.

 

“Carlyle” shall mean The Carlyle Group and its Affiliates.

 

“Cash Equivalents” shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s, (iii) Dollar denominated time deposits, certificates of
deposit and bankers acceptances of any Lender or any commercial bank having, or
which is the principal banking subsidiary of a bank holding company having, a
long-term unsecured debt rating of at least “A” or the equivalent thereof from
S&P or “A2” or the equivalent thereof from Moody’s with maturities of not
more than one year from the date of acquisition by such Person, (iv) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (iii) above, (v) commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s and in each case maturing not more than one year after the date of
acquisition by such Person, and (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.

 

“CERCLA” shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same has been amended and may
hereafter be amended from time to time, 42 U.S.C. §9601 et seq.

 

“Change of Control” shall mean, (a) any Person or “group”
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act, as in
effect on the Effective Date), other than Carlyle, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, as in effect
on the Effective Date) of 35% or more on a fully diluted basis of the voting
and/or economic interest in the Borrower Common Stock, (b) the Board of
Directors of the Borrower shall cease to consist of a majority of Continuing
Directors, or (c) a “change of control” or similar event shall occur as
provided in (i) any Additional Permitted Subordinated Debt Document or (ii) any
other instrument or indenture governing any Indebtedness of the Borrower or any
Subsidiary thereof, to the extent the outstanding principal amount of such
Indebtedness referred to in this sub-clause (ii) equals or exceeds $750,000.

 

83

 

“Change of Law” shall have the meaning provided in
Section 10.06.

 

“Chem-Nuclear” shall mean Chem-Nuclear Systems, LLC, a
Wholly-Owned Domestic Subsidiary of the Borrower.

 

“CLNY” shall mean Credit Lyonnais New York Branch in its
individual capacity and any successor thereto by merger, consolidation or
otherwise.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.  Section references to
the Code are to the Code as in effect at the date of this Agreement and any
subsequent provisions of the Code amendatory thereof, supplemental thereto or
substituted therefor.

 

“Collateral” shall mean all property (whether real or personal)
with respect to which any security interests have been granted (or purported to
be granted) pursuant to any Security Document, including, without limitation,
all Pledge Agreement Collateral, all Security Agreement Collateral, all
Mortgaged Properties and all cash and Cash Equivalents delivered as collateral
pursuant to Section 4.02 or 10.

 

“Collateral Agent” shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.

 

“Collective Bargaining Agreements” shall have the meaning
provided in Section 5.05.

 

“Commitment” shall mean any of the commitments of any Lender, i.e.,
either a Term Loan Commitment or a Revolving Loan Commitment.

 

“Commitment Commission” shall have the meaning provided in
Section 3.01(a).

 

“Consolidated Current Assets” shall mean, at any time, the
consolidated current assets of the Borrower and its Subsidiaries at such time.

 

“Consolidated Current Liabilities” shall mean, at any time, the
consolidated current liabilities of the Borrower and its Subsidiaries at such
time, but excluding the current portion of any Indebtedness under this
Agreement and the current portion of any other long-term Indebtedness which
would otherwise be included therein.

 

“Consolidated EBIT” shall mean, for any period, Consolidated Net
Income for such period before deducting therefrom consolidated interest expense
of the Borrower and its Subsidiaries for such period (to the extent that such
consolidated interest expense was deducted in arriving at Consolidated Net
Income for such period) and provision for taxes based on income that were
included in arriving at Consolidated Net Income for such period and without
giving effect to (x) any extraordinary gains or any extraordinary non-cash
losses (except to the extent that any such extraordinary non-cash losses will
require a cash payment in a future period) and (y) any gains or losses from sales
of assets other than from sales of inventory in the ordinary course of
business.

 

84

 

“Consolidated EBITDA” shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
Net Income for such period; it being understood that in determining the Total
Leverage Ratio and the Net Leverage Ratio, Consolidated EBITDA for any period
shall be calculated on a Pro Forma Basis to give effect to any Acquired
Entity or Business acquired during such period pursuant to a Permitted
Acquisition and not subsequently sold or otherwise disposed of by the Borrower
or any of its Subsidiaries during such period.

 

“Consolidated Fixed Charge Coverage Ratio” shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such
period.

 

“Consolidated Fixed Charges” shall mean, for any period, the
sum, without duplication, of (i) Consolidated Interest Expense for such period,
(ii) the amount of all Capital Expenditures made by the Borrower and its
Subsidiaries for such period (other than Capital Expenditures to the extent
financed with the Cumulative Retained Excess Cash Flow Amount pursuant to
Section 9.07(e), equity proceeds, Assets Sale proceeds, insurance proceeds
or Indebtedness (other than with Revolving Loans or Swingline Loans)) and (iii)
the scheduled principal amount of all amortization payments on all Indebtedness
(including, without limitation, the Term Loans and the principal component of
all Capitalized Lease Obligations but excluding the repayment of Indebtedness
to be Refinanced as part of the Transaction) of the Borrower and its
Subsidiaries for such period (as determined on the first day of such period).

 

“Consolidated Indebtedness” shall mean, at any time without
duplication, (i)the aggregate principal amount of all Indebtedness (or, if
greater, the aggregate face amount of any Indebtedness issued at a discount) of
the Borrower and its Subsidiaries at such time (including, without limitation,
all Loans, Capitalized Lease Obligations and guaranties of other Indebtedness),
(ii)the aggregate outstanding amount of all Attributable Debt of the Borrower
and its Subsidiaries at such time and (iii) the greater of the aggregate
liquidation value or the maximum fixed repurchase price of all Existing
Preferred Stock at such time; provided that for purposes of this
definition, (x) the amount of Indebtedness in respect of Interest Rate
Protection Agreements and Other Hedging Agreements shall be at any time the
unrealized net loss position, if any, of the Borrower and/or its Subsidiaries
thereunder on a marked-to-market basis determined no more than one month prior
to such time and (y) undrawn amounts in respect of letters of credit (including
Letters of Credit) shall not be included in any determination of Consolidated
Indebtedness.

 

“Consolidated Interest Coverage Ratio” shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period.

 

“Consolidated Interest Expense” shall mean, for any period, the
sum of the total consolidated interest expense of the Borrower and its
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, (i)that portion of Capitalized
Lease Obligations of the Borrower and its Subsidiaries representing the
interest factor for such period, (ii)the interest component (or imputed
interest) of any lease payment or other off-balance sheet financing under
Attributable Debt transactions paid by the Borrower and its Subsidiaries for
such period and (iii) the product of (x) all dividends actually paid, whether
paid in cash or in any other consideration, during such period with respect to
any 

 

85

 

Existing Preferred Stock (other
than dividends paid on the Initial Borrowing Date as part of the Existing
Preferred Stock Redemption), multiplied by (y) a fraction, the numerator
of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory income tax rate of the
Borrower, expressed as a decimal; provided that the amortization of
deferred financing, legal and accounting costs with respect to the Transaction
in each case shall be excluded from Consolidated Interest Expense to the extent
same would otherwise have been included therein.

 

“Consolidated Net Income” shall mean, for any period, the net
income (or loss) of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis (after any deduction for minority
interests), provided that (i) in determining Consolidated Net Income,
the net income of any other Person which is not a Subsidiary of the Borrower or
is accounted for by the Borrower by the equity method of accounting shall be
included only to the extent of the payment of cash dividends or cash
distributions by such other Person to the Borrower or a Subsidiary thereof
during such period, (ii) the net income of any Subsidiary of the Borrower shall
be excluded to the extent that the declaration or payment of cash dividends or
similar cash distributions by that Subsidiary of that net income is not at the
date of determination permitted by operation of its charter or any agreement,
instrument or law applicable to such Subsidiary and (iii) the net income (or
loss) of any other Person acquired by the Borrower or a Subsidiary of the
Borrower in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded.

 

“Contingent Obligation” shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
any other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv)otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

 

“Continuing Directors” shall mean the directors of the Borrower
on the Effective Date and each other director if such director’s nomination for
election to the Board of Directors of the Borrower is recommended by (i) a
majority of the then Continuing Directors or (ii) a 

 

86

 

nominating committee of the
Board of Directors, the majority of the members of which nominating committee
are then Continuing Directors.

 

“Control Agreement” shall mean a Control Agreement Regarding
Deposit Accounts substantially in the form of Annex G to the Security
Agreement.

 

“Credit Documents” shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty, the Intercompany Subordination Agreement and
each Security Document.

 

“Credit Event” shall mean the making of any Loan or the issuance
of any Letter of Credit.

 

“Credit Party” shall mean the Borrower and each Subsidiary
Guarantor.

 

“Cumulative Retained Excess Cash Flow Amount” shall initially
mean $0; provided that (A) on each Excess Cash Payment Date, the
Cumulative Retained Excess Cash Flow Amount shall be increased by an amount
equal to 25% (or to the extent that the Applicable Excess Cash Prepayment
Percentage is 50%, then by an amount equal to 50%) of the Excess Cash Flow for
the relevant Excess Cash Payment Period (or, if Excess Cash Flow for such period
is a negative amount, the Cumulative Retained Excess Cash Flow Amount shall be
reduced by an amount equal to 100% of the Excess Cash Flow (for this purpose
expressed as a positive amount) for the relevant Excess Cash Flow Payment
Period) and (B) the Cumulative Retained Excess Cash Flow Amount shall be
reduced (x) on each date that a Dividend is paid or made pursuant to
Section 9.03(iii), by the aggregate amount of the Dividends so paid or
made on each such date and (y) on each date that Capital Expenditures are made
pursuant to Section 9.07(e), by the aggregate amount of the Capital
Expenditures so made on each such date.

 

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

 

“Defaulting Lender” shall mean any Lender with respect to which
a Lender Default is in effect.

 

“Deposit Account” shall have the meaning provided in the
Security Agreement.

 

“Dividend” shall mean, with respect to any Person, that such
Person has declared or paid a dividend, distribution or returned any equity
capital to its stockholders, partners or members or authorized or made any
other distribution, payment or delivery of property (other than common equity
of such Person) or cash to its stockholders, partners or members as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock or any partnership
or membership interests outstanding on or after the Effective Date (or any
options or warrants issued by such Person with respect to its capital stock or
other Equity Interests), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership or membership interests of such Person outstanding on
or after the Effective Date (or any options or warrants issued by such Person
with respect to its capital stock or other Equity Interests).  Furthermore (x) 

 

87

 

without limiting the foregoing,
“Dividends” with respect to any Person shall also include all payments made or
required to be made by such Person with respect to any stock appreciation
rights, equity incentive or equity achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes and (y) notwithstanding
the foregoing, with respect to the Borrower, “Dividends” shall not include the payment
of cash by the Borrower pursuant to restricted stock unit awards granted by the
Borrower pursuant to an employee benefit plan approved by the Board of
Directors of the Borrower, so long as the payment of such cash is treated as an
expense and reduces the Consolidated Net Income of the Borrower in each case in
accordance with generally accepted accounting principles.

 

“Dollars” and the sign “$” shall each mean freely
transferable lawful money of the United States.

 

“Domestic Subsidiary” shall mean, as to any Person, any
Subsidiary of such Person incorporated or organized in the United States or any
State thereof.

 

“Drawing” shall have the meaning provided in
Section 2.05(b).

 

“Effective Date” shall have the meaning provided in
Section 13.10.

 

“Eligible Transferee” shall mean and include a commercial bank,
an insurance company, a finance company, a financial institution, any fund that
invests in loans, and any Person that would qualify as a “qualified
institutional buyer” (as defined in Rule 144A of the Securities Act), but
excluding (in each case) Carlyle (other than any fund that is sponsored or
managed by Carlyle and which was established to invest in (and regularly
invests in) loans generally of substantially the same type as the Loans
provided under this Agreement and whose investors that are not Carlyle
Affiliates own at least 75% of the economic interest in such fund).

 

“Employee Benefit Plans” shall have the meaning provided in
Section 5.05.

 

“Employment Agreements” shall have the meaning provided in
Section 5.05.

 

“End Date” shall mean, for any Margin Reduction Period, the last
day of such Margin Reduction Period.

 

“Environmental Claims” shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, “Claims”),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and
(b)any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.

 

“Environmental Law” shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, policy and
rule of common law now or hereafter in

 

88

 

effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials, including,
without limitation, the Atomic Energy Act, 42 U.S.C. § 2011 et seq.;
CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C §6901 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. §2601 et seq.; the Clean Air
Act, 42 U.S.C. §7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. §2701 et seq.;
the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
§11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
§ 1801 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
§651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.

 

“Equity Interests” of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interest in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.

 

“ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. 
Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of
the Borrower would be deemed to be a “single employer” (i) within the meaning
of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Borrower or a Subsidiary of the Borrower being or having been a general partner
of such person.

 

“Event of Default” shall have the meaning provided in
Section 10.

 

“Excess Cash Flow” shall mean, for any period, the remainder of
(a) the sum of (i) Adjusted Consolidated Net Income for such period and (ii)
the decrease, if any, in Adjusted Consolidated Working Capital from the first
day to the last day of such period, minus (b) the sum of (i) the
aggregate amount of all Capital Expenditures made by the Borrower and its
Subsidiaries during such period (other than Capital Expenditures to the extent
financed with the Cumulative Retained Excess Cash Flow Amount pursuant to
Section 9.07(e), equity proceeds, Asset Sale proceeds, insurance proceeds
or Indebtedness (other than with Revolving Loans or Swingline Loans)), (ii) the
aggregate amount of permanent principal payments of Indebtedness for borrowed
money of the Borrower and its Subsidiaries during such period (other than (A)
repayments to the extent made with Asset Sale proceeds, equity proceeds,
insurance proceeds or Indebtedness and (B) repayments of Loans, provided
that repayments of Loans shall be deducted in determining Excess Cash Flow if
such repayments were (x) required as a result of a Scheduled Repayment under
Section 4.02(b) or (y) made as a voluntary prepayment with internally
generated funds (but in the case of a voluntary prepayment of Revolving Loans
or Swingline Loans, only to the extent accompanied by a voluntary reduction to
the Total Revolving Loan Commitment)), (iii) the increase, if any, in Adjusted
Consolidated Working Capital from the first 

 

89

 

day to the last day of such
period, (iv) the aggregate amount of cash paid by the Borrower and its
Subsidiaries during such period to effect Permitted Acquisitions (other than
Permitted Acquisitions to the extent financed with equity proceeds, Asset Sale
proceeds, insurance proceeds or proceeds of Indebtedness (other than with
Revolving Loans or Swingline Loans)), and (v) the aggregate amount of all cash
Dividends paid or made by the Borrower pursuant to Sections 9.03(vi) and (vii)
during such period.

 

“Excess Cash Payment Date” shall mean, with respect to each
fiscal year of the Borrower beginning with its fiscal year ending
December 31, 2004, the date on which the delivery of the financial
statements by the Borrower required pursuant to Section8.01(b) (accompanied by
the officer’s certificate required to be delivered pursuant to Section8.01(e)
setting forth in reasonable detail the amount of (and the calculations required
to establish the amount of) Excess Cash Flow for the respective Excess Cash
Flow Payment Period) is made, but in no event shall the Excess Cash Flow
Payment Date in respect of any fiscal year of the Borrower occur after the last
day of the Borrower’s fiscal quarter ending closest to March31 of the
immediately succeeding fiscal year.

 

“Excess Cash Payment Period” shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended.

 

“Excluded Subsidiaries” shall mean (x) Durachem Limited
Partnership and (y) Analytical Resources, Inc.

 

“Existing Credit Agreement” shall mean the Credit Agreement,
dated as of June 8, 2000 and amended and restated as of February 28,
2003, among the Borrower, certain Subsidiaries of the Borrower, the lenders
party thereto, Wachovia Bank, National Association (formerly known as First
Union National Bank) as administrative agent, CLNY as documentation agent,
Fleet National Bank as syndication agent and Wachovia Securities, Inc. as lead
arranger and book manager.

 

“Existing Indebtedness” shall have the meaning provided in
Section 7.21.

 

“Existing Indebtedness Agreements” shall have the meaning
provided in Section 5.05(viii).

 

“Existing Preferred Stock” shall mean the 8% Cumulative
Convertible Redeemable Preferred Stock, $0.01 par value per share, of the
Borrower.

 

“Existing Preferred Stock Redemption” shall have the meaning
provided in Section5.06.

 

“Federal Funds Rate” shall mean, for any period, a fluctuating
interest rate equal for each day during such period to 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 for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day 

 

90

 

which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized standing
selected by the Administrative Agent.

 

“Fees” shall mean all amounts payable pursuant to or referred to
in Section 3.01.

 

“Foreign Pension Plan” shall mean each employee benefit plan,
employment, bonus, incentive, stock purchase and stock option plan, program,
agreement or arrangement; and each severance, termination pay, salary
continuation, retention, accrued leave, vacation, sick pay, sick leave,
medical, life insurance, disability, accident, profit-sharing, fringe benefit,
pension, deferred compensation or other retirement or superannuation plan,
fund, program, agreement, commitment or arrangement sponsored, established,
maintained or contributed to, or required to be contributed to, or with respect
to which any liability is borne, outside the fifty states of the United States
of America, by the Borrower or any of its Subsidiaries, including, without
limitation, any such plan, fund, program, agreement or arrangement sponsored by
a government or governmental entity and which plan is not subject to ERISA or
the Code.

 

“Foreign Subsidiary” shall mean, as to any Person, any
Subsidiary of such Person that is not a Domestic Subsidiary of such Person.

 

“Fronting Fee” shall have the meaning provided in
Section 3.01(c).

 

“Government Contract” shall have the meaning provided in the
Security Agreement.

 

“Hazardous Materials” shall mean (a)any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, dielectric fluid containing levels
of polychlorinated biphenyls, and radon gas; (b)any chemicals, materials or
substances defined as or included in the definition of “hazardous substances,”
“hazardous waste,” “hazardous materials,” “extremely hazardous substances,”
“restricted hazardous waste,” “toxic substances,” “toxic pollutants,”
“contaminants,” or “pollutants,” or words of similar import, under any
applicable Environmental Law; and (c)any other chemical, material or substance,
the exposure to, or Release of which is prohibited, limited or regulated by any
governmental authority.

 

“Inactive Subsidiary” shall mean, at any time, each Subsidiary
of the Borrower which (i) does not own assets with an aggregate fair market
value (as determined in good faith by the management of the Borrower) in excess
of $100,000 and (ii) at such time is inactive (i.e., does not conduct
any business).

 

“Indebtedness” shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the maximum amount available to be drawn or paid
under all letters of credit, bankers’ acceptances, bank guaranties and similar
obligations issued for the account of such Person and all unpaid drawings in
respect of such letters of credit, bankers’ acceptances and similar obligations,
(iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v),
(vi), (vii) or (viii) of this definition secured by any Lien on any property
owned by such Person, whether or not such Indebtedness has been assumed by such

 

91

 

Person (provided that,
if the Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (iv) the aggregate amount of all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, (vii) all obligations under any Interest Rate
Protection Agreement, any Other Hedging Agreement or under any similar type of
agreement, and (viii) all Attributable Debt of such Person.  Notwithstanding the foregoing, Indebtedness
shall not include trade payables and accrued expenses incurred by any Person in
accordance with customary practices and in the ordinary course of business of
such Person.

 

“Initial Borrowing Date” shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Loans occurs.

 

“Intercompany Loan” shall have the meaning provided in
Section 9.05(vii).

 

“Intercompany Note” shall mean a promissory note, in the form of
Exhibit O, evidencing Intercompany Loans.

 

“Intercompany Subordination Agreement” shall have the meaning
provided in Section 5.13.

 

“Interest Determination Date” shall mean, with respect to any
LIBOR Loan, the second Business Day prior to the commencement of any Interest
Period relating to such LIBOR Loan.

 

“Interest Period” shall have the meaning provided in
Section 1.09.

 

“Interest Rate Protection Agreement” shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.

 

“Investments” shall have the meaning provided in
Section 9.05.

 

“Issuing Lender” shall mean each of CLNY (except as otherwise
provided in Section 12.09) and any other Lender reasonably acceptable to
the Administrative Agent which agrees to issue Letters of Credit
hereunder.  Any Issuing Lender may, in
its discretion, arrange for one or more Letters of Credit to be issued by one
or more Affiliates of such Issuing Lender.

 

“L/C Supportable Obligations” shall mean (A) obligations of the
Borrower or any of its Subsidiaries with respect to (i) workers compensation,
surety bonds and other similar statutory obligations and (ii) performance bonds
and other similar contractual requirements, and (B) such other obligations of
the Borrower or any of its Subsidiaries as are reasonably acceptable to the
respective Issuing Lender and otherwise permitted to exist pursuant to the
terms of this Agreement (other than obligations in respect of Additional
Permitted Subordinated Debt or capital stock or other Equity Interests).

 

92

 

“Leaseholds” of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.

 

“Lender” shall mean each financial institution listed on
Schedule I, as well as any Person that becomes a “Lender” hereunder
pursuant to Section 1.13 or 13.04(b).

 

“Lender Default” shall mean (i)the refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii)a Lender having notified
in writing the Borrower and/or the Administrative Agent that such Lender does
not intend to comply with its obligations under Section 1.01(a), 1.01(b),
1.01(d) or 2.

 

“Letter of Credit” shall have the meaning provided in Section 2.01(a).

 

“Letter of Credit Fee” shall have the meaning provided in
Section 3.01(b).

 

“Letter of Credit Outstandings” shall mean, at any time, the sum
of (i) the Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.

 

“Letter of Credit Request” shall have the meaning provided in
Section 2.03(a).

 

“LIBOR Loan” shall mean each Loan (other than a Swingline Loan)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.

 

“LIBOR Rate” shall mean, with respect to any Interest Period,
(i) an interest rate per annum equal to the rate per annum set forth on page
3750 of the Dow Jones Market Service (or any other page that may replace such
page from time to time) as of 11:00 A.M. (London time) on the second Business
Day prior to the first day of the relevant Interest Period for dollar deposits
having a tenor equal to the duration of such Interest Period divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation
D).  In the event that two or more such
rates appear on page 3750 (or any replacement page), “LIBOR Rate” shall be the
arithmetic mean (rounded to the nearest whole multiple of 1/16 of 1% per annum,
if such a percentage is not such a multiple) of such offered rates.  In the event that the rates indicated above
are not available at the relevant date of determination for any reason, then
“LIBOR Rate” shall mean, with respect to any Interest Period, (i) the
arithmetic average of the offered quotation to first-class banks in the London
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the outstanding principal amount of the
LIBOR Loans for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such LIBOR Loans,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a 

 

93

 

percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).

 

“Lien” shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).

 

“Loan” shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.

 

“Management Agreements” shall have the meaning provided in
Section 5.05.

 

“Mandatory Borrowing” shall have the meaning provided in
Section 1.01(d).

 

“Margin Reduction Period” shall mean each period which shall
commence on the date upon which the respective officer’s certificate is
delivered pursuant to Section 8.01(e) (together with the related financial
statements pursuant to Section 8.01(a) or (b), as the case may be) and
which shall end on the date of actual delivery of the next officer’s
certificate pursuant to Section 8.01(e) (and related financial statements)
or the latest date on which such next officer’s certificate (and related
financial statements) is required to be so delivered; it being understood that
the first Margin Reduction Period shall commence with the delivery of the
Borrower’s financial statements (and related officer’s certificate) in respect
of the Borrower’s fiscal quarter ending closest to June 30, 2004.

 

“Margin Stock” shall have the meaning provided in Regulation U.

 

“Material Adverse Effect” shall mean (i) a material adverse
effect on the business, assets, property, liabilities (fixed or contingent),
condition (financial or otherwise) or operations of the Borrower and its
Subsidiaries taken as a whole or (ii) a material adverse effect (x) on the
validity, enforceability or priority of any of the Credit Documents or the
liens thereunder or on the rights or remedies of the Lenders or the
Administrative Agent hereunder or under any other Credit Document or (y) on the
ability of any Credit Party to perform its obligations to the Lenders or
Administrative Agent hereunder or under any other Credit Document.

 

“Material Contracts” shall have the meaning provided in
Section 5.05(x).

 

“Maximum Permitted Consideration” shall mean, with respect to
any Permitted Acquisition, the sum (without duplication) of (i) the fair market
value of the Borrower Common Stock (based on (x) the closing and/or trading
price of the Borrower Common Stock on the date of such Permitted Acquisition on
the stock exchange on which the Borrower Common Stock is listed or the
automated quotation system on which the Borrower Common Stock is quoted, or (y)
if the Borrower Common Stock is not listed on an exchange or quoted on a
quotation system, the 

 

94

 

bid and asked prices of the
Borrower Common Stock in the over-the-counter market at the close of trading or
(z) if the Borrower Common Stock is not so listed, based on a good faith
determination of the Board of Directors of the Borrower) issued as
consideration in connection with such Permitted Acquisition, (ii) the fair
market value of all Qualified Preferred Stock (based on a good faith
determination of the Board of Directors of the Borrower) issued as
consideration in connection with such Permitted Acquisition, (iii) the
aggregate amount of all cash paid by the Borrower or any of its Subsidiaries in
connection with such Permitted Acquisition (including payments of fees, costs,
expenses and taxes in connection therewith), (iv) the aggregate principal
amount of, and other obligations due under, all Indebtedness assumed, incurred,
repaid, refinanced and/or issued by the Borrower or any of its Subsidiaries in
connection with such Permitted Acquisition, (v) the aggregate amount that could
reasonably be expected to be paid (based on good faith projections prepared by the
Chief Financial Officer or Treasurer of the Borrower) pursuant to any earn-out,
non-compete, consulting or deferred compensation or purchase price adjustment)
for such Permitted Acquisition and (vi) the fair market value (based on a good
faith determination of the Chief Financial Officer or Treasurer of the
Borrower) of all other consideration payable in connection with such Permitted
Acquisition.

 

“Maximum Swingline Amount” shall mean $2,000,000.

 

“Minimum Borrowing Amount” shall mean (i) for Term Loans,
$5,000,000, (ii)for Revolving Loans, $1,000,000, and (iii) for Swingline Loans,
$250,000.

 

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

 

“Mortgage” shall mean a mortgage, leasehold mortgage, deed of
trust, leasehold deed of trust, deed to secure debt, leasehold deed to secure
debt or similar security instrument.

 

“Mortgage Policy” shall mean a mortgage title insurance policy
or a binding commitment with respect thereto.

 

“Mortgaged Property” shall mean any Real Property owned or
leased by the Borrower or any of its Subsidiaries which is encumbered (or
required to be encumbered) by a Mortgage.

 

“NAIC” shall mean the National Association of Insurance
Commissioners.

 

“Net Consolidated Indebtedness” shall mean, at any time, the
remainder of (i) Consolidated Indebtedness at such time minus (ii) the
aggregate amount of all cash and Cash Equivalents owned by the Borrower and its
Subsidiaries as would be reflected on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared at such time in excess of the Barnwell
Obligations at such time.

 

“Net Debt Proceeds” shall mean, with respect to any incurrence
of Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.

 

95

 

“Net Equity Proceeds” shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such Person,
the cash proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) received by such Person from the
respective sale or issuance of its equity or from the respective capital
contribution.

 

“Net Insurance Proceeds” shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs and taxes incurred
in connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event.

 

“Net Leverage Ratio” shall mean, at any time, the ratio of (x)
Net Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the
Test Period then most recently ended.

 

“Net Sale Proceeds” shall mean, for any Asset Sale, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of (i) the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by
the respective assets which were sold), (ii) reserves established in accordance
with generally accepted accounting principles for obligations related to such
Asset Sale, (iii) cash payments made to minority owners of such asset being
sold, to the extent required to be paid to such minority owners in connection
with such Asset Sale, and (iv) the incremental taxes paid or payable as a
result of such Asset Sale.

 

“Non-Compete Agreements” shall have the meaning provided in
Section 5.05.

 

“Non-Defaulting Lender” and “Non-Defaulting RL Lender”
shall mean and include each Lender or RL Lender, as the case may be, other than
a Defaulting Lender.

 

“Note” shall mean each Term Note, each Revolving Note and the
Swingline Note.

 

“Notice of Borrowing” shall have the meaning provided in
Section 1.03(a).

 

“Notice of Conversion/Continuation” shall have the meaning
provided in Section 1.06.

 

“Notice Office” shall mean, the office of the Administrative
Agent located at 1301 Avenue of the Americas, New York, New York 10019,
Attention:  John Chianchiano, Telephone
No.: (212) 261-7645, and Telecopier No.: (212) 459-3180, or such other office
or person as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.

 

“Obligations” shall mean all amounts owing to the Administrative
Agent, the Collateral Agent, any Issuing Lender, the Swingline Lender or any
Lender pursuant to the terms of this Agreement or any other Credit Document.

 

96

 

“Other Hedging Agreements” shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
arrangements, or arrangements designed to protect against fluctuations in
currency values or commodity prices.

 

“Participant” shall have the meaning provided in
Section 2.04(a).

 

“Payment Office” shall mean the office of the Administrative
Agent located at 1301 Avenue of the Americas, New York, New York 10019 or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Acquisition” shall mean the acquisition by the
Borrower or a Wholly-Owned Domestic Subsidiary of the Borrower which is a
Subsidiary Guarantor of an Acquired Entity or Business (including by way of
merger of such Acquired Entity or Business with and into the Borrower (so long
as the Borrower is the surviving corporation) or a Wholly-Owned Domestic
Subsidiary of the Borrower which is a Subsidiary Guarantor (so long as the
Subsidiary Guarantor is the surviving corporation)), provided that (in
each case) (A) in the case of the acquisition of 100% of the capital stock or
other Equity Interests of any Person (including way of merger), such Person
shall own no capital stock or other Equity Interests of any other Person
(excluding de minimis amounts) unless either (x) such Person and/or its
Wholly-Owned Subsidiaries own 100% of the capital stock or other Equity
Interests of such other Person or (y) (1) such Person and/or its Wholly-Owned
Subsidiaries own at least 95% of the consolidated assets of such Person and its
Subsidiaries and (2) any non-Wholly-Owned Subsidiary of such Person was
non-Wholly Owned prior to the date of such Permitted Acquisition of such
Person, (B) substantially all of the business, division or product line
acquired pursuant to the respective Permitted Acquisition, or the business of
the Person acquired pursuant to the respective Permitted Acquisition and its
Subsidiaries taken as a whole, is in the United States, (C) the Acquired Entity
or Business acquired pursuant to the respective Permitted Acquisition is in a
business permitted by Section 9.15 and (D) all applicable requirements of
Sections 8.17, 9.02 and 9.16 applicable to Permitted Acquisitions are
satisfied.  Notwithstanding anything to
the contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the
definition of “Permitted Acquisition” shall constitute a Permitted
Acquisition if, and to the extent, the Required Lenders agree in writing, prior
to the consummation thereof, that such acquisition shall constitute a Permitted
Acquisition for purposes of this Agreement.

 

“Permitted Encumbrance” shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the Mortgage
Policy delivered with respect thereto, all of which exceptions must be
acceptable to the Administrative Agent in its reasonable discretion.

 

“Permitted Liens” shall have the meaning provided in
Section 9.01.

 

“Person” shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.

 

97

 

“Plan” shall mean any pension plan as defined in
Section 3(2) of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date (whether before or after the Initial Borrowing
Date) on which the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.

 

“Pledge Agreement” shall have the meaning provided in
Section 5.11.

 

“Pledge Agreement Collateral” shall mean all “Collateral” as
defined in the Pledge Agreement.

 

“Pledgee” shall have the meaning provided in the Pledge
Agreement.

 

“Prime Lending Rate” shall mean the rate which the
Administrative Agent quotes from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes.  The Prime Lending Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer.  The Administrative Agent
may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate.

 

“Pro Forma Basis” shall mean, in connection with any calculation
of compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (x) the incurrence
of any Indebtedness (other than revolving Indebtedness, except to the extent
same is incurred to refinance other outstanding Indebtedness or to finance a
Permitted Acquisition) after the first day of the relevant Calculation Period
as if such Indebtedness had been incurred (and the proceeds thereof applied) on
the first day of the relevant Calculation Period, (y) the permanent repayment
of any Indebtedness (other than revolving Indebtedness except to the extent
accompanied by a corresponding permanent commitment reduction) after the first
day of the relevant Calculation Period as if such Indebtedness had been retired
or redeemed on the first day of the relevant Calculation Period and/or (z) the
Permitted Acquisition, if any, then being consummated as well as any other
Permitted Acquisition consummated after the first day of the relevant
Calculation Period and on or prior to the date of the respective Permitted
Acquisition then being effected, as the case may be, with the following rules
to apply in connection therewith:

 

(i)                                     all Indebtedness
(x) (other than revolving Indebtedness, except to the extent same is incurred
to refinance other outstanding Indebtedness or to finance a Permitted
Acquisition) incurred or issued after the first day of the relevant Calculation
Period (whether incurred to finance a Permitted Acquisition, to refinance
Indebtedness or otherwise) shall be deemed to have been incurred or issued (and
the proceeds thereof applied) on the first day of the respective Calculation
Period and remain outstanding through the date of determination and (y) (other
than revolving Indebtedness except to the extent accompanied by a corresponding
permanent commitment reduction) permanently retired or redeemed after the first
day of the relevant Calculation Period shall be deemed to have been retired or
redeemed on the first day of the respective Calculation Period and remain
retired through the date of determination;

 

98

 

(ii)                                  all Indebtedness
assumed to be outstanding pursuant to preceding clause (i) shall be deemed to
have borne interest at (x) the rate applicable thereto, in the case of fixed
rate indebtedness, or (y) at the rate which would have been applicable thereto
on the last day of the respective Calculation Period, in the case of floating
rate Indebtedness (although interest expense with respect to any Indebtedness
for periods while same was actually outstanding during the respective period
shall be calculated using the actual rates applicable thereto while same was
actually outstanding); and

 

(iii)                               in making any
determination of Consolidated EBITDA, pro forma effect shall be given to
any Permitted Acquisition consummated during the periods described above, with
such Consolidated EBITDA to be determined as if such Permitted Acquisition was
consummated on the first day of the relevant Calculation Period, but without
taking into account any pro forma cost savings and expenses.

 

“Projections” shall mean the projections that are contained in
the Confidential Information Memorandum dated November 2003 and that were
prepared by or on behalf of the Borrower in connection with the Transaction and
delivered to the Administrative Agent and the Lenders prior to the Initial
Borrowing Date.

 

“Qualified Preferred Stock” shall mean any preferred stock of
the Borrower so long as the terms of any such preferred stock (v) do not
contain any mandatory put, redemption, repayment, sinking fund or other similar
provision (including, without limitation, upon the occurrence of any change of
control event), (w) do not require the cash payment of dividends or
distributions, (x) do not contain any covenants (other than periodic reporting
covenants), (y) do not grant the holders thereof any voting rights except for
(I) voting rights required to be granted to such holders under applicable law
and (II) limited customary voting rights on fundamental matters such as
mergers, consolidations, sales of all or substantially all of the assets of the
Borrower, or liquidations involving the Borrower and (z) are otherwise
reasonably satisfactory to the Administrative Agent.

 

“Quarterly Payment Date” shall mean the last Business Day of
each June, September, December and March occurring after the Initial
Borrowing Date, commencing on March 31, 2004.

 

“Real Property” of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.

 

“Recovery Event” shall mean the receipt by the Borrower or any
of its Subsidiaries of any cash insurance proceeds or condemnation awards
payable by reason of theft, loss, physical destruction, damage, taking or any
other similar event with respect to any property or assets of the Borrower or
any of its Subsidiaries.

 

“Refinancing” shall mean the repayment of all outstanding loans
and, except for letters of credit that are supported by Letters of Credit
issued hereunder, the repayment of all other obligations (and the termination
of all commitments) under the Existing Credit Agreement, as described in
Section 5.07.

 

“Register” shall have the meaning provided in
Section 13.15.

 

99

 

“Regulation D” shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing reserve requirements.

 

“Regulation T” shall mean Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.

 

“Regulation U” shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.

 

“Regulation X” shall mean Regulation X of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.

 

“Release” shall mean actively or passively disposing,
discharging, injecting, spilling, pumping, leaking, leaching, dumping,
emitting, escaping, emptying, pouring, seeping, migrating or the like, into or
upon any land or water or air, or otherwise entering into the environment.

 

“Replaced Lender” shall have the meaning provided in
Section1.13.

 

“Replacement Lender” shall have the meaning provided in
Section1.13.

 

“Reportable Event” shall mean an event described in
Section 4043(c) of ERISA with respect to a Plan that is subject to Title
IV of ERISA other than those events as to which the 30-day notice period is
waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation
Section 4043.

 

“Required Lenders” shall mean Non-Defaulting Lenders the sum of
whose outstanding Term Loans and Revolving Loan Commitments (or after the
termination thereof, outstanding Revolving Loans and RL Percentages of (x)
outstanding Swingline Loans and (y) 
Letter of Credit Outstandings) represent greater than 50% of the sum of
(i)all outstanding Term Loans of Non-Defaulting Lenders and (ii)the Total
Revolving Loan Commitment less the Revolving Loan Commitments of all Defaulting
Lenders (or after the termination thereof, the sum of then total outstanding
Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages of
all Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter
of Credit Outstandings at such time).

 

“Returns” shall have the meaning provided in Section 7.09.

 

“Revolving Loan” shall have the meaning provided in
Section 1.01(b).

 

“Revolving Loan Commitment” shall mean, for each Lender, the
amount set forth opposite such Lender’s name in Schedule I directly below
the column entitled “Revolving Loan Commitment,” as same may be (x) reduced
from time to time or terminated pursuant to Sections 3.02, 3.03 and/or 10, as
applicable, or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 1.13 or 13.04(b).

 

100

 

“Revolving Loan Maturity Date” shall mean December 16,
2008.

 

“Revolving Note” shall have the meaning provided in
Section 1.05(a).

 

“RL Lender” shall mean each Lender with a Revolving Loan
Commitment or with outstanding Revolving Loans.

 

“RL Percentage” of any RL Lender at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Revolving
Loan Commitment of such RL Lender at such time and the denominator of which is
the Total Revolving Loan Commitment at such time, provided that if the
RL Percentage of any RL Lender is to be determined after the Total Revolving
Loan Commitment has been terminated, then the RL Percentages of such RL Lender
shall be determined immediately prior (and without giving effect) to such
termination.

 

“S&P” shall mean Standard & Poor’s Rating Services, a
division of McGraw-Hill, Inc., or any successor thereto.

 

“Sale and Leaseback Transaction” shall mean any arrangement,
directly or indirectly, whereby a seller or transferor shall sell or otherwise
transfer any real or personal property and then or thereafter lease, or
repurchase under an extended purchase contract, conditional sales or other
title retention agreement, the same or similar property.

 

“Scheduled Repayment” shall have the meaning provided in
Section 4.02(b).

 

“Scheduled Repayment Date” shall have the meaning provided in
Section 4.02(b).

 

“SEC” shall have the meaning provided in Section 8.01(g).

 

“Section 4.04(b)(ii) Certificate” shall have the meaning
provided in Section 4.04(b)(ii).

 

“Secured Creditors” shall have the meaning assigned that term in
the respective Security Documents.

 

“Securities Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

 

“Security Agreement” shall have the meaning provided in
Section 5.12.

 

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

 

“Security Document” shall mean and include each of the Security
Agreement, the Pledge Agreement, each Mortgage and, after the execution and
delivery thereof, each Additional Security Document.

 

“Shareholders’ Agreements” shall have the meaning provided in
Section 5.05.

 

101

 

“Start Date” shall mean, with respect to any Margin Reduction
Period, the first day of such Margin Reduction Period.

 

“Stated Amount” of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).

 

“Subsidiaries Guaranty” shall have the meaning provided in
Section 5.10.

 

“Subsidiary” shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
Equity Interest at the time.

 

“Subsidiary Guarantor” shall mean each Wholly-Owned Domestic
Subsidiary of the Borrower (other than the Excluded Subsidiaries), and to the
extent provided in Section 8.13, each Wholly-Owned Foreign Subsidiary of
the Borrower, in each case whether existing on the Initial Borrowing Date or
established, created or acquired after the Initial Borrowing Date.

 

“Substantially Similar Line of Business” shall mean any business
which (i) is involved in the characterization, treatment, remediation,
packaging, transportation, processing, storage, disposal or burial of
radioactive, hazardous, mixed and other wastes, (ii) provides management of
nuclear facility operations or (iii) which provides technical support services
that include, but are not limited to, site decontamination and decommissioning,
radiological engineering services, staff augmentation and outage support,
instrumentation services, environmental and computer consulting and
environmental health and safety training.

 

“Supermajority Lenders” shall mean those Non-Defaulting Lenders
which would constitute the Required Lenders under, and as defined in, this
Agreement if (x) all outstanding Obligations in respect of the Revolving Loan
Commitments were repaid in full and the Total Revolving Loan Commitment was
terminated and (y) the text “greater than 50%” contained therein were changed
to “at least 66-2/3%.”

 

“Supplemental Letters of Credit” shall mean letters of credit
issued by one or more Lenders for the account of the Borrower (other than
Letters of Credit issued under this Agreement) pursuant to documentation, and
on terms and conditions, reasonably satisfactory to the Administrative Agent.

 

“Swingline Expiry Date” shall mean that date which is five
Business Days prior to the Revolving Loan Maturity Date.

 

“Swingline Lender” shall mean CLNY for so long as CLNY is the
Administrative Agent hereunder and thereafter shall mean the successor
Administrative Agent in its individual capacity.

 

102

 

“Swingline Loan” shall have the meaning provided in
Section 1.01(c).

 

“Swingline Note” shall have the meaning provided in
Section 1.05(a).

 

“Syndication Date” shall mean that date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication (and resultant addition of Persons as
Lenders pursuant to Section 13.04(b)) has been completed.

 

“Tax Sharing Agreements” shall have the meaning provided in
Section 5.05.

 

“Taxes” shall have the meaning provided in Section 4.04(a).

 

“Term Loan” shall have the meaning provided in Section1.01(a).

 

“Term Loan Commitment” shall mean, for each Lender, the amount
set forth opposite such Lender’s name in Schedule I directly below the
column entitled “Term Loan Commitment,” as the same may be terminated pursuant
to Sections3.03 and/or 10.

 

“Term Loan Maturity Date” shall mean December 16, 2009.

 

“Term Note” shall have the meaning provided in Section1.05(a).

 

“Test Date” shall mean, with respect to any Start Date, the last
day of the most recent fiscal quarter of the Borrower ended immediately prior
to such Start Date.

 

“Test Period” shall mean each period of four consecutive fiscal
quarters of the Borrower then last ended (in each case taken as one accounting
period).  Notwithstanding anything to
the contrary contained above in this definition, with respect to any portion of
a Test Period occurring prior to the Initial Borrowing Date required to
determine compliance with Sections 9.08 and 9.11 the parties hereto hereby
agree that Consolidated Interest Expense for each of the fiscal quarters of the
Borrower ended March 30, 2003, June 29, 2003, September 28, 2003
and December 31, 2003 shall be $1,366,000.

 

“Total Commitment” shall mean, at any time, the sum of the
Commitments of each of the Lenders at such time.

 

“Total Leverage Ratio” shall mean, at any time, the ratio of (x)
Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the Test
Period then most recently ended.

 

“Total Revolving Loan Commitment” shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Lenders at such time.

 

“Total Term Loan Commitment” shall mean, at any time, the sum of
the Term Loan Commitments of each of the Lenders at such time.

 

“Total Unutilized Revolving Loan Commitment” shall mean, at any
time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less 

 

103

 

(y) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans then outstanding
plus the aggregate amount of all Letter of Credit Outstandings.

 

“Tranche” shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate Tranches, i.e.,
Term Loans, Revolving Loans and Swingline Loans.

 

“Transaction” shall mean, collectively, (i) the consummation of
the Existing Preferred Stock Redemption, (ii) the occurrence of the
Refinancing, (iii) the entering into of the Credit Documents and the incurrence
of Loans on the Initial Borrowing Date and (iv) the payment of all fees and
expenses in connection with the foregoing.

 

“Type” shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
LIBOR Loan.

 

“UCC” shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.

 

“Unfunded Current Liability” of any Plan shall mean the amount,
if any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued
but unpaid contribution).

 

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

 

“Unpaid Drawing” shall have the meaning provided in
Section 2.05(a).

 

“Unutilized Revolving Loan Commitment” shall mean, with respect
to any Lender at any time, such Lender’s Revolving Loan Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of all Revolving
Loans made by such Lender at such time and (ii) such Lender’s RL Percentage of
the Letter of Credit Outstandings at such time.

 

“Wholly-Owned Domestic Subsidiary” shall mean, as to any Person,
any Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary of
such Person.

 

“Wholly-Owned Foreign Subsidiary” shall mean, as to any Person,
any Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary of
such Person.

 

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% Equity
Interest at such time.

 

104

 

SECTION 12.  The Administrative Agent.

 

12.01.  Appointment.  The Lenders hereby irrevocably designate and
appoint CLNY as Administrative Agent (for purposes of this Section 12 and
Section 13.01, the term “Administrative Agent” also shall include CLNY in
its capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents.  Each Lender hereby irrevocably authorizes, and each holder of any
Note by the acceptance of such Note shall be deemed irrevocably to authorize,
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to
or required of the Administrative Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto.  The Administrative Agent may perform any of
its respective duties hereunder by or through its officers, directors, agents,
employees or affiliates.

 

12.02.  Nature
of Duties.  The Administrative
Agent shall not have any duties or responsibilities except those expressly set
forth in this Agreement and in the other Credit Documents.  Neither the Administrative Agent nor any of
its officers, directors, agents, employees or affiliates shall be liable for
any action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).  The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Lender or the holder of any Note; and nothing in this Agreement or in
any other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement or any other Credit Document except as expressly set forth
herein or therein.

 

12.03.  Lack of Reliance on the
Administrative Agent. 
Independently and without reliance upon the Administrative Agent, each
Lender and the holder of each Note, to the extent it deems appropriate, has
made and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Borrower and its Subsidiaries in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and its Subsidiaries and, except as
expressly provided in this Agreement, the Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.  The Administrative Agent shall not be
responsible to any Lender or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or any of its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or 

 

105

 

the financial condition of the
Borrower or any of its Subsidiaries or the existence or possible existence of
any Default or Event of Default.

 

12.04.  Certain Rights of the Administrative
Agent.  If the Administrative
Agent requests instructions from the Required Lenders with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Credit Document, the Administrative Agent shall be entitled to refrain
from such act or taking such action unless and until the Administrative Agent
shall have received instructions from the Required Lenders; and the
Administrative Agent shall not incur liability to any Lender by reason of so
refraining.  Without limiting the
foregoing, neither any Lender nor the holder of any Note shall have any right
of action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.

 

12.05.  Reliance.  The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this Agreement
and any other Credit Document and its duties hereunder and thereunder, upon
advice of counsel selected by the Administrative Agent.

 

12.06.  Indemnification.  To the extent the Administrative Agent (or
any affiliate thereof) is not reimbursed and indemnified by the Borrower, the
Lenders will reimburse and indemnify the Administrative Agent (and any
affiliate thereof) in proportion to their respective “percentage” as used in
determining the Required Lenders (determined as if there were no Defaulting Lenders)
for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Administrative Agent (or any affiliate thereof) in performing its duties
hereunder or under any other Credit Document or in any way relating to or
arising out of this Agreement or any other Credit Document; provided
that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent’s (or
such affiliate’s) gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision).

 

12.07.  The Administrative Agent in its
Individual Capacity.  With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights
and powers specified herein for a “Lender” and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term “Lender,” “Required Lenders,” “Supermajority Lenders,” “holders of Notes”
or any similar terms shall, unless the context clearly indicates otherwise,
include the Administrative Agent in its respective individual capacities.  The Administrative Agent and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, investment banking, trust or other business with, or provide debt
financing, equity capital or other services (including financial advisory
services) to any Credit Party or any Affiliate of any Credit Party (or any Person
engaged in a similar business with any Credit Party or any Affiliate thereof)
as if they 

 

106

 

were not performing the duties
specified herein, and may accept fees and other consideration from any Credit Party
or any Affiliate of any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.

 

12.08.  Holders.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent.  Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or endorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor.

 

12.09.  Resignation by the Administrative
Agent.  (a)  The Administrative Agent may resign from the
performance of all its respective functions and duties hereunder and/or under
the other Credit Documents at any time by giving 15 Business Days’ prior
written notice to the Lenders and, unless a Default or an Event of Default
under Section 10.05 then exists, the Borrower.  Any such resignation by an Administrative Agent hereunder shall
also constitute its resignation as an Issuing Lender and the Swingline Lender,
in which case the resigning Administrative Agent (x) shall not be required to
issue any further Letters of Credit or make any additional Swingline Loans
hereunder and (y) shall maintain all of its rights as Issuing Lender or
Swingline Lender, as the case may be, with respect to any Letters of Credit
issued by it, or Swingline Loans made by it, prior to the date of such
resignation.  Such resignation shall
take effect upon the appointment of a successor Administrative Agent pursuant
to clauses (b) and (c) below or as otherwise provided below.

 

(b)                                 Upon
any such notice of resignation by the Administrative Agent, the Required
Lenders shall appoint a successor Administrative Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably acceptable to the
Borrower, which acceptance shall not be unreasonably withheld or delayed (provided
that the Borrower’s approval shall not be required if an Event of Default then
exists).

 

(c)                                  If
a successor Administrative Agent shall not have been so appointed within such
15 Business Day period, the Administrative Agent, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed, provided
that the Borrower’s consent shall not be required if an Event of Default then
exists), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.

 

(d)                                 If
no successor Administrative Agent has been appointed pursuant to clause (b) or
(c) above by the 30th Business Day after the date such notice of resignation
was given by the Administrative Agent, the Administrative Agent’s resignation
shall become effective and the Required Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.

 

107

 

(e)                                  Upon
a resignation of the Administrative Agent pursuant to this Section 12.09,
the Administrative Agent shall remain indemnified to the extent provided in
this Agreement and the other Credit Documents and the provisions of this
Section 12 shall continue in effect for the benefit of the Administrative
Agent for all of its actions and inactions while serving as the Administrative
Agent.

 

12.10. 
Collateral Matters.  (a) 
Each Lender authorizes and directs the Collateral Agent to enter into
the Security Documents for the benefit of the Lenders and the other Secured
Creditors.  Each Lender hereby agrees,
and each holder of any Note or participant in Letters of Credit by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Required Lenders in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by the
Required Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders.  The
Collateral Agent is hereby authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Security Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.

 

(b)                                 The
Lenders hereby authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent upon
any Collateral (i)upon termination of the Commitments and payment and
satisfaction of all of the Obligations at any time arising under or in respect
of this Agreement or the Credit Documents or the transactions contemplated
hereby or thereby (other than those arising from indemnities for which no claim
has been made), (ii)constituting property being sold or disposed of (to Persons
other than the Borrower and its Subsidiaries) upon the sale thereof in
compliance with Section 9.02 or (iii)if approved, authorized or ratified
in writing by the Required Lenders (unless such release is required to be
approved by all of the Lenders hereunder). 
Upon request by the Administrative Agent at any time, the Lenders will
confirm in writing the Collateral Agent’s authority to release particular types
or items of Collateral pursuant to this Section 12.10.

 

(c)                                  Upon
any sale and transfer of Collateral which is expressly permitted pursuant to
the terms of this Agreement, or consented to in writing by the Required
Lenders, or all of the Lenders, as applicable, and upon at least five (5)
Business Days’ (or such shorter period as is acceptable to the Collateral
Agent) prior written request by the Borrower, the Collateral Agent shall (and
is hereby irrevocably authorized by the Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to the Collateral
Agent for the benefit of the Lenders herein or pursuant hereto upon the
Collateral that was sold or transferred, provided, that (i)the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s opinion, would expose the Collateral Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse, representation or warranty and (ii)such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of the Borrower or any of its Subsidiaries in
respect of) all interests retained by the Borrower or any of its Subsidiaries,
including, without limitation, the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. 
In the event of any foreclosure or similar enforcement action with
respect 

 

108

 

to any of the Collateral, the
Collateral Agent shall be authorized to deduct all of the costs and expenses
reasonably incurred by the Collateral Agent from the proceeds of any such sale,
transfer or foreclosure.

 

(d)                                 The
Collateral Agent shall have no obligation whatsoever to the Lenders or to any
other Person to assure that the Collateral exists or is owned by any Credit
Party or any of its Subsidiaries or insured or that the Liens granted to the
Collateral Agent herein or pursuant hereto have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the rights,
authorities and powers granted or available to the Collateral Agent in this
Section 12.10 or in any of the Security Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent’s own interest in the
Collateral as one of the Lenders and that the Collateral Agent shall have no
duty or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct.

 

12.11. 
Delivery of Information.  The Administrative Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from the Borrower, any Subsidiary of the Borrower, the
Required Lenders, any Lender or any other Person under or in connection with
this Agreement or any other Credit Document except (i)as specifically provided
in this Agreement or any other Credit Document, (ii) the information provided
to the Administrative Agent by the Borrower under Section 8.01 and (iii)as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of the Administrative Agent at the time of
receipt of such request and then only in accordance with such specific request.

 

SECTION 13.  Miscellaneous.

 

13.01. 
Payment of Expenses, etc.  The Borrower hereby agrees to:(i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including,
without limitation, the reasonable fees and disbursements of White & Case
LLP and the Administrative Agent’s other counsel and consultants) in connection
with the preparation, execution, delivery and administration of this Agreement
and the other Credit Documents and the documents and instruments referred to
herein and therein and any amendment, waiver or consent relating hereto or
thereto, of the Administrative Agent in connection with its syndication efforts
with respect to this Agreement and of the Administrative Agent and, after the
occurrence of an Event of Default, each of the Issuing Lenders and Lenders in
connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a “work-out” or pursuant to any
insolvency or bankruptcy proceedings (including, in each case without
limitation, the reasonable fees and disbursements of counsel and consultants
for the Administrative Agent and, after the occurrence of an Event of Default,
counsel for each of the Issuing Lenders and Lenders); (ii) pay and hold the
Administrative Agent, each of the Issuing Lenders and each of the Lenders
harmless from and 

 

109

 

against any and all present and
future stamp, excise and other similar documentary taxes with respect to the
foregoing matters and save the Administrative Agent, each of the Issuing
Lenders and each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to the Administrative Agent, such Issuing Lender or
such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent,
each Issuing Lender and each Lender, and each of their respective officers,
directors, employees, representatives, agents, affiliates, trustees and
investment advisors from and hold each of them harmless against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys’ and consultants’ fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding (whether or not the
Administrative Agent, any Issuing Lender or any Lender is a party thereto and
whether or not such investigation, litigation or other proceeding is brought by
or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
the Transaction or any other transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property at any time owned, leased or
operated by the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, whether or not owned, leased or
operated by the Borrower or any of its Subsidiaries, the non-compliance by the
Borrower or any of its Subsidiaries with any Environmental Law (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property at any time owned, leased or operated by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding (but
excluding, to the extent included in this clause (iii), any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)).  To the extent that the
undertaking to indemnify, pay or hold harmless the Administrative Agent, any
Issuing Lender or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.

 

13.02. 
Right of Setoff.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent, each Issuing Lender and each Lender is
hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by the Administrative Agent, such
Issuing Lender or such Lender (including, without limitation, by branches and
agencies of the Administrative Agent, such Issuing Lender or such Lender

 

110

 

wherever located) to or for the
credit or the account of the Borrower or any of its Subsidiaries against and on
account of the Obligations and liabilities of the Credit Parties to the
Administrative Agent, such Issuing Lender or such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Lender pursuant to
Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not the Administrative Agent, such Issuing Lender or
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.

 

13.03. 
Notices. 
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: 
if to any Credit Party, at the address specified opposite its signature
below or in the other relevant Credit Documents; if to any Lender, at its
address specified on Schedule II; and if to the Administrative Agent, at
the Notice Office; or, as to any Credit Party or the Administrative Agent, at
such other address as shall be designated by such party in a written notice to
the other parties hereto and, as to each Lender, at such other address as shall
be designated by such Lender in a written notice to the Borrower and the
Administrative Agent.  All such notices
and communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent and the Borrower shall not be
effective until received by the Administrative Agent or the Borrower, as the
case may be.

 

13.04. 
Benefit of Agreement;
Assignments; Participations. 
(a)  This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however,
the Borrower may not assign or transfer any of its rights, obligations or
interest hereunder without the prior written consent of the Lenders and, provided
further, that, although any Lender may transfer, assign or grant participations
in its rights hereunder, such Lender shall remain a “Lender” for all purposes
hereunder (and may not transfer or assign all or any portion of its Commitments
hereunder except as provided in Sections 1.13 and 13.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a “Lender”
hereunder and, provided  further, that no Lender shall transfer or
grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to
Section 13.07(a) shall not constitute a reduction in the rate of interest
or Fees payable hereunder), or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment (or the available portion
thereof) or Loan shall be permitted without 

 

111

 

the consent of any participant
if the participant’s participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly
provided in the Credit Documents) supporting the Loans or Letters of Credit
hereunder in which such participant is participating.  In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the participant’s
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the participant
relating thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation.

 

(b)                                 Notwithstanding
the foregoing, any Lender (or any Lender together with one or more other
Lenders) may (x) assign all or a portion of its Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Tranche have terminated, outstanding Obligations) hereunder to (i)(A) its
parent company and/or any affiliate of such Lender which is at least 50% owned
by such Lender or its parent company or (B) to one or more other Lenders or any
affiliate of any such other Lender which is at least 50% owned by such other
Lender or its parent company (provided that any fund that invests in
loans and is managed or advised by the same investment advisor of another fund
which is a Lender (or by an Affiliate of such investment advisor) shall be
treated as an affiliate of such other Lender for the purposes of this
sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed or
advised by the same investment advisor of any Lender or by an Affiliate of such
investment advisor or (y) (i) assign all, or if less than all, a portion equal
to at least $2,000,000 in the aggregate for the assigning Lender, of Term Loan
Commitments (if not theretofore terminated) and related outstanding Obligations
hereunder and (ii) a portion equal to at least $5,000,000 in the aggregate for
the assigning RL Lender, of Revolving Loan Commitments and related Outstandings
hereunder (provided that after giving effect to such partial assignment,
such assigning RL Lender shall have Revolving Loan Commitments aggregating at
least $5,000,000), in each such case to one or more Eligible Transferees
(treating any fund that invests in loans and any other fund that invests in
loans and is managed or advised by the same investment advisor of such fund or
by an Affiliate of such investment advisor as a single Eligible Transferee),
each of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment and Assumption Agreement, provided that (i)
at such time, Schedule I shall be deemed modified to reflect the
Commitments and/or outstanding Loans, as the case may be, of such new Lender
and of the existing Lenders, (ii) upon the surrender of the relevant Notes by
the assigning Lender (or, upon such assigning Lender’s indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower’s expense, to such new Lender and to
the assigning Lender upon the request of such new Lender or assigning Lender,
such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) the consent of
the Administrative Agent shall be required in connection with any such
assignment pursuant to clause (y) above (which consent shall not be
unreasonably withheld or delayed), (iv) the Administrative Agent shall receive
at the time of each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500 and (v) no such transfer
or assignment will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 13.15. 
To the extent of any assignment pursuant to this 

 

112

 

Section 13.04(b), the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments and outstanding Loans.  At the time of each assignment pursuant to this
Section 13.04(b) to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall, to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b).  To the extent
that an assignment of all or any portion of a Lender’s Commitments and related
outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 2.06 or 4.04 from those being charged
by the respective assigning Lender prior to such assignment, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).

 

(c)                                  Nothing
in this Agreement shall prevent or prohibit any Lender from pledging its Loans
and Notes hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank and any Lender which is a fund may
pledge all or any portion of its Loans and Notes to its trustee or to a
collateral agent providing credit or credit support to such Lender in support
of its obligations to such trustee, such collateral agent or a holder of such
obligations, as the case may be.  No
pledge pursuant to this clause (c) shall release the transferor Lender from any
of its obligations hereunder. The transferor Lender shall use commercially
reasonably efforts to notify the Administrative Agent of any transfer pursuant
to this Section 13.04(c), provided that (i) the consent of neither
the Administrative Agent nor the Borrower shall be required under the terms of
the Credit Documents in connection with any such transfer and (ii) the failure
by such transferor Lender to give any such notice shall not adversely affect
such transferor Lender’s rights under this Section 13.04(c).

 

13.05. 
No Waiver; Remedies Cumulative.  No failure or delay on the part of the
Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit
Party and the Administrative Agent, the Collateral Agent, any Issuing Lender or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder.  The rights, powers and remedies herein or in
any other Credit Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Administrative Agent, the
Collateral Agent, any Issuing Lender or any Lender would otherwise have.  No notice to or demand on any Credit Party
in any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Collateral Agent, any Issuing Lender or any
Lender to any other or further action in any circumstances without notice or
demand.

 

13.06. 
Payments Pro Rata.  (a) 
Except as otherwise provided in this Agreement, the Administrative Agent
agrees that promptly after its receipt of each payment from or on behalf of the
Borrower in respect of any Obligations hereunder, the Administrative Agent
shall 

 

113

 

distribute such payment to the
Lenders entitled thereto (other than any Lender that has consented in writing
to waive its pro rata share of any such payment) pro rata based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.

 

(b)                                 Each
of the Lenders agrees that, if it should receive any amount hereunder (whether
by voluntary payment, by realization upon security, by the exercise of the
right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise), which is
applicable to the payment of the principal of, or interest on, the Loans,
Unpaid Drawings, Commitment Commission or Letter of Credit Fees, of a sum which
with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of
such excess amount is thereafter recovered from such Lenders, such purchase
shall be rescinded and the purchase price restored to the extent of such
recovery, but without interest.

 

(c)                                  Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 13.06(a) and (b) shall be subject to the express provisions of this
Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders.

 

13.07. 
Calculations; Computations.  (a) 
The financial statements to be furnished to the Lenders pursuant hereto
shall be made and prepared in accordance with generally accepted accounting
principles in the United States consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrower to the Lenders); provided that, (i) except as
otherwise specifically provided herein, all computations of Excess Cash Flow
and the Applicable Margin, and all computations and all definitions (including
accounting terms) used in determining compliance with Sections 8.17, 9.03(iii)
and 9.07 through 9.11, inclusive, shall utilize generally accepted accounting
principles and policies in conformity with those used to prepare the historical
financial statements of the Borrower referred to in Section7.05(a) and (ii) to
the extent expressly provided herein, certain calculations shall be made on a Pro
Forma Basis.

 

(b)                                 All
computations of interest, Commitment Commission and other Fees hereunder shall
be made on the basis of a year of 360 days (or 365/366 days, in the case of
Base Rate Loans, the interest rate payable on which is then based on the Prime
Lending Rate) for the actual number of days (including the first day but
excluding the last day; except that in the case of Letter of Credit Fees and
Fronting Fees, the last day shall be included) occurring in the period for
which such interest, Commitment Commission or Fees are payable.

 

13.08. 
GOVERNING LAW; SUBMISSION
TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.  (a) 
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE 

 

114

 

MORTGAGES, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  THE BORROWER HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION
OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL
JURISDICTION OVER THE BORROWER.  THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, THE BORROWER
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. 
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT
THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.

 

(b)                                 THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

 

(c)                                  EACH
OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.

 

115

 

13.09. 
Counterparts.  This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. 
A set of counterparts executed by all the parties hereto shall be lodged
with the Borrower and the Administrative Agent.

 

13.10. 
Effectiveness.  This Agreement shall become effective on the
date (the “Effective Date”) on which the Borrower, the Administrative
Agent and each of the Lenders shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered the same to the
Administrative Agent at the Notice Office or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written or telex notice (actually received) at such office that the same has
been signed and mailed to it.  The
Administrative Agent will give the Borrower and each Lender prompt written
notice of the occurrence of the Effective Date.

 

13.11. 
Headings Descriptive.  The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.

 

13.12. 
Amendment or Waiver; etc.  (a) 
Neither this Agreement nor any other Credit Document nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the respective
Credit Parties party hereto or thereto and the Required Lenders (although
additional parties may be added to (and annexes may be modified to reflect such
additions), and Subsidiaries of the Borrower may be released from, the
Subsidiaries Guaranty and the Security Documents in accordance with the
provisions hereof and thereof without the consent of the other Credit Parties
party thereto or the Required Lenders), provided that no such change,
waiver, discharge or termination shall, without the consent of each Lender
(other than a Defaulting Lender) (with Obligations being directly affected in
the case of following clause (i)), (i) extend the final scheduled maturity of
any Loan or Note or extend the stated expiration date of any Letter of Credit
beyond the Revolving Loan Maturity Date or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with the waiver of
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to
Section 13.07(a) shall not constitute a reduction in the rate of interest
or Fees for the purposes of this clause (i)), (ii) release (A) all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents or (B) any Subsidiary Guarantor
from the Subsidiaries Guaranty (provided that this clause (B) shall not
apply to the extent that (x) such Subsidiary Guarantor is an Inactive
Subsidiary or (y) such Subsidiary Guarantor is otherwise permitted to be
released in accordance with the terms of the Credit Documents), (iii) amend,
modify or waive any provision of this Section 13.12(a) (except for
technical amendments with respect to additional extensions of credit pursuant
to this Agreement which afford the protections to such additional extensions of
credit of the type provided to the Term Loans and the Revolving Loan
Commitments on the Effective Date), (iv) reduce the percentage specified in the
definition of Required Lenders (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 

 

116

 

extensions of Term Loans and
Revolving Loan Commitments are included on the Effective Date), (v) consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (vi) permit the Borrower to elect an Interest Period in
excess of six months in duration; provided  further, that no such
change, waiver, discharge or termination shall (1) increase the Commitments of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase of the Commitment of such Lender), (2)
without the consent of each affected Issuing Lender, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (3) without the consent of the Swingline Lender, alter the
Swingline Lender’s rights or obligations with respect to Swingline Loans, (4)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the
rights or obligations of the Administrative Agent, (5) without the consent of
Collateral Agent, amend, modify or waive any provision relating to the rights
or obligations of the Collateral Agent, (6) without the consent of the
Supermajority Lenders holding Term Loans, reduce the amount of, or extend the
date of, any Scheduled Repayment or amend the definition of Supermajority
Lenders (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 Supermajority Lenders on substantially the same basis
as the extensions of Term Loans and Revolving Loan Commitments are included on
the Effective Date), or (7) without the consent of the RL Lenders the sum of
whose outstanding Revolving Loan Commitments represents greater than 50% of the
Total Revolving Loan Commitment, amend, modify or waive any condition precedent
set forth in Section 6A or 6B with respect to the making of Revolving
Loans or Swingline Loans or the issuance of Letters of Credit.  In addition, in furtherance of clause (7) of
the immediately preceding sentence, (i) any amendment or modification to, or
waiver of, any of Sections 7.05(e), 9.07, 9.08, 9.09, 9.10 or 9.11 (or any of
the financial definitions contained therein) or (ii) any amendment or
modification to, or waiver of, any provision of this Agreement or any other
Credit Document at a time when any Default or Event of Default has occurred and
is continuing (to the extent such amendment, waiver or modification would have
the effect of eliminating any such Default or Event of Default), shall not be
deemed to be effective for purposes of determining whether the conditions
precedent set forth in Section 6A or 6B to the making of any Revolving
Loan or any Swingline Loan, or any issuance of any Letter of Credit, as the
case may be, have been satisfied, unless the RL Lenders the sum of whose
outstanding Revolving Loan Commitments represents greater than 50% of the Total
Revolving Loan Commitment shall have consented to such amendment, modification
or waiver.

 

(b)                                 If,
in connection with any proposed change, waiver, discharge or termination of any
of the provisions of this Agreement as contemplated by clauses (i) through (v),
inclusive, of the first proviso to Section 13.12(a), the consent of the
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrower shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clauses (A) or (B) below, to either
(A) replace each such non-consenting Lender or Lenders with one or more
Replacement Lenders pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement 

 

117

 

Lender and the Administrative
Agent consent to the proposed change, waiver, discharge or termination or (B)
terminate such non-consenting Lender’s Commitments and/or repay each Tranche of
outstanding Loans of such Lender in accordance with Sections 3.02(b) and/or
4.01(b), provided that, unless the Commitments that are terminated, and
Loans repaid, pursuant to preceding clause (B) are immediately replaced in full
at such time through the addition of new Lenders or the increase of the
Commitments and/or outstanding Loans of existing Lenders (who in each case,
must specifically consent thereto), then, in the case of any action pursuant to
preceding clause (B), the Required Lenders (determined after giving effect to
the proposed action) and the Administrative Agent shall specifically consent
thereto, provided  further, that in any event the Borrower shall
not have the right to replace a Lender, terminate its Commitments or repay its
Loans solely as a result of the exercise of such Lender’s rights (and the
withholding of any required consent by such Lender) pursuant to the second
proviso to Section 13.12(a).

 

13.13. 
Survival. 
All indemnities set forth herein including, without limitation, in
Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Obligations.

 

13.14. 
Domicile of Loans.  Each Lender may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such
Lender.  Notwithstanding anything to the
contrary contained herein, to the extent that a transfer of Loans pursuant to
this Section13.14 would, at the time of such transfer, result in increased
costs under Section1.10, 1.11, 2.06 or 4.04 from those being charged by the
respective Lender prior to such transfer, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective transfer).

 

13.15. 
Register. 
The Borrower hereby designates the Administrative Agent to serve as its
agent, solely for purposes of this Section 13.15, to maintain a register
(the “Register”) on which it will record the Commitments from time to
time of each of the Lenders, the Loans made by each of the Lenders and each
repayment in respect of the principal amount of the Loans of each Lender.  Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower’s obligations in
respect of such Loans.  With respect to
any Lender, the transfer of the Commitments of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Commitments
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Commitments and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitments and Loans shall remain owing to the
transferor.  The registration of
assignment or transfer of all or part of any Commitments and Loans shall be recorded
by the Administrative Agent on the Register; provided that such
registration shall only be made upon the acceptance by the Administrative Agent
of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 13.04(b). 
Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note (if
any) evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor
Lender and/or the new Lender at the request of any such Lender.  The Borrower agrees to indemnify the
Administrative Agent from and 

 

118

 

against any and all losses,
claims, damages and liabilities of whatsoever nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its duties
under this Section 13.15.

 

13.16. 
Confidentiality.  (a) 
Subject to the provisions of clause (b) of this Section 13.16, each
Lender agrees that it will not disclose without the prior consent of the
Borrower (other than to its employees, auditors, advisors or counsel or to
another Lender if such Lender or such Lender’s holding or parent company in its
sole discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Lender) any information with
respect to the Borrower or any of its Subsidiaries which is now or in the
future furnished pursuant to this Agreement or any other Credit Document, provided
that any Lender may disclose any such information (i) as has become generally
available to the public other than by virtue of a breach of this
Section 13.16(a) by the respective Lender, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (iii) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (iv)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to any such contractual counterparty’s professional advisor), so
long as such contractual counterparty (or such professional advisor) agrees to
be bound by the provisions of this Section 13.16, and (vii) to any
prospective or actual transferee, pledgee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or
any interest therein by such Lender, provided that such prospective
transferee agrees to be bound by the confidentiality provisions contained in
this Section 13.16.

 

(b)                                 The
Borrower hereby acknowledges and agrees that each Lender may share with any of
its affiliates, and such affiliates may share with such Lender, any information
related to the Borrower or any of its Subsidiaries (including, without
limitation, any non-public customer information regarding the creditworthiness
of the Borrower and its Subsidiaries), provided such Persons shall be subject
to the provisions of this Section 13.16 to the same extent as such Lender.

 

(c)                                  Notwithstanding
anything contained in this Agreement or in any other Credit Document, agreement
or understanding relating to the transactions contemplated by this Agreement,
each party hereto (and each employee, representative, or other agent of such
party) is authorized to disclose to any and all persons, beginning immediately
upon commencement of discussions regarding the transactions contemplated by this
Agreement, and without limitation of any kind, the U.S. federal, state or local
tax treatment and tax structure of such transactions, and all materials of any
kind (including opinions or other tax analyses) that are provided to such party
(or any employee, representative, or other agent of such party) relating to
such tax treatment and tax structure. 
For purposes of this authorization, the “tax treatment” of a transaction
means the purported or claimed tax treatment of the transaction, and the “tax
structure” of a transaction means any fact that may be relevant to
understanding the purported or claimed tax treatment of the transaction.  None of the parties to the transactions
contemplated by 

 

119

 

this Agreement provides U.S.
tax advice, and each party should consult its own advisors regarding its
participation in the transactions contemplated by this Agreement.

 

*    
*     *

 

120

 

IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.

 

	
  Address:

  	
   

  	
  DURATEK, INC.

  
	
   

  	
   

  	
   

  
	
  Attention:
  Craig T. Bartlett

  	
   

  	
  By:

  	
   /S/ Craig T. Bartlett

  	
   

  
	
  10100
  Old Columbia Road

  	
   

  	
   

  	
  Name:

  	
  Craig
  T. Bartlett

  
	
  Columbia,
  MD  21046

  	
   

  	
   

  	
  Title:

  	
  Vice President, Finance,

  
	
  Tel:
  410-312-5100

  	
   

  	
   

  	
   

  	
  Treasurer & Assistant Secretary

  
	
  Fax  410-290-9112

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CREDIT LYONNAIS 

  
	
   

  	
   

  	
   

  	
  NEW YORK BRANCH, Individually and as

  Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Mischa Zabotin

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Mischa Zabotin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Gary Teaman

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gary Teaman

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing Director

  
						

 

121

 

SCHEDULE I

 

 

COMMITMENTS

 

	
  Lender

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Lyonnais New York Branch

  	
   

  	
  $

  	
  115,000,000

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  $

  	
  115,000,000

  	
   

  	
  $

  	
  30,000,000

  	
   

  

 

 

SCHEDULE II

 

 

LENDER ADDRESSES

 

	
  Lender

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Credit Lyonnais New York Branch

  	
   

  	
  1301 Avenue of the Americas

  New York, New York  10019

  Attention:  Mark Koneval

  Telephone:  (212) 261-7867

  Telecopier No.:  (212) 261-3375

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