Document:

Exhibit 4.4

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

 

Dated as of January 31, 2006

 

by and among

 

DRS TECHNOLOGIES, INC.

 

and

 

BEAR, STEARNS & CO. INC.

 

WACHOVIA CAPITAL MARKETS, LLC

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 

BANC OF
AMERICA SECURITIES LLC

 

CIBC WORLD
MARKETS CORP.

 

JEFFERIES &
COMPANY, INC.

 

RYAN BECK &
CO., INC.

 

 

This Registration Rights Agreement (this “Agreement”)
is made and entered into as of January 31, 2006, by and among DRS
Technologies, Inc., a Delaware corporation (the “Company”),
and Bear, Stearns & Co. Inc., Wachovia Capital Markets, LLC, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities
LLC, CIBC World Markets Corp., Jefferies & Company, Inc. and Ryan
Beck & Co., Inc. (each an “Initial Purchaser”
and, collectively, the “Initial Purchasers”),
each of whom has agreed to purchase up to $345,000,000 (including up to
$45,000,000 upon exercise of the Initial Purchasers’ option) aggregate
principal amount of the Company’s Convertible Senior Notes due 2026 (the “Notes”) pursuant to the Purchase
Agreement, dated January 30, 2006, (the “Purchase
Agreement”), by and among the Company, the Guarantors party
thereto and the Initial Purchasers.  This
Agreement is made pursuant to the Purchase Agreement.  In order to induce the Initial Purchasers to
purchase the Notes, the Company has agreed to provide the registration rights
set forth in this Agreement.

 

The parties hereby agree as follows:

 

SECTION 1. 
DEFINITIONS

 

As used in this Agreement, the following capitalized terms shall have
the following meanings:

 

Act:  The Securities Act of 1933, as amended.

 

Additional Interest:  As defined in Section 3.

 

Affiliate:  As defined in Rule 144 of the Act.

 

Business Day:  Any Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the city of New York
are authorized or obligated by law or executive order to close.

 

Closing Date:  The date hereof.

 

Commission:  The Securities and Exchange Commission.

 

Common Stock:  The Company’s common stock, par value $0.01
per share.

 

Demand Notice:  A written notice provided by any Holder to
the Company that such Holder desires to sell Registrable Shares pursuant to a
Shelf Registration Statement.

 

Demand Shelf Registration Statement:  As defined in Section 2(b).

 

Effectiveness Deadline:  As defined in Section 2(b) hereof.

 

Effectiveness Period:
The period from the Closing Date until the earliest of: (i) two years
after the issue date of any of the Notes; (ii) the date on which the
Holders are able to sell all Registrable Shares in accordance with the
provisions of Rule 144(k) under the Act; (iii) the date on which all
of the Registrable Shares have been included on a Shelf Registration Statement

 

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and disposed of pursuant to such Shelf
Registration Statement; (iv) the date on which all of the Notes cease to
be outstanding (whether as a result of repurchase and cancellation, conversion
or otherwise) and any of the conditions in clauses (ii), (iii) or (v) of
this definition, or a combination thereof, have been satisfied; and (v) the
date on which all of the Registrable Shares have been sold pursuant to Rule 144
under the Act.

 

Election and Questionnaire:  A Notice of Registration Statement and
Selling Securityholder Election and Questionnaire substantially in the form of
Appendix A hereto.

 

Exchange Act:  The Securities Exchange Act of 1934, as
amended.

 

Existing Shelf Registration Statement:  The Company’s automatic shelf registration statement
(File No. 333-130926).

 

Holder:  Any Person that owns Notes or Registrable
Shares, and includes any Person that has a beneficial interest in any Note or
Registrable Share in book-entry form.

 

Indenture: The
Indenture, dated January 31, 2006, among the Company, the Guarantors party
thereto and The Bank of New York, as Trustee, relating to the Notes.

 

Notice
Holder: A Holder that has returned a completed and
signed Election and Questionnaire to the Company in accordance with Section 2(b) hereof.

 

Prospectus:  Any prospectus or prospectus supplement
included in any Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Shares covered by any Shelf Registration Statement and by
all other amendments and supplements thereto, including post-effective
amendments, and all material incorporated by reference into such prospectus or
prospectus supplement and all documents filed after the date of such prospectus
or prospectus supplement by the Company under the Exchange Act and incorporated
by reference therein.

 

Registrable Shares:  The shares of Common Stock issuable upon
conversion of the Notes until the earliest of: (i) two years after the
issue date of any of the Notes; (ii) the date on which the Holder of such
shares is able to sell such shares in accordance with the provisions of Rule 144(k)
under the Act; (iii) the date on which such shares have been included on a
Shelf Registration Statement and disposed of pursuant to such Shelf
Registration Statement; (iv) the date on which all of the Notes cease to
be outstanding (whether as a result of repurchase and cancellation, conversion
or otherwise) and any of the conditions in clauses (ii), (iii) or (v) of
this definition, or a combination thereof, have been satisfied with respect to
such shares; and (v) the date on which such shares have been sold pursuant
to Rule 144 under the Act..

 

Registration Default:  As defined in Section 3 hereof.

 

Rule 144:  Rule 144 promulgated under the Act.

 

Shelf Registration Statement:  A “shelf” registration statement filed under
the Act providing for the registration of, and the sale on a continuous or
delayed basis by the Holders of, all of the Registrable Shares pursuant to Rule 415
under the Act and/or any similar rule that may

 

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be adopted by the Commission, including the
Existing Shelf Registration Statement and any Demand Shelf Registration
Statement, including the Propsectus contained therein, any amendments and
supplements to such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement, and any additional shelf registration statements filed
under the Act to permit the registration and sale of Registrable Shares.

 

Suspension Period:  As defined in Section 2(c) hereof.

 

SECTION 2. 
SHELF REGISTRATION

 

(a)                                  Existing
Shelf Registration Statement.  The
Company shall use its reasonable best efforts to keep the Existing Shelf
Registration Statement continuously effective, supplemented, amended and
current as required by, subject to the provisions of Section 2(c) hereof,
and in conformity with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time
to time, until the expiration of the Effectiveness Period.  Notwithstanding the foregoing, it is
understood that pursuant to Rule 415 of the Act, securities cannot be sold
pursuant to an automatic shelf registration statement (including the Existing
Shelf Registration Statement) not later than three years after the initial
effectiveness of the automatic shelf registration statement.

 

(b)                                 Demand
Shelf Registration Statement.  If at
any time during the Effectiveness Period (i) the Existing Shelf
Registration Statement ceases to be effective and (ii) the Company
receives a Demand Notice from a Holder, then the Company shall use its
reasonable best efforts to file with the Commission a Shelf Registration
Statement on such form as the Company deems appropriate (a “Demand Shelf Registration Statement”)
covering, without limitation, resales by the Holders of all Registrable Shares
who have properly completed in all material respects an Election and
Questionnaire, and to cause such Demand Shelf Registration Statement to be
declared effective by the Commission as promptly as is practicable, but in no
event later than 45 calendar days after receipt by the Company of the Demand
Notice (such 45th day, the “Effectiveness Deadline”).  Not more than 5 Business Days following the
receipt by the Company of a Demand Notice, the Company shall distribute an
Election and Questionnaire to each Holder of Notes or Registrable Shares.  The Company shall name in the Demand Shelf
Registration Statement, or a Prospectus thereto, as a selling securityholder,
each Holder that has returned to the Company a completed and executed Election
and Questionnaire no later than 30 calendar days following the date of distribution
by the Company of the Election and Questionnaire.  Each Notice Holder agrees to promptly furnish
additional information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
materially misleading.  The Company shall
use its reasonable best efforts to keep any Demand Shelf Registration Statement
continuously effective, supplemented, amended and current, subject to the
provisions of Section 2(c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, until the
expiration of the Effectiveness Period. 
Notwithstanding anything to the contrary in this Section 2(b), the
Company shall not be required to file a Demand Shelf Registration Statement if,
prior to the Effectiveness Deadline, the Existing Shelf Registration Statement
is declared effective or may be used for resales of the Registrable Shares.

 

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(c)                                  Suspension
Period.  The Company may suspend the
Holders’ use of any Shelf Registration Statement or Prospectus and shall not be
required to amend or supplement any Shelf Registration Statement for a period
not to exceed 45 calendar days in any 90 calendar day period or an aggregate of
120 calendar days in any 12-month period (each, a “Suspension
Period”) if the Board of Directors of the Company shall have
determined in good faith that because of valid business reasons (not including
avoidance of the Company’s obligations hereunder), including, without
limitation, the acquisition or divestiture of assets, pending corporate
developments and similar events or because of filings with the Commission, it
is in the best interests of the Company to suspend such use, provided that if the Suspension Period relates to disclosure
of a previously undisclosed proposed or pending material business transaction,
the disclosure of which would impede the Company’s ability to consummate such
transaction, the Company may extend the 45 day calendar day Suspension Period
to 60 calendar days

 

SECTION 3. 
ADDITIONAL INTEREST

 

If (i) a Demand Shelf Registration Statement required by this
Agreement has not been declared or deemed effective by the Commission on or
prior to the applicable Effectiveness Deadline, (ii) a Demand Shelf
Registration Statement required by this Agreement is filed and declared
effective but thereafter ceases to be effective or usable in connection with
resales of Registrable Shares (other than due to a Suspension Period or without
a replacement Shelf Registration Statement being declared or deemed effective)
during the Effectiveness Period and the Company does not cause the Demand Shelf
Registration Statement or another Shelf Registration Statement to become
effective or usable within 5 Business Days by filing a post-effective
amendment, Prospectus or report pursuant to the Exchange Act, (iii) any
Suspension Period with respect to the Existing Shelf Registration Statement or
any Demand Shelf Registration Statement exceeds 45 days (or 60 days, if
applicable pursuant to Section 2(c)), whether or not consecutive, in any
90 day period, or 120 days, whether or not consecutive, in any 12-month period,
during the Effectiveness Period, or (iv) the Company shall fail to comply
with its obligation under this Agreement to name in a Prospectus, as a selling
securityholder, a Holder who has returned a completed and executed Election and
Questionnaire (each such event referred to in clauses (i) through (iv), a
“Registration Default”), then
additional interest (“Additional Interest”)
will accrue on the Notes from and including the calendar day following the
Registration Default to but excluding the earlier of (1) the calendar day
on which all Registration Defaults have been cured and (2) the termination
of the Effectiveness Period.  All accrued
Additional Interest shall be paid quarterly in arrears to the Holders of Notes,
in the manner provided for in the Indenture and the Notes.  Additional Interest will accrue on the Notes
in an amount equal to a per annum rate of 0.25% on the principal amount of
Notes for the first 90-day period immediately following the occurrence of such
Registration Default and shall increase by an additional per annum rate of
0.25% with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of Additional Interest of
1.00% per annum on the principal amount of Notes; provided
that the Company shall in no event be required to pay Additional Interest to a
Holder for more than one Registration Default at any given time.  Additional Interest, if any, shall be payable
only to Holders who have duly returned a completed and executed Election and
Questionnaire and, in respect of a Registration Default described in clause (iv) above,
Additional Interest, if any, shall be payable only to the Holders to whom such
Registration Default relates.  Upon the
Company curing any Registration Default, the Additional Interest payable with
respect to the Notes as a result of such Registration Default

 

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shall cease. 
The Company will not pay Additional Interest on any Note after it has
been converted into cash and, if applicable, shares of Common Stock.

 

SECTION 4.  REGISTRATION PROCEDURES

 

(a)                                  Election
and Questionnaire.  The Company
shall, upon the request of any Holder from time to time, promptly send an
Election and Questionnaire to such Holder.

 

(b)                                 Shelf
Registration Statement.  In the event
that the Existing Shelf Registration Statement remains effective pursuant to Section 2(a) hereof,
or following the effectiveness of the Demand Shelf Registration Statement as
contemplated by Section 2(b) hereof, the Company shall, upon its
receipt of a completed and signed Election and Questionnaire from a Holder,
take any action reasonably necessary to permit the sale of the Registrable
Shares being sold by such Holder in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company in the Election and Questionnaire), and pursuant thereto the
Company will prepare and file with the Commission a (i) prospectus
supplement as soon as reasonably practicable and, in any event, no later than
ten Business Days following such receipt of the Election and Questionnaire, or (ii) if
required, a post-effective amendment to the Shelf Registration Statement as
promptly as is reasonably practicable, provided that
if an Election and Questionnaire is delivered to the Company during a
Suspension Period, the Company shall not be obligated to take the actions set
forth in this Section 4(b) until the termination of such Suspension
Period.  Notwithstanding the foregoing,
the Company will not be required to file pursuant to this Section 4(b) more
than once in any calendar quarter, a post-effective amendment or prospectus
supplement pursuant to Rule 424(b) under the Act for such purpose.

 

(c)                                  General
Provisions.  In connection with any
Shelf Registration Statement and any related Prospectus required by this
Agreement, the Company shall:

 

(i)                                     use its reasonable
best efforts to keep such Registration Statement continuously effective and
provide all requisite financial statements for the Effectiveness Period.  Upon the occurrence of any event that would
cause any such Shelf Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading or (B) not
to be effective and usable for resale of Registrable Shares during the
Effectiveness Period, the Company shall file promptly an appropriate amendment
to such Shelf Registration Statement curing such defect, and, if Commission
review is required, use its reasonable best efforts to cause such amendment to
be declared effective as soon as practicable (in each case, subject to Section 2(c) hereof);

 

(ii)                                  prepare and file with
the Commission such amendments and post-effective amendments to the applicable
Shelf Registration Statement as may be reasonably necessary to keep such Shelf
Registration Statement effective for the Effectiveness Period; cause the
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply
fully with Rules 424, 430A and 462, as applicable, under the Act in a
timely manner; and comply with the provisions of the Act with respect to the
disposition of all Registrable

 

5

 

Shares covered by such Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Registration Statement
or Prospectus (in each case, subject to Section 2(c) hereof;

 

(iii)                               advise each Notice
Holder promptly and, if requested by such Notice Holder, confirm such advice in
writing, provided, however,
that the Company shall not be obligated to provide such advice to any Notice
Holder that has completed the sale of all Registrable Shares that were
registered under such Shelf Registration Statement);

 

(A)                              when the Prospectus,
Shelf Registration Statement or post-effective amendment has been filed, and,
with respect to any applicable Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective,

 

(B)                                of the issuance by the
Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or of the suspension by any state securities commission
of the qualification of the Registrable Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, and

 

(C)                                of the existence of any
state of facts or the happening of any event that requires the making of any
changes in any Shelf Registration Statement or the Prospectus included therein
so that, as of such date, such Shelf Registration Statement or the Prospectus
do not contain an untrue statement of a material fact and do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading (which advice shall be
accompanied by an instruction to such Notice Holders to suspend the use of the
Prospectus until the requisite changes have been made, which notice need not
specify the nature of the event giving rise to such suspension;

 

(iv)                              the Company shall use its
reasonable best efforts to prevent the issuance of, and if issued to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of any Shelf Registration Statement;

 

(v)                                 if any fact or event
contemplated by Section 4(c)(iii)(C) above shall exist or have
occurred, subject to Section 2(c), prepare a supplement or post-effective
amendment to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Registrable Shares, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;

 

(vi)                              before filing any Shelf
Registration Statement or Prospectus or any amendments or supplements (other
than supplements solely for the purpose of naming

 

6

 

one or more Holders as selling securityholders
and except as required for the Company to timely file any reports required
under the Exchange Act) thereto relating to the Registrable Shares with the
Commission, furnish to the Notice Holders copies of all such documents proposed
to be filed and use efforts to reflect in each such document when so filed with
the Commission such comments as the Notice Holders shall reasonably propose
within three (3) Business Days of the delivery of such copies to the
Notice Holders;

 

(vii)                           if requested by any Notice
Holders in connection with such sale, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment
if necessary, such information as such Notice Holders may reasonably request to
have included therein, including, without limitation, information relating to
the “Plan of Distribution” of the Registrable Shares; and make all required
filings of such Prospectus or post-effective amendment as soon as reasonably
practicable after the Company is notified of the matters to be included in such
Prospectus or post-effective amendment;

 

(viii)                        furnish to each Notice Holder,
upon such Notice Holder’s request, in connection with such sale, without
charge, at least one copy of the Registration Statement, as first filed with
the Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);

 

(ix)                                deliver to each Notice
Holder, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by each
selling Notice Holder in connection with the offering and the sale of the
Registrable Shares covered by the Prospectus or any amendment or supplement
thereto;

 

(x)                                   prior to any public
offering of Registrable Shares, reasonably cooperate with the selling Notice
Holders and their counsel in connection with the registration and qualification
of the Registrable Shares under the securities or Blue Sky laws of such
jurisdictions as the selling Notice Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Shares covered by the applicable Shelf
Registration Statement; provided, however, that the Company shall not be required to register
or qualify as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the Shelf
Registration Statement, in any jurisdiction where it is not now so subject;

 

(xi)                                in connection with any
sale of Registrable Shares that will result in such securities no longer being
Registrable Shares, reasonably cooperate with the Notice Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Shares to be sold and not bearing any restrictive legends; and to register such
Registrable Shares in such denominations and such names as the selling Notice
Holders

 

7

 

may reasonably request at least two business
days prior to such sale of Registrable Shares;

 

(xii)                             use its reasonable best
efforts to cause the disposition of the Registrable Shares covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable
the seller or sellers thereof to consummate the disposition of such Registrable
Shares, subject to the proviso contained in clause (x) above;

 

(xiii)                          otherwise use its reasonable
best efforts to comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders with regard to
any applicable Shelf Registration Statement, as soon as reasonably practicable,
a consolidated earnings statement meeting the requirements of Rule 158
under the Act (which need not be audited) covering a twelve-month period
beginning after the effective date of the Shelf Registration Statement (as such
term is defined in paragraph (c) of Rule 158 under the Act); and

 

(xiv)                         use its reasonable best
efforts to take all other steps necessary to effect the registration, offering
and sale of the Registrable Shares covered by each Shelf Registration Statement
covered thereby.

 

SECTION 5. 
REGISTRATION EXPENSES

 

(a)                                  All
expenses incident to the Company’s performance of or compliance with this
Agreement will be borne by the Company, including without limitation:  (i) all registration and filing fees and
expenses; (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing of Prospectuses), messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company; (v) all
application and filing fees in connection with listing the Registrable Shares
on a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance).  The Company will, in any
event, bear its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company.

 

SECTION 6. 
INDEMNIFICATION

 

(a)                                  The
Company agrees to indemnify and hold harmless each Notice Holder that has sold
Registrable Shares pursuant to any Shelf Registration Statement, its directors,
officers and each Person, if any, who controls such Notice Holder (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments and
expenses whatsoever (including without limitation, any legal or other expenses
incurred in connection with investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation) caused
by any untrue statement or alleged

 

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untrue statement of a material fact contained
in any Shelf Registration Statement, preliminary prospectus or Prospectus (or
any amendment or supplement thereto) provided by the Company to any selling
Notice Holder or any prospective purchaser of Registrable Shares, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by (i) an
untrue statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Notice Holders furnished in
writing to the Company by or on behalf any of the Notice Holders, or (ii) offers
or sales by such Notice Holder “by means of” (as defined in Rule 159A of
the Act) a “free writing prosectus” (as defined in Rule 405 of the Act)
that was not authorized in writing by the Company.

 

(b)                                 Each
selling Notice Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, and its directors, officers, partners, employees,
representatives and agents, and each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, to the same extent as the foregoing indemnity from the Company set
forth in section (a) above, but only with reference to (i) information
relating to such Notice Holder furnished in writing to the Company by or on
behalf of such Notice Holder expressly for use in any Shelf Registration
Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto.) or (ii) offers or sales by such Notice Holder “by means of” (as
defined in Rule 159A of the Act) a “free writing prospectus” (as defined
in Rule 405 of the Act) that was not authorized in writing by the
Company.  In no event shall any Notice
Holder, its directors, officers or any Person who controls such Notice Holder
be liable or responsible for any amount in excess of the amount by which the
total amount received by such Notice Holder with respect to its sale of
Registrable Shares pursuant to a Shelf Registration Statement exceeds (i) the
amount paid by such Notice Holder for such Registrable Shares and (ii) the
amount of any damages that such Notice Holder, its directors, officers or any
Person who controls such Notice Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.

 

(c)                                  In
case any action shall be commenced involving any person in respect of which
indemnity may be sought pursuant to Section 6(a) or Section 6(b) (the
“indemnified party”), the
indemnified party shall promptly notify the person against whom such indemnity
may be sought (the “indemnifying person”)
in writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 6 except to the extent that it has been prejudiced in
any material respect by such failure or from any liability which it may
otherwise have).  In case any such action
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. 
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement

 

9

 

of the action, or (iii) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in of which events
such fees and expenses of counsel shall be borne by the indemnifying
parties.  In such case, the indemnifying
party shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred.  Such firm shall be
designated in writing by a majority of the Notice Holders, in the case of the
parties indemnified pursuant to Section 6(a), and by the Company, in the
case of parties indemnified pursuant to Section 6(b).  The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of any
action (i) effected with its written consent or (ii) effected without
its written consent if the settlement is entered into more than twenty business
days after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party
from all liability on claims that are or could have been the subject matter of
such action and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of the indemnified
party.

 

(d)                                 To
the extent that the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or judgments (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company, on the one hand, and
the Notice Holders, on the other hand, from their sale of Registrable Shares or
(ii) if the allocation provided by clause 6(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 6(d)(i) above but
also the relative fault of the Company, on the one hand, and of the Notice
Holder, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. 
The relative fault of the Company, on the one hand, and of the Notice
Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Notice Holder,
on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and judgments
referred to above shall be deemed to include, subject to the limitations

 

10

 

set forth in the second paragraph of Section 6(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.

 

The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Notice Holders were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any matter, including any action
that could have given rise to such losses, claims, damages, liabilities or
judgments.  Notwithstanding the
provisions of this Section 6, no Notice Holder, its directors, its
officers or any Person, if any, who controls such Notice Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Notice Holder with respect to the sale of
Registrable Shares pursuant to a Registration Statement exceeds (i) the
amount paid by such Notice Holder for such Registrable Shares and (ii) the
amount of any damages which such Notice Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The Notice
Holders’ obligations to contribute pursuant to this Section 6(d) are
several in proportion to the respective principal amount of Registrable Shares
held by each Notice Holder hereunder and not joint.

 

SECTION 7. 
RULE 144A AND RULE 144

 

The Company agrees with each Holder, for so long as any Notes or any
Registrable Shares remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Registrable Shares in connection with any sale of
Registrable Shares and any prospective purchaser of such Registrable Shares
designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Registrable Shares pursuant to Rule 144A,
and (ii) is subject to Section 13 or 15 (d) of the Exchange Act,
to make all filings required thereby in a timely manner in order to permit
resales of such Registrable Shares pursuant to Rule 144.

 

SECTION 8. 
MISCELLANEOUS

 

(a)                                  Remedies.  The Company acknowledges and agrees that any
failure by the Company to comply with its obligations under Sections 2 and 4
hereof may result in material irreparable injury to the Holders for which there
is no adequate remedy at law, that it will not be possible to measure damages
for such injuries precisely and that, in the event of any such failure, any
Holder may obtain such relief as may be required to specifically enforce the
Company’s obligations under Sections 2 and 4 hereof.  The Company further agrees to waive the
defense in any action for specific performance that a remedy at law would be adequate.

 

11

 

(b)                                 No
Inconsistent Agreements.  The Company
will not, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company’s securities under any
agreement in effect on the date hereof.

 

(c)                                  Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given unless (i) in
the case of Section 3 hereof and this Section 8(c)(i), the Company
has obtained the written consent of Holders of all outstanding Notes and
Registrable Shares and (ii) in the case of all other provisions hereof,
the Company has obtained the written consent of (a) Holders of a majority
of the outstanding principal amount of Notes and (b) Holders of a majority
of the outstanding Registrable Shares (excluding Notes and Registrable Shares
held by the Company or its Affiliates).

 

(d)                                 Third
Party Beneficiary.  The Holders shall
be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.

 

(e)                                  Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:

 

(i)                                     if to a Holder, at
the address set forth on the records of the Registrar under the Indenture, with
a copy to the Registrar under the Indenture; and

 

(ii)                                  if to the Company:

 

DRS
Technologies, Inc.

5 Sylvan Way

Parsippany, New Jersey 07054 

Telecopier No.:  (973) 898-4730 

Attention:  Nina Laserson Dunn

 

With a copy
to:

 

Skadden, Arps,
Slate, Meagher & Flom LLP 

4 Times Square

New York, New York 10036

Telecopier No.:  (212) 735-2000

Attention:  David J. Goldschmidt

 

All such notices and communications shall be deemed to have been duly
given:  at the time delivered by hand, if
personally delivered; five business days after being deposited in the

 

12

 

mail, postage prepaid, if mailed; when
receipt acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

 

(f)                                    Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for an
express assignment, subsequent Holders; provided, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Notes or Registrable Shares in violation of the terms hereof or
of the Purchase Agreement or the Indenture. 
If any transferee of any Holder shall acquire Notes or Registrable
Shares in any manner, whether by operation of law or otherwise, such
Registrable Shares shall be held subject to all of the terms of this Agreement,
and by taking and holding such Notes and Registrable Shares such Person shall
be conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Purchase Agreement, and
such Person shall be entitled to receive the benefits hereof.

 

(g)                                 Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

(h)                                 Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(i)                                     Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.

 

(j)                                     Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

(k)                                  Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Registrable
Shares.  This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

 

13

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

 

	
   

  	
  DRS
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard A. Schneider

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard
  A. Schneider

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President, CFO

  
					

 

 

	
  BEAR,
  STEARNS & CO. INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David Baxt

  	
   

  
	
   

  	
  Name:

  	
  David
  Baxt

  
	
   

  	
  Title:

  	
  Senior
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  WACHOVIA
  CAPITAL MARKETS, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Steven Gray

  	
   

  
	
   

  	
  Name:

  	
  Steven
  Gray

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  MERRILL
  LYNCH, PIERCE, FENNER & SMITH INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Michael Barrish

  	
   

  
	
   

  	
  Name:

  	
  Michael
  Barrish

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANC
  OF AMERICA SECURITIES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  J.H. Caldwell

  	
   

  
	
   

  	
  Name:

  	
  J.H.
  Caldwell

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  CIBC
  WORLD MARKETS CORP.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Edward C. Eppler

  	
   

  
	
   

  	
  Name:  Edward C. Eppler

  
	
   

  	
  Title:    Managing Director

  
						

 

 

	
  JEFFERIES &
  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David Losito

  	
   

  
	
   

  	
  Name:

  	
  David
  Losito

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  RYAN
  BECK & CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  John Bolebruch

  	
   

  
	
   

  	
  Name:

  	
  John
  Bolebruch

  
	
   

  	
  Title:

  	
  Managing
  Director

  
					

 

 

APPENDIX A

 

DRS TECHNOLOGIES, INC.

 

FORM OF NOTICE OF REGISTRATION STATEMENT
AND

SELLING SECURITYHOLDER ELECTION AND
QUESTIONNAIRE

 

Notice

 

DRS Technologies, Inc. (the “Company”)
has filed, or intends shortly to file, with the Securities and Exchange
Commission (the “SEC”) a
registration statement on Form S-3 or such other Form as may be
available (the “Shelf Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of
1933, as amended (the “Securities Act”),
of the Company’s common stock, par value $0.01 per share, issuable upon
conversion (the “Shares”) of the
Company’s 2.0% Convertible Senior Notes due 2026 (CUSIP No. 23330X AK 6)
(the “Notes”), in accordance with
the terms of the Registration Rights Agreement, dated as of January 31,
2006 (the “Registration Rights Agreement”)
among the Company, Bear, Stearns & Co. Inc. and the other initial
purchasers named therein. A copy of the Registration Rights Agreement is
available from the Company. All capitalized terms not otherwise defined herein
have the meanings ascribed thereto in the Registration Rights Agreement.

 

To sell or otherwise dispose of any Shares pursuant to the Shelf
Registration Statement, a beneficial owner of Shares generally will be required
to be named as a Selling Securityholder in the related Prospectus, deliver a
Prospectus to purchasers of Shares, be subject to certain civil liability
provisions of the Securities Act and be bound by those provisions of the
Registration Rights Agreement applicable to such beneficial owner (including
certain indemnification rights and obligations, as described below).

 

Certain legal consequences arise from being named as a Selling
Securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Shares are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a Selling Securityholder in the Shelf Registration Statement
and the related Prospectus.

 

ELECTION

 

The undersigned holder (the “Selling
Securityholder”) of Shares hereby elects to include in the
Prospectus forming a part of the Shelf Registration Statement the Shares
beneficially owned by it and listed below in Item III (unless otherwise specified
under Item III). The undersigned, by signing and returning this Election and
Questionnaire, understands that it will be bound with respect to such Shares by
the terms and conditions of this Election and Questionnaire and the
Registration Rights Agreement.

 

Pursuant to the Registration Rights Agreement, the Selling
Securityholder has agreed to indemnify and hold harmless the initial
purchasers, the Company, and each person, if any, who controls any such parties
within the meaning of either Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each of their
respective directors, officers, employees, representatives and agents, from and
against certain losses arising in connection with statements concerning the
Selling Securityholder made in the

 

 

Shelf
Registration Statement or the related Prospectus, or any amendment or
supplement thereto or any state securities or “Blue Sky” applications in
reliance upon the information provided in this Election and Questionnaire.  The Selling Securityholder hereby provides
the following information to the Company and represents and warrants that such
information is accurate and complete:

 

QUESTIONNAIRE

 

I.
Identification of Selling Securityholder:

 

A.           Full legal name of Selling Securityholder:

 

B.             Full legal name of registered holder (if
not the same as (A) above) through which Shares listed in Item III are
held:

 

C.             Is the Selling Securityholder an
SEC-reporting company? If so, list below the individual or individuals who
exercise dispositive powers with respect to the Notes, and the voting and/or
dispositive powers with respect to the Shares.

 

D.            Full legal name of DTC participant (if
applicable and if not the same as (B) above) through which Shares listed
in Item III are held:

 

E.              Are you a broker-dealer registered
pursuant to Section 15 of the Exchange Act? (Please answer “Yes” or “No.”)

 

F.              If your response to (E) above is
“No,” are you an “affiliate” of a broker-dealer registered pursuant to Section 15
of the Exchange Act? (Please answer “Yes” or “No.”) For the purposes of this
item (F), an “affiliate” of a registered broker-dealer shall include any
company that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
broker-dealer, and does not include any of the individuals employed by such
broker-dealer or its affiliates.

 

II. Address
for notices to Selling Securityholders:

 

Telephone:

 

Fax:

 

Contact Person:

 

 

III. Beneficial
ownership of Shares:

 

A.                                   Type of Shares
beneficially owned and principal amount of Notes or number of shares of Common
Stock, as the case may be, beneficially owned:

 

B.                                     CUSIP No(s). of
such Shares beneficially owned:

 

IV. Beneficial
ownership of the Company’s securities owned by the Selling Securityholder:

 

EXCEPT AS SET FORTH BELOW IN THIS ITEM IV, THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE
SHARES LISTED ABOVE IN ITEM III (“Other
Securities”).

 

A.                                   Type and amount of
Other Securities beneficially owned by the Selling Securityholder:

 

B.                                     CUSIP No(s). of
such Other Securities beneficially owned:

 

V.
Relationship with the Company:

 

A.           Except as set forth below, neither the
undersigned nor any of its affiliates, officers, directors or principal equity
holders (5% or more) has held any position or office or has had any other
material relationship with the Company (or their predecessors or affiliates)
during the past three years.

 

State any exceptions here:

 

B.             If the Selling Securityholder is a
registered broker-dealer, except as set forth below, (i) neither the
undersigned nor any of its affiliates has purchased the Shares other than in
the ordinary course of business and (ii) at the time of the purchase of
the Shares to be registered, there was no agreement or understanding, written
or otherwise, with any person to distribute any such Shares.

 

State any exception here:

 

VI. Plan of
Distribution:

 

Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Shares listed above in Item III pursuant to
the Shelf Registration Statement only as follows (if at all). Such Shares may
be sold from time to time directly by the undersigned or, alternatively,
through underwriters, broker-dealers or agents. If the Shares are sold through
underwriters or broker-dealers, the Selling Securityholder will be responsible
for underwriting discounts or commissions or agent’s commissions. Such

 

 

Shares may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):

 

1.               on any national securities exchange or
quotation service on which the Shares may be listed or quoted at the time of
sale;

 

2.               in the over-the-counter market;

 

3.               in transactions otherwise than on such
exchanges or services or in the over-the-counter market; or

 

4.               through the writing of options.

 

In connection with sales of the Shares or otherwise, the undersigned
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Shares and deliver Shares to close out such short
positions, or loan or pledge Shares to broker-dealers that in turn may sell
such securities. State any exceptions here:

 

Note: In no event will such method(s) of distribution take the form of
an underwritten offering of the Shares without the prior agreement of the
Company.

 

We advise each Selling Securityholder of the following Interpretation
A.65 of the July 1997 SEC Manual of Publicly Available Telephone
Interpretations regarding short selling:

 

“An issuer filed a Form S-3 registration
statement for a secondary offering of common stock which is not yet effective.
One of the selling shareholders wanted to do a short sale of common stock
“against the box” and cover the short sale with registered shares after the
effective date. The issuer was advised that the short sale could not be made
before the registration statement becomes effective, because the shares
underlying the short sale are deemed to be sold at the time such sale is made.
There would, therefore, be a violation of Section 5 if the shares were
effectively sold prior to the effective date.”

 

By returning this Election and Questionnaire, the Selling
Securityholder will be deemed to be aware of the foregoing interpretation.

 

By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees it will comply, with the prospectus
delivery requirements and other provisions of the Securities Act and the
Exchange Act and the respective rules and regulations promulgated
thereunder, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Shares pursuant to the Shelf
Registration Statement.

 

If the Selling Securityholder transfers all or any portion of the
Shares listed in Item III above after the date on which such information is
provided to the Company, the Selling

 

 

Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights
and obligations under this Election and Questionnaire and the Registration
Rights Agreement.

 

By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items I through VI above
and the inclusion of such information in the Shelf Registration Statement, the
related Prospectus and any state securities or “Blue Sky” applications. The
Selling Securityholder understands that such information will be relied upon by
the Company in connection with the preparation or amendment of the Shelf
Registration Statement, the related Prospectus and any state securities or
“Blue Sky” applications.

 

In accordance with the Selling Securityholder’s obligation under the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains
effective. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing at the address set forth below.

 

Once this Election and Questionnaire is executed by the Selling
Securityholders and received by the Company, the terms of this Election and Questionnaire
and the representations and warranties contained herein shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives and assigns of the Company and the
Selling Securityholder with respect to the Shares beneficially owned by such
Selling Securityholder and listed in Item III above. This Election and
Questionnaire shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Election and Questionnaire to be executed and delivered either in
person or by its authorized agent.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

** THE
INSTRUCTION BELOW IS ONLY FOR USE IN THE CASE OF A DEMAND SHELF REGISTRATION
STATEMENT **

 

[Please return the completed and executed Election and Questionnaire
for receipt by [date] to:

 

DRS Technologies, Inc.

5 Sylvan Way

Parsippany, NJ 07054

Attention: Nina L. Dunn,

Senior Vice President and General Counsel

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: David J. Goldschmidt]Exhibit 10.1

 

	
   

  	
  Published CUSIP Number:

  	
  23330UAD81

  
	
   

  	
  Revolving Loan CUSIP Number:

  	
  23330UAE64

  
	
   

  	
  Term Loan CUSIP Number:

  	
  23330UAF30

  

 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of January 31, 2006

 

by and among

 

DRS TECHNOLOGIES, INC.,

as Borrower,

 

the Lenders referred to herein,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

BEAR STEARNS CORPORATE LENDING INC.,

as Syndication Agent,

 

BANK OF AMERICA, N.A., BNP PARIBAS and
CALYON, NEW YORK BRANCH,

each as a Documentation Agent,

 

and

 

WACHOVIA CAPITAL MARKETS, LLC,

as Sole Bookrunner

 

 

 

 

WACHOVIA CAPITAL MARKETS, LLC and BEAR,
STEARNS & CO. INC.

as Joint-Lead Arrangers,

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.1

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2

  	
  General

  	
   

  	
  23

  
	
  SECTION 1.3

  	
  Other Definitions and Provisions

  	
   

  	
  23

  
	
  SECTION 1.4

  	
  Effectiveness of Euro Provisions

  	
   

  	
  23

  
	
  SECTION 1.5

  	
  Currency Equivalents.

  	
   

  	
  23

  
	
  SECTION 1.6

  	
  Permitted Senior Unsecured Convertible Debt

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II REVOLVING
  CREDIT FACILITY

  	
   

  	
  24

  
	
  SECTION 2.1

  	
  Revolving Credit Loans

  	
   

  	
  24

  
	
  SECTION 2.2

  	
  Swingline Loans

  	
   

  	
  24

  
	
  SECTION 2.3

  	
  Procedure for Advances of Revolving Credit
  and Swingline Loans

  	
   

  	
  26

  
	
  SECTION 2.4

  	
  Repayment of Loans

  	
   

  	
  27

  
	
  SECTION 2.5

  	
  Notes

  	
   

  	
  28

  
	
  SECTION 2.6

  	
  Permanent Reduction of the Revolving Credit
  Commitment

  	
   

  	
  29

  
	
  SECTION 2.7

  	
  Termination of Revolving Credit Facility

  	
   

  	
  29

  
	
  SECTION 2.8

  	
  Increase of Revolving Credit Commitment

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III LETTER OF
  CREDIT FACILITY

  	
   

  	
  31

  
	
  SECTION 3.1

  	
  L/C Commitment

  	
   

  	
  31

  
	
  SECTION 3.2

  	
  Procedure for Issuance of Letters of Credit

  	
   

  	
  32

  
	
  SECTION 3.3

  	
  Commissions and Other Charges

  	
   

  	
  33

  
	
  SECTION 3.4

  	
  L/C Participations

  	
   

  	
  33

  
	
  SECTION 3.5

  	
  Reimbursement Obligations

  	
   

  	
  35

  
	
  SECTION 3.6

  	
  Obligations Absolute

  	
   

  	
  36

  
	
  SECTION 3.7

  	
  Effect of Application

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV TERM LOAN
  FACILITY

  	
   

  	
  36

  
	
  SECTION 4.1

  	
  Initial Term Loans

  	
   

  	
  36

  
	
  SECTION 4.2

  	
  Procedure for Advances of Term Loans

  	
   

  	
  36

  
	
  SECTION 4.3

  	
  Repayment of Term Loans

  	
   

  	
  37

  
	
  SECTION 4.4

  	
  Prepayments of Term Loans

  	
   

  	
  38

  
	
  SECTION 4.5

  	
  Term Notes

  	
   

  	
  42

  
	
  SECTION 4.6

  	
  Optional Increase In Term Loan Commitment

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V GENERAL LOAN
  PROVISIONS

  	
   

  	
  45

  
	
  SECTION 5.1

  	
  Interest

  	
   

  	
  45

  
	
  SECTION 5.2

  	
  Notice and Manner of Conversion or
  Continuation of Loans

  	
   

  	
  47

  
	
  SECTION 5.3

  	
  Fees

  	
   

  	
  48

  
	
  SECTION 5.4

  	
  Manner of Payment

  	
   

  	
  48

  
	
  SECTION 5.5

  	
  Crediting of Payments and Proceeds

  	
   

  	
  49

  
	
  SECTION 5.6

  	
  Adjustments

  	
   

  	
  50

  

 

i

 

	
  SECTION 5.7

  	
  Nature of Obligations of Lenders Regarding
  Extensions of Credit; Assumption by the Administrative Agent

  	
   

  	
  50

  
	
  SECTION 5.8

  	
  Redenomination under EMU.

  	
   

  	
  51

  
	
  SECTION 5.9

  	
  Regulatory Limitation

  	
   

  	
  51

  
	
  SECTION 5.10

  	
  Changed Circumstances

  	
   

  	
  53

  
	
  SECTION 5.11

  	
  Indemnity

  	
   

  	
  54

  
	
  SECTION 5.12

  	
  Capital Requirements

  	
   

  	
  54

  
	
  SECTION 5.13

  	
  Taxes

  	
   

  	
  55

  
	
  SECTION 5.15

  	
  Security

  	
   

  	
  57

  
	
  SECTION 5.16

  	
  Mitigation Obligations; Replacement of
  Lenders

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CLOSING;
  CONDITIONS OF CLOSING AND BORROWING

  	
   

  	
  58

  
	
  SECTION 6.1

  	
  Closing

  	
   

  	
  58

  
	
  SECTION 6.2

  	
  Conditions to Closing and Initial
  Extensions of Credit on the Closing Date

  	
   

  	
  58

  
	
  SECTION 6.3

  	
  Conditions to All Extensions of Credit

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII REPRESENTATIONS
  AND WARRANTIES OF THE BORROWER

  	
   

  	
  65

  
	
  SECTION 7.1

  	
  Representations and Warranties

  	
   

  	
  65

  
	
  SECTION 7.2

  	
  Survival of Representations and Warranties,
  Etc

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII FINANCIAL
  INFORMATION AND NOTICES

  	
   

  	
  73

  
	
  SECTION 8.1

  	
  Financial Statements and Projections

  	
   

  	
  73

  
	
  SECTION 8.2

  	
  Officer’s Compliance Certificate

  	
   

  	
  74

  
	
  SECTION 8.3

  	
  Accountants’ Certificate

  	
   

  	
  74

  
	
  SECTION 8.4

  	
  Other Reports

  	
   

  	
  75

  
	
  SECTION 8.5

  	
  Notice of Litigation and Other Matters

  	
   

  	
  75

  
	
  SECTION 8.6

  	
  Extension of Time

  	
   

  	
  76

  
	
  SECTION 8.7

  	
  Accuracy of Information

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX AFFIRMATIVE
  COVENANTS

  	
   

  	
  77

  
	
  SECTION 9.1

  	
  Preservation of Corporate Existence and
  Related Matters

  	
   

  	
  77

  
	
  SECTION 9.2

  	
  Maintenance of Property

  	
   

  	
  77

  
	
  SECTION 9.3

  	
  Insurance

  	
   

  	
  77

  
	
  SECTION 9.4

  	
  Accounting Methods and Financial Records

  	
   

  	
  77

  
	
  SECTION 9.5

  	
  Payment and Performance of Obligations

  	
   

  	
  77

  
	
  SECTION 9.6

  	
  Compliance With Laws and Approvals

  	
   

  	
  78

  
	
  SECTION 9.7

  	
  Environmental Laws

  	
   

  	
  78

  
	
  SECTION 9.8

  	
  Compliance with ERISA

  	
   

  	
  78

  
	
  SECTION 9.9

  	
  Compliance With Agreements

  	
   

  	
  78

  
	
  SECTION 9.10

  	
  Inspection of Property; Books and Records;
  Discussions

  	
   

  	
  79

  
	
  SECTION 9.11

  	
  Additional Subsidiaries

  	
   

  	
  79

  
	
  SECTION 9.12

  	
  Use of Proceeds

  	
   

  	
  82

  
	
  SECTION 9.13

  	
  Conduct of Business

  	
   

  	
  82

  
	
  SECTION 9.14

  	
  Account Designation

  	
   

  	
  82

  
	
  SECTION 9.15

  	
  Debt Rating

  	
   

  	
  82

  

 

ii

 

	
  ARTICLE X FINANCIAL
  COVENANTS

  	
   

  	
  82

  
	
  SECTION 10.1

  	
  Maximum Total Leverage Ratio

  	
   

  	
  82

  
	
  SECTION 10.2

  	
  Maximum Senior Leverage Ratio

  	
   

  	
  83

  
	
  SECTION 10.3

  	
  Minimum Fixed Charge Coverage Ratio

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI NEGATIVE
  COVENANTS

  	
   

  	
  83

  
	
  SECTION 11.1

  	
  Limitations on Debt

  	
   

  	
  83

  
	
  SECTION 11.2

  	
  Limitations on Liens

  	
   

  	
  86

  
	
  SECTION 11.3

  	
  Limitations on Loans, Advances, Investments
  and Acquisitions

  	
   

  	
  88

  
	
  SECTION 11.4

  	
  Limitations on Mergers and Liquidation

  	
   

  	
  90

  
	
  SECTION 11.5

  	
  Limitations on Sale of Assets

  	
   

  	
  91

  
	
  SECTION 11.6

  	
  Limitations on Dividends and Distributions

  	
   

  	
  92

  
	
  SECTION 11.7

  	
  Limitations on Exchange and Issuance of
  Capital Stock

  	
   

  	
  93

  
	
  SECTION 11.8

  	
  Transactions with Affiliates.

  	
   

  	
  93

  
	
  SECTION 11.9

  	
  Certain Accounting Changes; Organizational
  Documents

  	
   

  	
  93

  
	
  SECTION 11.10

  	
  Amendments; Payments and Prepayments of
  Debt

  	
   

  	
  93

  
	
  SECTION 11.11

  	
  Amendments, Consents and Waivers under the
  ESSI Merger Documents

  	
   

  	
  95

  
	
  SECTION 11.12

  	
  Restrictive Agreements

  	
   

  	
  95

  
	
  SECTION 11.13

  	
  Nature of Business.

  	
   

  	
  95

  
	
  SECTION 11.14

  	
  Limitation on Bonding Obligations

  	
   

  	
  95

  
	
  SECTION 11.15

  	
  Impairment of Security Interests

  	
   

  	
  96

  
	
  SECTION 11.16

  	
  Foreign Subsidiaries

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII DEFAULT AND
  REMEDIES

  	
   

  	
  96

  
	
  SECTION 12.1

  	
  Events of Default

  	
   

  	
  96

  
	
  SECTION 12.2

  	
  Remedies

  	
   

  	
  99

  
	
  SECTION 12.3

  	
  Rights and Remedies Cumulative; Non-Waiver;
  etc

  	
   

  	
  100

  
	
  SECTION 12.4

  	
  Judgment Currency

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII THE
  ADMINISTRATIVE AGENT

  	
   

  	
  101

  
	
  SECTION 13.1

  	
  Appointment

  	
   

  	
  101

  
	
  SECTION 13.2

  	
  Delegation of Duties

  	
   

  	
  101

  
	
  SECTION 13.3

  	
  Exculpatory Provisions

  	
   

  	
  102

  
	
  SECTION 13.4

  	
  Reliance by the Administrative Agent

  	
   

  	
  102

  
	
  SECTION 13.5

  	
  Notice of Default

  	
   

  	
  102

  
	
  SECTION 13.6

  	
  Non-Reliance on the Administrative Agent
  and Other Lenders

  	
   

  	
  103

  
	
  SECTION 13.7

  	
  Indemnification

  	
   

  	
  103

  
	
  SECTION 13.8

  	
  The Administrative Agent in Its Individual
  Capacity

  	
   

  	
  104

  
	
  SECTION 13.9

  	
  Resignation of the Administrative Agent;
  Successor Administrative Agent

  	
   

  	
  104

  
	
  SECTION 13.10

  	
  Trustee Powers

  	
   

  	
  104

  
	
  SECTION 13.11

  	
  Documentation Agents and Syndication Agent

  	
   

  	
  105

  
	
  SECTION 13.12

  	
  Collateral and Guaranty Matters

  	
   

  	
  105

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV MISCELLANEOUS

  	
   

  	
  106

  
	
  SECTION 14.1

  	
  Notices

  	
   

  	
  106

  

 

iii

 

	
  SECTION 14.2

  	
  Expenses; Indemnity

  	
   

  	
  107

  
	
  SECTION 14.3

  	
  Set off

  	
   

  	
  107

  
	
  SECTION 14.4

  	
  Governing Law

  	
   

  	
  108

  
	
  SECTION 14.5

  	
  Jurisdiction and Venue

  	
   

  	
  108

  
	
  SECTION 14.6

  	
  Waiver of Jury Trial

  	
   

  	
  109

  
	
  SECTION 14.7

  	
  Reversal of Payments

  	
   

  	
  109

  
	
  SECTION 14.8

  	
  Injunctive Relief; Punitive Damages

  	
   

  	
  110

  
	
  SECTION 14.9

  	
  Accounting Matters

  	
   

  	
  110

  
	
  SECTION 14.10

  	
  Successors and Assigns; Participations

  	
   

  	
  110

  
	
  SECTION 14.11

  	
  Amendments, Waivers and Consents

  	
   

  	
  115

  
	
  SECTION 14.12

  	
  Performance of Duties

  	
   

  	
  116

  
	
  SECTION 14.13

  	
  All Powers Coupled with Interest

  	
   

  	
  117

  
	
  SECTION 14.14

  	
  Survival of Indemnities

  	
   

  	
  117

  
	
  SECTION 14.15

  	
  Titles and Captions

  	
   

  	
  117

  
	
  SECTION 14.16

  	
  Severability of Provisions

  	
   

  	
  117

  
	
  SECTION 14.17

  	
  Counterparts

  	
   

  	
  117

  
	
  SECTION 14.18

  	
  Term of Agreement

  	
   

  	
  117

  
	
  SECTION 14.19

  	
  Advice of Counsel

  	
   

  	
  117

  
	
  SECTION 14.20

  	
  No Strict Construction

  	
   

  	
  117

  
	
  SECTION 14.21

  	
  Inconsistencies with Other Documents;
  Independent Effect of Covenants

  	
   

  	
  118

  
	
  SECTION 14.22

  	
  Continuity of Contract

  	
   

  	
  118

  
	
  SECTION 14.23

  	
  USA Patriot Act

  	
   

  	
  118

  

 

iv

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  -

  	
  Form of Revolving Credit Note

  
	
  Exhibit A-2

  	
  -

  	
  Form of Swingline Note

  
	
  Exhibit A-3

  	
  -

  	
  Form of Term Note

  
	
  Exhibit B

  	
  -

  	
  Form of Notice of Borrowing

  
	
  Exhibit C

  	
  -

  	
  Form of Notice of Account Designation

  
	
  Exhibit D

  	
  -

  	
  Form of Notice of Prepayment

  
	
  Exhibit E

  	
  -

  	
  Form of Notice of
  Conversion/Continuation

  
	
  Exhibit F

  	
  -

  	
  Form of Officer’s Compliance
  Certificate

  
	
  Exhibit G

  	
  -

  	
  Form of Assignment and Acceptance

  
	
  Exhibit H

  	
  -

  	
  Subsidiary Guaranty Agreement

  
	
  Exhibit I

  	
  -

  	
  Collateral Agreement

  
	
  Exhibit J

  	
  -

  	
  Form of Reaffirmation Agreement

  
	
  Exhibit K

  	
  -

  	
  Pledge Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1

  	
  -

  	
  Joinder Documents

  
	
  Schedule 2

  	
  -

  	
  Unrestricted Subsidiaries

  
	
  Schedule 7.1(a)

  	
  -

  	
  Jurisdictions of Organization and
  Qualification

  
	
  Schedule 7.1(b)

  	
  -

  	
  Subsidiaries and Capitalization

  
	
  Schedule 7.1(i)

  	
  -

  	
  ERISA Plans

  
	
  Schedule 7.1(m)

  	
  -

  	
  Labor and Collective Bargaining Agreements

  
	
  Schedule 7.1(r)

  	
  -

  	
  Owned and Leased Real Property

  
	
  Schedule 7.1(t)

  	
  -

  	
  Debt, Guaranty and Bonding Obligations

  
	
  Schedule 7.1(u)

  	
  -

  	
  Litigation

  
	
  Schedule 11.1

  	
  -

  	
  Existing Permitted Debt

  
	
  Schedule 11.2

  	
  -

  	
  Existing Liens

  
	
  Schedule 11.3

  	
  -

  	
  Existing Loans, Advances and Investments

  
	
  Schedule 11.8

  	
  -

  	
  Transactions with Affiliates

  
	
   

  	
   

  	
   

  
	
  ANNEX

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex A

  	
   

  	
  Form of Lender Authorization

  

 

v

 

THIRD AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of the 31st day of January, 2006, by and
among DRS TECHNOLOGIES, INC., a Delaware corporation, as Borrower, the lenders who are party to this Agreement pursuant
to an authorization (in the form attached hereto as Annex A, an “Authorization”)
and the lenders who may become party to this Agreement, WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as Administrative Agent for the
Lenders, BEAR STEARNS CORPORATE LENDING INC., as Syndication Agent and BANK OF
AMERICA, N.A., BNP PARIBAS and CALYON, NEW YORK BRANCH, each as a Documentation
Agent.

 

STATEMENT OF PURPOSE

 

Pursuant to the Credit
Agreement, dated as of September 28, 2001, as amended and restated as of November 26,
2002, and further amended and restated as of November 4, 2003 (the “Existing
Credit Agreement”), among the Borrower and the lenders party thereto, such
existing lenders (the “Existing Lenders”) extended certain credit
facilities to the Borrower.

 

The Borrower has requested,
and, subject to the terms and conditions hereof, the Administrative Agent, the
Syndication Agent, the Documentation Agents and the Lenders have agreed, to
amend and restate the Existing Credit Agreement as set forth herein.

 

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

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1                                                  Definitions.  The following terms when used in this
Agreement shall have the meanings assigned to them below:

 

“Additional Term Loan”
has the meaning assigned thereto in Section 4.6.

 

“Additional Term Loan
Effective Date” means the date, which shall be a Business Day, on or before
the Term Loan Maturity Date, but no earlier than thirty (30) days after any
Increase Notification Date, on which each of the Increasing Term Lenders make
Additional Term Loans to the Borrower pursuant to Section 4.6.

 

“Administrative Agent”
means Wachovia, in its capacity as Administrative Agent hereunder, and any
successor thereto appointed pursuant to Section 13.9.

 

“Administrative Agent’s
Office” means the office of the Administrative Agent specified in or
determined in accordance with the provisions of Section 14.1(c).

 

 

“Affiliate” means, with
respect to any Person, any other Person (other than a Subsidiary of such
Person) which directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such first Person or any
of its Subsidiaries.  The term “control”
means (a) the power to vote ten percent (10%) or more of the securities or
other equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

 

“Aggregate Commitment”
means the aggregate amount of the Lenders’ Commitments hereunder, as such
amount may be increased, reduced or otherwise modified at any time or from time
to time pursuant to the terms hereof.  On
the Closing Date, the Aggregate Commitment shall be Six Hundred Seventy-Five
Million Dollars ($675,000,000).

 

“Agreement” means this
Third Amended and Restated Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time.

 

“Agreement Regarding
Post-Closing Matters” shall mean the Agreement Regarding Post-Closing
Matters of even date herewith by and among the Borrower and the Administrative
Agent (on behalf of itself and the Lenders).

 

“Alternative Currency”
means (i) the euro, (ii) the Pounds Sterling, (iii) the Canadian
Dollar, (iv) the Japanese Yen, (v) the Australian Dollar and (vi) with
the prior written consent of the Administrative Agent and the applicable
Issuing Lender, such consents not to be unreasonably withheld or delayed, any
other lawful currency (other than Dollars); provided that in each case
of (i) through (vi) above, such currency is freely transferable and
convertible into Dollars in the United States currency market and freely
available to the applicable Issuing Lender in the London interbank deposit
market.

 

“Alternative Currency Amount”
means, with respect to each Alternative Currency Letter of Credit, the amount
of the Alternative Currency in which such Alternative Currency Letter of Credit
is denominated which is equivalent to the principal amount in Dollars of such
Alternative Currency Letter of Credit at the most favorable spot exchange rate
determined by the Administrative Agent to be available to it at approximately
11:00 a.m. (Charlotte time) two (2) Business Days before such
Alternative Currency Letter of Credit is issued or extended (or to be issued or
extended).  When used with respect to any
sum expressed in Dollars, “Alternative Currency Amount” shall mean the amount
of the applicable Alternative Currency into which Dollars are to be exchanged
which is equivalent to the amount so expressed in Dollars at the most favorable
spot exchange rate determined by the Administrative Agent to be available to it
at the relevant time.

 

“Alternative Currency L/C
Commitment” means the lesser of (a) Fifty Million Dollars ($50,000,000)
and (b) the L/C Commitment.

 

“Alternative Currency L/C
Obligations” means, at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Alternative
Currency

 

2

 

Letters of Credit and (b) the aggregate
amount of drawings under Alternative Currency Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.

 

“Alternative Currency Letter
of Credit” means any Letter of Credit denominated in an Alternative
Currency and “Alternative Currency Letters of Credit” means the
collective reference to all Letters of Credit denominated in an Alternative
Currency.

 

“Applicable Law” means
all applicable provisions of constitutions, laws, statutes, ordinances, rules,
treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators.

 

“Applicable Margin”
means the margin calculated and determined in accordance with Section 5.1(c).

 

“Application” means an
application, in the form specified by the applicable Issuing Lender from time
to time, requesting that such Issuing Lender issue a Letter of Credit.

 

“Approved Fund” means
any Person (other than a natural Person), including, without limitation, any
special purpose entity, that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business; provided, that such
Approved Fund must be administered, managed or underwritten by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.

 

“Asset Sale Proceeds”
has the meaning assigned thereto in Section 4.4(b)(iii).

 

“Assignment and Acceptance”
has the meaning assigned thereto in Section 14.10.

 

“Australian Dollar”
means, at any time of determination, the then official currency of Australia.

 

“Authorization”
has the meaning assigned to such term in the preamble.

 

“Base Rate” means, at
any time, the higher of (a) the Prime Rate and (b) the Federal Funds
Rate plus 1/2 of 1%; each change in the Base Rate shall take effect
simultaneously with the corresponding change or changes in the Prime Rate or
the Federal Funds Rate.

 

“Base Rate Loan” means
any Loan bearing interest at a rate based upon the Base Rate as provided in Section 5.1(a).

 

“Benefited Lender” has
the meaning assigned thereto in Section 5.6.

 

“Bonding Obligations”
means, with respect to the Borrower or any Restricted Subsidiary, without
duplication, the face amount (including, without limitation, any contingent
obligations arising in connection therewith), of any surety, performance or
other bond issued at the request of or delivered by the Borrower or any
Restricted Subsidiary in the ordinary course of business

 

3

 

to any other Person owed any contractual or
other obligation (other than for borrowed money or other Debt) by the Borrower
or any Restricted Subsidiary to secure the performance of such contractual or
other obligations or to otherwise benefit such Person to whom such contractual
or other obligations are owed.  All
outstanding Bonding Obligations as of the Closing Date are set forth on Schedule 7.1(t).

 

“Borrower” means DRS
Technologies, Inc., a Delaware corporation.

 

“Business Day” means (a) for
all purposes other than as set forth in clause (b) below, any day other
than a Saturday, Sunday or legal holiday on which banks in Charlotte, North
Carolina and New York, New York, are open for the conduct of their domestic or
international commercial banking business, as applicable, and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, any LIBOR Rate Loan, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market. Notwithstanding the
foregoing, with respect to any amount denominated or to be denominated in the
euro, any reference to a “Business Day” shall be construed as a reference to a
day (other than a Saturday or Sunday) on which banks are generally open for
business in New York, New York and prime banks in London generally provide
quotations for deposits denominated in the euro.

 

“Calculation Date” has
the meaning assigned thereto in Section 5.1(c).

 

“Canadian Dollar” or “C$”
means, at any time of determination, the then official currency of Canada.

 

“Capital Asset” means,
with respect to the Borrower and its Restricted Subsidiaries, any asset that
should, in accordance with GAAP, be classified and accounted for as a capital
asset on a Consolidated balance sheet of the Borrower and its Restricted
Subsidiaries.

 

“Capital Expenditures”
means with respect to the Borrower and its Restricted Subsidiaries for any
period, the aggregate cost of all Capital Assets acquired by the Borrower and
its Restricted Subsidiaries during such period, as determined in accordance
with GAAP.

 

“Capital Lease” means
any lease of any property by the Borrower or any of its Restricted
Subsidiaries, as lessee, that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a Consolidated balance sheet of the
Borrower and its Restricted Subsidiaries.

 

“Cash Equivalents” has
the meaning assigned thereto in Section 11.3(b).

 

“Change in Control” has
the meaning assigned thereto in Section 12.1(i).

 

“Closing Date” means the
date of this Agreement or such later Business Day upon which each condition
described in Section 6.2 shall be satisfied or waived in all respects in a
manner acceptable to the Administrative Agent, in its sole discretion.

 

4

 

“Code” means the
Internal Revenue Code of 1986, and the rules and regulations thereunder,
each as amended or modified from time to time.

 

“Collateral” means the
collateral security for the Obligations pledged or granted pursuant to the
Security Documents.

 

“Collateral Agreement”
means the collateral agreement dated as of September 28, 2001, entered
into by the Borrower and its Domestic Subsidiaries that are Restricted
Subsidiaries in favor of the Administrative Agent for the ratable benefit of
itself and the Lenders, in the form of Exhibit I, as amended,
restated, supplemented or otherwise modified prior to the date hereof, by the
Existing Joinder Documents or otherwise, as reaffirmed pursuant to the
Reaffirmation Agreement and as otherwise amended, restated, supplemented or
otherwise modified from time to time hereafter.

 

“Commitment” means, as
to any Lender, the sum of such Lender’s Revolving Credit Commitment and
applicable Term Loan Commitment as set forth in the Register, as such
Commitment may be increased, reduced or otherwise modified at any time or from
time to time pursuant to the terms hereof.

 

“Commitment Percentage”
means, as to any Lender at any time, the ratio of (a) the amount of the
Commitment of such Lender to (b) the Aggregate Commitment.

 

“Consolidated” means,
when used with reference to financial statements or financial statement items
of the Borrower and its Subsidiaries, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.

 

“Convertible Note Indenture”
means that certain Indenture entered into in connection with the issuance of
the Convertible Notes in the form provided to the Administrative Agent and the
Lenders as of the Closing Date, including such indenture as subsequently
qualified under the Trust Indenture Act of 1939, as amended, and all exhibits
and schedules thereto, as each may be amended, restated, supplemented or
otherwise modified pursuant to the terms and conditions set forth in this
Agreement.

 

“Convertible Notes”
means the collective reference to the senior unsecured notes due 2026 of the
Borrower issued pursuant to the Convertible Note Indenture (including any
senior unsecured convertible notes issued pursuant to the Permitted Debt
Add-On) in the initial principal amount of $300,000,000 (as such amount may be
increased pursuant to the Permitted Debt Add-On) which are convertible into
common stock of the Borrower upon the occurrence of certain terms and
conditions as described in the Convertible Note Indenture.

 

“Credit Facility” means,
collectively, the Revolving Credit Facility, the Term Loan Facility, the
Swingline Facility and the L/C Facility.

 

“Debt” means, with
respect to the Borrower and its Restricted Subsidiaries at any date and without
duplication, the sum of the following calculated in accordance with GAAP:  (a) all liabilities, obligations and
indebtedness for borrowed money including, but not limited to,

 

5

 

obligations evidenced by bonds, debentures,
notes or other similar instruments of any such Person (excluding, in each case,
any unamortized premiums associated therewith), (b) all obligations to pay
the deferred purchase price of property or services of any such Person
(including, without limitation, all obligations under non-competition
agreements), except trade payables arising in the ordinary course of business
not more than ninety (90) days past due, (c) all obligations of any such
Person as lessee under Capital Leases to the extent such obligations are
required to be capitalized in accordance with GAAP, (d) all Debt of any
other Person secured by a Lien on any asset of any such Person, (e) all
Guaranty Obligations of any such Person, (f) all obligations, contingent
or otherwise, of any such Person relative to the face amount of letters of
credit, whether or not drawn, including, without limitation, any Reimbursement
Obligation, and banker’s acceptances issued for the account of any such Person,
(g) all obligations of any such Person to redeem, repurchase, exchange,
defease or otherwise make payments in respect of capital stock or other
securities or partnership interests of such Person and, (h) all net
payment obligations incurred by any such Person pursuant to Hedging Agreements;
provided, however, that Bonding Obligations shall not be considered
Debt.

 

“Default” means any of
the events specified in Section 12.1 which with the passage of time, the
giving of notice or any other condition, would constitute an Event of Default.

 

“Designated Acquisition”
has the meaning assigned thereto in Section 4.4(b)(i)(B).

 

“Disputes” has the
meaning assigned thereto in Section 14.5(b).

 

“Documentation Agent”
means each of Bank of America, N.A., BNP Paribas and Calyon, New York Branch in
its capacity hereunder as documentation agent.

 

“Dollar Amount” means (a) with
respect to each Letter of Credit issued or extended (or to be issued or
extended), in Dollars, the principal amount thereof and (b) with respect
to each Alternative Currency Letter of Credit, the amount of Dollars which is
equivalent to the face amount of such Letter of Credit, at the most favorable
spot exchange rate determined by the Administrative Agent to be available to it
at approximately 11:00 a.m. (the time of the applicable Issuing Lender’s
Correspondent) two (2) Business Days before such Letter of Credit is
issued or extended (or to be issued or extended).  When used with respect to any sum expressed
in an Alternative Currency, “Dollar Amount” shall mean the amount of Dollars
which is equivalent to the amount so expressed in such Alternative Currency at
the most favorable spot exchange rate determined by the Administrative Agent to
be available to it at the relevant time.

 

“Dollars” or “$” means,
unless otherwise qualified, the lawful currency of the United States.

 

“Domestic Subsidiary”
means any direct or indirect Subsidiary organized under the laws of the United
States, the law of any State thereof or the laws of Puerto Rico.

 

“EBITDA” means, for any
period, the sum of the following determined on a Consolidated basis, without
duplication, for the Borrower and its Restricted Subsidiaries in accordance
with GAAP (but excluding any such amount attributable to any Unrestricted 

 

6

 

Subsidiary or any Subsidiary thereof):  (a) Net Income for such period plus
(b) the sum of the following to the extent deducted in determining Net
Income: (i) income and franchise taxes, (ii) Interest Expense, (iii) amortization
and depreciation, (iv) expenses related to the transactions contemplated
under this Agreement, including, without limitation, any charges resulting from
the acceleration of deferred financing expenses relating to the Existing Credit
Agreement, (v) extraordinary losses, (vi) non-cash minority interest
deductions, (vii) non-cash charges related to the issuance of stock
options and (viii) restricted stock amortization expense, less (c) interest
income and any extraordinary gains, plus (d) to the extent deducted
or not included in determining Net Income, (i) Pro Forma EBITDA, and (ii) non-recurring
charges to the extent that such non-recurring charges are reasonably
satisfactory to the Administrative Agent and such non-recurring charges do not
exceed 5.0% of Consolidated EBITDA (including Pro Forma EBITDA) for the period
for which such charges are to be added back.

 

“Eligible Assignee”
means, with respect to any assignment of the rights, interest and obligations
of a Lender hereunder, a Person that is at the time of such assignment (a) a
commercial bank organized under the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
commercial bank organized under the laws of any other country that is a member
of the Organization of Economic Cooperation and Development, or a political
subdivision of any such country, having combined capital and surplus in excess
of $500,000,000, (c) a finance company, insurance company, fund or other
financial institution which in the ordinary course of business extends credit
of the type extended hereunder and that has total assets in excess of
$500,000,000, (d) already a Lender hereunder (whether as an original party
to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially
all of the commercial lending business of the assigning Lender, (f) any
Affiliate of the assigning Lender, (g) any Approved Fund or (h) any
other Person that has been approved in writing as an Eligible Assignee by the
Borrower (other than upon the occurrence and during the continuance of any
Default or Event of Default) and the Administrative Agent.

 

“Employee Benefit Plan”
means any employee benefit plan within the meaning of Section 3(3) of
ERISA which (a) is maintained for employees of the Borrower or any ERISA
Affiliate or (b) has at any time within the preceding six (6) years
been maintained for employees of the Borrower or any current or former ERISA
Affiliate.

 

“EMU” means economic and
monetary union as contemplated in the Treaty on European Union.

 

“EMU Legislation” means
legislative measures of the Council of European Union for the introduction of,
change over to or operation of the euro.

 

“Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, allegations, notices of noncompliance
or violation, investigations (other than internal reports prepared by any
Person in the ordinary course of business and not in response to any third
party action or request of any kind) or proceedings relating in any way to any
actual or alleged violation of or liability under any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law,
including,

 

7

 

without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.

 

“Environmental Laws”
means any and all federal, foreign, state, provincial and local laws, statutes,
ordinances, rules, regulations, permits, licenses, approvals, interpretations
and orders of courts or Governmental Authorities, relating to the protection of
human health or the environment, including, but not limited to, requirements
pertaining to the manufacture, processing, distribution, use, treatment, storage,
disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, and the rules and
regulations thereunder, each as amended or modified from time to time.

 

“ERISA Affiliate” means
any Person who, together with the Borrower, is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA.

 

“ESSI” means Engineered
Support Systems, Inc., a Missouri corporation.

 

“ESSI Investigation”
means that certain private investigation of ESSI by (a) the U.S. Attorney’s
Office in St. Louis, Missouri and (b) the SEC in the matter captioned In the Matter of Engineered Support Systems, Inc., in
each case as more particularly described in ESSI’s
annual report on Form 10-K filed with the SEC on January 9, 2006 for
the fiscal year ended October 31, 2005.

 

“ESSI Merger” means the
merger of Maxco, Inc. with and into ESSI and the other transactions
contemplated by the ESSI Merger Agreement and the other ESSI Merger Documents.

 

“ESSI Merger Agreement”
means the Agreement and Plan of Merger (together with the disclosure schedules
thereto), dated as of September 21, 2005, among the Borrower, Maxco, Inc.
(a Missouri corporation and a Wholly-Owned Subsidiary) and ESSI, as amended,
modified or supplemented from time to time, subject to the terms and conditions
set forth in this Agreement.

 

“ESSI Merger Documents”
means the ESSI Merger Agreement and each other material document, instrument,
certificate and agreement executed or delivered by the Borrower or any
Subsidiary in connection with the ESSI Merger Agreement or otherwise referred
to therein or contemplated thereby (other than the Loan Documents and the
Permitted Debt Documents), all as amended, restated, supplemented or otherwise
modified subject to the terms and conditions set forth in this Agreement.

 

“euro” means the single
currency to which the Participating Member States of the European Union have
converted.

 

8

 

“Eurodollar Reserve
Percentage” means, for any day, the percentage (expressed as a decimal and
rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in
effect for such day as prescribed by the Federal Reserve Board (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any basic, supplemental or emergency reserves) in respect of
eurocurrency liabilities or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

 

“Event of Default” means
any of the events specified in Section 12.1, provided that any requirement
for passage of time, giving of notice, or any other condition, has been satisfied.

 

“Excess Cash Flow”
means, for any period of determination, the sum of (a) EBITDA for such
period, minus (b) each of the following, without duplication, (i) income
and franchise taxes (paid or payable in cash) and Interest Expense (paid or
payable in cash), (ii) all principal payments made in respect of Debt
during such period, to the extent permitted hereunder (excluding Excess Cash
Flow payments pursuant to Section 4.4(b)(v) and payments of principal
that can be re-borrowed (including repayments of Revolving Credit Loans not
accompanied by a permanent reduction in the Revolving Credit Commitment)), (iii) all
Capital Expenditures made in cash during such period, to the extent permitted
hereunder, (iv) non-scheduled principal payments of Term Loans (excluding
Excess Cash Flow payments pursuant to Section 4.4(b)(v), (v) cash
payments made in respect of Permitted Acquisitions and (vi) any increases
in working capital plus (c) any decreases in working capital.

 

“Existing Credit Agreement”
has the meaning assigned thereto in the Statement of Purpose of this Agreement.

 

“Existing Lenders” has
the meaning assigned thereto in the Statement of Purpose of this Agreement.

 

“Existing Joinder Documents”
means each agreement and instrument listed on Schedule 1.

 

“Existing Letters of Credit”
means those letters of credit issued by Wachovia or Bank of America, N.A.
existing on the Closing Date and identified on Schedule 11.1.

 

“Existing Senior
Subordinated Note Indenture” means that certain Indenture dated as of October 30,
2003 entered into in connection with the issuance of the Existing Senior
Subordinated Notes, and all the exhibits and schedules thereto, as previously
amended, restated, supplemented or otherwise modified and as may be further
amended, restated, supplemented or otherwise modified subject to the terms and
conditions of this Agreement.

 

“Existing Senior
Subordinated Notes” means the collective reference to the Borrower’s
existing 6 7/8% senior subordinated notes due 2013 in an aggregate principal
amount of $550,000,000 and issued pursuant to the Existing Senior Subordinated
Note Indenture.

 

“Extensions of Credit”
means, as to any Lender at any time, (a) an amount equal to the sum of (i) the
aggregate principal amount of all Revolving Credit Loans made by such Lender

 

9

 

then outstanding, (ii) such Lender’s
Revolving Credit Commitment Percentage of the L/C Obligations then outstanding,
(iii) such Lender’s Revolving Credit Commitment Percentage of the
Swingline Loans then outstanding and (iv) the aggregate principal amount
of all Term Loans made by such Lender then outstanding, and (b) the making
of any Loan or participation in any Letter of Credit by such Lender, as the
context requires.

 

“FDIC” means the Federal
Deposit Insurance Corporation, or any successor thereto.

 

“Federal Funds Rate”
means, the rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) representing the daily effective federal funds rate as quoted by
the Administrative Agent and confirmed in Federal Reserve Board Statistical
Release H.15 (519) or any successor or substitute publication selected by the
Administrative Agent.  If, for any
reason, such rate is not available, then “Federal Funds Rate” means a daily
rate which is determined, in the opinion of the Administrative Agent, to be the
rate at which federal funds are being offered for sale in the national federal
funds market at 9:00 a.m. (Charlotte time).  Rates for weekends or holidays shall be the
same as the rate for the most immediately preceding Business Day.

 

“Fiscal Year” means the
fiscal year of the Borrower and its Restricted Subsidiaries ending on March 31.

 

“Fixed Charges” means,
for any period, the sum of the following determined on a Consolidated basis, without
duplication, for the Borrower and its Restricted Subsidiaries in accordance
with GAAP: (a) Interest Expense (paid in cash), (b) scheduled
principal payments with respect to Debt, and (c) cash taxes.

 

“Foreign Lender” has the
meaning assigned thereto in Section 5.13(e).

 

“Foreign Subsidiary”
means any direct or indirect Subsidiary that is not a Domestic Subsidiary.

 

“GAAP” means United
States generally accepted accounting principles, as recognized by the American
Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrower and its Subsidiaries throughout the period indicated.

 

“Governmental Approvals”
means all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all Governmental Authorities.

 

“Governmental Authority”
means any nation, province, state or political subdivision thereof, and any
government or any Person exercising executive, legislative, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.

 

“Guaranty Obligation”
means, with respect to the Borrower and its Restricted Subsidiaries, without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation

 

10

 

of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of any such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include (i) endorsements for collection or deposit in
the ordinary course of business or (ii) guarantees by the Borrower or any
Restricted Subsidiary of any non-Debt obligations of the Borrower or any
Restricted Subsidiary.

 

“Hazardous Materials”
means any substances or materials (a) which are or become defined as
hazardous wastes, hazardous substances, pollutants, contaminants, chemical
substances or mixtures or toxic substances under any Environmental Law, (b) which
are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise harmful to human health or the environment
and are or become regulated by any Governmental Authority, (c) the
presence of which require investigation or remediation under any Environmental
Law or common law, (d) the discharge or emission or release of which
requires a permit or license under any Environmental Law or other Governmental
Approval, (e) which are deemed to constitute a nuisance or a trespass
which pose a health or safety hazard to Persons or neighboring properties, or (f) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedging Agreement”
means any agreement with respect to any Interest Rate Contract, forward rate
agreement, commodity swap, forward foreign exchange agreement, currency swap
agreement, cross-currency rate swap agreement, currency option agreement or
other agreement or arrangement designed to alter the risks of any Person
arising from fluctuations in interest rates, currency values or commodity
prices, all as amended, restated, supplemented or otherwise modified from time
to time.

 

“Hedging Obligations”
has the meaning assigned thereto in the definition of “Obligations”.

 

“Hold Period” has the
meaning assigned thereto in Section 4.4(b)(i)(B).

 

“IDT” means Integrated
Defense Technologies, Inc., a Delaware corporation and Wholly-Owned
Subsidiary.

 

“Increase Effective Date”
means the date, which shall be a Business Day, on or before the Revolving
Credit Maturity Date, but no earlier than thirty (30) days after any Increase
Notification Date, on which each of the Increasing Revolving Lenders increase
(or, in the case of New Revolving Lenders, provide) their respective Revolving
Credit Commitments to the Borrower pursuant to Section 2.8.

 

11

 

“Increase Notification”
means the written notice by the Borrower of its desire to increase the
Revolving Credit Commitment pursuant to Section 2.8 and/or the Term Loan
Commitment pursuant to Section 4.6.

 

“Increase Notification Date”
means the date on which the Increase Notification is received by the
Administrative Agent.

 

“Increasing Revolving
Lenders” has the meaning assigned thereto in Section 2.8(b).

 

“Increasing Term Lenders”
has the meaning assigned thereto in Section 4.6(b).

 

“Initial Term Loans”
means the term loans made, or to be made, to the Borrower by the Lenders
pursuant to Section 4.1 and shall not include any of the Additional Term
Loans made, or to be made, to the Borrower pursuant to Section 4.6.

 

“Insurance and Condemnation
Proceeds” has the meaning assigned thereto in Section 4.4(b)(iv).

 

“Interest Expense”
means, with respect to the Borrower and its Restricted Subsidiaries for any
period, the gross interest expense (including, without limitation, interest
expense attributable to Capital Leases and all net payment obligations pursuant
to Hedging Agreements) of the Borrower and its Restricted Subsidiaries, all
determined for such period on a Consolidated basis, without duplication, in
accordance with GAAP.

 

“Interest Period” has
the meaning assigned thereto in Section 5.1(b).

 

“Interest Rate Contract”
means any interest rate swap agreement, interest rate cap agreement, interest
rate floor agreement, interest rate collar agreement, interest rate option or
any other agreement regarding the hedging of interest rate risk exposure
executed in connection with hedging the interest rate exposure of any Person
and any confirming letter executed pursuant to such agreement, all as amended,
restated, supplemented or otherwise modified from time to time.

 

“ISP98” means the
International Standby Practices (1998 Revision, effective January 1,
1999), International Chamber of Commerce Publication No. 590.

 

“Issuing Lender” means (a) with
respect to Letters of Credit issued hereunder on or after the Closing Date, (i) Wachovia,
in its capacity as issuer thereof, or any successor thereto and (ii) any
other issuing lender agreed to by the Borrower and the Administrative Agent and
(b) with respect to the Existing Letters of Credit, Wachovia and Bank of
America.

 

“Issuing Lender’s
Correspondent” means, Wachovia Bank, National Association, London Branch or
any other financial institution designated by an Issuing Lender to act as its
correspondent hereunder with respect to the issuance and payment of Alternative
Currency Letters of Credit.

 

“Japanese Yen” means, at
any time of determination, the then official currency of Japan.

 

12

 

“Joinder Agreement”
means collectively, each joinder agreement executed in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders, in form
and substance satisfactory to the Administrative Agent.

 

“L/C Commitment” means
the lesser of (a) Seventy-Five Million Dollars ($75,000,000) and (b) the
Revolving Credit Commitment.

 

“L/C Facility” means the
letter of credit facility established pursuant to Article III.

 

“L/C Obligations” means,
at any time, an amount equal to the sum of (a) the aggregate undrawn and
unexpired amount of the then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit which have not then been
reimbursed pursuant to Section 3.5.

 

“L/C Participants”
means, with respect to any Letter of Credit, the collective reference to all
the Lenders under the Revolving Credit Facility other than the applicable
Issuing Lender with respect to such Letter of Credit.

 

“L/C Supporting
Documentation” has the meaning assigned thereto in Section 3.2.

 

“Lender” means each
Person executing the signature pages to this Agreement as a Lender
(including, without limitation, each Issuing Lender and the Swingline Lender
unless the context otherwise requires) or executing this Agreement pursuant to an Authorization and each Person that
hereafter becomes a party to this Agreement as a Lender pursuant to Section 2.8,
Section 4.6 or Section 14.10.

 

“Lender Addition and
Acknowledgement Agreement” shall have the meaning assigned thereto in Section 2.8.

 

“Lending Office” means,
with respect to any Lender, the office of such Lender maintaining such Lender’s
Revolving Credit Commitment Percentage or applicable Term Loan Percentage, as
applicable, of the Extensions of Credit.

 

“Letters of Credit”
means the collective reference to letters of credit issued pursuant to Section 3.1
and the Existing Letters of Credit.

 

“LIBOR” means the rate
of interest per annum determined on the basis of the rate for deposits in
Dollars in minimum amounts of at least $5,000,000 for a period equal to the
applicable Interest Period which appears on the Telerate Page 3750 at
approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first day of the applicable Interest Period (rounded upward, if necessary,
to the nearest 1/100th of 1%). 
If, for any reason, such rate does not appear on Telerate Page 3750,
the “LIBOR” shall be determined by the Administrative Agent to be the arithmetic
average of the rate per annum at which deposits in Dollars in minimum amounts
of at least $5,000,000 would be offered by first class banks in the London
interbank market to the Administrative Agent at approximately 11:00 a.m.
(London time) two (2)

 

13

 

Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period.  Each calculation by the Administrative Agent
of LIBOR shall be conclusive and binding for all purposes, absent manifest
error.

 

“LIBOR Rate” means a
rate per annum (rounded upwards, if necessary, to the next higher 1/100th
of 1%) determined by the Administrative Agent pursuant to the following
formula:

 

	
  LIBOR Rate =

  	
   

  	
  LIBOR

  	
   

  
	
   

  	
   

  	
  1.00 - Eurodollar Reserve Percentage

  	
   

  

 

“LIBOR Rate Loan” means
any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 5.1(a).

 

“Lien” means, with
respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge,
security interest, hypothecation or encumbrance of any kind in respect of such
asset.  For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement relating to
such asset.

 

“Loan Documents” means,
collectively, this Agreement, the Notes, the Applications, the Security
Documents, the Agreement Regarding Post-Closing Matters, each Joinder Agreement
executed pursuant to Section 9.11 and each other document, instrument,
certificate and agreement executed and delivered by the Borrower or any
Subsidiary in connection with this Agreement or otherwise referred to herein or
contemplated hereby (excluding any Hedging Agreement), all as may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Loans” means the
collective reference to the Revolving Credit Loans, the Term Loans, and the
Swingline Loans, and “Loan” means any of such Loans.

 

“Material Adverse Effect”  means, with respect to the Borrower or any of
its Restricted Subsidiaries (or prior to the consummation of the ESSI Merger,
ESSI or any of its Subsidiaries), a material adverse effect on (i) the
properties, business, operations or financial condition of such Persons, taken
as a whole, or (ii) the ability of such Persons, taken as a whole, to
perform their obligations under the Loan Documents in each case to which they
are parties.

 

“Material Contract”
means any contract or agreement, written or oral, of the Borrower or any of its
Restricted Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.

 

“Moody’s” means Moody’s
Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate is making, or is accruing an
obligation to make, or has accrued an obligation to make, contributions within
the preceding six (6) years.

 

14

 

“Net Cash Proceeds”
means, as applicable, (a) with respect to any sale or other disposition of
assets, the gross cash proceeds received by the Borrower or any of its Restricted
Subsidiaries from such sale less the sum of (i) all income taxes
and other taxes assessed by (or reasonably anticipated to be payable to) a
Governmental Authority as a result of such sale and any other fees and expenses
incurred in connection therewith, (ii) net reserves required in accordance
with GAAP in connection with such sale and (iii) the principal amount of,
and premium, if any, and interest on, any Debt secured by a Lien on the asset
(or a portion thereof) sold, which Debt is required to be repaid in connection
with such sale, (b) with respect to any offering of capital stock or
issuance of Debt, the gross cash proceeds received by the Borrower or any of
its Restricted Subsidiaries therefrom less all reasonable legal,
underwriting and other reasonable fees and expenses incurred in connection
therewith and (c) with respect to any payment under an insurance policy or
in connection with a condemnation proceeding, the amount of cash proceeds
received by the Borrower or its Restricted Subsidiaries from an insurance
company or Governmental Authority, as applicable, net of all reasonable
expenses of collection.

 

“Net Income” means, with
respect to the Borrower and its Restricted Subsidiaries, for any period of
determination, the net income (or loss) of the Borrower and its Restricted
Subsidiaries for such period, determined on a Consolidated basis in accordance
with GAAP; provided that there shall be excluded from Net Income the net
income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Borrower or
any of its Restricted Subsidiaries or that Person’s assets are acquired by the
Borrower or any of its Restricted Subsidiaries.

 

“New Revolving Lender”
has the meaning assigned thereto in Section 2.8(b).

 

“New Term Lender” has
the meaning assigned thereto in Section 4.6(b).

 

“Notes” means the
collective reference to the Revolving Credit Notes, the Term Notes and the
Swingline Note, and “Note” means any of such Notes.

 

“Notice of Account
Designation” has the meaning assigned thereto in Section 2.3(b).

 

“Notice of Borrowing”
has the meaning assigned thereto in Section 2.3(a).

 

“Notice of
Conversion/Continuation” has the meaning assigned thereto in Section 5.2.

 

“Notice of Prepayment” has
the meaning assigned thereto in Section 2.4(c).

 

“Obligations” means, in
each case, whether now in existence or hereafter arising: (a) the
principal of and interest on (including interest accruing after the filing of
any bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all
existing or future payment and other obligations owing by the Borrower under
any Hedging Agreement (which Hedging Agreement is permitted hereunder) with any
Person that is a Lender or an Affiliate of a Lender hereunder at the time such
Hedging Agreement is executed (all such obligations with respect to any such
Hedging Agreement, “Hedging Obligations”) and (d) all other fees and
commissions (including

 

15

 

attorneys’ fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and duties
owing by the Borrower or any of its Restricted Subsidiaries to the Lenders or
the Administrative Agent, in each case under or in respect of this Agreement,
any Note, any Letter of Credit or any of the other Loan Documents of every
kind, nature and description, direct or indirect, absolute or contingent, due
or to become due, contractual or tortious, liquidated or unliquidated, and
whether or not evidenced by any note.

 

“Officer’s Compliance
Certificate” has the meaning assigned thereto in Section 8.2.

 

“Other Taxes” has the
meaning assigned thereto in Section 5.13(b).

 

“Participating Member State”
means each state so described in any EMU Legislation.

 

“PBGC” means the Pension
Benefit Guaranty Corporation or any successor agency.

 

“Pension Plan” means any
Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code and which (a) is
maintained for the employees of the Borrower or any ERISA Affiliates or (b) has
at any time within the preceding six (6) years been maintained for the
employees of the Borrower or any of its current or former ERISA Affiliates.

 

“Performance Based Letters
of Credit” means standby Letters of Credit issued to ensure the performance
of services and/or delivery of goods by or on behalf of the Borrower.

 

“Permitted Acquisition”
means any acquisition permitted by Section 11.3(d).

 

“Permitted Acquisition Consideration”
means the aggregate amount of the purchase price (including, but not limited
to, any assumed debt, earn-outs (valued at the maximum amount payable
thereunder), deferred payments, or capital stock of the Borrower, net of the
applicable acquired company’s cash (including Cash Equivalents) balance as
shown on its most recent financial statements delivered in connection with the
applicable Permitted Acquisition) to be paid in connection with any applicable
Permitted Acquisition as set forth in the applicable Permitted Acquisition
Documents executed by the Borrower or any of its Restricted Subsidiaries in
order to consummate the applicable Permitted Acquisition.

 

“Permitted Acquisition
Documents” means the merger, stock and/or asset purchase documents entered
into in connection with any Permitted Acquisition.

 

“Permitted Currency”
means Dollars or any Alternative Currency, or each such currency, as the
context requires.

 

“Permitted Debt Add-On”
means the issuance pursuant to and in accordance with the terms of the
Permitted Debt Documents of an additional amount of Permitted Senior Unsecured
Convertible Debt to be issued on or after the Closing Date at the option of the
initial purchasers of the Convertible Notes in an aggregate principal amount
not to exceed $45,000,000.

 

16

 

“Permitted Debt Documents”
means the collective reference to the Senior Subordinated Note Indenture, the
Convertible Note Indenture and the Senior Unsecured Note Indenture.

 

“Permitted Debt Issuance”
has the meaning assigned thereto in Section 6.2(g).

 

“Permitted Escrow Deposit”
means, with respect to any Permitted Subordinated Debt or senior unsecured Debt
incurred in accordance with Section 11.1(m)(ii), the deposit into escrow
with the applicable trustee of the proceeds of such Debt for a period not to
exceed the Hold Period and upon other terms and conditions reasonably
acceptable to the Administrative Agent.

 

“Permitted Escrow Redemption”
means any release of a Permitted Escrow Deposit to the holders of the
applicable Permitted Subordinated Debt or senior unsecured Debt incurred in
accordance with Section 11.1(m)(ii), on or prior to the expiration of the
Hold Period solely for the purpose of redeeming in full such Debt to the extent
required as a result of the failure of the applicable Designated Acquisition to
close on or prior to such date.

 

“Permitted Lien” means
any Lien permitted pursuant to Section 11.2.

 

“Permitted Senior Unsecured
Convertible Debt” means the collective reference to Convertible Notes and
any Debt incurred in accordance with Section 11.1(m)(ii) in the form
of senior unsecured convertible notes.

 

“Permitted Subordinated Debt”
means Subordinated Debt which is permitted pursuant to Section 11.1(j).

 

“Person” means an
individual, corporation, limited liability company, partnership, association,
trust, business trust, joint venture, joint stock company, pool, syndicate,
sole proprietorship, unincorporated organization, Governmental Authority or any
other form of entity or group thereof.

 

“Pledge Agreement” means
the collective reference to the pledge agreements entered into by the Borrower
(or applicable Restricted Subsidiary) in favor of the Administrative Agent for
the ratable benefit of itself and the Lenders, in the form of Exhibit K,
as amended, restated, supplemented or otherwise modified prior to the date
hereof, by the Existing Joinder Documents or otherwise, as reaffirmed pursuant
to the Reaffirmation Agreement and as otherwise amended, restated, supplemented
or otherwise modified from time to time hereafter.

 

“Pounds Sterling” means,
at any time of determination, the then official currency of the United Kingdom.

 

“Prime Rate” means, at
any time, the rate of interest per annum publicly announced from time to time
by Wachovia as its prime rate.  Each
change in the Prime Rate shall be effective as of the opening of business on
the day such change in such prime rate occurs. 
The parties hereto acknowledge that the rate announced publicly by
Wachovia as its prime rate is an index or base rate and shall not necessarily
be its lowest or best rate charged to its customers or other banks.

 

17

 

“Pro Forma EBITDA”
means, with respect to any Person acquired in connection with a  Permitted Acquisition consummated during any
calculation period, EBITDA of such acquired Person calculated on a pro forma
basis as of the first day of such calculation period.

 

“Purchasing Lender” has
the meaning assigned thereto in Section 14.10.

 

“Reaffirmation Agreement”
means the Reaffirmation and Amendment Agreement, of even date herewith, among
the Borrower, its Domestic Subsidiaries that are Restricted Subsidiaries and
the Administrative Agent (for the ratable benefit of itself and the Lenders), substantially
in the form of Exhibit J, as amended, restated, supplemented or
otherwise modified from time to time.

 

“Register” shall have
the meaning assigned thereto in Section 14.10(d).

 

“Reimbursement Obligation”
means the obligation of the Borrower to reimburse the  applicable Issuing Lender pursuant to Section 3.5
for amounts drawn under Letters of Credit.

 

“Required Lenders”
means, at any date, any combination of Lenders holding more than fifty percent
(50%) of the sum of (a) the Revolving Credit Commitment (or, if the
Revolving Credit Facility has been terminated, any combination of Lenders
holding more than fifty percent (50%) of the aggregate outstanding Extensions
of Credit thereunder) and (b) the aggregate outstanding Extensions of
Credit under the Term Loan Facility.

 

“Responsible Officer”
means any of the following: the chief executive officer, chief financial
officer or corporate controller of the Borrower or any other officer of the
Borrower reasonably acceptable to the Administrative Agent.

 

“Restricted Subsidiaries”
means all Subsidiaries other than the Unrestricted Subsidiaries.

 

“Revolving Credit Commitment”
means (a) as to any Lender, the obligation of such Lender to make
Revolving Credit Loans for the account of the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth in the Register, as such Revolving Credit Commitment may be reduced or
modified at any time or from time to time pursuant to the terms hereof and (b) as
to all Lenders, the aggregate commitment of all Lenders to make Revolving
Credit Loans, as such amount may be reduced at any time or from time to time
pursuant to the terms hereof.  The
Revolving Credit Commitment of all Lenders on the Closing Date shall be
$400,000,000.

 

“Revolving Credit Commitment
Percentage” means, as to any Lender at any time, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to (b) the
Revolving Credit Commitments of all Lenders.

 

“Revolving Credit Facility”
means the revolving credit facility established pursuant to Article II.

 

18

 

“Revolving Credit Loan”
means any revolving loan made to the Borrower pursuant to Section 2.1 and “Revolving
Credit Loans” means the collective reference to all revolving loans made to
the Borrower pursuant to Section 2.1.

 

“Revolving Credit Maturity
Date” means the earliest of the dates referred to in Section 2.7.

 

“Revolving Credit Notes”
means the collective reference to the revolving credit promissory notes made by
the Borrower payable to the order of each Lender, substantially in the form of Exhibit A-1,
evidencing the Revolving Credit Loans, and any amendments, supplements and
modifications thereto, any substitutions therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part; “Revolving
Credit Note” means any of such Revolving Credit Notes.

 

“S&P” means Standard & Poor’s
Ratings Services, a division of The McGraw Hill Companies, Inc., and any
successor thereto.

 

“SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

 

“Security Documents”
means the collective reference to the Subsidiary Guaranty Agreement, the
Collateral Agreement, the Pledge Agreement, the Reaffirmation Agreement and
each other agreement or writing pursuant to which the Borrower or any
Restricted Subsidiary purports to pledge or grant a security interest in any
property or assets securing the Obligations or any such Person purports to
guaranty the payment and/or performance of the Obligations, in each case, as
amended, restated, supplemented or otherwise modified prior to the date hereof,
by the Existing Joinder Documents or otherwise, as reaffirmed pursuant by the
Reaffirmation Agreement and as otherwise amended, restated, supplemented or
otherwise modified from time to time hereafter.

 

“Senior Debt” means,
with respect to the Borrower and its Restricted Subsidiaries on any date, all
Debt of such Persons as of such date minus Subordinated Debt of such
Persons as of such date.

 

“Senior Leverage Ratio”
means, as of any date, the ratio of (a) the sum of (i) Senior Debt
outstanding as of such date less (ii) the sum of (A) the
outstanding amount of all Performance Based Letters of Credit and (B) so
long as there are no outstanding Revolving Credit Loans, an amount (not to
exceed $150,000,000) equal to the amount of cash and Cash Equivalents of the
Borrower and its Subsidiaries immediately available to repay their obligations,
in each case as of such date to (b) EBITDA for the period of four (4) consecutive
fiscal quarters ending on or immediately prior to such date.

 

“Senior Subordinated Note
Indenture” means the Indenture entered into in connection with the issuance
of the Senior Subordinated Notes in the form provided to the Administrative
Agent and the Lenders as of the Closing Date, including such indenture as
subsequently qualified under the Trust Indenture Act of 1939, as amended, and
all exhibits and schedules thereto as each 

 

19

 

may be amended, restated, supplemented or otherwise modified subject to
the terms and conditions set forth in this Agreement.

 

“Senior Subordinated Notes” means the collective reference to
the senior subordinated notes due 2018 of the Borrower issued pursuant to the
Senior Subordinated Note Indenture in the initial aggregate principal amount of
$250,000,000.

 

“Senior Unsecured Note Indenture” means the Indenture entered
into in connection with the issuance of the Senior Unsecured Notes in the form
provided to the Administrative Agent and the Lenders as of the Closing Date,
including such indenture as subsequently qualified under the Trust Indenture
Act of 1939, as amended, and all exhibits and schedules thereto, as each may be
amended, restated, supplemented or otherwise modified pursuant to the terms and
conditions set forth in this Agreement.

 

“Senior Unsecured Notes” means the collective reference to the
senior unsecured fixed rate notes due 2016 of the Borrower issued pursuant to
the Senior Unsecured Note Indenture in the initial principal amount of
$350,000,000.

 

“Solvent” means, as to the Borrower and its Restricted
Subsidiaries on a particular date, that any such Person (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as
they mature, (b) owns property having a value, both at fair valuation and
at present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe
that it will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.

 

“Subordinated Debt” means the collective reference to (a) Permitted
Subordinated Debt, and (b) any other Debt of the Borrower or any
Restricted Subsidiary subordinated in right and time of payment to the
Obligations and containing such other terms and conditions, in each case as are
reasonably satisfactory to the Required Lenders.

 

“Subsidiary” means, as to any Person, any corporation,
partnership, limited liability company or other entity of which more than fifty
percent (50%) of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other managers of such corporation, partnership, limited liability company or
other entity is at the time owned by or the management is otherwise controlled
by such Person (irrespective of whether, at the time, capital stock or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency).  Unless otherwise qualified, references to
“Subsidiary” or “Subsidiaries” herein shall refer to those of the Borrower.

 

“Subsidiary Guaranteed Obligations” means the collective
reference to the guaranteed obligations of each of the Restricted Subsidiaries
party to the Subsidiary Guaranty Agreement.

 

20

 

“Subsidiary Guarantors” means the collective reference to the
Domestic Subsidiaries who are Restricted Subsidiaries executing the Subsidiary
Guaranty Agreement and any other Person which, after the Closing Date, becomes
a party to the Subsidiary Guaranty Agreement by executing and delivering a
Joinder Agreement.

 

“Subsidiary Guaranty Agreement” means the unconditional guaranty
dated as of September 28, 2001 entered into by each of the Subsidiary
Guarantors in favor of the Administrative Agent for the ratable benefit of
itself and the Lenders, in the form of Exhibit H, as amended,
restated, supplemented or otherwise modified prior to the date hereof, by the
Existing Joinder Documents or otherwise, as reaffirmed by the Reaffirmation
Agreement and as otherwise amended, restated, supplemented or otherwise
modified from time to time hereafter.

 

“Swingline Commitment” means the lesser of (a) Twenty-Five
Million Dollars ($25,000,000) and (b) the Revolving Credit Commitment.

 

“Swingline Facility” means the swingline facility established
pursuant to Section 2.2.

 

“Swingline Lender” means Wachovia in its capacity as swingline
lender hereunder.

 

“Swingline Loan” means any swingline loan made by the Swingline
Lender to the Borrower pursuant to Section 2.2 and “Swingline Loans”
means the collective reference to all swingline loans made by the Swingline
Lender to the Borrower pursuant to Section 2.2.

 

“Swingline Note” means the swingline promissory note made by the
Borrower payable to the order of the Swingline Lender, substantially in the
form of Exhibit A-2, evidencing the Swingline Loans, and any
amendments, supplements and modifications thereto, any substitutions therefor,
and any replacements, restatements, renewals or extensions thereof, in whole or
in part.

 

“Swingline Termination Date” means the first to occur of (a) the
resignation of Wachovia as Administrative Agent in accordance with Section 13.9
and (b) the Revolving Credit Maturity Date.

 

“Syndication Agent” means Bear Stearns Corporate Lending Inc. in
its capacity as syndication agent hereunder.

 

“Taxes” has the meaning assigned thereto in Section 5.13(a).

 

“Term Loan Commitment” means (a) as to any Lender, the
obligation of such Lender to make Initial Term Loans and/or Additional Term
Loans, as applicable, for the account of the Borrower hereunder in an aggregate
principal amount not to exceed the amount set forth in the Register, as such
applicable Term Loan Commitment may be increased, reduced or modified at any time
or from time to time pursuant to the terms hereof and (b) as to all
Lenders, the aggregate commitment to make all such Term Loans.  The Term Loan Commitment of all Lenders on
the Closing Date will be $275,000,000.

 

“Term Loan Facility” means the term loan facility established
pursuant to Article IV.

 

21

 

“Term Loan Maturity Date” means the first to occur of (a) January 31,
2013, (b) the date of termination pursuant to Section 12.2(a), or (c) the
date of repayment in full of the outstanding Term Loans pursuant to Section 4.4.

 

“Term Loan Percentage” means, as to any Lender, as applicable,
after the applicable Term Loans are made, the ratio of (a) the outstanding
principal balance of such Term Loan or Term Loans of such Lender to (b) the
aggregate outstanding principal balance of all such Term Loans of all Lenders.

 

“Term Loans” means the Initial Term Loans and all Additional
Term Loans.

 

“Term Notes” means the term promissory notes made by the
Borrower payable to the order of each of the Lenders, substantially in the form
of Exhibit A-3, evidencing the Debt incurred by the Borrower
pursuant to the Term Loan Facility, and any amendments, modifications and
supplements thereto, any substitutions therefor, and any replacement,
restatements, renewals or extensions thereof, in whole or in part.

 

“Termination Event” means except for any such event or condition
that could not reasonably be expected to have a Material Adverse Effect: (a) a
“Reportable Event” described in Section 4043 of ERISA for which the notice
requirement has not been waived by the PBGC, or (b) the withdrawal of the
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA, or (c) the termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan amendment
as a termination, under Section 4041 of ERISA, if the plan assets are not
sufficient to pay all plan liabilities, or (d) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC, or (e) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan, or (f) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA, or (g) the partial or complete withdrawal of the Borrower or any
ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted
by such plan, or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or
4245 of ERISA, or (h) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042
of ERISA.

 

“Total Leverage Ratio” means, as of any date, the ratio of (a) the
sum of (i) Debt outstanding as of such date less (ii) the sum
of (A) the outstanding amount of all Performance Based Letters of Credit
and (B) so long as there are no outstanding Revolving Credit Loans, an
amount (not to exceed $150,000,000) equal to the amount of cash and Cash
Equivalents of the Borrower and its Subsidiaries immediately available to repay
their obligations, in each case as of such date to (b) EBITDA for the period of four (4) consecutive
fiscal quarters ending on or immediately prior to such date.

 

22

 

“Transaction Documents” means the collective reference to the
Loan Documents, the Permitted Debt Documents and the ESSI Merger Documents.

 

“Treaty on European Union” means the Treaty of Rome of March 25,
1957, as amended by the Single European Act of 1986 and the Maastricht Treaty
(signed February 7, 1992), as amended from time to time.

 

“UCC” means the Uniform Commercial Code as in effect in the
State of New York, as amended or modified from time to time.

 

“United Kingdom” means the United Kingdom of Great Britain and
Northern Ireland.

 

“United States” means the United States of America.

 

“Unrestricted Subsidiary” means any Subsidiary set forth on Schedule 2.

 

“Wachovia” means Wachovia Bank, National Association, a national
banking association, and its successors.

 

“Wholly-Owned” means, with respect to a Subsidiary, that all of
the shares of capital stock or other ownership interests of such Subsidiary
are, directly or indirectly, owned or controlled by the Borrower and/or one or
more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares
or other shares required by Applicable Law to be owned by a Person other than
the Borrower).

 

SECTION 1.2                                                  General.  Unless otherwise specified, a reference in
this Agreement to a particular article, section, subsection, Schedule or Exhibit is
a reference to that article, section, subsection, Schedule or Exhibit of
this Agreement.  Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter.  Any reference herein to
“Charlotte time” shall refer to the applicable time of day in Charlotte,
North Carolina.

 

SECTION 1.3                                                  Other
Definitions and Provisions.

 

(a)                                  Use of Capitalized
Terms.  Unless otherwise defined
therein, all capitalized terms defined in this Agreement shall have the defined
meanings when used in this Agreement, the Notes and the other Loan Documents or
any certificate, report or other document made or delivered pursuant to this
Agreement.

 

(b)                                 Miscellaneous.  The words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

 

SECTION 1.4                                                  Effectiveness
of Euro Provisions.  With respect to
any state (or the 

 

23

 

currency of such state) that is not a Participating Member State on the
date of this Agreement, the provisions of Sections 5.8(a), 5.8(b) and 5.14
shall become effective in relation to such state (and the currency of such
state) at and from the date on which such state becomes a Participating Member
State.

 

SECTION 1.5 Currency
Equivalents.

 

(a)                                  For
purposes of Articles II, III and IV, the applicable outstanding amount of
Letters of Credit and L/C Obligations (including, without limitation, all
Alternative Currency Letters of Credit and Alternative Currency L/C
Obligations) shall be deemed to refer to the Dollar Amount thereof.

 

(b)                                 All
Loans made under this Agreement, including, without limitation, Loans made to
refund drawings made under Alternative Currency Letters of Credit, shall be
made only in Dollars.

 

SECTION 1.6 Permitted
Senior Unsecured Convertible Debt. 
The parties hereto acknowledge that prior to the conversion of any
Permitted Senior Unsecured Convertible Debt into equity securities or capital
stock, such Permitted Senior Unsecured Convertible Debt shall not constitute
equity securities or capital stock.

 

ARTICLE II

 

REVOLVING CREDIT FACILITY

 

SECTION 2.1                                                  Revolving
Credit Loans.  Subject to the terms
and conditions of this Agreement, and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make Revolving
Credit Loans to the Borrower from time to time from the Closing Date through,
but not including, the Revolving Credit Maturity Date as requested by the Borrower
in accordance with the terms of Section 2.3; provided, that (a) the
sum of the aggregate amount of all outstanding Revolving Credit Loans (after
giving effect to the amount requested and the use of the proceeds thereof to
repay Extensions of Credit hereunder), 
Swingline Loans and L/C Obligations from any Lender to the Borrower
shall at no time exceed such Lender’s Revolving Credit Commitment and (b) the
principal amount of outstanding Revolving Credit Loans from any Lender to the
Borrower shall not at any time exceed such Lender’s Revolving Credit Commitment
less such Lender’s Revolving Credit Commitment Percentage of outstanding
Swingline Loans less such Lender’s Revolving Credit Commitment
Percentage of all outstanding L/C Obligations. 
Each Revolving Credit Loan by a Lender shall be in a principal amount
equal to such Lender’s Revolving Credit Commitment Percentage of the aggregate
principal amount of Revolving Credit Loans requested on such occasion.  Subject to the terms and conditions hereof,
the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder
until the Revolving Credit Maturity Date.

 

24

 

SECTION 2.2                                                  Swingline
Loans.

 

(a)           Availability. 
Subject to the terms and conditions of this Agreement, the Swingline
Lender agrees to make Swingline Loans to the Borrower from time to time from
the Closing Date through, but not including, the Swingline Termination Date; provided,
that the Swingline Lender shall have no obligation to make any Swingline Loan,
if, after giving effect to any amount requested and the use of the proceeds
thereof to repay Extensions of Credit hereunder, the aggregate principal amount
of all Swingline Loans then outstanding would exceed the lesser of (i) the
Swingline Commitment or (ii) the Revolving Credit Commitment less the sum
of all outstanding Revolving Credit Loans and L/C Obligations.

 

(b)                                 Refunding.

 

(i)                                     Swingline
Loans shall be refunded by the Lenders (which for such purpose shall include
the Swingline Lender in its capacity as a Lender having a Revolving Credit
Commitment) on demand by the Swingline Lender. 
Subject to the proviso to the initial sentence of Section 2.1, such
refundings shall be made by the Lenders in accordance with their respective
Revolving Credit Commitment Percentages and shall thereafter be reflected as
Revolving Credit Loans of the Lenders on the books and records of the
Administrative Agent.  Each Lender shall
fund its respective Revolving Credit Commitment Percentage of Revolving Credit
Loans (as Base Rate Loans) as required to repay Swingline Loans outstanding to
the Swingline Lender upon demand to such Lender 
by telecopier (or by telephone promptly confirmed by telecopier) by the
Swingline Lender but in no event later than 3:00 p.m. (Charlotte time) on
the next succeeding Business Day after such demand is made.  No Lender’s obligation to fund its respective
Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by
any other Lender’s failure to fund its Revolving Credit Commitment Percentage
of a Swingline Loan, nor shall any Lender’s Revolving Credit Commitment
Percentage be increased as a result of any such failure of any other Lender to
fund its Revolving Credit Commitment Percentage of a Swingline Loan.

 

(ii)                                  The
Borrower shall pay to the Swingline Lender on demand the amount of such
Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded.  In addition,
the Borrower hereby authorizes the Administrative Agent to charge any account
maintained by the Borrower with the Swingline Lender (up to the amount
available therein) in order to immediately pay the Swingline Lender the amount
of such Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded.  If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise,
the loss of the amount so recovered shall be ratably shared among all the
Lenders in accordance with their respective Revolving Credit Commitment
Percentages (unless the amounts so recovered by or on behalf of the Borrower
pertain to a Swingline Loan extended after the occurrence and during the
continuance of an Event of Default of which the Administrative Agent has
received notice in the manner required pursuant to Section 13.5

 

25

 

and which Event of Default has not been waived by the Required Lenders
or the Lenders, as applicable); provided that with respect to any
Swingline Loan, no Lender shall be required to fund more than its Revolving Credit
Commitment Percentage of such Swingline Loan.

 

(iii)                               Each
Lender acknowledges and agrees that its obligation to refund Swingline Loans in
accordance with the terms of this Section 2.2 is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in Article VI
at the time of refunding.  Further, each
Lender agrees and acknowledges that if prior to the refunding of any
outstanding Swingline Loans pursuant to this Section 2.2, one of the
events described in Section 12.1(j) or (k) shall have occurred, each
Lender will, in lieu of making a Revolving Credit Loan under Section 2.2(b)(i) (subject
to the proviso to the initial sentence of Section 2.1), on the date the
applicable Revolving Credit Loans would have been made, purchase an undivided
participating interest in the Swingline Loan to be refunded in an amount equal
to its Revolving Credit Commitment Percentage of the aggregate amount of such
Swingline Loan.  Each Lender will
immediately transfer to the Swingline Lender, in immediately available funds at
the office of the Swingline Lender, the amount of its participation and upon
receipt thereof the Swingline Lender will deliver to such Lender a certificate
evidencing such participation dated the date of receipt of such funds and for
such amount.  Whenever, at any time after
the Swingline Lender has received from any Lender such Lender’s participating
interest in a Swingline Loan, the Swingline Lender receives any payment on
account thereof, the Swingline Lender will promptly distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded).

 

SECTION 2.3                                                  Procedure
for Advances of Revolving Credit and Swingline Loans.

 

(a)                                  Requests for
Borrowing.  The Borrower shall give
the Administrative Agent irrevocable prior written notice substantially in the
form attached hereto as Exhibit B (a “Notice of Borrowing”)
not later than 12:00 p.m.(Charlotte time) (i) on the same Business
Day as each Base Rate Loan and each Swingline Loan and (ii) at least three
(3) Business Days before each LIBOR Rate Loan, of its intention to borrow,
specifying (A) the date of such borrowing, which shall be a Business Day, (B) the
amount of such borrowing, which shall be (x) with respect to Base Rate Loans
(other than Swingline Loans) in an aggregate principal amount of $2,500,000 or
a whole multiple of $100,000 in excess thereof, (y) with respect to LIBOR Rate
Loans in an aggregate principal amount of $5,000,000 or a whole multiple of
$100,000 in excess thereof and (z) with respect to Swingline Loans in an
aggregate principal amount of $50,000 or a whole multiple of $50,000 in excess
thereof, (C) whether such Loan is to be a Revolving Credit Loan or
Swingline Loan, (D) whether the Revolving Credit Loans are to be LIBOR
Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR Rate Loan,
the duration of the Interest Period applicable thereto.  A Notice of Borrowing received after 12:00 p.m.
(Charlotte time) shall be deemed received on the next Business Day.  The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing by telecopier (or by telephone
promptly confirmed by telecopier).

 

26

 

(b)                                 Disbursement of
Revolving Credit and Swingline Loans. 
Not later than 3:00 p.m. (Charlotte time) on the proposed borrowing
date, subject to the terms and conditions of this Agreement, (i) each
Lender will make available to the Administrative Agent, for the account of the
Borrower, at the Administrative Agent’s Office in funds immediately available
to the Administrative Agent, such Lender’s Revolving Credit Commitment
Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the Administrative Agent’s Office in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date; provided that no Lender shall be
responsible for any default by any other Lender in that other Lender’s
obligation to make a Loan requested hereunder nor shall the commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender’s obligation
to make a Loan requested hereunder.  The
Borrower hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 2.3 in
immediately available funds by crediting or wiring such proceeds to the deposit
account of the Borrower identified in the most recent notice substantially in
the form of Exhibit C (a “Notice of Account Designation”)
delivered by the Borrower to the Administrative Agent or as may be otherwise
agreed upon by the Borrower and the Administrative Agent from time to
time.  Subject to Section 5.7, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3
to the extent that any Lender has not made available to the Administrative
Agent its Revolving Credit Commitment Percentage of such Loan.  Revolving Credit Loans to be made for the
purpose of refunding Swingline Loans shall be made by the Lenders as provided
in Section 2.2(b).

 

SECTION 2.4                                                  Repayment
of Loans.

 

(a)                                  Repayment Date.  The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on
the Revolving Credit Maturity Date, and (ii) all Swingline Loans in
accordance with Section 2.2(b) and otherwise in full on the Swingline
Termination Date, together, in each case, with all accrued but unpaid interest
and fees.

 

(b)                                 Mandatory Repayment
of Revolving Credit Loans.

 

(i)                                     If at any time the
outstanding principal amount of all Revolving Credit Loans plus the sum
of all outstanding Swingline Loans and L/C Obligations exceeds the Revolving
Credit Commitment, the Borrower agrees to repay immediately upon notice from
the Administrative Agent, by payment to the Administrative Agent for the
account of the Lenders Extensions of Credit in an amount equal to such excess
with each such repayment applied first to the principal amount of
outstanding Swingline Loans, second to the principal amount of
outstanding Revolving Credit Loans and third, with respect to any
Letters of Credit then outstanding, a payment of cash collateral into a cash
collateral account opened by the Administrative Agent, for the benefit of the
applicable Issuing Lender and the Lenders under the Revolving Credit Facility
in an amount equal to the

 

27

 

aggregate then undrawn and unexpired Dollar Amount of such Letters of
Credit (such cash collateral to be applied in accordance with Section 12.2(b)).

 

(ii)                                  If at any time (as
determined by the Administrative Agent pursuant to this Section 2.4(b)(ii))
and for any reason, based upon the Dollar Amount of all outstanding Loans and
L/C Obligations, (a) the outstanding amount of all L/C Obligations exceeds
the lesser of (i) the Aggregate Commitment less the sum of the
aggregate principal amount of all outstanding Loans and (ii) the L/C
Commitment or (b) the outstanding amount of all Alternative Currency L/C
Obligations exceeds the Alternative Currency L/C Commitment, then, in each such
case, the Borrower shall, at its option, either (A) repay Loans in an
amount equal to such excess (to the extent such repayment will eliminate such
excess) or (B) make a payment of cash collateral into a cash collateral
account opened by the Administrative Agent for the benefit of the applicable
Issuing Lender and the Lenders under the Revolving Credit Facility in an amount
equal to such excess (such cash collateral to be applied in accordance with Section 12.2(b)).  The Borrower’s compliance with this Section 2.4(b)(ii) shall
be tested from time to time by the Administrative Agent at its sole discretion,
but in any event shall be tested on the date on which the Borrower requests an
Issuing Lender to issue a Letter of Credit under Section 3.2.  Each such repayment pursuant to this Section 2.4(b)(ii) shall
be accompanied by any amount required to be paid pursuant to Section 5.11.

 

(c)                                  Optional
Repayments.  The Borrower may at any
time and from time to time repay the Revolving Credit Loans and Swingline
Loans, in whole or in part, upon at least three (3) Business Days’
irrevocable notice to the Administrative Agent with respect to LIBOR Rate Loans
and one (1) Business Day’s irrevocable notice with respect to Base Rate
Loans and Swingline Loans, substantially in the form attached hereto as Exhibit D
(a “Notice of Prepayment”) specifying the date and amount of repayment
and whether the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each.  Upon receipt of such notice,
the Administrative Agent shall promptly notify each Lender by telecopier (or by
telephone promptly confirmed by telecopier). 
If any such notice is given, the amount specified in such notice shall
be due and payable on the date set forth in such notice.  Partial repayments shall be in an aggregate
amount of $2,500,000 or a whole multiple of $100,000 in excess thereof with
respect to Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole
multiple of $100,000 in excess thereof with respect to LIBOR Rate Loans and
$50,000 or a whole multiple of $50,000 in excess thereof with respect to
Swingline Loans.  Each such repayment
shall be accompanied by an amount required to be paid pursuant to Section 5.11.

 

(d)                                 Limitation
on Repayment of LIBOR Rate Loans. 
The Borrower may not repay any LIBOR Rate Loan on any day other than on
the last day of the Interest Period applicable thereto unless such repayment is
accompanied by any amount required to be paid pursuant to Section 5.11.

 

(e)                                  Hedging
Agreements.  No repayment or
prepayment pursuant to this Section 2.4 shall affect any of the Borrower’s
obligations under any Hedging Agreement.

 

28

 

(f)                                    Prepayment
of Excess Proceeds.  In the event
that excess proceeds remain after the prepayments of the Term Loans pursuant to
Section 4.4(b)(vi)(B), the amount of such excess proceeds shall be used on
the date of the required prepayment under Section 4.4(b)(vi)(B) to
prepay the outstanding principal amount of the Revolving Credit Loans, without
a corresponding reduction of the Revolving Credit Commitment.

 

SECTION 2.5                                                  Notes.

 

(a)                                  Revolving
Credit Notes.  Except as otherwise
provided in Section 14.10 (a) - (e), each Lender’s Revolving Credit
Loans and the obligation of the Borrower to repay such Revolving Credit Loans
may, at the election of such Lender, be evidenced by a separate Revolving
Credit Note executed by the Borrower payable to the order of such Lender.

 

(b)                                 Swingline
Notes.  The Swingline Loans and the
obligation of the Borrower to repay Swingline Loans may, at the election of the
Swingline Lender, be evidenced by a Swingline Note executed by the Borrower
payable to the order of the Swingline Lender.

 

SECTION 2.6                                                  Permanent
Reduction of the Revolving Credit Commitment.

 

(a)                                  Voluntary
Reduction.  The Borrower shall have
the right at any time and from time to time, upon at least five (5) Business
Days’ prior written notice to the Administrative Agent, to permanently reduce,
without premium or penalty, (i) the entire Revolving Credit Commitment at
any time or (ii) portions of the Revolving Credit Commitment, from time to
time, in an aggregate principal amount not less than $5,000,000 or any whole
multiple of $1,000,000 in excess thereof. 
Upon receipt of such notice, the Administrative Agent shall promptly
notify each of the Lenders thereof by telecopier (or by telephone promptly
confirmed by telecopier).  The amount of
each partial permanent reduction shall permanently reduce the Lenders’
Revolving Credit Commitments pro  rata in accordance with their
respective Revolving Credit Commitment Percentages.

 

(b)                                 Mandatory Reduction.        In the event excess proceeds remain
after the prepayment of Term Loans pursuant to Section 4.4(b)(vi)(A), the
Revolving Credit Commitment shall be permanently reduced on the date of the
required prepayment under Section 4.4(b)(vi)(A) by an amount equal to
the amount of such excess proceeds.

 

(c)                                  Corresponding
Payment.  Each permanent reduction
permitted or required pursuant to this Section 2.6 shall be accompanied by
a payment of principal sufficient to reduce the aggregate outstanding Revolving
Credit Loans, Swingline Loans and L/C Obligations, as applicable, after such
reduction to the Revolving Credit Commitment as so reduced and if the Revolving
Credit Commitment as so reduced is less than the aggregate amount of all
outstanding Letters of Credit, the Borrower shall be required to deposit cash
collateral in a cash collateral account opened by the Administrative Agent in
an amount equal to the aggregate then undrawn and unexpired Dollar Amount of
such Letters of Credit.  Such cash
collateral shall be applied in accordance with Section 12.2(b).  Any reduction of the Revolving Credit
Commitment to zero shall be accompanied by payment of all outstanding Revolving
Credit Loans and Swingline Loans (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C 

 

29

 

Obligations) and shall result in the termination of the Revolving
Credit Commitment and the Swingline Commitment and the Revolving Credit
Facility.  Such cash collateral shall be
applied in accordance with Section 12.2(b).  If any reduction of the Revolving Credit
Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall
be accompanied by any amount required to be paid pursuant to Section 5.11.

 

SECTION 2.7                                                  Termination
of Revolving Credit Facility.  The
Revolving Credit Facility shall terminate on the earliest of (a) January 31,
2012, (b) the date of termination by the Borrower pursuant to Section 2.6,
or (c) the date of termination pursuant to Section 12.2(a).

 

SECTION 2.8                                                  Increase
of Revolving Credit Commitment.

 

(a)                                  Subject
to the conditions set forth below, the Borrower shall have the option, at any
time prior to the Revolving Credit Maturity Date and exercisable on no more
than two (2) occasions following the Closing Date, to increase the
Revolving Credit Commitment by an aggregate principal amount of up to (i) $250,000,000
less (ii) the sum of (A) the aggregate principal amount of any
prior or simultaneous increase to the Term Loan Commitment made pursuant to Section 4.6
and (B) the aggregate principal amount of any prior increase to the
Revolving Credit Commitment made pursuant to this Section 2.8.  In the event the Borrower desires to exercise
the above-described option, the Borrower shall deliver to the Administrative
Agent an Increase Notification pursuant to which the Borrower may request that
additional Revolving Credit Loans be made on the Increase Effective Date.

 

(b)                                 Increases in the
Revolving Credit Commitment shall be obtained from existing Lenders or
from other banks, financial institutions or investment funds that qualify as
Eligible Assignees, in each case in accordance with this Section 2.8.  Participation in any increase in the
Revolving Credit Commitment shall be offered first to each of the existing
Lenders; provided that no such Lender shall have any obligation to
provide any portion of such increase.  If
the amount of the increase requested by the Borrower shall exceed the
commitments which the existing Lenders are willing to provide with respect to
such increase, then the Borrower may invite other banks, financial institutions
and investment funds which meet the requirements of an Eligible Assignee to
join this Agreement as Lenders for the portion of such increase not committed
to by existing Lenders (each such other bank, financial institution or
investment fund, a “New Revolving Lender” and, collectively with the
existing Lenders providing increased Revolving Credit Commitments, the “Increasing
Revolving Lenders”).

 

(c)                                  The
following terms and conditions shall apply to each increase in the Revolving
Credit Commitment: (i) such increase in the Revolving Credit Commitment pursuant to this Section 2.8 (and any Extensions of
Credit made thereunder) shall constitute Obligations of the Borrower and shall
be secured and guaranteed with the other Extensions of Credit on a pari  passu
basis; (ii) any New Revolving Lender providing such increase shall be
entitled to the same voting rights as the existing Lenders under the Revolving
Credit Facility and any Extensions of Credit made in connection with such
increase shall receive proceeds of prepayments on the same basis as the other
Revolving Credit Loans made hereunder; (iii) the Borrower shall, upon the
request of any Increasing Revolving Lender, execute such Revolving Credit Notes
as are necessary to reflect such Increasing Revolving Lender’s Revolving Credit
Commitment (as

 

30

 

increased); (iv) the Administrative Agent and the Lenders shall
have received from the Borrower an Officer’s Compliance Certificate in form and
substance reasonably satisfactory to the Administrative Agent, demonstrating that,
after giving effect to any such increase in the Revolving Credit Commitment and
any Extensions of Credit made or to be made in connection therewith (and, if
applicable, any simultaneous Additional Term Loan), the Borrower will be in pro
forma compliance with the financial covenants set forth in Article X;
(v) no Default or Event of Default shall have occurred and be continuing
as of the applicable Increase Effective Date or after giving effect to such
increase in the Revolving Credit Commitment pursuant to this Section 2.8
or any Extensions of Credit made in connection therewith; (vi) the
representations and warranties contained in Article VII and in the other
Loan Documents shall be true and correct on and as of the Increase Effective
Date with the same effect as if made on and as of such date (other than those
representations and warranties that by their terms speak as of a particular
date, which representations and warranties shall be true and correct as of such
particular date); (vii) the amount of such increase in the Revolving
Credit Commitment shall not be less than a minimum principal amount of
$10,000,000 or a whole multiple of $5,000,000 in excess thereof, or if less,
the maximum amount permitted pursuant to clause (a) above; (viii) the
Borrower and each Increasing Revolving Lender shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, a
written agreement acknowledged by the Administrative Agent and each Subsidiary
Guarantor, in form and substance satisfactory to the Administrative Agent (a “Lender
Addition and Acknowledgement Agreement”); (ix) the Administrative
Agent shall have received any documents or information, including any joinder
agreements, in connection with such increase in the Revolving Credit Commitment
as it may reasonably request; and (x) the outstanding Revolving Credit Loans
and Revolving Credit Commitment Percentages of L/C Obligations will be
reallocated by the Administrative Agent on the applicable Increase Effective
Date among the Lenders in accordance with their revised Revolving Credit
Commitment Percentages (and the Lenders agree to make all payments and
adjustments necessary to effect such reallocation and the Borrower shall pay
any and all costs required pursuant to Section 5.11 in connection
with such reallocation as if such reallocation were a repayment).

 

(d)                                 Upon the execution, delivery,
acceptance and recording of the applicable Lender Addition and Acknowledgment
Agreement, from and after the applicable Increase Effective Date, each
Increasing Revolving Lender shall have a Revolving Credit Commitment as set
forth in the Register and all the rights and obligations of a Lender with a
Revolving Credit Commitment hereunder.

 

(e)                                  The
Administrative Agent shall maintain a copy of each Lender Addition and
Acknowledgment Agreement delivered to it in accordance with Section 14.10(d).

 

(f)                                    Within
five (5) Business Days after receipt of notice, the Borrower shall execute
and deliver to the Administrative Agent, in exchange for any surrendered
Revolving Credit Note or Revolving Credit Notes of any existing Lender or with
respect to New Revolving Lender, a new Revolving Credit Note or Revolving
Credit Notes to the order of the applicable Lenders in amounts equal to the
Revolving Credit Commitment of such Lenders as set forth in the Register.  Such new Revolving Credit Note or Revolving
Credit Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such Revolving Credit Commitments, shall be dated as of the
Increase Effective Date and shall otherwise be in substantially the form of the

 

31

 

existing Revolving Credit Notes. 
Each surrendered Revolving Credit Note and/or Revolving Credit Notes
shall be canceled and returned to the Borrower.

 

(g)                                 All
Revolving Credit Loans made on account of any increase in the Revolving Credit
Commitment pursuant to this Section 2.8 shall bear interest at the rate
applicable to the Revolving Credit Loans immediately prior to giving effect to
such increase in the Revolving Credit Commitment pursuant to this Section 2.8.

 

ARTICLE III

 

LETTER OF CREDIT FACILITY

 

SECTION 3.1                                                  L/C
Commitment.  Subject to the terms and
conditions hereof, the applicable Issuing Lender, in reliance on the agreements
of the other Lenders set forth in Section 3.4(a), agrees to issue standby
Letters of Credit for the account of the Borrower on any Business Day from the
Closing Date through but not including the fifth (5th) Business Day
prior to the Revolving Credit Maturity Date in such form as may be approved
from time to time by the applicable Issuing Lender; provided, that no
Issuing Lender shall have any obligation to issue any Letter of Credit if,
after giving effect to such issuance, (a) the L/C Obligations would exceed
the L/C Commitment, (b) the aggregate principal amount of outstanding
Revolving Credit Loans, plus the aggregate principal amount of
outstanding Swingline Loans, plus the aggregate amount of L/C
Obligations would exceed the Revolving Credit Commitment or (c) the
Alternative Currency L/C Obligations would exceed the Alternative Currency L/C
Commitment.  Each Letter of Credit (other
than the Existing Letters of Credit) shall (i) be denominated in a
Permitted Currency (ii) be in a minimum Dollar Amount of $100,000 or in a
Dollar Amount less than $100,000 if approved in writing by the Administrative
Agent and the applicable Issuing Lender in their respective sole discretion (or
the Alternative Currency Amount thereof with respect to Alternative Currency
Letters of Credit), (iii) be a standby letter of credit issued to support
obligations of the Borrower or any of its Restricted Subsidiaries, contingent
or otherwise, incurred in the ordinary course of business, (iv) expire on
a date satisfactory to the applicable Issuing Lender and the Administrative
Agent, which date shall be no later than the earlier of (A) one (1) year
after the date of issuance of such Letter of Credit or (B) five (5) Business
Days prior to the Revolving Credit Maturity Date, provided that any
Letter of Credit with a one-year tenor may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (B) above), and (v) be subject to ISP98 and, to
the extent not inconsistent therewith, the laws of the State of North Carolina.
As of the Closing Date, each of the Existing Letters of Credit shall
constitute, for all purposes of this Agreement and the other Loan Documents, a
Letter of Credit issued and outstanding hereunder.  No Issuing Lender shall at any time be
obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause such Issuing Lender or any L/C Participant to exceed
any limits imposed by, any Applicable Law. 
References herein to “issue” and derivations thereof with respect to
Letters of Credit shall also include extensions or modifications of any
existing Letters of Credit, unless the context otherwise requires.

 

32

 

SECTION 3.2                                                  Procedure
for Issuance of Letters of Credit. 
The Borrower may from time to time request that the applicable Issuing
Lender issue a Letter of Credit by delivering to such Issuing Lender at such
Issuing Lender’s Lending Office an Application therefor, completed to the
satisfaction of such Issuing Lender, and such other certificates, documents and
other papers and information (the “L/C Supporting Documentation”) as the
applicable Issuing Lender and the Administrative Agent may request (which
information shall include the Permitted Currency in which such Letter of Credit
shall be denominated).  The Borrower will
contemporaneously deliver to the Administrative Agent, at the Administrative
Agent’s Office, a copy of such Application and L/C Supporting Documentation.  Upon receipt of any Application, the
applicable Issuing Lender shall process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall, after
approving the same and receiving confirmation from the Administrative Agent
that sufficient availability exists under the Revolving Credit Facility for the
issuance of such Letter of Credit, subject to Section 3.1 and Article VI,
promptly issue the Letter of Credit requested thereby (but in no event shall
any Issuing Lender be required to issue any Letter of Credit earlier than (a) two
(2) Business Days, with respect to a Letter of Credit denominated in
Dollars, and (b) three (3) Business Days, with respect to an
Alternative Currency Letter of Credit, after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the applicable
Issuing Lender and the Borrower.  The
applicable Issuing Lender shall promptly furnish to the Borrower  and the Administrative Agent a copy of such
Letter of Credit and promptly notify each Lender under the Revolving Credit
Facility of the issuance and upon request by any Lender under the Revolving
Credit Facility, furnish to such Lender a copy of such Letter of Credit and the
amount of such Lender’s L/C Participation therein by telecopier (or by
telephone promptly confirmed by telecopier).

 

SECTION 3.3                                                  Commissions
and Other Charges.

 

(a)                                  The Borrower shall
pay to the Administrative Agent, for the account of the applicable Issuing
Lender and the L/C Participants, a letter of credit commission with respect to
each Letter of Credit outstanding during the preceding period in an amount
equal to the face amount of such Letter of Credit (reflected as the Dollar
Amount thereof as determined by the Administrative Agent) multiplied  by
the Applicable Margin with respect to Revolving Credit Loans that are LIBOR
Rate Loans (determined on a per annum basis). 
Such commission shall be payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Revolving Credit Maturity
Date. The Administrative Agent shall, promptly following its receipt thereof,
distribute to the applicable Issuing Lender and the L/C Participants all
commissions received pursuant to this Section 3.3(a) in accordance
with their respective Revolving Credit Commitment Percentages.

 

(b)                                 In addition to the
foregoing commission, the Borrower shall pay the applicable Issuing Lender for
its own account an issuance fee with respect to each Letter of Credit issued by
such Issuing Lender in an amount equal to the face amount of such Letter of
Credit (reflected as the Dollar Amount thereof as determined by the applicable
Issuing Lender) multiplied by

 

33

 

0.125% per annum.  Such issuance
fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter and on the Revolving Credit Maturity Date.

 

(c)                                  In
addition to the foregoing fees and commissions, the Borrower shall pay or
reimburse each Issuing Lender for its own account for such normal and customary
costs and expenses as are incurred or charged by such Issuing Lender in
issuing, effecting payment under, amending or otherwise administering any
Letter of Credit.

 

(d)                                 The
commissions, fees, charges, costs and expenses payable pursuant to this Section 3.3
shall be payable in Dollars.

 

SECTION 3.4                                                  L/C
Participations.

 

(a)                                  Each Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce each Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees (subject to the proviso to the initial sentence
of Section 2.1) to accept and purchase and hereby accepts and purchases
from such Issuing Lender, on the terms and conditions hereinafter stated, for
such L/C Participant’s own account and risk an undivided interest equal to such
L/C Participant’s Revolving Credit Commitment Percentage in such Issuing Lender’s
obligations and rights under and in respect of each Letter of Credit issued by
such Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder.  Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender that, if a
draft is paid under any Letter of Credit for which such Issuing Lender is not
reimbursed in full by the Borrower through a Revolving Credit Loan or otherwise
in accordance with the terms of this Agreement, such L/C Participant shall
(subject to the proviso to the initial sentence of Section 2.1) pay to
that Issuing Lender upon demand at the Issuing Lender’s address for notices
specified herein an amount equal to the Dollar Amount of such L/C Participant’s
Revolving Credit Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed; provided that with respect to any
draft under any Letter of Credit, no Lender shall be required to fund more than
its Revolving Credit Commitment Percentage of such draft or more than any
amount which would cause the sum of aggregate outstanding principal amount of
all Revolving Credit Loans made by such Lender plus such Lender’s
Revolving Credit Commitment Percentage of all outstanding Swingline Loans plus
such Lender’s Revolving Credit Commitment Percentage of all outstanding L/C
Obligations to exceed such Lender’s Revolving Credit Commitment.

 

(b)                                 Upon becoming aware of
any amount required to be paid by any L/C Participant to the applicable Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit,
such Issuing Lender shall notify each L/C Participant by telecopier (or by
telephone promptly confirmed by telecopier) of the amount and due date (which
shall not be less than one (1) Business Day after the giving of such
notice) of such required payment and such L/C Participant shall pay to such
Issuing Lender the amount specified on the applicable due date.  If any such amount is paid to such Issuing
Lender after the date such payment is due, such L/C Participant shall pay to
such Issuing Lender on demand, in addition to such amount, the product of (i) such
amount, times (ii) the daily average Federal Funds Rate as
determined by the Administrative Agent during the

 

34

 

period from and including the date such payment is due to the date on
which such payment is immediately available to such Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360.  A certificate of the applicable Issuing
Lender with respect to any amounts owing under this Section 3.4(b) shall
be conclusive in the absence of manifest error. 
With respect to payment to an Issuing Lender of the unreimbursed amounts
described in this Section 3.4(b) and subject to the second
parenthetical of the first sentence of this subsection (b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day,
such payment shall be due on the following Business Day.

 

(c)                                  Whenever, at any time
after any Issuing Lender has made payment under any Letter of Credit and has
received from any L/C Participant its Revolving Credit Commitment Percentage of
such payment in accordance with this Section 3.4, such Issuing Lender
receives any payment related to such Letter of Credit (whether directly from
the Borrower or otherwise), or any payment of interest on account thereof, such
Issuing Lender will promptly distribute to such L/C Participant its pro  rata
share thereof; provided, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to such Issuing Lender the
portion thereof previously distributed by such Issuing Lender to it.

 

(d)                                 All payments made by
any L/C Participant under this Section 3.4 shall be made in Dollars (based
upon the Dollar Amount of the applicable payment); provided that the
Borrower shall be liable for any currency exchange loss pursuant to the terms
of Section 5.10(d).

 

SECTION 3.5                                                  Reimbursement
Obligations.

 

(a)                                  Reimbursement
Obligation of the Borrower.          In
the event of any drawing under any Letter of Credit, the Borrower agrees to
reimburse (either with the proceeds of a Revolving Credit Loan or a Swingline
Loan as provided for in this Section 3.5 or with funds from other
sources), in same day funds, in Dollars, the applicable Issuing Lender on each
date on which such Issuing Lender notifies the Borrower of the date and Dollar
Amount of a draft paid under any Letter of Credit for the Dollar Amount of (i) such
draft so paid and (ii) any amounts referred to in Section 3.3(c) incurred
by such Issuing Lender in connection with such payment (including, without
limitation, any and all costs, fees and other expenses incurred by such Issuing
Lender in effecting the payment of any Alternative Currency Letter of Credit).

 

(b)                                 Reimbursement
Obligation of the Lenders.                Unless
the Borrower shall immediately notify the applicable Issuing Lender that the
Borrower intends to reimburse such Issuing Lender for such drawing from other
sources or funds, the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Administrative Agent requesting that the Lenders make a
Revolving Credit Loan or, if less than the minimum amount for such Loan, a
Swingline Loan, in either case funded in Dollars on such date and bearing
interest at the Base Rate plus the Applicable Margin, in the Dollar Amount of (i) such
draft so paid and (ii) any amounts referred to in Section 3.3(c) incurred
by such Issuing Lender in connection with such payment (including, without
limitation, any and all costs, fees and other expenses incurred by such Issuing
Lender in

 

35

 

effecting the payment of any Alternative Currency Letter of Credit),
and not later than one (1) Business Day after being given notice thereof
by the Administrative Agent by telecopier (or by telephone promptly confirmed
by telecopier), the Lenders under the Revolving Credit Facility shall make a
Revolving Credit Loan or, if less than the minimum amount for such Loan, the
Swingline Lender shall make a Swingline Loan, in either case, funded in Dollars
and bearing interest at the Base Rate plus the Applicable Margin, in such
amount, the proceeds of which shall be applied to reimburse such Issuing Lender
for the amount of the related drawing and costs and expenses. Each Lender under
the Revolving Credit Facility (or as the case may be, the Swingline Lender)
acknowledges and agrees that its obligation to fund a Revolving Credit Loan or,
if less than the minimum amount for such Loan, a Swingline Loan, in accordance
with this Section 3.5 to reimburse such Issuing Lender for any draft paid
under a Letter of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation,
non-satisfaction of the conditions set forth in Section 2.3(a) or Article VI
at the time of funding. If the Borrower has elected to pay the amount of such
drawing with funds from other sources and shall fail to reimburse such Issuing
Lender as provided above, the unreimbursed amount of such drawing shall bear
interest at the rate which would be payable on any outstanding Base Rate Loans
which were then overdue from the date such amounts become payable (whether at
stated maturity, by acceleration or otherwise) until payment in full.

 

SECTION 3.6                                                  Obligations
Absolute.  The Borrower’s obligations
under this Article III (including, without limitation, the Reimbursement
Obligation) shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the applicable Issuing Lender or any
beneficiary of a Letter of Credit or any other Person.  The Borrower also agrees that each Issuing
Lender and the L/C Participants shall not be responsible for, and the Borrower’s
Reimbursement Obligation under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee.  No Issuing Lender shall be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by such Issuing Lender’s gross
negligence or willful misconduct.  The
Borrower agrees that any action taken or omitted by any Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct, shall be binding
on the Borrower and shall not result in any liability of any Issuing Lender or
any L/C Participant to the Borrower.  The
responsibility of each Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.

 

36

 

SECTION 3.7                                                  Effect
of Application.  To the extent that
any provision of any Application related to any Letter of Credit is
inconsistent with the provisions of this Article III, the provisions of
this Article III shall apply.

 

ARTICLE IV

 

TERM LOAN FACILITY

 

SECTION 4.1                                                  Initial
Term Loans.  Subject to
the terms and conditions of this Agreement, each Lender with a Term Loan
Commitment on the Closing Date severally agrees to make an Initial Term Loan to
the Borrower on the Closing Date.  The
Initial Term Loans shall be funded by each Lender in a principal amount equal
to such Lender’s allocated percentage (as set forth on the Register) of the
aggregate principal amount of the Initial Term Loans requested by the Borrower
to be made on the Closing Date, which aggregate principal amount shall equal
the total Term Loan Commitment as of the Closing Date.  Notwithstanding the foregoing, if the total
Term Loan Commitment as of the Closing Date is not drawn on the Closing Date,
the undrawn amount shall automatically be cancelled.

 

SECTION 4.2                                                  Procedure
for Advances of Term Loans.  The
Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing
prior to 12:00 p.m. (Charlotte time) on the Closing Date requesting that
each Lender with a Term Loan Commitment make the Initial Term Loans as Base
Rate Loans on such date (provided that the Borrower may request, no
later than three (3) Business Days prior to the Closing Date, that the
Lenders make the Initial Term Loans as LIBOR Rate Loans if the Borrower has
delivered to the Administrative Agent a letter in form and substance
satisfactory to the Administrative Agent indemnifying the Lenders in the manner
set forth in Section 5.11 of this Agreement).  The Administrative Agent shall promptly
notify the Lenders of such Notice of Borrowing by telecopier (or by telephone
promptly confirmed by telecopier). Not later than 3:00 p.m. (Charlotte
time) on the Closing Date, each such Lender will make available to the
Administrative Agent for the account of the Borrower, at the office of the
Administrative Agent in immediately available funds, the amount of such Initial
Term Loan to be made by such Lender on such borrowing date. The Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of the
Initial Term Loans in immediately available funds by wire transfer to such
Person or Persons as may be designated by the Borrower.

 

SECTION 4.3                                                  Repayment
of Term Loans.

 

(a)                                  Initial
Term Loans.  The Borrower shall repay
the aggregate outstanding principal amount of the Initial Term Loans in
consecutive quarterly installments on the last Business Day of each of
December, March, June and September commencing June 30, 2006, as
set forth below, except as the amounts of individual installments may be
adjusted pursuant to Section 4.4:

 

37

 

	
  YEAR

  	
   

  	
  PAYMENT DATE

  	
   

  	
  PRINCIPAL

  INSTALLMENT

  	
   

  	
  REMAINING

  PRINCIPAL AMOUNT

  OF INITIAL TERM

  LOAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  	
  ($)

  	
   

  
	
  1

  	
   

  	
  June 30,
  2006

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  274,312,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2006

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  273,625,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2006

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  272,937,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2007

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  272,250,000

  	
   

  
	
  2

  	
   

  	
  June 30,
  2007

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  271,562,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2007

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  270,875,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2007

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  270,187,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2008

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  269,500,000

  	
   

  
	
  3

  	
   

  	
  June 30,
  2008

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  268,812,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2008

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  268,125,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2008

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  267,437,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2009

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  266,750,000

  	
   

  
	
  4

  	
   

  	
  June 30,
  2009

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  266,062,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2009

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  265,375,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2009

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  264,687,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2010

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  264,000,000

  	
   

  
	
  5

  	
   

  	
  June 30,
  2010

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  263,312,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2010

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  262,625,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2010

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  261,937,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2011

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  261,250,000

  	
   

  
	
  6

  	
   

  	
  June 30,
  2011

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  260,562,500

  	
   

  
	
   

  	
   

  	
  September 30,
  2011

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  259,875,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2011

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  259,187,500

  	
   

  
	
   

  	
   

  	
  March 31,
  2012

  	
   

  	
  $

  	
  687,500

  	
   

  	
  $

  	
  258,500,000

  	
   

  
	
  7

  	
   

  	
  June 30,
  2012

  	
   

  	
  $

  	
  64,625,000

  	
   

  	
  $

  	
  193,875,000

  	
   

  
	
   

  	
   

  	
  September 30,
  2012

  	
   

  	
  $

  	
  64,625,000

  	
   

  	
  $

  	
  129,250,000

  	
   

  
	
   

  	
   

  	
  December 31,
  2012

  	
   

  	
  $

  	
  64,625,000

  	
   

  	
  $

  	
  64,625,000

  	
   

  
	
   

  	
   

  	
  Term
  Loan Maturity Date

  	
   

  	
  $

  	
  64,625,000

  	
   

  	
  $

  	
  0

  	
   

  

 

If not sooner paid, the Initial Term Loans shall be paid in full,
together with accrued interest thereon, on the Term Loan Maturity Date.

 

(b)                                 Additional
Term Loans.  The Borrower shall repay
the aggregate outstanding principal amount of the Additional Term Loans (if
any) in consecutive quarterly installments on the last Business Day of each of
March, June, September and December commencing with the first full
calendar quarter ending after the Additional Term Loan Effective Date, in the
following amounts (which amounts shall be calculated on the Additional Term
Loan Effective Date):  (i) as of any
fiscal quarter end prior to the fiscal quarter ending June 30, 2012, an amount
equal to one-quarter of one percent (0.25%) of the original principal amount of
the Additional Term Loans, and (ii) as of any fiscal quarter ending on or
after June 30, 2012, an amount equal to twenty-five percent (25%) of the
sum of (X) the original amount of the Additional Term Loans less (Y) the
aggregate amount of all scheduled amortization payments to be made with respect
to the Additional Term Loans (determined as of the Additional Term Loan
Effective Date) prior to June 30, 2012 as provided in clause (i) of
this Section 4.3(b); provided that such amounts of individual
installments may be adjusted pursuant to Section 4.4.  If not sooner paid, the Additional Term Loans
shall be paid in full, together with accrued interest thereon on the Term Loan
Maturity Date.

 

(c)                                  No
Reborrowing.  Amounts repaid pursuant
to this Section 4.3 may not be reborrowed and will constitute a permanent
reduction of the Term Loan Commitment.

 

38

 

SECTION 4.4                                                  Prepayments
of Term Loans.

 

(a)                                  Optional
Prepayment of Term Loans.  The
Borrower shall have the right at any time and from time to time, upon delivery
to the Administrative Agent of a Notice of Prepayment at least three (3) Business
Days prior to any prepayment, to prepay the Term Loans in whole or in part
without premium or penalty except as provided in Section 5.11.  The Administrative Agent shall promptly give
each of the Lenders notice of any such proposed prepayment by telecopier (or by
telephone promptly confirmed by telecopier). 
Each optional prepayment of the Term Loans hereunder shall be in an
aggregate principal amount of at least $5,000,000 or any whole multiple of
$1,000,000 in excess thereof and shall be applied to the outstanding principal
installments of the Term Loans (with respect to any such outstanding Term
Loans, pro  rata on the basis of the original aggregate funded
amount thereof, among the Initial Term Loans, and, if applicable, the
Additional Term Loans) in the order directed by the Borrower.  Each prepayment shall be accompanied by any
amount required to be paid pursuant to Section 5.11.

 

(b)                                 Mandatory
Prepayment of Term Loans.

 

(i)                                     Debt
Proceeds.  The Borrower shall make
mandatory principal prepayments of the Loans in the manner set forth in Section 4.4(b)(vi) in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from any incurrence by the Borrower or any of its Restricted Subsidiaries of
Debt, excluding:

 

(A)          The
Debt issued pursuant to the Permitted Debt Issuance, solely to the extent the
proceeds thereof are used on the Closing Date to consummate the ESSI Merger and
costs associated therewith;

 

(B)           Permitted
Subordinated Debt, other than Subordinated Debt issued pursuant to the
Permitted Debt Issuance, solely to the extent the proceeds thereof are used
within ninety (90) days (such ninety (90) day period, the “Hold Period”)
after receipt thereof to consummate a proposed acquisition and costs associated
therewith so long as such proposed acquisition (a “Designated Acquisition”)
(I) constitutes  a Permitted Acquisition
at the time of the closing thereof and (II) is identified in writing to the
Administrative Agent on or prior to the issuance date of such Debt; provided,
that any excess proceeds not so used to consummate a Permitted Acquisition or
to fund a Permitted Escrow Redemption shall be applied as a mandatory
prepayment as set forth in this Section 4.4(b)(i); and

 

(C)           senior
unsecured Debt incurred in accordance with Section 11.1(m)(ii), solely to
the extent the proceeds thereof are used within the Hold Period to consummate a
proposed acquisition and costs associated therewith so long as such proposed
acquisition is a Designated Acquisition; provided, that any excess
proceeds not so used to consummate a Permitted Acquisition or to fund a
Permitted Escrow Redemption shall be applied as a mandatory prepayment as set
forth in this Section 4.4(b)(i); and

 

39

 

(D)          other
Debt permitted pursuant to Section 11.1, other than Debt permitted by:

 

(1) Section 11.1(j), to the extent
that the proceeds are not used (x) in accordance with Section 4.4(b)(i)(B) above,
(y) to refinance existing Permitted Subordinated Debt or (z) to refinance
existing senior unsecured Debt previously incurred in accordance with Section 11.1(m),
or

 

(2) Section 11.1(m), to the extent
that the proceeds are not used (x) in accordance with Section 4.4(b)(i)(C) above
or (y) to refinance existing senior unsecured Debt previously incurred in
accordance with Section 11.1(m).

 

Such prepayment shall be made within three (3) Business Days after
the date of receipt of Net Cash Proceeds of any such transaction. (This
provision shall not be deemed to permit the incurrence of Debt not otherwise
permitted pursuant to this Agreement.)

 

(ii)                                  Equity
Proceeds.  If at any time the Total
Leverage Ratio exceeds 4.00 to 1.00, the Borrower shall make mandatory
principal prepayments of the Loans in the manner set forth in Section 4.4(b)(vi) in
amounts equal to fifty percent (50%) of the aggregate Net Cash Proceeds from
any offering of equity securities by the Borrower or any of its Restricted
Subsidiaries (excluding (A) offerings of equity securities made in
connection with employee stock option or incentive plans or made in connection
with compensation or incentive plans for directors and officers, in each case
entered into in the ordinary course of business, (B) the exercise of
warrants existing on the Closing Date and set forth on Schedule 7.1(b) and
(C) the Net Cash Proceeds of any offering of equity securities of the
Borrower to the extent used by the Borrower or any Restricted Subsidiary as
permitted by Section 11.6(g) to purchase its capital stock or other
ownership interests or options in respect of its capital stock or other
ownership interests).  Such prepayment
shall be made within three (3) Business Days after the date of receipt of
Net Cash Proceeds of any such transaction. (This provision shall not be deemed
to permit the issuance of equity not otherwise permitted pursuant to this Agreement.)

 

(iii)                               Asset
Sale Proceeds.  No later than one
hundred eighty (180) days following the Borrower’s or applicable Restricted
Subsidiary’s receipt thereof, the Borrower shall make mandatory principal
prepayments of the Loans in the manner set forth in Section 4.4(b)(vi) in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from the sale or other disposition or series of related sales or other
dispositions of assets (the “Asset Sale Proceeds”) by the Borrower or
any of its Restricted Subsidiaries which have not been reinvested as of such
date in replacement assets; provided that no prepayments shall be
required hereunder in connection with:

 

(A)                              Asset Sale Proceeds
received from asset sales or other dispositions permitted by Section 11.5(a) through
and including Section 11.5(d); or

 

(B)                                So long as no Event of
Default has occurred and is continuing, 

 

 

40

 

Asset Sale Proceeds received from:

 

(1)                                  subject to clause (2) of
this Section 4.4(b)(iii)(B) asset sales and dispositions (other than
asset sales and dispositions permitted by Section 11.5(a) through and
including Section 11.5(d)) in an aggregate amount not to exceed
$30,000,000 in any Fiscal Year; or

 

(2)                                  any asset sale or disposition
(other than asset sales and dispositions permitted by Section 11.5(a) through
and including Section 11.5(d)) to the extent the Asset Sale Proceeds from
such individual sale or disposition together with all related sales or
dispositions (if any) is equal to or less than $5,000,000; or

 

(3)           asset
sales and dispositions (other than (i) asset sales and dispositions
permitted by Section 11.5(a) through and including Section 11.5(d) and
(ii) asset sales and dispositions covered under clause (1) or clause (2) of
this Section 4.4(b)(iii)(B)) that have been committed to be reinvested
within one hundred eighty (180) days after receipt thereof and are thereafter
actually reinvested within two hundred seventy (270) days after receipt of such
Asset Sale Proceeds.  If such Asset Sale
Proceeds are not actually reinvested in accordance with the terms of this Section 4.4(b)(iii)(B)(3) by
the date which is two hundred seventy (270) days after the receipt thereof, the
Borrower shall make a mandatory prepayment in an amount equal to such Asset
Sale Proceeds as described above on such date.

 

Notwithstanding any of the foregoing to the contrary, upon and during
the continuance of an Event of Default and upon notice from the Administrative
Agent, all Asset Sale Proceeds received by the Borrower and its Restricted
Subsidiaries shall be applied to make prepayments of the Loans pursuant to Section 4.4(b)(vi),
such prepayments to be made within three (3) Business Days after the
Borrower’s receipt of such Asset Sale Proceeds.

 

(This provision shall not be deemed to permit the disposition of assets
not otherwise permitted pursuant to this Agreement.)

 

(iv)                              Insurance
and Condemnation Proceeds. No later than one hundred eighty (180) days
following the date of receipt by the Borrower or any of its Restricted
Subsidiaries of any Net Cash Proceeds under any of the insurance policies
maintained pursuant to Section 9.3 or from any condemnation proceeding
(the “Insurance and Condemnation Proceeds”) which have not been
reinvested as of such date in replacement assets, the Borrower shall make
mandatory principal prepayments of the 
Loans in the manner set forth in Section 4.4(b)(vi) below in
amounts equal to one hundred percent (100%) of the aggregate amount of such
Insurance and Condemnation Proceeds received by the Borrower or any of its
Restricted Subsidiaries unless such Insurance and Condemnation Proceeds have
been committed to be reinvested within such one hundred

 

41

 

eighty (180) day period and are thereafter actually reinvested within
two hundred seventy (270) days after receipt of such Insurance and Condemnation
Proceeds.  If such Insurance and
Condemnation Proceeds are not actually reinvested in accordance with the terms
of this Section 4.4(b)(iv) by the date which is two hundred seventy
(270) days after the receipt thereof, the Borrower shall make a mandatory
prepayment in an amount equal to such Insurance and Condemnation Proceeds as
described above on such date. 
Notwithstanding any of the foregoing to the contrary, upon and during
the continuance of an Event of Default and upon notice from the Administrative
Agent, all Insurance and Condemnation Proceeds received by the Borrower and its
Restricted Subsidiaries shall be applied to make prepayments of the Loans, such
prepayments to be made within three (3) Business Days after the Borrower’s
receipt of such Insurance and Condemnation Proceeds.

 

(v)                                 Excess
Cash Flow.  No later than one hundred
twenty (120) days after the end of any Fiscal Year during the term of this
Agreement, commencing with the Fiscal Year ending March 31, 2007, the
Borrower shall make a mandatory principal repayment of the Loans in an amount
equal to fifty  percent (50%) of Excess
Cash Flow, if any, for such Fiscal Year; provided that the amount of
such mandatory principal repayment shall be reduced to twenty-five percent
(25%) of Excess Cash Flow, if any, for any Fiscal Year for which the Total
Leverage Ratio is less than 4.00 to 1.00.

 

(vi)                              Notice;
Manner of Payment.  Upon the
occurrence of any event triggering the prepayment requirement under Sections
4.4(b)(i) through and including 4.4(b)(v), the Borrower shall promptly
deliver a Notice of Prepayment to the Administrative Agent and upon receipt of
such notice, the Administrative Agent shall promptly so notify each of the
Lenders by telecopier (or by telephone promptly confirmed by telecopier).  Each prepayment of the Loans under this Section 4.4(b) shall
be applied as follows:

 

(A)                              with respect to any
prepayment pursuant to Section 4.4(b)(iii) or (iv), (1) first,
to reduce, on a pro  rata basis, the remaining scheduled principal
installments of the Term Loans (with respect to any such outstanding Term
Loans, pro  rata on the basis of the original aggregate funded
amount thereof among the Initial Term Loans and, if applicable, the Additional
Term Loans) pursuant to Section 4.3 and (2) second, to the
extent of any excess proceeds, to reduce permanently the Revolving Credit
Commitment, pursuant to Section 2.6(b), and

 

(B)           with
respect to any prepayment pursuant to Section 4.4(b)(i) (other than
as provided below with respect to a Permitted Debt Add-On) and Section 4.4(b)(ii) or
(v), (1) first, to reduce, on a pro  rata basis, the
remaining scheduled principal installments of the Term Loans (with respect to
any such outstanding Term Loans, pro  rata on the basis of the
original aggregate funded amount thereof among the Initial Term Loans and, if
applicable, the Additional Term Loans) pursuant to Section 4.3 and (2) second,
to the extent of any excess proceeds, to repay the Revolving Credit Loans
pursuant to Section 2.4(f) (without a corresponding permanent
reduction in the Revolving Credit Commitment); provided that,
notwithstanding the foregoing to the contrary, any prepayment pursuant to Section 4.4(b)(i) from
the Net Cash Proceeds of a Permitted Debt

 

42

 

Add-On shall be applied first to repay the Revolving Credit
Loans pursuant to Section 2.4(f) (without a corresponding permanent
reduction in the Revolving Credit Commitment); and second to reduce, on
a pro  rata basis, the remaining scheduled principal installments
of the Term Loans (with respect to any such outstanding Term Loans, pro  rata
on the basis of the original aggregate funded amount thereof among the Initial
Term Loans and, if applicable, the Additional Term Loans) pursuant to Section 4.3.

 

provided, however that, regardless of
whether there are amounts outstanding under the Revolving Credit Facility, each
Lender having a Term Loan Commitment or outstanding Term Loans shall have the
right to refuse its pro  rata share (based on its respective Term
Loan Percentage) of any such mandatory prepayment (excluding prepayments made
pursuant to Section 4.4(b)(iii) or (iv)) at which time the remaining
amount shall be applied first to temporarily reduce the Revolving Credit
Loans in accordance with Section 2.4(f), and then, to the extent of
any remaining funds to the Borrower; provided that, if at the time of
such prepayment there are no outstanding Revolving Credit Loans, the Borrower
may (X) elect to have the remaining amount of such mandatory prepayment (if
any) applied as an optional prepayment of Term Loans in accordance with Section 4.4(a) or
(Y) retain such amount. No prepayment or repayment pursuant to this Section 4.4
shall affect any of the Borrower’s obligations under any Hedging Agreement.

 

Amounts prepaid in respect of the Term Loans pursuant to this Section 4.4
may not be reborrowed and will constitute a permanent reduction in such Term
Loan Commitment.  Each prepayment shall
be accompanied by any amount required to be paid pursuant to Section 5.11.

 

SECTION 4.5                                                  Term
Notes.  Except as otherwise provided
in Section 14.10 (a) – (e), each Lender’s Term Loan and the
obligation of the Borrower to repay such Term Loan may, at the election of such
Lender, be evidenced by a separate Term Note executed by the Borrower payable
to the order of such Lender.

 

SECTION 4.6                                                  Optional
Increase In Term Loan Commitment.

 

(a)                                  Subject
to the conditions set forth below, the Borrower shall have the option,
exercisable on no more than two (2) occasions following the Closing Date
until the Term Loan Maturity Date to incur additional indebtedness under this
Agreement in the form of an increase of the Term Loan Commitment by an
aggregate principal amount of up to (i) $250,000,000 less (ii) the
sum of (A) the aggregate principal amount of any prior or simultaneous
increase to the Revolving Credit Commitment made pursuant to Section 2.8
and (B) the aggregate principal amount of any prior increase to the Term
Loan Commitment made pursuant to this Section 4.6.  In the event the Borrower desires to exercise
the above-described option, the Borrower shall deliver to the Administrative
Agent an Increase Notification pursuant to which the Borrower may request that
additional Term Loans be made on the Additional Term Loan Effective Date
pursuant to such increase in the Term Loan Commitment (each such additional
Term Loan, an “Additional Term Loan”, and collectively, the “Additional
Term Loans”).

 

43

 

(b)                                 Each
Additional Term Loan shall be obtained from existing Lenders or from
other banks, financial institutions or investment funds that qualify as
Eligible Assignees, in each case in accordance with this Section 4.6.  Participation in any Additional Term Loan
shall be offered first to each of the existing Lenders; provided that no
Lender shall have any obligation to provide any portion of such Additional Term
Loans.  If the amount of the Additional
Term Loans requested by the Borrower shall exceed the commitments which the
existing Lenders are willing to provide with respect to such Additional Term
Loans, then the Borrower may invite other banks, financial institutions and investment
funds which meet the requirements of an Eligible Assignee to join this
Agreement as Lenders for the portion of such Additional Term Loans not
committed to by existing Lenders (each such other bank, financial institution
or investment fund, a “New Term Lender” and collectively with the
existing Lenders providing increased Term Loan Commitments, the “Increasing
Term Lenders”).  The Administrative
Agent is authorized to enter into, on behalf of the Lenders, any amendment to
this Agreement or any other Loan Document as may be necessary to incorporate
the terms of any Additional Term Loan herein or therein; provided that
such amendment shall not modify this Agreement or any other Loan Document in
any manner materially adverse to any Lender and shall otherwise be in
accordance with Section 14.11.

 

(c)                                  The
following terms and conditions shall apply to each Additional Term Loan:  (i) the Additional Term Loans made under
this Section 4.6 shall constitute Obligations of the Borrower and shall be
secured and guaranteed with the other Extensions of Credit on a pari  passu
basis; (ii) any New Term Lender making Additional Term Loans shall be
entitled to the same voting rights as the existing Lenders under the Term Loan
Facility and the Additional Term Loans shall receive proceeds of prepayments on
the same basis as the Initial Term Loans; (iii) the Borrower shall, upon
the request of any Increasing Term Lender, execute such Term Loan Notes as are
necessary to reflect such Increasing Term Lender’s Additional Term Loans; (iv) the
Administrative Agent and the Lenders shall have received from the Borrower an
Officer’s Compliance Certificate in form and substance satisfactory to the
Administrative Agent, demonstrating that, after giving effect to any such
Additional Term Loan (and, if applicable, any simultaneous increase in the
Revolving Credit Commitment), the Borrower will be in pro forma compliance with
the financial covenants set forth in Article X; (v) no Default or
Event of Default shall have occurred and be continuing hereunder as of the
Additional Term Loan Effective Date or after giving effect to the making of any
such Additional Term Loans; (vi) the representations and warranties
contained in Article VII and in the other Loan Documents shall be true and
correct on and as of the Additional Term Loan Effective Date with the same
effect as if made on and as of such date (other than those representations and
warranties that by their terms speak as of a particular date, which
representations and warranties shall be true and correct as of such particular
date); (vii) the amount of such increase in the Term Loan Commitment and
any Additional Term Loans obtained thereunder shall not be less than a minimum
principal amount of $10,000,000, or any whole multiple of $5,000,000 in excess
thereof, or if less, the maximum amount permitted pursuant to clause (a) above;  (viii) the Borrower and each Increasing
Term Lender shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, a Lender Addition and Acknowledgement
Agreement; and (ix)  the Administrative Agent shall have received any
documents or information, including any joinder agreements, in connection with
such increase in the Term Loan Commitment as it may reasonably request.

 

44

 

(d)                                 Upon
the execution, delivery, acceptance and recording of the applicable Lender
Addition and Acknowledgement Agreement, from and after the applicable
Additional Term Loan Effective Date, each Increasing Term Lender shall have a
Term Loan Commitment as set forth in the Register and all the rights and
obligations of a Lender with such a Term Loan Commitment hereunder.  The Increasing Term Lenders shall make the
Additional Term Loans to the Borrower on the Additional Term Loan Effective
Date in an amount equal to each such Increasing Term Lender’s commitment in
respect of Additional Term Loans as agreed upon pursuant to subsection (b) above.

 

(e)                                  The
Administrative Agent shall maintain a copy of each Lender Addition and
Acknowledgment Agreement delivered to it in accordance with Section 14.10(d).

 

(f)                                                                                    Within
five (5) Business Days after receipt of notice, the Borrower shall execute
and deliver to the Administrative Agent, in exchange for any surrendered Term
Loan Note or Term Loan Notes of any existing Lender or with respect to any New
Term Lender, a new Term Loan Note or Term Loan Notes to the order of the
applicable Lenders in amounts equal to the Term Loan Commitment of such Lenders
as set forth in the Register.  Such new
Term Loan Note or Term Loan Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such Term Loan Commitments, shall be
dated as of the Additional Term Loan Effective Date and shall otherwise be in
substantially the form of the existing Term Loan Notes.  Each surrendered Term Loan Note and/or Term
Loan Notes shall be canceled and returned to the Borrower.

 

(g)                                 The
Applicable Margin and pricing grid, if applicable, for the Additional Term
Loans shall be determined on the applicable Additional Term Loan Effective
Date.

 

ARTICLE V

 

GENERAL LOAN PROVISIONS

 

SECTION 5.1                                                  Interest.

 

(a)                                  Interest Rate
Options.  Subject to the provisions
of this Section 5.1, at the election of the Borrower, (i) Revolving
Credit Loans and Term Loans shall bear interest at (A) the Base Rate plus
the Applicable Margin as set forth in Section 5.1(c) or (B) the
LIBOR Rate plus the Applicable Margin as set forth in Section 5.1(c) (provided
that the LIBOR Rate shall not be available until three (3) Business Days
after the Closing Date unless the Borrower has delivered to the Administrative
Agent a letter in form and substance satisfactory to the Administrative Agent
indemnifying the Lenders in the manner set forth in Section 5.11 of this
Agreement) and (ii) any Swingline Loan shall bear interest at the Base
Rate plus the Applicable Margin as set forth in Section 5.1(c)(i).  The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given or at the time a Notice of Conversion/Continuation
is given pursuant to Section 5.2. 
Each Loan or portion thereof bearing interest based on the Base Rate
shall be a “Base Rate Loan”, and each Loan or portion thereof bearing
interest based on the LIBOR Rate shall be a “LIBOR Rate Loan.” Any Loan
or any

 

45

 

portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Base Rate Loan.

 

(b)                                 Interest Periods.  In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall
elect an interest period (each, an “Interest Period”) to be applicable
to such Loan, which Interest Period shall be a period of one (1), two (2),
three (3), or six (6) months; provided that:

 

(i)                                     the Interest
Period shall commence on the date of advance of or conversion to any LIBOR Rate
Loan and, in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the date on which the immediately
preceding Interest Period expires;

 

(ii)                                  if any Interest
Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided,
that if any Interest Period would otherwise expire on a day that 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 immediately
preceding Business Day;

 

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

 

(iv)                              no Interest Period shall
extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity
Date, as applicable, and Interest Periods shall be selected by the Borrower so
as to permit the Borrower to make mandatory reductions of the Revolving Credit
Commitment pursuant to Section 2.6(b) and the quarterly principal
installment payments pursuant to Section 4.3 without payment of any
amounts pursuant to Section 5.11; and

 

(v)                                 there shall be no more
than ten (10) Interest Periods in effect at any time.

 

(c)                                  Applicable Margin.

 

(i)                                     The Applicable
Margin provided for in Section 5.1(a) with respect to any Revolving
Credit Loans shall be based upon the table set forth below and shall be
determined and adjusted quarterly on the date (each a “Calculation Date”)
ten (10) Business Days after the date by which the Borrower is required to
provide an Officer’s Compliance Certificate for the most recently ended fiscal
quarter of the Borrower.  The Pricing
Level shall be determined by reference to the Total Leverage Ratio as of the last day of the most recently
ended fiscal quarter of the Borrower preceding the applicable Calculation Date,
provided, however, that (A) the initial Applicable Margin
for the Revolving Credit Loans shall not be less than Pricing Level II (as
shown below) until the Calculation Date for the fiscal quarter ending September 30,
2006 and (B) if the

 

46

 

Borrower fails to provide the Officer’s Compliance Certificate as required
by Article VIII for the most recently ended fiscal quarter of the Borrower
preceding the applicable Calculation Date, the Applicable Margin for the Loans
from such Calculation Date shall be based on Pricing Level I (as shown below)
until such time as an appropriate Officer’s Compliance Certificate is provided,
at which time the Pricing Level shall be determined by reference to the Total
Leverage Ratio as of the last day of the most recently ended fiscal quarter of
the Borrower preceding such Calculation Date. 
The Applicable Margin for the Loans shall be effective from one
Calculation Date until the next Calculation Date.  Any adjustment in the Applicable Margin shall
be applicable to all Extensions of Credit then existing or subsequently made or
issued.

 

	
  Pricing
  Level

  	
   

  	
  Total Leverage Ratio

  	
   

  	
  Applicable

  LIBOR Margin

  (Revolver)

  	
   

  	
  Applicable Base

  Rate Margin

  (Revolver)

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  I

  	
   

  	
  > 6.0 to 1.0

  	
   

  	
  1.75

  	
  %

  	
  0.50

  	
  %

  	
  0.500

  	
  %

  
	
  II

  	
   

  	
  > 5.0 to 1.0 but < 6.0 to 1.0

  	
   

  	
  1.50

  	
  %

  	
  0.25

  	
  %

  	
  0.375

  	
  %

  
	
  III

  	
   

  	
  > 4.0 to 1.0 but < 5.0 to 1.0

  	
   

  	
  1.25

  	
  %

  	
  0.00

  	
  %

  	
  0.375

  	
  %

  
	
  IV

  	
   

  	
  < 4.0 to 1.0

  	
   

  	
  1.00

  	
  %

  	
  0.00

  	
  %

  	
  0.375

  	
  %

  

 

(ii)                                  The Applicable Margin
provided for in Section 5.1(a) with respect to any Term Loans shall
be (A) 1.50% for LIBOR Loans and (B) 0.25% for Base Rate Loans.

 

(d)                                 Default Rate.  Subject to Section 12.3, at the
discretion of the Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (A) the Borrower shall no longer have
the option to request LIBOR Rate Loans or Swingline Loans, (B) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) plus the rate then applicable to LIBOR Rate Loans until the end of
the applicable Interest Period and thereafter at a rate equal to two percent
(2%) plus the rate then applicable to Base Rate Loans, and (C) all
outstanding Base Rate Loans and other Obligations arising hereunder or under
any other Loan Document shall bear interest at a rate per annum equal to two
percent (2%) plus the rate then applicable to Base Rate Loans or such other
Obligations arising hereunder or under any other Loan Document.  Interest shall continue to accrue on the
Obligations after the filing by or against the Borrower of any petition seeking
any relief in bankruptcy or under any act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign.

 

(e)                                  Interest Payment
and Computation.  Interest on each
Base Rate Loan shall be payable in arrears on the last Business Day of each
calendar quarter commencing with the quarter ending March 31, 2006; and
interest on each LIBOR Rate Loan shall be payable on the last day of each
Interest Period applicable thereto, and if such Interest Period extends over
three (3) months, at the end of each three (3) month interval during
such Interest Period. Interest on LIBOR Rate Loans and all fees payable
hereunder shall be computed on the basis of a 360-day year and assessed for the
actual number of days elapsed and interest on Base Rate Loans shall be computed
on the basis of a 365/66-day year and assessed for the actual number of days
elapsed.

 

47

 

(f)                                    Maximum Rate.  In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under or in respect
of any of the Obligations charged or collected pursuant to the terms of this
Agreement or pursuant to any of the Obligations exceed the highest rate
permissible under any Applicable Law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto.  In the event that such a court determines
that the Lenders have charged or received interest hereunder in excess of the
highest applicable rate, the rate in effect hereunder shall automatically be
reduced to the maximum rate permitted by Applicable Law and the Lenders shall
at the Administrative Agent’s option (i) promptly refund to the Borrower
any interest received by the Lenders in excess of the maximum lawful rate or (ii) apply
such excess to the principal balance of the Obligations on a pro  rata
basis.  It is the intent hereof that the
Borrower not pay or contract to pay, and that neither the Administrative Agent
nor any Lender receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by the Borrower
under Applicable Law.

 

SECTION 5.2                                                  Notice
and Manner of Conversion or Continuation of Loans.  Provided that no Default or Event of Default
has occurred and is then continuing, the Borrower shall have the option to (a) convert
at any time following the third Business Day after the Closing Date all or any
portion of any outstanding Base Rate Loans (other than Swingline Loans) in a
principal amount equal to $5,000,000 or any whole multiple of $100,000 in
excess thereof into one or more LIBOR Rate Loans and (b) upon the
expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $2,500,000 or a
whole multiple of $100,000 in excess thereof into Base Rate Loans (other than
Swingline Loans) or (ii) continue such LIBOR Rate Loans as LIBOR Rate
Loans.  Whenever the Borrower desires to
convert or continue Loans as provided above, the Borrower shall give the
Administrative Agent irrevocable prior written notice substantially in the form
attached hereto as Exhibit E (a “Notice of
Conversion/Continuation”) not later than 12:00 p.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to
be converted or continued, and, in the case of any LIBOR Rate Loan to be
converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Loans to be converted or continued,
and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan.  The
Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation by telecopier (or by telephone promptly confirmed by
telecopier).

 

SECTION 5.3                                                  Fees.

 

(a)                                  Commitment Fee.  Commencing on the Closing Date, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum determined by reference to
the pricing grid set forth in Section 5.1(c) on the average daily
unused portion of the Revolving Credit Commitment; provided, that the
amount of outstanding Swingline Loans shall not be considered usage of the
Revolving Credit Commitment for the purpose of calculating such commitment
fee.  The commitment fee shall be payable
in arrears on the last Business Day of each calendar quarter during the term of
this Agreement with the first payment due on March 31, 2006, and on the
Revolving Credit Maturity Date.  Such
commitment fee shall be promptly distributed by the Administrative Agent to the
Lenders pro

 

48

 

rata in accordance with the Lenders’
respective Revolving Credit Commitment Percentages.  The commitment fee shall be determined by
reference to the Total Leverage Ratio as of the end of the fiscal quarter
immediately preceding the delivery of the applicable Officer’s Compliance
Certificate and adjusted quarterly on the Calculation Date for the most
recently ended fiscal quarter of the Borrower, provided, however,
that (A) the initial commitment fee shall not be less than that set forth
in Pricing Level II as shown in the pricing grid set forth in Section 5.1(c) until
the Calculation Date for the fiscal quarter ending September 30, 2006 and (B) in
the event the Borrower fails to deliver the Officer’s Compliance Certificate as
required by Article VIII for the most recently ended fiscal quarter of the
Borrower preceding the applicable Calculation Date, the commitment fee shall be
the highest commitment fee set forth in the above-described pricing grid until
the delivery of an appropriate Officer’s Compliance Certificate at which time
the Commitment Fee shall be determined by reference to the Total Leverage Ratio
as of the last day of the most recently ended fiscal quarter of the Borrower
preceding such Calculation Date.

 

(b)                                 Administrative
Agent’s and Other Fees.  In order to
compensate the Administrative Agent for structuring and syndicating the Loans
and for its obligations hereunder, the Borrower agrees to pay to the
Administrative Agent, for its account, the fees set forth in the separate fee
letter agreement executed by the Borrower and the Administrative Agent dated October 6,
2005.

 

SECTION 5.4                                                  Manner
of Payment.

 

(a)                                  Loans
and Letters of Credit Denominated in Dollars.  Each payment by the Borrower on account of
the principal of or interest on any Loan or Letter of Credit denominated in
Dollars or of any fee, commission or other amounts (including the Reimbursement
Obligation with respect to any Letter of Credit denominated in Dollars) payable
to the Lenders under this Agreement or any Note shall be made not later than
1:00 p.m. (Charlotte time) on the date specified for payment under this
Agreement to the Administrative Agent at the Administrative Agent’s Office for
the account of the Lenders (other than as set forth below) pro  rata
in accordance with their respective Revolving Credit Commitment Percentages or
applicable Term Loan Percentages, as applicable (except as specified below), in
Dollars and in immediately available funds and shall be made without any
set-off, counterclaim or deduction whatsoever. 
Any payment received after such time but before 2:00 p.m. (Charlotte
time) on such day shall be deemed a payment on such date for the purposes of Section 12.1,
but for all other purposes shall be deemed to have been made on the next
succeeding Business Day.  Any payment
received after 2:00 p.m. (Charlotte time) shall be deemed to have been
made on the next succeeding Business Day for all purposes.

 

(b)                                 Alternative
Currency Letters of Credit.  Each
payment by the Borrower on account of any Alternative Currency Letter of Credit
(including the Reimbursement Obligation with respect to any Alternative
Currency Letter of Credit) shall be made in Dollars not later than 1:00 p.m.
(the time of the applicable Issuing Lender’s Correspondent) on the date
specified for payment under this Agreement to the Administrative Agent’s
account with the applicable Issuing Lender’s Correspondent for the account of
the applicable Issuing Lender in immediately available funds, and shall be made
without any set-off, counterclaim or deduction whatsoever.  Any payment received after such time but before
2:00 p.m. (the time of the applicable Issuing

 

49

 

Lender’s Correspondent) on such day shall be deemed a payment on such
date for the purposes of Section 12.1, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day. Any payment
received after 2:00 p.m. (the time of the applicable Issuing Lender’s
Correspondent) shall be deemed to have been made on the next succeeding
Business Day for all purposes.

 

(c)                                  Treatment
of Payments.  Upon receipt by the
Administrative Agent of each such payment, the Administrative Agent shall
promptly distribute to each Lender at its address for notices set forth herein
its pro  rata share of such payment in accordance with such Lender’s
Revolving Credit Commitment Percentage or applicable Term Loan Percentage, as
applicable (except as specified below), and shall wire advice of the amount of
such credit to each Lender. Except as set forth in Section 5.4(b), each
payment to the Administrative Agent of an Issuing Lender’s fees or L/C
Participants’ commissions shall be made in like manner, but for the account of
the Issuing Lender or the L/C Participants, as the case may be.  Each payment to the Administrative Agent of
Administrative Agent’s fees or expenses shall be made for the account of the
Administrative Agent and any amount payable to any Lender under Sections 5.10,
5.11, 5.12, 5.13 or 14.2 shall be promptly paid to the Administrative Agent for
the account of the applicable Lender. 
Subject to Section 5.1(b)(ii) if any payment under this
Agreement or any Note shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day and such extension of time shall in such case be included in computing any
interest if payable along with such payment.

 

SECTION 5.5                                                  Crediting
of Payments and Proceeds.  In the
event that the Borrower shall fail to pay any of the Obligations when due and
the Obligations have been accelerated pursuant to Section 12.2, all
payments received by the Lenders upon the Notes and the other Obligations and
all net proceeds from the enforcement of the Obligations shall be applied:  (a) first, to all expenses then due and
payable by the Borrower hereunder and under the other Loan Documents, (b) then
to all indemnity obligations then due and payable by the Borrower hereunder and
under the other Loan Documents, (c) then to all Administrative Agent’s and
Issuing Lender’s fees then due and payable, (d) then to all commitment and
other fees and commissions then due and payable, (e) then to accrued and
unpaid interest on the Loans, accrued and unpaid interest on the Reimbursement
Obligation and any payments (including any termination payments and any accrued
and unpaid interest thereon) due in respect of a Hedging Agreement with the
Person serving as the Administrative Agent or any Lender (which Hedging
Agreement is permitted or required hereunder) (pro  rata in
accordance with all such amounts due), (f) then to the principal amount of
the Loans and Reimbursement Obligation (pro  rata in accordance
with all such amounts due) and (g) then to the cash collateral account
described in Section 12.2(b) to the extent of any L/C Obligations
then outstanding, in that order.

 

SECTION 5.6                                                  Adjustments.  If any Lender (a “Benefited Lender”)
shall at any time receive any payment of all or part of the Obligations owing
to it, or interest thereon, or if any Lender shall at any time receive any
collateral in respect to the Obligations owing to it (whether voluntarily or
involuntarily, by set-off or otherwise) (other than as a result of the
operation of the proviso to Section 4.4(b)(vi) or pursuant to
Sections 5.10, 5.11, 5.12, 5.13 or 14.2) in a greater proportion than any
such payment to and collateral received by any other Lender, if any, in respect
of the similar Obligations owing to such other Lender, or interest 

 

50

 

thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender’s Extensions of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned to
the extent of such recovery, but without interest.  The Borrower agrees that each Lender so
purchasing a portion of another Lender’s Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.

 

SECTION 5.7                                                  Nature
of Obligations of Lenders Regarding Extensions of Credit; Assumption by the
Administrative Agent.  The
obligations of the Lenders under this Agreement to make the Loans and issue or
participate in Letters of Credit are several and are not joint or joint and
several.  Unless the Administrative Agent
shall have received written notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of the amount to be borrowed on such date (which
notice shall not release such Lender of its obligations hereunder), the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the proposed borrowing date in
accordance with Sections 2.3(b) and 4.2, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If such amount is
made available to the Administrative Agent on a date after such borrowing date,
such Lender shall pay to the Administrative Agent on demand an amount, until
paid, equal to the product of (a) the amount not made available by such
Lender in accordance with the terms hereof, times (b) the daily
average Federal Funds Rate during such period as determined by the
Administrative Agent, times (c) a fraction the numerator of which
is the number of days that elapse from and including such borrowing date to the
date on which such amount not made available by such Lender in accordance with
the terms hereof shall have become immediately available to the Administrative
Agent and the denominator of which is 360. 
A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest
error.  If such Lender’s Revolving Credit
Commitment Percentage or applicable Term Loan Percentage, as applicable, of
such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days after such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to such borrowing hereunder, on demand, from the Borrower.  The failure of any Lender to make available
its Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of any Loan requested by the Borrower shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Commitment Percentage or Term Loan Percentage, as applicable, of such Loan
available on the borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Revolving Credit Commitment Percentage
or Term Loan Percentage, as applicable, of such Loan available on the borrowing
date.  Notwithstanding anything set forth
herein to the contrary, any Lender that fails to make available its Revolving
Credit Commitment Percentage or applicable Term Loan Percentage, as applicable,
shall not (a) have any voting or consent rights under or with respect to
any Loan Document or (b) constitute a “Lender” for purposes of the
calculation of Required

 

51

 

Lenders hereunder for any voting or consent rights under or with
respect to any Loan Document; so long as such Lender fails to make available
such Revolving Credit Commitment Percentage or applicable Term Loan
Percentage.  Notwithstanding the
foregoing, in no event shall any of the amendments, changes or modifications
specifically enumerated in Sections 14.11(a)-(c) be effective with respect
to any Lender directly affected thereby that has not consented thereto.

 

SECTION 5.8                                                  Redenomination
under EMU.

 

(a)                                  Redenomination
of Letters of Credit.  Subject to Section 1.4,
any Letter of Credit to be denominated in the currency of any Participating
Member State shall be made in the euro.

 

(b)                                 Redenomination
of Obligations.  Subject to Section 1.4,
any obligation of any party under this Agreement or any other Loan Document
which has been denominated in the currency of a Participating Member State
shall be redenominated into the euro.

 

(c)                                  Further
Assurances.  The terms and provisions
of this Agreement will be subject to such reasonable changes of construction as
determined by the Administrative Agent to reflect the implementation of the EMU
in any Participating Member State or any market conventions relating to the fixing
and/or calculation of interest being changed or replaced and to reflect market
practice at that time, and subject thereto, to put the Administrative Agent,
the Lenders and the Borrower in the same position, so far as possible, that
they would have been if such implementation had not occurred.  In connection therewith, the Borrower agrees,
at the request of the Administrative Agent, at the time of or at any time
following the implementation of the EMU in any Participating Member State or
any market conventions relating to the fixing and/or calculation of interest
being changed or replaced, to enter into an agreement amending this Agreement
in such manner as the Administrative Agent shall reasonably request.

 

SECTION 5.9                                                  Regulatory
Limitation.  In the event, as a
result of increases in the value of any Alternative Currency against the Dollar
or for any other reason, the obligation of any Issuing Lender to issue
Alternative Currency Letters of Credit (taking into account the Dollar Amount
of the Obligations and all other indebtedness required to be aggregated under
12 U.S.C.A. §84, as amended, the regulations promulgated thereunder and any
other Applicable Law) is determined by such Issuing Lender to exceed its then
applicable legal lending limit under 12 U.S.C.A. §84, as amended, and the
regulations promulgated thereunder, or any other Applicable Law, the amount of
additional Alternative Currency Letters of Credit such Issuing Lender shall be
obligated to issue hereunder shall immediately be reduced to the maximum amount
which such Issuing Lender may legally issue (as determined by such Issuing
Lender) and, to the extent necessary under such laws and regulations (as
determined by such Issuing Lender, with respect to the applicability of such
laws and regulations to itself), the Borrower shall reduce, or cause to be
reduced, complying to the extent practicable with the remaining provisions
hereof, the Obligations outstanding hereunder by an amount sufficient to comply
with such maximum amounts.

 

 

52

 

SECTION 5.10                                            Changed
Circumstances.

 

(a)                                  Circumstances
Affecting LIBOR Rate Availability. 
If with respect to any Interest Period the Administrative Agent or any
Lender (after consultation with the Administrative Agent) shall determine that,
by reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in eurodollars, in the applicable amounts are not being
quoted via the Telerate Page 3750 or offered to the Administrative Agent or
such Lender for such Interest Period, then the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Lenders by telecopier (or
by telephone promptly confirmed by telecopier). 
Thereafter, until the Administrative Agent notifies the Borrower and the
Lenders by telecopier (or by telephone promptly confirmed by telecopier) that
such circumstances no longer exist, the obligation of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Loan to or continue any
Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall repay in
full (or cause to be repaid in full) the then outstanding principal amount of
each such LIBOR Rate Loan together with accrued interest thereon, on the last
day of the then current Interest Period applicable to such LIBOR Rate Loan or
convert the then outstanding principal amount of each such LIBOR Rate Loan to a
Base Rate Loan as of the last day of such Interest Period.

 

(b)                                 Laws Affecting
LIBOR Rate Availability.  If, after the
date hereof, the introduction of, or any change in, any Applicable Law or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their
respective Lending Offices) with any request or directive (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, shall make it unlawful or impossible for any of the Lenders
(or any of their respective Lending Offices) to honor their obligations
hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly
give notice thereof to the Administrative Agent and the Administrative Agent
shall promptly give notice to the Borrower and the other Lenders by telecopier
(or by telephone promptly confirmed by telecopier).  Thereafter, until the Administrative Agent
notifies the Borrower and the other Lenders by telecopier (or by telephone promptly
confirmed by telecopier) that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall
be suspended and thereafter the Borrower may select only Base Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to
maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall
immediately be converted to a Base Rate Loan for the remainder of such Interest
Period and the Borrower shall pay any amount required to be paid under Section 5.11.

 

(c)                                  Increased Costs.  If, after the date hereof, the introduction
of, or any change in, any Applicable Law, or in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any of the Lenders (or any of their respective Lending Offices)
with any request or directive (whether or not having the force of law) of such
Governmental Authority, central bank or comparable agency:

 

53

 

(i)                                     shall
(except as provided in Section 5.13(e)) subject any of the Lenders (or any
of their respective Lending Offices) to any tax, duty or other charge with
respect to any Loan, Letter of Credit or Application or shall change the basis
of taxation of payments to any of the Lenders (or any of their respective
Lending Offices) of the principal of or interest on any Loan, L/C Obligation or
any other amounts due under this Agreement in respect thereof (except for
changes in the rate of franchise tax or tax on the overall net income of any of
the Lenders or any of their respective Lending Offices imposed by the
jurisdiction in which such Lender is organized or is or should be qualified to
do business or such Lending Office is located); provided that the
Borrower shall not be obligated to pay any amounts pursuant to this Section 5.10(c)(i) to
the extent that such amounts are duplicative of any amounts paid by the
Borrower pursuant to Section 5.13; or

 

(ii)                                  shall
impose, modify or deem applicable any reserve (including, without limitation,
any reserve imposed by the Board of Governors of the Federal Reserve System),
special deposit, insurance or capital or similar requirement against assets of,
deposits with or for the account of, or credit extended by any of the Lenders
(or any of their respective Lending Offices) or shall impose on any of the
Lenders (or any of their respective Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Loan;

 

and the result of any of the foregoing events described in clause (i) or
(ii) above is to increase the costs to any of the Lenders of maintaining
any LIBOR Rate Loan or issuing or participating in Letters of Credit or to
reduce the yield or amount of any sum received or receivable by any of the
Lenders under this Agreement or under the Loans in respect of a LIBOR Rate Loan
or Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. The Administrative Agent, or the
applicable Lender (with a copy to the Administrative Agent) will promptly
notify the Borrower of any event of which it has knowledge which will entitle
such Lender to compensation pursuant to this Section 5.10(c); provided,
that the Administrative Agent shall incur no liability whatsoever to the
Lenders or the Borrower in the event it fails to do so.  The amount of such compensation shall be
determined, in the applicable Lender’s sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage
or applicable Term Loan Percentage, as applicable, of the LIBOR Rate Loans in
the London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical.  A certificate of such Lender setting forth
the basis for determining such amount or amounts necessary to compensate such
Lender shall be forwarded to the Borrower through the Administrative Agent and
shall be conclusively presumed to be correct save for manifest error.

 

(d)                                 Exchange
Indemnification and Increased Costs. 
The Borrower shall, upon demand from any Issuing Lender or L/C
Participant, pay to such Issuing Lender or L/C

 

54

 

Participant, the amount of  (i) any
loss or cost or increased cost incurred by such Issuing Lender or L/C
Participant, (ii) any reduction in any amount payable to or in the
effective return on the capital to such Issuing Lender or L/C Participant, (iii) any
interest or any other return foregone by such Issuing Lender or L/C Participant
as a result of the introduction of, change over to or operation of the euro and
(iv) any currency exchange loss, in each case that such Issuing Lender or
L/C Participant sustains as a result of the Borrower’s or any L/C Participant’s
repayment in Dollars of any Alternative Currency Letter of Credit.  A certificate of such Issuing Lender or L/C
Participant setting forth in reasonable detail the basis for determining such
additional amount or amounts necessary to compensate such Issuing Lender or
such L/C Participant shall be conclusively presumed to be correct save for
manifest error.

 

SECTION 5.11                                            Indemnity.  The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to such
Lender’s obtaining, liquidating or employing deposits or other funds acquired
to effect, fund or maintain any Loan (a) as a consequence of any failure
by the Borrower to make any payment when due of any amount due hereunder in
connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower
to borrow, continue or convert on a date specified therefor in a Notice of
Borrowing or Notice of Continuation/Conversion or (c) due to any payment,
prepayment or conversion of any LIBOR Rate Loan on a date other than the last
day of the Interest Period therefor.  The
amount of such loss or expense shall be determined, in the applicable Lender’s
sole discretion, based upon the assumption that such Lender funded its
Revolving Credit Commitment Percentage or applicable Term Loan Percentage, as
applicable, of the LIBOR Rate Loans in the London interbank market and using
any reasonable attribution or averaging methods which such Lender deems
appropriate and practical.  A certificate
of such Lender setting forth the basis for determining such amount or amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.

 

SECTION 5.12                                            Capital
Requirements.  If either (a) the
introduction of, or any change in, or any change in the interpretation of, any
Applicable Law or (b) compliance with any guideline or request from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has or would have the effect of reducing the rate
of return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any corporation controlling
such Lender as a consequence of, or with reference to the Commitments and other
commitments of this type, below the rate which such Lender or such other
corporation could have achieved but for such introduction, change or
compliance, then within five (5) Business Days after written demand by any
such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such
Lender or other corporation for such reduction. 
A certificate as to such amounts submitted to the Borrower and the
Administrative Agent by such Lender, shall, in the absence of manifest error,
be presumed to be correct and binding for all purposes.

 

55

 

SECTION 5.13                                            Taxes.

 

(a)                                  Payments
Free and Clear.  Except as otherwise
provided in Section 5.13(e), any and all payments by the Borrower
hereunder or under or in the respect of the Loans or in respect of the Letters
of Credit shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of
each Lender and the Administrative Agent, income and franchise taxes imposed by
the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender’s
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as “Taxes”). 
If the Borrower shall be required by law to deduct or withhold any Taxes
from or in respect of any sum payable hereunder or under or in respect of any
Loan or in respect of any Letter of Credit to any Lender or the Administrative
Agent, (A) except as otherwise provided in Section 5.13(e), the sum
payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 5.13) such Lender
or the Administrative Agent (as the case may be) receives an amount equal to
the amount such party would have received had no such deductions or
withholdings been made, (B) the Borrower shall make such deductions or
withholdings, (C) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with Applicable Law,
and (D) the Borrower shall deliver to the Administrative Agent and such
Lender evidence of such payment to the relevant taxing authority or other Governmental
Authority in the manner provided in Section 5.13(d).

 

(b)                                 Stamp
and Other Taxes.  In addition, the
Borrower shall pay any present or future stamp, registration, recordation or
documentary taxes or any other similar fees or charges or excise or property
taxes, levies of the United States or any state or political subdivision
thereof or any applicable foreign jurisdiction which arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement, the Loans, the Letters of Credit or the other
Loan Documents, or the perfection of any rights or security interest in respect
thereof (hereinafter referred to as “Other Taxes”).

 

(c)                                  Indemnity.  Except as otherwise provided in Section 5.13(e),
the Borrower shall indemnify each Lender and the Administrative Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
and Other Taxes imposed by any jurisdiction on amounts payable under this Section 5.13)
paid by such Lender or the Administrative Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted.  Such indemnification
shall be made within thirty (30) days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.

 

(d)                                 Evidence
of Payment.  Within thirty (30) days
after the date of any payment of Taxes or Other Taxes, the Borrower shall
furnish to the Administrative Agent and the applicable Lender, at its address
referred to in Section 14.1, the original or a certified copy of a receipt

 

56

 

evidencing payment thereof or other evidence of payment satisfactory to
the Administrative Agent.

 

(e)                                  Delivery
of Tax Forms.  To the extent required
by Applicable Law to reduce or eliminate withholding or payment of taxes, each
Lender organized under the laws of any jurisdiction other than the United
States or any state thereof (a “Foreign Lender”) and the Administrative
Agent shall deliver to the Borrower, with a copy to the Administrative Agent,
on the Closing Date or concurrently with the delivery of the relevant
Assignment and Acceptance, as applicable, (i) two United States Internal
Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable (or
successor forms) properly completed and certifying in each case that such
Foreign Lender is entitled to a complete exemption from withholding or
deduction for or on account of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable
form, as the case may be, to establish an exemption from United States backup
withholding taxes.  Each such Foreign
Lender further agrees to deliver to the Borrower, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI,
or successor applicable forms or manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form W-9,
Form W-8BEN or W-8ECI (or successor forms) that such Foreign Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes (unless in any such case
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders such forms inapplicable or the exemption to
which such forms relate unavailable and such Foreign Lender notifies the
Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income
taxes) and, in the case of a Form W-9, Form W-8BEN or W-8ECI,
establishing an exemption from United States backup withholding tax.  Notwithstanding anything in any Loan Document
to the contrary, the Borrower shall not be required to pay additional amounts
to any Lender or the Administrative Agent under this Section 5.13 or under
Section 5.10(c), (i) if such Foreign Lender or the Administrative
Agent fails to comply with the requirements of this Section 5.13(e), other
than to the extent (i) that such failure is due to a change in law
occurring after the date on which such Foreign Lender or the Administrative
Agent became a party to this Agreement or (ii) that such additional
amounts are the result of such Foreign Lender’s or the Administrative Agent’s
gross negligence or willful misconduct, as applicable.

 

(f)                                    Survival.  Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 5.13 shall survive the payment in
full of the Obligations and the termination of the Commitments until the
expiration of the applicable statute of limitations.

 

SECTION 5.14                                            Rounding
and Other Consequential Changes. 
Subject to Section 1.4, without prejudice and in addition to any
method of conversion or rounding prescribed by any EMU Legislation and without
prejudice to the respective obligations of the Borrower to the Administrative
Agent and the Lenders and the Administrative Agent and the Lenders to the
Borrower under or pursuant to this Agreement, except as expressly provided in
this Agreement,

 

57

 

each provision of this Agreement, including, without limitation, the
right to combine currencies to effect a set-off, shall be subject to such
reasonable changes of interpretation as the Administrative Agent may from time
to time specify to be necessary or appropriate to reflect the introduction of
or change over to the euro in Participating Member States.

 

SECTION 5.15                                            Security.  The Obligations of the Borrower and the
Subsidiary Guaranteed Obligations shall be secured as provided in the Security
Documents.

 

SECTION 5.16                                            Mitigation
Obligations; Replacement of Lenders.

 

(a)                                  If
any Lender requests compensation under Section 5.10(c), or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.13, then
such Lender shall use its reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 5.10(c) or
5.13, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

(b)                                 If
any Lender requests compensation under Section 5.10(c), or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.13, or if
any Lender defaults in its obligations to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 14.10),
all its interests, rights and obligations under this Agreement (other than any
indemnification rights pursuant to Sections 5.10, 5.12, 5.13 or 14.2 for the
period prior to such assignment) to an Eligible Assignee that shall assume such
obligations (which Eligible Assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Commitment is being assigned, the Issuing Bank and Swingline Lender),
which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in L/C Obligations and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts
(including, without limitation, any amounts then payable to such Lender under Section 5.10(c) or
under Section 5.13)) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 5.10(c) or
payments required to be made pursuant to Section 5.13, such assignment
will result in a material reduction in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

 

58

 

ARTICLE VI

 

CLOSING; CONDITIONS OF CLOSING AND BORROWING

 

SECTION 6.1                                                  Closing.  The closing shall take place at the offices
of Kennedy Covington Lobdell & Hickman, L.L.P. at 10:00 a.m. on January 31,
2006, or on such other place, date and time as the parties hereto shall
mutually agree.

 

SECTION 6.2                                                  Conditions
to Closing and Initial Extensions of Credit on the Closing Date.  The obligation of the Lenders to close this
Agreement and to make the Loans or issue or participate in the Letters of
Credit, if any, to be made or issued on the Closing Date is subject to the
satisfaction of each of the following conditions:

 

(a)                                  Executed Loan
Documents.  This Agreement, the
Revolving Credit Notes, the Term Notes, the Swingline Note, and the Security
Documents, together with any other applicable Loan Documents, shall have been
duly authorized, executed and delivered to the Administrative Agent by the
Administrative Agent, on behalf of itself and the Lenders, the Borrower and its
Subsidiaries party thereto, and the other parties thereto, shall be in full
force and effect and no Default or Event of Default shall exist, and the
Borrower shall have delivered original counterparts thereof to the
Administrative Agent.

 

(b)                                 Closing
Certificates; etc.

 

(i)                                     Officer’s
Certificate of the Borrower.  The
Administrative Agent shall have received a certificate from a Responsible
Officer, in form and substance satisfactory to the Administrative Agent, to the
effect that all representations and warranties contained in this Agreement and
the other Loan Documents are true, correct and complete; that the Borrower and
its Subsidiaries are not in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; and that the Borrower has satisfied each of the
closing conditions.

 

(ii)                                  Certificate of
Secretary of the Borrower and Subsidiary Guarantors. The Administrative
Agent shall have received a certificate of the secretary or assistant secretary
of each of the Borrower and the Subsidiary Guarantors certifying as to the
incumbency and genuineness of the signature of each officer of the Borrower or
such Subsidiary Guarantor executing the Loan Documents to which it is a party
and certifying that attached thereto is a true, correct and complete copy of (A) the
certificate of limited partnership, articles of incorporation or other
organizational document of the Borrower or such Subsidiary Guarantor and all
amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation, (B) the
bylaws, partnership agreement, operating agreement or other operative document
of the Borrower or such Subsidiary Guarantor as in effect on the date of such
certifications, (C) resolutions duly adopted by the Board of Directors,
partners or members of the Borrower or such Subsidiary Guarantor authorizing
the borrowings and other credit extensions

 

59

 

contemplated hereunder and the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 6.2(b)(iii).

 

(iii)                               Certificates of Good
Standing.  The Administrative Agent
shall have received certificates as of a recent date of the good standing of the
Borrower and each Subsidiary Guarantor under the laws of its jurisdiction of
organization and, to the extent requested by the Administrative Agent in its
reasonable judgment, each other jurisdiction where the Borrower and each
Subsidiary Guarantor is qualified to do business and a certificate of the
relevant taxing authorities of such jurisdictions certifying that such Person
has filed required tax returns and owes no delinquent taxes.

 

(iv)                              Opinions of Counsel.  The Administrative Agent shall have received
favorable opinions of counsel to the Borrower and Subsidiary Guarantors
addressed to the Administrative Agent and the Lenders with respect to the
Borrower and Subsidiary Guarantors, the Loan Documents and such other matters
as the Administrative Agent shall reasonably request.

 

(v)                                 Tax Forms.  The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section 5.13(e).

 

(c)                                  Collateral.

 

(i)                                     Filings
and Recordings.  All filings and
recordations that are necessary to perfect the security interests of the
Lenders in the collateral described in the Security Documents shall have been
received by the Administrative Agent and the Administrative Agent shall have
received evidence satisfactory to the Administrative Agent that upon such
filings and recordations such security interests constitute valid and perfected
first priority Liens therein.

 

(ii)                                  Pledged
Collateral.  The Administrative Agent
shall have received (A) original stock certificates or other certificates
evidencing the capital stock or other ownership interests pledged pursuant to
the Collateral Agreement or the Pledge Agreements together with an undated
stock power for each such certificate duly executed in blank by the registered
owner thereof and (B) each original promissory note pledged pursuant to
the Collateral Agreement or any Pledge Agreement together with an endorsement
for each such promissory note duly executed in blank by the holder thereof.

 

(iii)                               Lien
Search. The Administrative Agent shall have received the results of a Lien
search (including a search as to judgments and tax matters) made against the
Borrower, its Restricted Subsidiaries (including, without limitation, ESSI and
each of its Subsidiaries that are Restricted Subsidiaries) under the Uniform
Commercial Code as in effect in any state in which any of its assets are
located, to the extent requested by the Administrative Agent, indicating among
other things that its assets are free and clear of any Lien except for Liens
permitted hereunder.

 

60

 

(iv)                              Hazard
and Liability Insurance.  The
Administrative Agent shall have received certificates of insurance, evidence of
payment of all insurance premiums for the current policy year of each, and, if
requested by the Administrative Agent, copies (certified by a Responsible
Officer) of insurance policies in the form required under the Security
Documents and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.

 

(d)                                 Consents; Defaults.

 

(i)                                     Governmental
and Third Party Approvals.  The
Borrower shall have obtained all necessary approvals, authorizations and
consents of any Person and of all Governmental Authorities and courts having
jurisdiction with respect to the transactions contemplated by the Transaction
Documents.

 

(ii)                                  No Injunction,
Etc.  No action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before any Governmental Authority to enjoin, restrain, or prohibit,
or to obtain substantial damages in respect of, or which is related to or
arises out of (a) the Transaction Documents or the consummation of the
transactions contemplated thereby, which, in the Administrative Agent’s sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents or (b) the
ESSI Merger, which prohibits or imposes materially adverse conditions upon, or
makes it economically unfeasible to consummate, the transactions contemplated
by this Agreement and such other Loan Documents.

 

(iii)                               No Event of Default.  No Default or Event of Default shall have
occurred and be continuing.

 

(e)                                  Financial Matters.

 

(i)                                     Financial
Statements.  Each of the Lenders
shall have received (A) audited consolidated financial statements of each
of the Borrower, ESSI and their respective Subsidiaries for the three (3) most
recent fiscal years ended for which audited consolidated financial statements
are available, including balance sheets and income and cash flow statements and
related notes thereto, (B) to the extent available, unaudited interim
consolidated balance sheets and income and cash flow statements of the
Borrower, ESSI and their respective Subsidiaries for each quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (A) of this paragraph, and (C) such other financial statements
of the Borrower as may be required, or in the reasonable opinion of the
Administrative Agent, reasonably desirable in connection with the Facilities,
prepared in accordance with GAAP and Regulation S-X for a registration
statement on Form S-1 under the Securities Act of 1933, as amended.

 

(ii)                                  Balance
Sheets and Income Statements.  Each
of the Lenders shall have received consolidating pro  forma
balance sheets and income statements (as of the date of the
most recent consolidated quarterly balance sheet of the Borrower delivered
pursuant

 

61

 

to
clause (B) of subsection (i) above) and income statements (for
the most recent fiscal year, the most recent fiscal quarter, and the most
recent twelve-month period for which quarterly income statements have been
delivered pursuant to clause (B) of subsection (i) above subject
to adjustments required by SEC rules) of the Borrower and
its Subsidiaries, giving effect to the ESSI Merger, the Permitted Debt Issuance
and the financings contemplated hereby (including the payment of premiums, fees
and expenses related to the ESSI Merger, the Permitted Debt Issuance or the
financings contemplated hereby) as if each such transaction had occurred (x) on
such date, in the case of the balance sheets, and (y) at the beginning of such
period, in the case of the income statements, in each case prepared in
accordance with Regulation S-X for a registration statement on Form S-1,
in each case, reasonably satisfactory in form to the Administrative Agent.

 

(iii)                               No
Material Adverse Change.  There shall
have occurred no material adverse change in the business, prospects, operations
or financial condition of (A) the Borrower and its Subsidiaries, taken as
a whole, since March 31, 2005, or (B) ESSI and its Subsidiaries,
taken as a whole, since October 31, 2005.

 

(iv)                              Financial Condition
Certificate.  The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent and certified as accurate
by a Responsible Officer, that (A) after giving effect to the transactions
contemplated by the Transaction Documents, the Borrower and its Restricted
Subsidiaries taken as a whole are Solvent, (B) after giving effect to the
transactions contemplated by the Transaction Documents, the payables of the
Borrower and its Restricted Subsidiaries are not past due beyond customary
trade terms, (C) attached thereto are calculations evidencing compliance
with the covenants contained in Article X, determined on a pro  forma
basis, as of the Closing Date and after giving effect to the transactions
contemplated by the Transaction Documents and the initial Extensions of Credit
under the Loan Documents, and (D) the financial projections previously
delivered to the Administrative Agent represent the good faith estimates
(utilizing assumptions believed by the Borrower’s management to be reasonable)
of the financial condition and operations of the Borrower and its Restricted
Subsidiaries.

 

(v)                                 Financial
Projections.  The Administrative
Agent shall have received management approved five (5) year projected financial
statements of the Borrower and its Subsidiaries (it being acknowledged that the
projections provided to the Administrative Agent on June, 2005 shall satisfy
this condition).

 

(vi)                              Payment at Closing;
Fee Letters. The Borrower shall have paid to the Administrative Agent and
the Lenders the fees set forth or referenced in Section 5.3 and any other
accrued and unpaid fees or commissions due hereunder (including, without
limitation, legal fees and expenses) and to any other Person such amount as may
be due thereto in connection with the transactions contemplated hereby,
including all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of any of the Loan Documents.

 

62

 

(f)                                    ESSI Merger.

 

(i)                                     ESSI Merger
Documents.  The Administrative Agent
shall have received the ESSI Merger Documents and such ESSI Merger Documents
shall be in form and substance reasonably satisfactory to the Administrative
Agent and the Syndication Agent (including, but not limited to, a total
purchase price not to exceed $1,978,900,000 and a cash purchase price not to
exceed $1,410,900,000 (it being acknowledged that the ESSI
Merger Agreement filed on Form 8-K on September 23, 2005 is
satisfactory to the Administrative Agent and the Syndication Agent)).

 

(ii)                                  Conditions
to the ESSI Merger.  All
conditions to the ESSI Merger shall be satisfied or waived (any such waiver to
be with the consent of the Administrative Agent and the Syndication Agent, not
to be unreasonably withheld) on or before the Closing Date such that the ESSI
Merger shall occur contemporaneously with the initial funding under this
Agreement on the Closing Date.

 

(iii)                               Governmental and
Third Party Approvals.  The Administrative
Agent shall have received evidence satisfactory thereto that all material
governmental, shareholder and third party consents and approvals necessary in
connection with the ESSI Merger (including, without limitation, approvals
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, landlord consents and consents under customer supply agreements),
shall have been obtained and remain in effect.

 

(iv)                              Tax, Accounting,
Corporate and Capital Structure.  The
Administrative Agent shall be satisfied that the proposed tax and accounting
treatment of the ESSI Merger and the proposed corporate and capital structure
of the Borrower and its Subsidiaries (including ESSI and its Subsidiaries, if
any) after giving effect to the transactions contemplated by the Transaction
Documents, (A) does not differ materially from the treatment and structure
previously disclosed in writing by the Borrower to the Administrative Agent or (B) is
otherwise reasonably satisfactory to the Administrative Agent.

 

(v)                                 Joinder of ESSI and
its Subsidiaries.  The Administrative
Agent shall have received (A) a duly executed Joinder Agreement joining
ESSI and each Domestic Subsidiary of ESSI (to the extent such Subsidiary is a
Restricted Subsidiary) to the Subsidiary Guaranty Agreement, the Collateral
Agreement and any other applicable Security Documents, (B) updated
Schedules 7.1(a) and 7.1(b) reflecting the creation or acquisition of
each Subsidiary of ESSI, (C) favorable legal opinions covering such
matters consistent with opinions for this Agreement and addressed to the
Administrative Agent and Lenders in form and substance reasonably satisfactory
thereto with respect to such Joinder Agreement, (D) original stock or
other certificates and stock or other transfer powers evidencing the ownership
interests of the Borrower or such Restricted Subsidiary, as applicable, in ESSI
or such Subsidiary of ESSI, and (E) any other documents and certificates
as may be reasonably requested by the Administrative Agent.

 

63

 

(vi)                              Other Documents.  The Administrative Agent shall have received
copies of all other documents, certificates and instruments reasonably
requested thereby, with respect to the transactions contemplated by the ESSI
Merger, and each such document, certificate and instrument shall be in form and
substance reasonably satisfactory to the Administrative Agent.

 

(g)                                 Permitted Debt
Issuance.

 

(i)                                     Permitted Debt
Documents.  The Administrative Agent
shall have received copies of all of the Permitted Debt Documents and such
Permitted Debt Documents shall be in form and substance reasonably satisfactory
to the Administrative Agent and the Syndication Agent.

 

(ii)                                  Permitted Debt
Issuance.  The Borrower shall have
received, on or prior to the Closing Date, net cash proceeds from the issuance
of a combination of the Senior Subordinated Notes, the Convertible Notes and/or
the Senior Unsecured Notes in an aggregate amount of $900,000,000
(collectively, the “Permitted Debt Issuance”), such Permitted Debt
Issuance to be on terms and conditions reasonably satisfactory to the
Administrative Agent.

 

(iii)                               Other Documents.  The Administrative Agent shall have received
copies of all other documents, certificates and instruments reasonably requested
thereby, with respect to the transactions contemplated by the Permitted Debt
Documents, and each such document, certificate and instrument shall be in form
and substance reasonably satisfactory to the Administrative Agent.

 

(h)                                 Repayment
of Certain Amounts Outstanding under Existing Credit Agreement. On the
Closing Date, (i) all outstanding loans under the Existing Credit
Agreement (the “Existing Loans”) made by any Existing Lender which is
not a Lender hereunder shall be repaid in full and the commitments and other
obligations and rights (except as expressly set forth in the Existing Credit
Agreement) of such Existing Lender shall be terminated, (ii) all
outstanding Existing Loans not being repaid under clause (i) above shall
be deemed Revolving Credit Loans or Term Loans, as applicable, hereunder and
the Administrative Agent shall make such transfers of funds as are necessary in
order that the outstanding balance of such Revolving Credit Loans or Term
Loans, as applicable, together with any Revolving Credit Loans and any Term
Loans funded on the Closing Date, are in accordance with the Revolving Credit
Commitment Percentages or Term Loan Percentages, as applicable, of the Lenders
hereunder, (iii) there shall have been paid in cash in full all accrued
but unpaid interest due on the Existing Loans to the Closing Date, (iv) there
shall have been paid in cash in full all accrued but unpaid fees under the
Existing Credit Agreement due to the Closing Date and all other amounts, costs
and expenses then owing to any of the Existing Lenders and/or Wachovia, as
administrative agent under the Existing Credit Agreement, (v) all
outstanding Letters of Credit under the Existing Credit Agreement shall be
Letters of Credit hereunder and (vi) all outstanding promissory notes
issued by the Borrower to the Existing Lenders under the Existing Credit
Agreement shall be promptly returned to the Administrative Agent which shall
forward such notes to the Borrower for cancellation.

 

64

 

(i)                                     Other
Existing Debt.  All Debt (including ,
without limitation, all Debt of ESSI and its Subsidiaries) except (i) Debt
of the Borrower under the Existing Credit Agreement permitted pursuant to Section 6.2(h),
and (ii) other existing Debt of the Borrower and its Subsidiaries
permitted by Section 11.1, shall have been repaid in connection with the
closing of transactions contemplated by the Transaction Documents and all Liens
securing such other existing Debt shall have been terminated.

 

(j)                                     Transaction
Documents.  The transactions
described in the Transaction Documents, including, without limitation, the
Borrower’s issuance of at least $568,000,000 of certain common equity
securities, shall have been consummated in accordance with all requirements of
Applicable Law for an aggregate consideration (including the refinancing of
debt of the Borrower and ESSI and the payment of fees and expenses) not
exceeding $2,198,800,000, including the assumption of ESSI’s indebtedness, and
(x) no material provision of any of the Transaction Documents (other than the
Loan Documents, which may be amended, waived or modified only as provided in Section 14.11)
shall have been amended, waived or otherwise modified without the prior written
consent of the Administrative Agent (which consent shall not be unreasonably
withheld or delayed) and (y) the Borrower and its Affiliates and Subsidiaries
shall not be in material breach or violation of any of its obligations under
the Transaction Documents or any documentation relating to the financing
transactions contemplated by the Transaction Documents.

 

(k)                                  Miscellaneous.

 

(i)                                     Notice of
Borrowing.  The Administrative Agent
shall have received a Notice of Borrowing, as applicable, from the Borrower in
accordance with Section 2.3(a) and Section 4.2, and a Notice of
Account Designation specifying the account or accounts to which the proceeds of
any Loans made after the Closing Date are to be disbursed.

 

(ii)                                  Other Documents.  All opinions, certificates and other
instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be in form and substance reasonably
satisfactory to the Administrative Agent. 
The Administrative Agent shall have received copies of all other
documents, certificates and instruments reasonably requested thereby, with
respect to the transactions contemplated by this Agreement, the ESSI Merger or
the Permitted Debt Issuance.

 

SECTION 6.3                                                  Conditions
to All Extensions of Credit.  The
obligations of the Lenders to make any Extensions of Credit (including the
initial Extension of Credit), or convert or continue any Loan and/or any
Issuing Lender to issue or extend any Letter of Credit are subject to the
satisfaction  or waiver in accordance with
Section 14.11 of the following conditions precedent on the relevant
borrowing, continuation, conversion, issuance or extension date:

 

(a)                                  Continuation of
Representations and Warranties.  The
representations and warranties contained in Article VII and in the other
Loan Documents shall be true and correct on and as of such borrowing or
issuance date or such date of continuation or conversion with the same effect
as if made on and as of such date; except for any representation and warranty
made

 

65

 

as of an earlier date, which representation and warranty shall remain
true and correct as of such earlier date.

 

(b)                                 No Existing Default.  No Default or Event of Default shall have
occurred and be continuing (i) on the borrowing date with respect to such Loan
or after giving effect to the Loans to be made on such date or (ii) on the
issue date with respect to such Letter of Credit or after giving effect to the
issuance of such Letter of Credit on such date or on such continuation or
conversion date after giving effect to such continuation or conversion.

 

(c)                                  Notices.  The Administrative Agent shall have received
a Notice of Borrowing or Notice of Conversion/Continuation, as applicable, from
the Borrower in accordance with Section 2.3(a) and Section 5.2.

 

(d)                                 Additional
Documents.  The Administrative Agent
shall have received each additional document, instrument, legal opinion or
other item reasonably requested by it.

 

SECTION 6.4                                                  Post-Closing
Conditions. The Borrower and each of its Subsidiaries shall comply with all
terms and conditions of the Agreement Regarding Post-Closing Matters within the
required time periods set forth therein.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES OF THE
BORROWER

 

SECTION 7.1                                                  Representations
and Warranties.  To induce the Administrative
Agent and Lenders to enter into this Agreement and to induce the Lenders to
make Extensions of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and Lenders both before and after giving effect to the
transactions contemplated hereunder that:

 

(a)                                  Organization;
Power; Qualification.  Each of the
Borrower and its Restricted Subsidiaries (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and (ii) except to the extent as could not
reasonably be expected to have a Material Adverse Effect, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization.  The jurisdictions in which the Borrower and
its Restricted Subsidiaries are organized and qualified to do business as of
the Closing Date are described on Schedule 7.1(a).

 

(b)                                 Ownership.  Each Subsidiary as of the Closing Date is
listed on Schedule 7.1(b). 
As of the Closing Date, the capitalization of the Borrower and its
Subsidiaries consists of the number of shares, authorized, issued and
outstanding, of such classes and series, with or without par value, described
on Schedule 7.1(b).  All
outstanding shares have been duly authorized and validly issued and are fully
paid and nonassessable, with no personal liability attaching to the ownership
thereof, and not subject to any preemptive or similar rights.  The shareholders of the

 

66

 

Subsidiaries and the number of shares owned by each as of the Closing
Date are described on Schedule 7.1(b).  As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock or other ownership interests of the Borrower or its
Restricted Subsidiaries, except as described on Schedule 7.1(b).

 

(c)                                  Authorization of
Agreement, Loan Documents and Borrowing. Each of the Borrower and its
Restricted Subsidiaries has the right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms, in the case of the
Borrower, the Extensions of Credit hereunder, and the transactions contemplated
hereby.  This Agreement and each of the
other Loan Documents have been duly executed and delivered by the duly
authorized officers of the Borrower and each of its Restricted Subsidiaries
party thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or the Restricted Subsidiary party thereto,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors’ rights in general and the availability of equitable
remedies.

 

(d)                                 Compliance of
Agreement, Loan Documents and Borrowing with Laws, Etc.  The execution, delivery and performance by
the Borrower and its Restricted Subsidiaries of the Loan Documents to which
each such Person is a party, in accordance with their respective terms, the
Extensions of Credit hereunder and the transactions contemplated hereby do not
and will not, by the passage of time, the giving of notice or otherwise, (i) require
any Governmental Approval or violate any Applicable Law relating to the
Borrower or any of its Restricted Subsidiaries, (ii) conflict with, result
in a breach of or constitute a default under the articles of incorporation,
bylaws or other organizational documents of the Borrower or any of its
Restricted Subsidiaries or any indenture, agreement or other instrument to
which such Person is a party or by which any of its properties may be bound or
any Governmental Approval relating to such Person, (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens
arising under the Loan Documents or (iv) require any consent or
authorization of, filing with, or other act in respect of, an arbitrator or
Governmental Authority and no consent of any other Person is required in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement.

 

(e)                                  Compliance with
Law; Governmental Approvals.  Except (i) as
publicly disclosed in a filing with the SEC prior to the Closing Date or (ii) where
the failure to do so could not reasonably be expected to create a Material
Adverse Effect, each of the Borrower and its Restricted Subsidiaries (A) has
all Governmental Approvals required by any Applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not subject
to review on appeal and is not the subject of any pending or, to the best of
its knowledge, threatened attack by direct or collateral proceeding, (B) is
in compliance with each Governmental Approval applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties and (C) has timely filed all material reports,

 

67

 

documents and other materials required to be filed by it under all
Applicable Laws with any Governmental Authority and has retained all material
records and documents required to be retained by it under Applicable Law.

 

(f)                                    Tax Returns and
Payments.  Each of the Borrower and
its Restricted Subsidiaries has duly filed or caused to be filed all federal,
state, local and other tax returns required by Applicable Law to be filed, and
has paid, or made adequate provision for the payment of, all federal, state,
local and other taxes, assessments and governmental charges or levies upon it
and its property, income, profits and assets which are due and payable, except (a) any
taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower or such Restricted Subsidiary, as applicable, has set aside
on its books adequate reserves in conformity with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.   Such returns
accurately reflect in all material respects all liability for taxes of the
Borrower and its Subsidiaries for the periods covered thereby.  There is no ongoing audit or examination or,
to the knowledge of the Borrower, other investigation by any Governmental
Authority of the tax liability of the Borrower and its Restricted
Subsidiaries.  No Governmental Authority
has asserted any Lien or other claim against the Borrower or any Restricted Subsidiary
with respect to unpaid taxes which has not been discharged or resolved other
than Liens for taxes not yet due and payable. 
The charges, accruals and reserves on the books of the Borrower and any
of its Subsidiaries in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof for all open years of the Borrower and any of
its Restricted Subsidiaries are in the judgment of the Borrower adequate, and
the Borrower does not anticipate any additional material taxes or assessments
for any of such years.

 

(g)                                 Intellectual
Property Matters.  Except where the
failure to do so could not reasonably be expected to create a Material Adverse
Effect, each of the Borrower and its Restricted Subsidiaries owns or possesses
rights to use all franchises, licenses, copyright registrations, copyright
applications, issued patents, patent applications, trademarks, trademark
applications, trademark registrations, trademark rights, service marks, service
mark applications, service mark rights, trade names, trade name rights, copyrights
and rights with respect to the foregoing which are required to conduct its
business.  To the knowledge of the
Borrower and its Restricted Subsidiaries, no event has occurred which permits,
or after notice or lapse of time or both would permit, the revocation or
termination of any such rights (except for the expiration of patents in the
ordinary course), and neither the Borrower nor any Restricted Subsidiary is
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations except to the extent any
such revocation, termination, or infringement could not reasonably be expected
to have a Material Adverse Effect.

 

(h)                                 Environmental
Matters.  Except for (i) matters
publicly disclosed in a filing with the SEC prior to the Closing Date or (ii) any
other matter that could not reasonably be expected to create a Material Adverse
Effect,

 

(A)                              The
properties presently owned, leased or operated by the Borrower and its
Restricted Subsidiaries do not contain, and to their knowledge have not
previously contained, any Hazardous Materials in amounts or concentrations
which (1) constitute or

 

68

 

constituted a violation of applicable Environmental Laws or (2) could
reasonably be expected to give rise to liability under applicable Environmental
Laws;

 

(B)                                The
Borrower, each Restricted Subsidiary and such properties and all operations
conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations which could
interfere with the continued operation of such properties;

 

(C)                                Neither
the Borrower nor any Restricted Subsidiary has received any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters, Hazardous Materials, or compliance with
Environmental Laws, nor does the Borrower or any Restricted Subsidiary have
knowledge or reason to believe that any such notice will be received or is
being threatened;

 

(D)                               Hazardous
Materials have not been transported or disposed of to or from the properties
owned, leased or operated by the Borrower and its Restricted Subsidiaries in violation
of, or in a manner or to a location which could reasonably be expected to give
rise to liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Laws; and

 

(E)                                 No
judicial proceedings or governmental or administrative action is pending under
any Environmental Law to which the Borrower or any Restricted Subsidiary has
been named as a potentially responsible party with respect to such properties
or operations conducted in connection therewith, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to Borrower or any Restricted Subsidiary.

 

(i)                                     ERISA.

 

(i)                                     As of the Closing
Date, neither the Borrower nor any ERISA Affiliate maintains or contributes to,
or has any obligation under, any Employee Benefit Plans other than those
identified on Schedule 7.1(i);

 

(ii)                                  Each of the Borrower
and each ERISA Affiliate is in material compliance with all applicable
provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b) of
the Code has not yet expired and except where a failure to so comply could not
reasonably be expected to have a Material Adverse Effect.  Each Employee Benefit Plan that is intended
to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has

 

69

 

been determined to be exempt under Section 501(a) of the Code
except for such plans that have not yet received determination letters but for
which the remedial amendment period for submitting a determination letter has
not yet expired.  No liability has been
incurred by the Borrower or any ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan except for a liability that could not reasonably be expected
to have a Material Adverse Effect;

 

(iii)                               Except for any such
matter that could not reasonably be expected to create a Material Adverse
Effect, as of the Closing Date, no Pension Plan has been terminated, nor has
any accumulated funding deficiency (as defined in Section 412 of the Code)
been incurred (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested with respect to any Pension Plan, nor has the Borrower or
any ERISA Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 302 of
ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA,
nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan;

 

(iv)                              Except where the failure
of any of the following representations to be correct in all material respects
could not reasonably be expected to have a Material Adverse Effect, neither the
Borrower nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of ERISA or Section 4975
of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make a
required installment or other required payment under Section 412 of the
Code;

 

(v)                                 No Termination Event
has occurred or is reasonably expected to occur; and

 

(vi)                              Except where the failure
of any of the following representations to be correct in all material respects
could not reasonably be expected to have a Material Adverse Effect, no
proceeding, claim (other than a benefits claim in the ordinary course of
business), lawsuit and/or investigation is existing or, to the best knowledge
of the Borrower after due inquiry, threatened concerning or involving any (A) employee
welfare benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by the Borrower or any ERISA Affiliate, (B) Pension
Plan or (C) Multiemployer Plan.

 

(j)                                     Margin Stock.  Neither the Borrower nor any Restricted
Subsidiary is engaged principally or as one of its activities in the business
of extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” (as each such term is defined or used, directly or indirectly, in
Regulation U of the Board of Governors of the Federal Reserve System).  No part of the proceeds of any of the Loans
or Letters of Credit will be used for purchasing or carrying

 

70

 

margin stock in violation of, or for any other purpose which violates,
or which would be inconsistent with, the provisions of Regulation T, U or X of
such Board of Governors.

 

(k)                                  Government
Regulation.  Neither the Borrower nor
any Restricted Subsidiary is an “investment company” or a company “controlled”
by an “investment company” (as each such term is defined or used in the
Investment Company Act of 1940, as amended) and neither the Borrower nor any
Restricted Subsidiary is, or after giving effect to any Extension of Credit
will be, subject to regulation under the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.

 

(l)                                     Material
Contracts. Each Material Contract of the Borrower and each Restricted
Subsidiary in effect as of the Closing Date is, and after giving effect to the
consummation of the transactions contemplated by the Loan Documents will be, in
full force and effect in accordance with the terms thereof as of the Closing
Date except as could not reasonably be expected to have a Material Adverse
Effect.

 

(m)                               Employee Relations.
Neither the Borrower nor any of its Restricted Subsidiaries is, as of the
Closing Date, party to any collective bargaining agreement nor has any labor
union been recognized as the representative of its employees except as set
forth on Schedule 7.1(m). 
The Borrower knows of no pending, threatened or contemplated strikes,
work stoppage or other collective labor disputes involving its employees
or those of its Restricted Subsidiaries.

 

(n)                                 Burdensome
Provisions.  Neither the Borrower nor
any Restricted Subsidiary is a party to any indenture, agreement, lease or
other instrument, or subject to any corporate or partnership restriction,
Governmental Approval or Applicable Law which is so unusual or burdensome as in
the foreseeable future could be reasonably expected to have a Material Adverse
Effect.  The Borrower and its Restricted
Subsidiaries do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as could reasonably be expected to
have a Material Adverse Effect.  No
Restricted Subsidiary is party to any agreement or instrument or otherwise
subject to any restriction or encumbrance that restricts or limits its ability
to make dividend payments or other distributions in respect of its capital
stock or other ownership interests to the Borrower or any Restricted Subsidiary
or to transfer any of its assets or properties to the Borrower or any other
Restricted Subsidiary in each case other than those existing under or by reason
of the Loan Documents or Applicable Law.

 

(o)                                 Financial
Statements.  The financial statements
required pursuant to Section 6.2(e) (including pro  forma
financial statements) and related unaudited interim statements of income and
retained earnings, copies of which have been furnished to the Administrative
Agent and each Lender, are complete and correct and fairly present on a
Consolidated basis the assets, liabilities and financial position of the
Borrower and its Restricted Subsidiaries as at such dates, and the results of
the operations and changes of financial position for the periods then ended
(other than customary year-end adjustments for unaudited financial
statements).  All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP.

 

71

 

(p)                                 No Material Adverse
Change.  Since March 31, 2005,
there has been no material adverse change in the properties, business,
operations or financial condition of the Borrower and its Restricted
Subsidiaries, taken as a whole.  Since October 31,
2005 there has been no material adverse change (i) in the properties,
business, operations, or financial condition of ESSI and its Subsidiaries,
taken as a whole, and no event has occurred or condition arisen that could
reasonably be expected to have a Material Adverse Effect or (ii) in the
ESSI Investigation.

 

(q)                                 Solvency.  As of the Closing Date and after giving
effect to the transactions contemplated by the Transaction Documents and each
Extension of Credit made hereunder, the Borrower and its Restricted
Subsidiaries taken as a whole will be Solvent.

 

(r)                                    Titles to
Properties.  Each of the Borrower and
its Restricted Subsidiaries has such title to the real property owned or leased
by it as is necessary or desirable to the conduct of its business and valid and
legal title to all of its personal property and assets, including, but not
limited to, those reflected on the balance sheets of the Borrower and its
Restricted Subsidiaries referred to in Section 7.1(o), except those which
have been disposed of by the Borrower or its Restricted Subsidiaries subsequent
to such date which dispositions have been in the ordinary course of business or
as otherwise expressly permitted hereunder. 
As of the Closing Date, all real property owned or leased by the
Borrower or any Restricted Subsidiary is set forth on Schedule 7.1(r).

 

(s)                                  Liens.  None of the properties and assets of the
Borrower or any Restricted Subsidiary is subject to any Lien, except Permitted
Liens.  No financing statement under the
Uniform Commercial Code of any state which names the Borrower or any Restricted
Subsidiary or any of their respective trade names or divisions as debtor and
which has not been terminated, has been filed in any state or other
jurisdiction and neither the Borrower nor any Restricted Subsidiary has signed
any such financing statement or any security agreement authorizing any secured
party thereunder to file any such financing statement, except to perfect those
Liens permitted by Section 11.2.

 

(t)                                    Debt and
Guaranty Obligations.  Schedule 7.1(t)
is a complete and correct listing of all Debt, Guaranty Obligations and Bonding
Obligations of the Borrower and its Restricted Subsidiaries in excess of
$10,000,000, in each case, as of the date set forth on such Schedule 7.1(t)
..

 

(u)                                 Litigation.  Except for (i) the ESSI Investigation, (ii) any
such matter that could not reasonably be expected to create a Material Adverse
Effect, and (iii) to the extent not covered by clauses (i) and (ii) above,
any other matters existing on the Closing Date and set forth on Schedule 7.1(u),
there are no actions, suits or proceedings pending nor, to the knowledge of the
Borrower, threatened against or in any other way relating adversely to or
affecting the Borrower, any Restricted Subsidiary or ESSI or any of their
respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority.

 

(v)                                 Absence of Defaults.  No event has occurred or is continuing (i) which
constitutes a Default or an Event of Default, or (ii) which constitutes,
or which with the passage of time or

 

72

 

giving of notice or both would constitute, a default or which would
require the Borrower or any of its Restricted Subsidiaries to make any payment
under a Material Contract prior to the scheduled maturity date therefor that,
in any case under this clause (ii), could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

(w)                               Senior Debt Status.  The Obligations of the Borrower and each of
its Restricted Subsidiaries under this Agreement, the Subsidiary Guaranteed
Obligations and each of the other Loan Documents ranks and shall continue to
rank at least senior in priority of payment to all Subordinated Debt and the
Obligations of the Borrower and each Restricted Subsidiary under this Agreement
are hereby designated as “Senior Indebtedness” (or by a term with substantially
equivalent meaning) under all instruments and documents, now or in the future,
relating to all Subordinated Debt.

 

(x)                                   Accuracy and
Completeness of Information.  All
written information, reports and other papers and data, when taken as a whole,
produced by or on behalf of the Borrower or any Restricted Subsidiary (other
than financial projections, which shall be subject to the standard set forth in
Section 8.1(c)) and furnished to the Lenders were, at the time the same
were so furnished, complete and correct in all material respects to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter.  No document furnished or written
statement made to the Administrative Agent or the Lenders by the Borrower or
any Restricted Subsidiary in connection with the negotiation, preparation or
execution of, or pursuant to, this Agreement or any of the other Loan Documents
contains or will contain any untrue statement of a fact material to the
creditworthiness of the Borrower or its Restricted Subsidiaries or omits or
will omit to state a fact necessary in order to make the statements contained
therein not misleading.  The Borrower is
not aware of any facts which it has not disclosed in writing to the
Administrative Agent having a Material Adverse Effect, or insofar as the
Borrower can now foresee, which could reasonably be expected to have a Material
Adverse Effect.

 

SECTION 7.2                                                  Survival
of Representations and Warranties, Etc. 
All representations and warranties set forth in this Article VII
and all representations and warranties contained in any certificate, or any of
the Loan Documents (including, but not limited to, any such representation or
warranty made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement.  All representations and warranties made under
this Agreement shall be made or deemed to be made at and as of the Closing Date
(except those that are expressly made as of a specific date), shall survive the
Closing Date and shall not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lenders or any
Extensions of Credit hereunder.

 

ARTICLE VIII

 

FINANCIAL INFORMATION AND NOTICES

 

Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to (a) S&P, (b) Moody’s and (c) the

 

73

 

Administrative Agent at the Administrative Agent’s Office at the
address set forth in Section 14.1 and to each Lender at the respective
address as set forth in Section 14.1, or at such other office as may be
designated by the Administrative Agent and Lenders from time to time:

 

SECTION 8.1                                                  Financial
Statements and Projections.

 

(a)                                  Quarterly Financial
Statements.  As soon as practicable
and in any event within forty-five (45) days after the end of each of the first
three (3) fiscal quarters of each Fiscal Year (or, if the date of any
required public filing is earlier, no later than the Business Day immediately
following the date of any required public filing thereof after giving effect to
any extensions granted with respect to such date), an unaudited Consolidated
and consolidating balance sheet of the Borrower and its Restricted Subsidiaries
as of the close of such fiscal quarter and unaudited Consolidated and
consolidating statements of income, retained earnings and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
corresponding period in the preceding Fiscal Year and prepared by the Borrower
in accordance with GAAP and, if applicable, containing disclosure of the effect
on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its
Restricted Subsidiaries on a Consolidated and consolidating basis as of their
respective dates and the results of operations of the Borrower and its
Restricted Subsidiaries for the respective periods then ended, subject to
normal year end adjustments.  Delivery by
the Borrower to the Administrative Agent of the Borrower’s quarterly report to
the SEC on Form 10-Q with respect to any fiscal quarter, within the period
specified above shall be deemed to be compliance by the Borrower with this Section 8.1(a).

 

(b)                                 Annual Financial
Statements.  As soon as practicable
and in any event within ninety (90) days after the end of each Fiscal Year (or,
if the date of any required public filing is earlier, no later than the
Business Day immediately following the date of any required public filing
thereof after giving effect to any extensions granted with respect to such
date), an audited Consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of the close of such Fiscal Year and audited Consolidated
statements of income, retained earnings and cash flows for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
preceding Fiscal Year and prepared by an independent certified public
accounting firm acceptable to the Administrative Agent in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of
accounting principles and practices during the year, and accompanied by a
report thereon by such certified public accountants that is not qualified with
respect to scope limitations imposed by the Borrower or any of its Restricted
Subsidiaries or with respect to accounting principles followed by the Borrower
or any of its Restricted Subsidiaries not in accordance with GAAP. Delivery by the Borrower to the Administrative Agent of the
Borrower’s annual report to the SEC on Form 10-K with respect to any
fiscal quarter, within the period specified above shall be deemed to be
compliance by the Borrower with this Section 8.1(b).

 

74

 

(c)                                  Annual Business
Plan and Financial Projections.  As
soon as practicable and in any event within ninety (90) days following the
beginning of each Fiscal Year, a business plan of the Borrower and its
Restricted Subsidiaries for the ensuing twenty (20) fiscal quarters, such plan
to be prepared in accordance with GAAP and to include, on a quarterly basis,
the following:  a quarterly operating and
capital budget, a projected income statement, statement of cash flows and
balance sheet and a report containing management’s discussion and analysis of
such projections, accompanied by a certificate from the chief financial officer
of the Borrower to the effect that, to the best of such officer’s knowledge,
such projections are good faith estimates (utilizing assumptions believed by
Borrower’s management to be reasonable) of the financial condition and
operations of the Borrower and its Restricted Subsidiaries for such twenty (20)
quarter period.

 

SECTION 8.2                                                  Officer’s
Compliance Certificate.  At each time
financial statements are delivered pursuant to Sections 8.1 (a) or (b) and
at such other times as the Administrative Agent shall reasonably request
(including, without limitation, in connection with any Permitted Acquisition),
a certificate of a Responsible Officer of the Borrower in the form of Exhibit F
(an “Officer’s Compliance Certificate”).

 

SECTION 8.3                                                  Accountants’
Certificate.  At each time financial
statements are delivered pursuant to Section 8.1(b), a certificate of the
independent public accountants certifying such financial statements addressed
to the Administrative Agent for the benefit of the Lenders:

 

(a)                                  stating that in
making the examination necessary for the certification of such financial
statements, they obtained no knowledge of any Default or Event of Default or,
if such is not the case, specifying such Default or Event of Default and its
nature and period of existence; and

 

(b)                                 including the
calculations prepared by such accountants required to establish whether or not
the Borrower and its Restricted Subsidiaries are in compliance with the
financial covenants set forth in Article X as at the end of each
respective period.

 

SECTION 8.4                                                  Other
Reports.

 

(a)                                  Auditor’s
Management Letters.  Promptly upon
receipt thereof, copies of all reports, if any, submitted to the Borrower or
its Board of Directors by its independent public accountants in connection with
their auditing function, including, without limitation, any management report
and any management responses thereto.

 

(b)                                 SEC Reports.  All current, quarterly and annual reports
that would be required to be filed with the Securities and Exchange Commission
on Forms 8-K, 10-Q or 10-K if the Borrower were required to file such reports.

 

(c)                                  Other Information.  Such other information regarding the
operations, business affairs and financial condition of the Borrower or any of
its Restricted Subsidiaries, including

 

75

 

any reports delivered to the Securities and Exchange Commission as the
Administrative Agent may reasonably request.

 

SECTION 8.5                                                  Notice
of Litigation and Other Matters. 
Prompt (but in no event later than ten (10) days after an officer
of the Borrower obtains knowledge thereof) telephonic and written notice of:

 

(a)                                  except for any such
matter that could not reasonably be expected to create a Material Adverse
Effect, the commencement of all proceedings and investigations by or before any
Governmental Authority and all actions and proceedings in any court or before
any arbitrator against or involving the Borrower or any Restricted Subsidiary
or any of their respective properties, assets or businesses;

 

(b)                                 except for any such
matter that could not reasonably be expected to create a Material Adverse
Effect, any notice of any violation received by the Borrower or any Restricted
Subsidiary from any Governmental Authority including, without limitation, any
notice of violation of Environmental Laws;

 

(c)                                  except for any such
matter that could not reasonably be expected to create a Material Adverse
Effect, any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against the Borrower or any Restricted
Subsidiary;

 

(d)                                 any attachment,
judgment, lien, levy or order exceeding $5,000,000 that may be assessed against
or threatened in writing against the Borrower or any Restricted Subsidiary;

 

(e)                                  (i) any Default
or Event of Default, (ii) the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of Default or (iii) any
event which constitutes or which with the passage of time or giving of notice
or both would constitute a default or event of default under any Material
Contract to which the Borrower or any of its Restricted Subsidiaries is a party
or by which the Borrower or any Restricted Subsidiary or any of their
respective properties may be bound;

 

(f)                                    (i) any
unfavorable determination letter from the Internal Revenue Service regarding
the qualification of an Employee Benefit Plan under Section 401(a) of
the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC’s intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining
knowledge or reason to know that the Borrower or any ERISA Affiliate has filed
or intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA;

 

(g)                                 any event which makes
any of the representations set forth in Section 7.1 or in any other Loan
Document that is subject to materiality or Material Adverse Effect
qualifications inaccurate in any respect or any event which makes any of the
representations set forth in Section

 

76

 

7.1 or in any other Loan Document that is not subject to materiality or
Material Adverse Effect qualifications inaccurate in any material respect;

 

(h)                                 any change in the
government contracting status of the Borrower or its Restricted Subsidiaries
with respect to the government of the United States or any department or agency
thereof that could reasonably be expected to have a Material Adverse Effect;

 

(i)                                     the designation of
any Subsidiary as a “Restricted Subsidiary” (or any similar designation) under
any Permitted Subordinated Debt or any other Debt issued pursuant to the
Permitted Debt Issuance or Section 11.1(m) or the joinder of any
Subsidiary as a guarantor of any Permitted Subordinated Debt or any other Debt
issued pursuant to the Permitted Debt Issuance or Section 11.1(m); and

 

(j)                                     any material
adverse development in the ESSI Investigation since the Closing Date.

 

SECTION 8.6                                                  Extension
of Time.   Notwithstanding anything
in this Agreement to the contrary, the Administrative Agent may, in its sole
discretion, extend the delivery deadline applicable to any notice, certificate
or other information required to be delivered under this Article VIII for
a period of time not to exceed five (5) Business Days.

 

SECTION 8.7                                                  Accuracy
of Information.  All written
information, reports, statements and other papers and data furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender whether
pursuant to this Article VIII or any other provision of this Agreement, or
any of the Security Documents, shall, at the time the same is so furnished,
comply with the representations and warranties set forth in Section 7.1.

 

ARTICLE IX

 

AFFIRMATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 14.11, the Borrower will, and will cause each of
its Restricted Subsidiaries to:

 

SECTION 9.1                                                  Preservation
of Corporate Existence and Related Matters. 
Except as permitted by Section 11.4, preserve and maintain (a) its
separate corporate existence and (b) all rights, franchises, licenses and
privileges necessary to the conduct of its business, and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction where the nature and scope of its activities require it to so
qualify under Applicable Law except (with respect to this clause (b) only)
to the extent such failure to preserve or maintain could not reasonably be
expected to have a Materially Adverse Effect.

 

SECTION 9.2                                                  Maintenance
of Property.  In addition to the
requirements of any of the Security Documents, protect and preserve all
properties useful in and material to its business,

 

77

 

including copyrights, patents, trade names, service marks and
trademarks; maintain in good working order and condition all buildings,
equipment and other tangible real and personal property; and from time to time
make or cause to be made all renewals, replacements and additions to such
property necessary for the conduct of its business, so that the business
carried on in connection therewith may be conducted in a commercially
reasonable manner.

 

SECTION 9.3                                                  Insurance.  Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the
Closing Date and from time to time thereafter deliver to the Administrative
Agent upon its request a reasonably detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby.

 

SECTION 9.4                                                  Accounting
Methods and Financial Records. 
Maintain a system of accounting, and keep such books, records and
accounts (which shall be true and complete in all material respects) as may be
required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of
any Governmental Authority having jurisdiction over it or any of its
properties.

 

SECTION 9.5                                                  Payment
and Performance of Obligations.  Pay
and perform all Obligations under this Agreement and the other Loan Documents,
and pay or perform (a) except where the failure to do so could not
reasonably be expected to create a Material Adverse Effect, all taxes,
assessments and other governmental charges that may be levied or assessed upon
it or any of its property, and (b) except where the failure to do so could
not reasonably be expected to create a Material Adverse Effect, all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Borrower or such Restricted Subsidiary may
contest any item described in clauses (a) or (b) of this Section 9.5
in good faith so long as adequate reserves are maintained with respect thereto
in accordance with GAAP.

 

SECTION 9.6                                                  Compliance
With Laws and Approvals.  Except
where the failure to do so could not reasonably be expected to create a
Material Adverse Effect, observe and remain in compliance in all respects with
all Applicable Laws and maintain in full force and effect all Governmental
Approvals, in each case applicable to the conduct of its business.

 

SECTION 9.7                                                  Environmental
Laws.  Except where the failure to do
so could not reasonably be expected to create a Material Adverse Effect, in
addition to and without limiting the generality of Section 9.6, (a) comply
with, and make commercially reasonable efforts to ensure compliance by all
tenants and subtenants with, all applicable Environmental Laws and obtain and
comply with and maintain, and make commercially reasonable efforts to ensure
that all tenants and subtenants, if any, obtain and comply with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and other
actions required under Environmental Laws, and promptly comply with all lawful
orders and directives of any Governmental Authority regarding Environmental
Laws, and (c) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their

 

78

 

respective parents, Subsidiaries, Affiliates, employees, agents,
officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the presence of Hazardous Materials, or the violation of,
noncompliance with or liability under any Environmental Laws applicable to the
operations of the Borrower or any such Restricted Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney’s and consultant’s fees, investigation
and laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.

 

SECTION 9.8                                                  Compliance
with ERISA. In addition to and without limiting the generality of Section 9.6,
(a) except where the failure to so comply could not, individually or in
the aggregate, reasonably be expected to create a Material Adverse Effect, (i) comply
with all material applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit
Plans, (ii) not take any action or fail to take action the result of which
could be a liability to the PBGC or to a Multiemployer Plan, (iii) not
participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section 4980B
of the Code and (b) furnish to the Administrative Agent upon the
Administrative Agent’s request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent.

 

SECTION 9.9                                                  Compliance
With Agreements.  Except where the
failure to do so could not reasonably be expected to create a Material Adverse
Effect, comply in all respects with each term, condition and provision of any
Material Contract; provided, that the Borrower or any Restricted
Subsidiary may contest any such Material Contract in good faith through
applicable proceedings so long as adequate reserves are maintained in
accordance with GAAP.

 

79

 

SECTION 9.10                                            Inspection
of Property; Books and Records; Discussions. Except for information and
records which the Borrower may not under Applicable Law disseminate or disclose
to the Administrative Agent and/or the Lenders, permit, and cause its Affiliates
to permit, any authorized representative(s) designated by the Administrative
Agent and/or any of the Lenders to visit, to conduct a field audit or to
otherwise inspect any of the Borrower’s, its Restricted Subsidiaries’ and/or
its Affiliates’ respective properties, including their financial and accounting
records, and to make copies and take extracts therefrom, and to discuss the
Borrower’s, its Restricted Subsidiaries’ and/or Affiliates’ respective affairs,
finances and accounts with the Administrative Agent’s and the Lenders’
officers, employees, representatives or independent certified public
accountants, upon reasonable notice and during normal business hours.  All information furnished to the
Administrative Agent and/or the Lenders shall be received and maintained by the
Administrative Agent and the Lenders in strict confidence and in accordance
with Applicable Law, and they shall not disseminate said information to any
Person for so long as said information has or retains a confidential or proprietary
nature, except where required by and in accordance with Applicable Law, or
pursuant to subpoena or other legal process or where contemplated by the Loan
Documents (including, without limitation, in connection with the enforcement of
any rights or remedies thereunder).  Each
of the Administrative Agent and the Lenders agrees that during any such visit
it shall not take any action or omit to take any action which would cause or
result in the violation of Applicable Law (including without limitation, any export
control law) by the Borrower, its Restricted Subsidiaries and its
Affiliates.  Each such visitation and
inspection by or on behalf of the Administrative Agent and/or the Lenders after
the occurrence and during the continuance of an Event of Default shall be at
the Borrower’s own reasonable cost and expense. 
The Borrower shall, and shall cause its Restricted Subsidiaries and its
Affiliates, to keep proper books and records and accounts in accordance with
GAAP and Applicable Law.

 

SECTION 9.11                                            Additional
Subsidiaries.

 

(a)                                  Within
forty-five (45) days after (i) the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary in accordance with Section 9.11(c) or
(ii) the creation or acquisition of any Domestic Subsidiary (any such
Subsidiary, a “New Subsidiary”) (including in connection with any
Permitted Acquisition), cause to be executed and delivered to the
Administrative Agent (A) a duly executed Joinder Agreement in form and
substance reasonably satisfactory to the Administrative Agent joining such New
Subsidiary (to the extent such New Subsidiary is a Restricted Subsidiary) to
the Subsidiary Guaranty Agreement, the Collateral Agreement and any other
applicable Security Documents, (B) updated Schedules 7.1(a) and 7.1(b) reflecting
the creation or acquisition of such Subsidiary, (C) favorable legal
opinions covering such matters consistent with opinions for this Agreement and
addressed to the Administrative Agent and Lenders in form and substance
reasonably satisfactory to the Administrative Agent with respect to such
Joinder Agreement, (D) original stock or other certificates and stock or
other transfer powers evidencing the ownership interests of the Borrower or
such Restricted Subsidiary, as applicable, in such New Subsidiary, and (E) any
other documents and certificates as may be reasonably requested by the
Administrative Agent or the Required Lenders (through the Administrative
Agent).

 

80

 

(b)                                 Within
forty-five (45) days after the creation of any first tier Foreign Subsidiary of
the Borrower or any Restricted Subsidiary (including in connection with a
Permitted Acquisition), cause to be executed and delivered to the
Administrative Agent, (A) a supplement to the applicable Security
Documents previously executed and delivery by the Borrower or such Restricted
Subsidiary, as applicable, to provide for the pledge of sixty-five percent
(65%) of the capital stock or other ownership interests of such Foreign
Subsidiary, (B) updated Schedules 7.1(a) and 7.1(b) reflecting
the creation or acquisition of such Subsidiary, (C) favorable legal
opinions addressed to the Administrative Agent and Lenders and in form and
substance reasonably satisfactory thereto with respect to such supplement, (D) original
stock or other certificates and stock or other transfer powers evidencing the
ownership interests of the Borrower or such Restricted Subsidiary in such
Foreign Subsidiary, and (E) any other documents and certificates as may be
reasonably requested by the Administrative Agent or the Required Lenders
(through the Administrative Agent).

 

(c)                                  The
Borrower may, at any time and upon written notice to the Administrative Agent,
redesignate an Unrestricted Subsidiary as a Restricted Subsidiary.  Further, promptly after the date on which the
Borrower or the Administrative Agent determines that:

 

(i)                                     any individual
Unrestricted Subsidiary and its respective Subsidiaries (A) represent five
percent (5%) or more of (I) the Consolidated assets of the Borrower and its
Subsidiaries as of the most recently ended fiscal quarter prior to such date or
(II) Consolidated EBITDA (notwithstanding the definition thereof, calculated to
include all Unrestricted Subsidiaries) of the Borrower and its Subsidiaries for
the four (4) consecutive fiscal quarters most recently ended prior to such
date or (B) are or become the obligor on any Debt (notwithstanding the
definition thereof, determined by reference to such Unrestricted Subsidiary)
which is guaranteed by, credit supported by, or recourse to the Borrower or any
Restricted Subsidiary; or

 

(ii)                                  any individual
Unrestricted Subsidiary provides a guarantee of, or is designated as a
“restricted subsidiary” (or equivalent term) under, any Permitted Subordinated
Debt or any other Debt issued pursuant to the Permitted Debt Issuance or Section 11.1(m);
or

 

(iii)                               all Unrestricted
Subsidiaries and their respective Subsidiaries represent ten percent (10%) or
more of (A) the Consolidated assets of the Borrower and its Subsidiaries
as of the most recently ended fiscal quarter prior to such date or (B) Consolidated
EBITDA (notwithstanding the definition thereof, calculated to include all
Unrestricted Subsidiaries) for the four consecutive fiscal quarters most
recently ended prior to such date,

 

then, in the case of clauses (i) and (ii), such Unrestricted
Subsidiary shall be redesignated as a Restricted Subsidiary and in the case of
clause (iii), the Borrower shall promptly identify in writing to the
Administrative Agent such Unrestricted Subsidiaries to be redesignated as
Restricted Subsidiaries to cause such remaining Unrestricted Subsidiaries and
their Subsidiaries (after giving effect to such redesignation) to represent
less than ten percent (10%) of (A) the Consolidated assets of the Borrower
and its Subsidiaries as of the most recently ended fiscal

 

81

 

quarter prior to such date and (B) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four consecutive fiscal quarters most recently ended
prior to such date.

 

(d)                                 So
long as no Default or Event of Default has occurred and is continuing, the
Borrower shall be permitted, on prior written notice to the Administrative
Agent, to redesignate any Restricted Subsidiary as an Unrestricted Subsidiary
(or designate any newly formed or acquired Subsidiary as an Unrestricted
Subsidiary; provided that such formation or acquisition is otherwise
permitted hereunder), so long as the following conditions have been satisfied
as reasonably determined by the Administrative Agent:

 

(i)                                     any such
individual Subsidiary and its respective Subsidiaries to be designated (or
redesignated, as applicable) as an Unrestricted Subsidiary (A) represent
less than five percent (5%) of (I) the Consolidated assets of the Borrower and
its Subsidiaries as of the most recently ended fiscal quarter prior to such
date and (II) Consolidated EBITDA (notwithstanding the definition thereof,
calculated to include all Unrestricted Subsidiaries) of the Borrower and its
Subsidiaries for the four (4) consecutive fiscal quarters most recently
ended prior to such date and (B) are not the obligors on any Debt
(notwithstanding the definition thereof, determined by reference to such
Unrestricted Subsidiary) which is guaranteed by, credit supported by, or
recourse to the Borrower or any Restricted Subsidiary; and

 

(ii)                                  any such individual
Subsidiary is not a guarantor of, or a “restricted subsidiary” (or equivalent
term) under, any Permitted Subordinated Debt or any other Debt issued pursuant
to the Permitted Debt Issuance or Section 11.1(m); and

 

(iii)                               at the time of such
proposed designation (or redesignation, as applicable), and after giving effect
thereto, all Unrestricted Subsidiaries and their respective Subsidiaries
(including the Subsidiary and its respective Subsidiaries to be designated (or
redesignated, as applicable) as an Unrestricted Subsidiary) represent less than
ten percent (10%) of (A) the Consolidated assets of the Borrower and its
Subsidiaries as of the most recently ended fiscal quarter prior to such date
and (B) Consolidated EBITDA (notwithstanding the definition thereof,
calculated to include all Unrestricted Subsidiaries) for the four consecutive
fiscal quarters most recently ended prior to such date.

 

Such
designation (or redesignation, as applicable) shall have an effective date
mutually acceptable to the Administrative Agent and Borrower, but in no event
earlier than fifteen (15) Business Days following receipt by the Administrative
Agent of such written notice unless agreed to by the Administrative Agent in
its sole discretion.

 

(e)                                  Notwithstanding
anything to the contrary contained herein, in the event that any Subsidiary
shall guaranty the payment or performance of any Permitted Subordinated Debt or
any Debt issued pursuant to the Permitted Debt Issuance or Section 11.1(m),
the Borrower shall cause such Subsidiary to, as promptly as practicable, be
designated as a Restricted Subsidiary and execute a Joinder Agreement in
respect of the Subsidiary Guaranty Agreement and the

 

82

 

Security Documents described in
Section 9.11(a) and deliver all of the other instruments, documents,
certificates and opinions required pursuant to Section 9.11(a).

 

SECTION 9.12                                            Use
of Proceeds.  The Borrower shall use
the proceeds of the Extensions of Credit (a) to finance the ESSI Merger
(including the refinancing of certain existing Debt of ESSI) (b) to
finance Permitted Acquisitions, (c) to refinance existing indebtedness of
the Borrower under the Existing Credit Agreement, (d) to finance Capital
Expenditures of the Borrower, and (e) for working capital and general
corporate requirements of the Borrower and its Restricted Subsidiaries,
including the payment of certain fees and expenses incurred in connection with
the ESSI Merger and the other transactions contemplated hereby.

 

SECTION 9.13                                            Conduct
of Business.  Engage only in
businesses in substantially the same fields as the business conducted on the
Closing Date and in lines of business reasonably related thereto.

 

SECTION 9.14                                            Account
Designation.  Designate only accounts
with the Administrative Agent as the location for all deposits and payments
required to be made to the Borrower as buyer pursuant to the terms of the ESSI
Merger Agreement.

 

SECTION 9.15                                            Debt
Rating.  Maintain an up to date debt
rating with both S&P and Moody’s or, in the event one or
both such entities cease to provide any such rating, such other rating agency
or agencies that are reasonably acceptable to the Administrative Agent.

 

ARTICLE X

 

FINANCIAL COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower and its Restricted Subsidiaries on a
Consolidated basis will not:

 

SECTION 10.1                                            Maximum
Total Leverage Ratio:  As of any
fiscal quarter end commencing with the fiscal quarter ending June 30,
2006, during any period set forth below, permit the Total Leverage Ratio to be
greater than the corresponding ratio set forth below:

 

	
  Period

  	
   

  	
  Ratio

  
	
  April 1, 2006 through December 31,
  2006

  	
   

  	
  6.00 to 1.00

  
	
  January 1, 2007 through December 31,
  2007

  	
   

  	
  5.75 to 1.00

  
	
  January 1, 2008 through December 31,
  2008

  	
   

  	
  5.50 to 1.00

  
	
  January 1, 2009 through December 31,
  2009

  	
   

  	
  5.00 to 1.00

  

 

83

 

	
  January 1, 2010 through December 31,
  2010

  	
   

  	
  4.75 to 1.00

  
	
  Thereafter

  	
   

  	
  4.50 to 1.00

  

 

SECTION 10.2                                            Maximum
Senior Leverage Ratio:  As of the end
of any fiscal quarter end, commencing with the fiscal quarter ending June 30,
2006, permit the Senior Leverage Ratio to be greater than 3.50 to 1.00.

 

SECTION 10.3                                            Minimum
Fixed Charge Coverage Ratio:  As of
any fiscal quarter end, commencing with the fiscal quarter ending June 30,
2006, during any period set forth below, permit the ratio of (a) the sum
of (i) EBITDA for the period of four (4) consecutive fiscal quarters
ending on such date minus (ii) Capital Expenditures for such period
to (b) Fixed Charges for the period of four (4) consecutive fiscal
quarters ending on such date to be less than the corresponding ratio set forth
below:

 

	
  Period

  	
   

  	
  Ratio

  
	
  Closing Date through December 31, 2008

  	
   

  	
  1.25 to 1.00

  
	
  Thereafter

  	
   

  	
  1.30 to 1.00

  

 

ARTICLE XI

 

NEGATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower has not and will not and will not
permit any of its Restricted Subsidiaries to:

 

SECTION 11.1                                            Limitations
on Debt.  Create, incur, assume or
suffer to exist any Debt except:

 

(a)                                  the Obligations
(excluding Hedging Obligations permitted pursuant to Section 11.1(b));

 

(b)                                 Debt incurred in
connection with a Hedging Agreement with a counterparty and upon terms and
conditions (including interest rate) reasonably satisfactory to the
Administrative Agent; provided, that any counterparty that is a Lender
or an affiliate of a Lender shall be deemed satisfactory to the Administrative
Agent.

 

(c)                                  Debt existing on the
Closing Date and not otherwise permitted under this Section 11.1, as set
forth on Schedule 11.1 and the renewal, refinancing, extensions and
replacements (but not the increase in the aggregate principal amount) thereof;

 

84

 

(d)                                 Debt of the Borrower
and its Restricted Subsidiaries incurred in connection with Capital Leases in
an aggregate amount not to exceed $50,000,000 on any date of determination;

 

(e)                                  purchase money Debt
of the Borrower and its Restricted Subsidiaries in an aggregate amount not to
exceed $25,000,000 on any date of determination;

 

(f)                                    Guaranty
Obligations in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;

 

(g)                                 other
Debt in an aggregate principal amount not exceeding $50,000,000 at any time
outstanding; provided that not more that $25,000,000 of any Debt
incurred in accordance with this subsection (g) may be secured Debt;

 

(h)                                 Debt of the Borrower
to any Restricted Subsidiary and of any Subsidiary Guarantor to the Borrower or
any other Restricted Subsidiary; provided that if requested by the
Administrative Agent any such loans and advances made by a Borrower or any
Restricted Subsidiary that are evidenced by a promissory note or other
instrument shall be pledged pursuant to the Collateral Agreement;

 

(i)                                     Guaranty
Obligations with respect to Debt permitted pursuant to subsections (a) through
(e) and subsection (j), (k) or (m) of this Section 11.1 (provided
that any Guaranty Obligation with respect to subsection (j) or (k) is
subordinated at least to the same extent as the obligation guaranteed);

 

(j)                                     Subordinated Debt
of the Borrower and its Restricted Subsidiaries:

 

(i)                                     under the Existing
Senior Subordinated Notes and the Senior Subordinated Notes; and

 

(ii)                                  consisting of
high-yield notes or convertible notes (including, without limitation, any
additional Subordinated Debt issued under, or by a supplement to, the Senior
Subordinated Note Indenture or the Existing Senior Subordinated Note Indenture)
(A) containing subordination terms that are, taken as a whole, no less
favorable to the Lenders and the Borrower than the related terms of the
Existing Senior Subordinated Notes or the Senior Subordinated Notes (as reasonably
determined by the Administrative Agent in consultation with the Borrower and
with such determination not to be unreasonably withheld or delayed and, if
requested by the Borrower, evidenced by a certificate addressed to the
Borrower) and (B) issued on terms and conditions that are, taken as a
whole, consistent with the then-current market terms and conditions of such
tenor of subordinated debt (as reasonably determined in good faith by a
Responsible Officer of the Borrower); provided that (1) no Default
or Event of Default exists and is continuing or would be caused by the issuance
thereof, (2) the Administrative Agent shall have received satisfactory
written evidence that the Borrower would be in compliance with all covenants in
this Agreement on a pro  forma basis after giving effect to the
issuance thereof, (3) the maturity date of such Subordinated Debt shall be
no earlier than the Debt (if any) being refinanced and in any event shall be at
least six (6) months after

 

85

 

the Term Loan Maturity Date, and (4) to the extent not used to
refinance the Existing Senior Subordinated Notes and/or the Senior Subordinated
Notes and/or the Senior Unsecured Notes and/or the Convertible Notes (including
an amount equal to a reasonable premium or other reasonable amount paid (as
reasonably determined by the Administrative Agent in consultation with the
Borrower and with such determination not to be unreasonably withheld or delayed
and, if requested by the Borrower, evidenced by a certificate addressed to the
Borrower), and fees and expenses reasonably incurred, in connection with such
refinancing), the Net Cash Proceeds of such Subordinated Debt are applied to
repay outstanding Obligations to the extent required pursuant to Section 4.4(b)(i) and
Section 4.4(b)(vi);

 

(k)                                  Unsecured Debt of DRS
Technologies Canada Company in an aggregate amount not to exceed $25,000,000 on
any date of determination;

 

(l)                                     Debt consisting of
existing letters of credit issued prior to the date hereof for the account of (i) IDT
and/or its Subsidiaries, in an aggregate face amount not to exceed $5,000,000 and (ii) ESSI and/or its Subsidiaries, in an aggregate
face amount not to exceed $5,000,000;

 

(m)                               senior unsecured Debt of
the Borrower and its Restricted Subsidiaries:

 

(i)                                     under the Senior
Unsecured Notes and the Convertible Notes; and

 

(ii)                                  consisting of
high-yield notes or convertible notes (including, without limitation, any
additional senior unsecured Debt issued under, or by a supplement to, the
Convertible Note Indenture or the Senior Unsecured Note Indenture) issued on
terms and conditions that are, taken as a whole, consistent with the
then-current market terms and conditions of such tenor of senior unsecured debt
(as reasonably determined in good faith by a Responsible Officer of the
Borrower); provided that (A) no Default or Event of Default exists
and is continuing or would be caused by the issuance thereof, (B) the
Administrative Agent shall have received satisfactory written evidence that the
Borrower would be in compliance with all covenants in this Agreement on a pro
forma basis after giving effect to the issuance thereof, (C) the
maturity date of such senior unsecured Debt shall be no earlier than the Debt
(if any) being refinanced and in any event shall be at least six (6) months
after the Term Loan Maturity Date, and (D) to the extent not used to
refinance the Senior Unsecured Notes and/or the Convertible Notes (including an
amount equal to a reasonable premium or other reasonable amount paid (as
reasonably determined by the Administrative Agent in consultation with the
Borrower and with such determination not to be unreasonably withheld or delayed
and, if requested by the Borrower, evidenced by a certificate addressed to the
Borrower), and fees and expenses reasonably incurred, in connection with such
refinancing), the Net Cash Proceeds of such senior unsecured Debt are applied
to repay outstanding Obligations to the extent required pursuant to Section 4.4(b)(i) and
Section 4.4(b)(vi); and

 

(n)                                 Debt (i) of any
Person that becomes a Restricted Subsidiary after the Closing Date in
connection with any Permitted Acquisition or (ii) assumed in connection
with any assets acquired in connection with any Permitted Acquisition, and the
refinancing, refunding, renewal

 

86

 

and extension (but not the increase in the aggregate principal amount)
thereof; provided that (A) such Debt exists at the time such Person
becomes a Restricted Subsidiary or such assets are acquired and is not created
in contemplation of, or in connection with, such Person becoming a Restricted
Subsidiary or such assets being acquired, (B) notwithstanding anything to
the contrary contained in this Agreement, neither the Borrower nor any other
Restricted Subsidiary (other than such Person) shall have any liability or
other obligation with respect to such Debt (other than any liability or other
obligation of the Borrower or any Restricted Subsidiary permitted  hereunder which existed prior to the time
that such Person became a Restricted Subsidiary or such asset was acquired) and
(C) the aggregate amount of such Debt incurred in accordance with this Section 11.1(n)
shall not exceed $25,000,000 at any time outstanding;

 

provided, that no agreement or instrument with
respect to Debt permitted to be incurred by this Section 11.1 shall
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Restricted Subsidiary to make any payment to the Borrower or any of its Restricted
Subsidiaries (in the form of dividends, intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.

 

SECTION 11.2                                            Limitations
on Liens.  Create, incur, assume or
suffer to exist any Lien on or with respect to any of its assets or properties
(including, without limitation, shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:

 

(a)                                  Liens for taxes,
assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA or Environmental Laws) not
yet due or as to which the period of grace (not to exceed thirty (30) days), if
any, related thereto has not expired or which are being contested in good faith
and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP;

 

(b)                                 the claims of
materialmen, mechanics, carriers, warehousemen, processors or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of
business, (i) which are not overdue for a period of more than thirty (30)
days or (ii) which are being contested in good faith and by appropriate
proceedings;

 

(c)                                  Liens consisting of
deposits or pledges made in the ordinary course of business in connection with,
or to secure payment of, obligations under workers’ compensation, unemployment
insurance or similar legislation;

 

(d)                                 Liens constituting
encumbrances in the nature of zoning restrictions, easements and rights or
restrictions of record on the use of real property, which in the aggregate are
not substantial in amount and which do not, in any case, detract from the value
of such property or impair the use thereof in the ordinary conduct of business;

 

(e)                                  Liens of the
Administrative Agent for the benefit of the Administrative Agent and the
Lenders and any affiliate of a Lender that is party to a Hedging Agreement
permitted by this Agreement;

 

87

 

(f)                                    Liens not otherwise
permitted by this Section 11.2 and in existence on the  Closing Date and described on Schedule 11.2;

 

(g)                                 Liens securing Debt
permitted under Sections 11.1(d) and (e); provided that (i) such
Liens shall be created substantially simultaneously with the acquisition or lease
of the related asset, (ii) such Liens do not at any time encumber any
property other than the property financed by such Debt, (iii) the amount
of Debt secured thereby is not increased and (iv) the principal amount of
Debt secured by any such Lien shall at no time exceed one hundred percent
(100%) of the original purchase price or lease payment amount of such property
at the time it was acquired;

 

(h)                                 any Lien existing on
any property or asset prior to the acquisition thereof by the Borrower or any
Restricted Subsidiary or existing on any property or asset of any Person that
becomes a Restricted Subsidiary after the date of consummation of such
acquisition prior to the time such Person becomes a Restricted Subsidiary; provided
that (i) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Restricted Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or
assets of the Borrower or any Restricted Subsidiary and (iii) such Lien
shall secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Restricted Subsidiary, as the
case may be, and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

 

(i)                                     deposits to secure
the performance of bids, trade contracts, obligations for utilities, leases,
Bonding Obligations permitted pursuant to Section 11.14 and other
obligations of a like nature (other than obligations for borrowed money or
other Debt), in each case in the ordinary course of business;

 

(j)                                     Liens on the
proceeds of any Permitted Subordinated Debt or senior unsecured Debt incurred
in accordance with Section 11.1(m)(ii) (and the escrow account, if
any, in which such proceeds are held) for the benefit of the holders thereof; provided
that (i) the Administrative Agent shall have approved the terms and
conditions of such Lien, (ii) such proceeds are held in an escrow account
by the trustee with respect to such Debt, (iii) such Lien is terminated
and released upon the earlier to occur of the expiration of the Hold Period and
the consummation of the applicable Designated Acquisition, (iv) such Lien
does not extend to any other assets or property of the Borrower or any Subsidiary
and (v) no Default or Event of Default shall have occurred and be
continuing at the time of, or would result from, issuance of such Debt;

 

(k)                                  (i) Liens of a
collecting bank arising in the ordinary course of business under Section 4-208
of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) Liens
of any depositary bank in connection with statutory, common law and contractual
rights of set-off and recoupment for customary account fees or charges with
respect to any deposit account of the Borrower or any Restricted Subsidiary;

 

(l)                                     other Liens encumbering only real property
(excluding any real property now or hereafter mortgaged in favor of the
Administrative Agent, for the benefit of itself and the

 

88

 

Lenders), securing Debt permitted pursuant to
Section 11.1(g) in an aggregate amount outstanding at any time not to
exceed $10,000,000; and

 

(m)                               other Liens securing
obligations in an aggregate amount not to exceed $25,000,000 at any time.

 

SECTION 11.3                                            Limitations
on Loans, Advances, Investments and Acquisitions.  Purchase, own, invest in or otherwise
acquire, directly or indirectly, any capital stock, interests in any
partnership or joint venture (including, without limitation, the creation or
capitalization of any Restricted Subsidiary), evidence of Debt or other
obligation or security, substantially all or a portion of the business or
assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any
loans, advances or extensions of credit to, or any investment in cash or by
delivery of property in, any Person except:

 

(a)                                  (i) investments
existing on the Closing Date in Restricted Subsidiaries existing on the Closing
Date, (ii) investments in Restricted Subsidiaries or Unrestricted
Subsidiaries formed or acquired after the Closing Date so long as the Borrower
and its Restricted Subsidiaries comply with the applicable provisions of Section 9.11
and Section 11.3(d), and (iii) the other loans, advances and
investments existing on the Closing Date which are described on Schedule 11.3;

 

(b)                                 investments in (i) United
States Dollars, (ii) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality of the
United States government (provided that the full faith and credit of the
United States is pledged in support of those securities) having maturities of
not more than one (1) year from the date of acquisition, (iii) certificates
of deposit and eurodollar time deposits with maturities of one (1) year or
less from the date of acquisition, bankers’ acceptances with maturities not
exceeding six (6) months and overnight bank deposits, in each case, with
any domestic commercial bank having capital and surplus in excess of
$500,000,000 and a Thomson Bank Watch Rating of “B” or better, (iv) repurchase
obligations with a term of not more than one (1) year for underlying
securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper having one of
the two highest ratings obtainable from Moody’s or S&P and in each case
maturing within one (1) year after the date of acquisition, (vi) marketable
direct obligations issued by the United States or any political subdivision of
any state or any public instrumentality thereof having one of the two highest
ratings obtainable from Moody’s or S&P and in each case maturing within one
(1) year after the date of acquisition; and (vii) money market funds
at least ninety-five percent (95%) of the assets of which constitute
investments described in clauses (i) through (vi) of this Section 11.3(b) (such
investments described in items (i) through (vii) above, “Cash
Equivalents”);

 

(c)                                  the ESSI Merger; provided
that the ESSI Merger shall be subject to the conditions set forth in Section 11.4(d);

 

(d)                                 investments by the
Borrower or any Restricted Subsidiary in the form of acquisitions of all or
substantially all of the business or a line of business (whether by the

 

89

 

acquisition of capital stock or other ownership interests, assets or
any combination thereof) of any other Person if each such acquisition meets all
of the following requirements (such acquisitions being, “Permitted
Acquisitions”):

 

(i)                                     the Person to be
acquired shall be in a substantially similar line of business as the Borrower,

 

(ii)                                  evidence of approval
of the acquisition by the acquiree’s board of directors or equivalent governing
body or a copy of the opinion of counsel delivered by legal counsel to the
acquiree in connection with the acquisition which evidences such approval shall
be delivered to the Administrative Agent at the time the documents referred to
in clause (vi) of this Section 11.3(d) are required to be
delivered;

 

(iii)                               a description of the
acquisition in the form customarily prepared by the Borrower shall have been
delivered to the Administrative Agent and the Lenders prior to the consummation
of the acquisition;

 

(iv)                              the Borrower or any
Restricted Subsidiary shall be the surviving Person and no Change in Control
shall have been effected thereby;

 

(v)                                 the Borrower shall
have demonstrated to the Administrative Agent (A) pro  forma
compliance (as of the date of the proposed acquisition and after giving effect
thereto and any Extensions of Credit made or to be made in connection
therewith) with each covenant contained in and in the manner set forth in, Article X,
(B) maintenance of at least $30,000,000 of availability under the
Revolving Credit Facility both before and after giving effect to the proposed
acquisition; and (C) a pro  forma Total Leverage Ratio and
Senior Leverage Ratio (as of the date of the proposed acquisition and after
giving effect thereto and any Extensions of Credit made or to be made in
connection therewith) at least 0.25 below the applicable ratio set forth in Section 10.1
and Section 10.2, respectively, and no Default or Event of Default shall
have occurred and be continuing both before and after giving effect to the
acquisition;

 

(vi)                              the Borrower shall have
delivered to the Administrative Agent such documents reasonably requested by
the Administrative Agent or the Required Lenders (through the Administrative
Agent) pursuant to Section 9.11 to be delivered at the time required
pursuant to Section 9.11 confirming that such Person is or will be a
Subsidiary Guarantor hereunder, and its Subsidiary Guaranteed Obligations incurred
in such capacity are secured by the Security Documents, said documents to
include a favorable opinion of counsel to the Borrower acceptable to the
Administrative Agent addressed to the Administrative Agent and the Lenders with
respect to the Borrower, the Person to be acquired and the acquisition in form
and substance reasonably acceptable to the Administrative Agent; and

 

(vii)                           the
Borrower shall provide such other documents and other information as may be
reasonably requested by the Administrative Agent or the Required Lenders
(through the Administrative Agent) in connection with the proposed acquisition;

 

90

 

(e)                                  Hedging
Agreements permitted pursuant to Section 11.1;

 

(f)                                    loans
or advances made by the Borrower to any Subsidiary Guarantor and made by any
Subsidiary to the Borrower or any Subsidiary Guarantor; provided that if
requested by the Administrative Agent any such loans and advances permitted
hereunder that are evidenced by a promissory note or other instrument shall be
pledged pursuant to the Collateral Agreement;

 

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

 

(h)                                 investments
made after the Closing Date in joint ventures and other business entities (in
each case that are not Subsidiaries) that are engaged in the same line or lines
of business as the Borrower and its Restricted Subsidiaries in an aggregate
amount not to exceed $50,000,000; provided that the original amount of
any such investment shall be deemed reduced by any permanent return of
principal or equity thereon up to but not exceeding the original amount of such
investment;

 

(i)                                     loans
to employees of the Borrower and the Restricted Subsidiaries in their capacity
as such, in an aggregate principal amount not to exceed $1,000,000 at any time
outstanding;

 

(j)                                     any
investment received as consideration, in whole or in part, for any asset sale
otherwise permitted hereunder in an aggregate principal amount not to exceed
$25,000,000; and

 

(k)                                  purchases
of assets in the ordinary course of business.

 

SECTION 11.4                                            Limitations
on Mergers and Liquidation.  Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:

 

(a)                                  any Subsidiary may
merge with the Borrower or any Restricted Subsidiary; provided that (i) in
any merger involving the Borrower, the Borrower shall be the surviving entity, (ii) in
any merger involving a Subsidiary Guarantor (and not involving the Borrower), a
Subsidiary Guarantor shall be the surviving entity and (iii) in any merger
involving a Restricted Subsidiary (and not involving the Borrower or a
Subsidiary Guarantor), a Restricted Subsidiary shall be the surviving entity;

 

(b)                                 any Wholly-Owned
Subsidiary may merge into the Person such Wholly-Owned Subsidiary was formed to
acquire in connection with a Permitted Acquisition (and, in the case of any
merger involving a Restricted Subsidiary, such Person is or becomes a
Restricted Subsidiary);

 

(c)                                  any Subsidiary may
wind-up into the Borrower or any Subsidiary Guarantor; and

 

91

 

(d)                                 the
ESSI Merger; provided, that prior to or upon the consummation thereof:

 

(i)                                     each
of the conditions to the consummation of the ESSI Merger shall have been
satisfied or waived (with the consent of the Administrative Agent, such consent
not to be unreasonably withheld);

 

(ii)                                  no Default or Event
of Default shall have occurred and be continuing or would be in existence after
giving effect to the consummation of the ESSI Merger;

 

(iii)                               the
Administrative Agent shall be satisfied that no material adverse change has
occurred in the business, properties, prospects, operations or condition
(financial or otherwise) of (A) the Borrower and its Subsidiaries, taken
as a whole, or (B) ESSI and its Subsidiaries, taken as a whole; and

 

(iv)                              the
representations and warranties contained in Article VII and in the other
Loan Documents shall be true and correct on and as of the date of consummation
of the ESSI Merger and after giving effect to the ESSI Merger, in each case
with the same effect as if made on and as of such date.

 

SECTION 11.5                                            Limitations
on Sale of Assets.  Convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business
or assets (including, without limitation, the sale of any receivables and
leasehold interests and any sale-leaseback or similar transaction), whether now
owned or hereafter acquired except:

 

(a)                                  the sale of inventory
in the ordinary course of business;

 

(b)                                 the sale of obsolete
assets no longer used or usable in the business of the Borrower or any of its
Subsidiaries;

 

(c)                                  the transfer of
assets to the Borrower or any Subsidiary Guarantor not prohibited by  Section 11.4; provided that the
Borrower or such Subsidiary Guarantor shall not pay more than the fair market
value of such assets as determined at the time of such transfer unless such
payment is made to the Borrower or a Subsidiary Guarantor;

 

(d)                                 the sale or discount
without recourse of accounts receivable arising in the ordinary course of
business in connection with the compromise or collection thereof; and

 

(e)                                  the sale, transfer
and other disposition of assets of the Borrower or its Restricted Subsidiaries
(excluding the sale, transfer or disposition of less than 100% of the equity
ownership interest in a Subsidiary) that are not permitted by any other clause
of this Section 11.5; provided that (i) the aggregate fair
market value of all assets sold, transferred or otherwise disposed of in
reliance upon this clause (e) in the aggregate shall not exceed
$100,000,000 in a Fiscal Year; provided, that such fair market value
shall be determined without regard to any earnout or other contingent payments
based on the financial performance or other results of the assets sold and (ii) the
Borrower or applicable Restricted Subsidiary complies with the provisions of Section 4.4(b).

 

92

 

SECTION 11.6                                            Limitations
on Dividends and Distributions. 
Declare or pay any dividends upon any of its capital stock or other
ownership interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its capital stock or other ownership interests, or
make any distribution of cash, property or assets among the holders of shares
of its capital stock or other ownership interests, or make any change in its
capital structure which change in its capital structure could reasonably be
expected to have a Material Adverse Effect; provided that:

 

(a)                                  the Borrower or any
Restricted Subsidiary may pay dividends in shares of its own capital stock or
other ownership interests;

 

(b)                                 any Restricted
Subsidiary may make dividends or distributions to any Subsidiary Guarantor or
to the Borrower;

 

(c)                                  the
Borrower or any Restricted Subsidiary may make any distribution (whether direct
or indirect and whether in the form of cash, property, securities or otherwise)
to shareholders, employees or other permitted distributees under Borrower’s
1996 Omnibus Plan and other benefit or retirement plans maintained and created
by the Borrower, its Restricted Subsidiaries and its Affiliates;

 

(d)                                 the
Borrower and its Subsidiaries may pay the cash consideration payable in the
ESSI Merger (including any payments in respect of appraisal rights);

 

(e)                                  the
Borrower may declare and pay cash dividends to its shareholders in an aggregate
amount in any Fiscal Year not to exceed $25,000,000;

 

(f)                                    the
Borrower may make cash redemption of Permitted Senior Unsecured Convertible
Debt to the extent permitted pursuant to Section 11.10(e)(iv);

 

(g)                                 the
Borrower or any Restricted Subsidiary may purchase its capital stock or other
ownership interests or options in respect of its capital stock or other
ownership interests to the extent that such purchase is made with the Net Cash
Proceeds of any offering of equity securities of the Borrower;

 

(h)                                 the
Borrower or any Restricted Subsidiary may purchase, redeem, retire or otherwise
acquire for value any capital stock or other ownership interests of the
Borrower or any Restricted Subsidiary held by any current or former officer,
director, employee or consultant of the Borrower or any Restricted Subsidiary
(or any permitted transferees of such persons) pursuant to any equity
subscription agreement, stock option agreement, shareholders’ agreement or
similar agreement; provided that
the aggregate price paid for all such repurchased, redeemed, acquired or
retired capital stock or other ownership interests may not exceed $5,000,000 in
any twelve-month period, provided, that
the Borrower may carry forward and make in a subsequent twelve-month period, in
addition to the amounts permitted for such twelve-month period, the amount of
such repurchase, redemptions or other acquisitions or retirements for value
permitted

 

93

 

to have been made but not made in any preceding twelve-month period up
to a maximum of $10,000,000 in any twelve-month period;

 

(i)                                     the
Borrower or any Restricted Subsidiary may make cash payments in lieu of the
issuance of fractional shares in an amount not to exceed $10,000,000 in any
twelve-month period; and

 

(j)                                     the
repurchase of capital stock or other ownership interests deemed to occur upon
the exercise of stock options to the extent such capital stock or other
ownership interest represents a portion of the exercise price of those stock
options.

 

SECTION 11.7                                            Limitations
on Exchange and Issuance of Capital Stock. 
Issue, sell or otherwise dispose of any class or series of capital stock
or other ownership interest that, by its terms or by the terms of any security
into which it is convertible or exchangeable, is, or upon the happening of an
event or passage of time would be, (a) convertible or exchangeable into
Debt or (b) required to be redeemed or repurchased, including at the
option of the holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due,
except for any class or series of capital stock or other ownership interest
that is not required to be redeemed or repurchased prior to the date which is
one (1) year and one (1) day following the Term Loan Maturity Date.

 

SECTION 11.8                                            Transactions
with Affiliates.  Except for
transactions permitted by Sections 11.3, 11.6 and 11.7 and those listed on Schedule 11.8,
directly or indirectly (a) make any loan or advance to, or purchase or
assume any note or other obligation to or from, any of its officers, directors,
shareholders or other Affiliates, or to or from any member of the immediate
family of any of its officers, directors, shareholders or other Affiliates, or
subcontract any operations to any of its Affiliates or (b) enter into, or
be a party to, any other transaction not described in clause (a) above
with any of its Affiliates, except pursuant to the reasonable requirements of
its business and upon fair and reasonable terms that are (i) fully
disclosed to and approved in writing by (A) the Administrative Agent; provided,
that the aggregate of all such transactions approved by the Administrative
Agent does not exceed $10,000,000, or (B) the Required Lenders, if the
aggregate of all such transactions exceeds $10,000,000, prior to the
consummation thereof and (ii) no less favorable to it than it would obtain
in a comparable arm’s length transaction with a Person not its Affiliate.

 

SECTION 11.9                                            Certain
Accounting Changes; Organizational Documents.  (a) Change its Fiscal Year end, or make
any change in its accounting treatment and reporting practices except as
required by GAAP or (b) amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational documents)
or amend, modify or change its bylaws (or other similar documents) in any
manner materially adverse in any respect to the rights or interests of the
Lenders.

 

SECTION 11.10                                      Amendments;
Payments and Prepayments of Debt.

 

(a)                                  Amend
or modify (or permit the modification or amendment of) any of the material
terms or provisions of any Subordinated Debt (including, without limitation, any

 

94

 

Permitted Subordinated Debt) including, without limitation, any
amendment or modification to (i) increase the interest rate applicable
thereto, (ii) change any date upon which payments of principal or interest
on any Subordinated Debt or other obligations thereunder are due to an earlier
date, (iii) add or make more restrictive any event of default or any
covenant with respect to any Subordinated Debt or any other obligations
thereunder (other than proportional amendments to the covenants thereunder
corresponding to and made in connection with an amendment to the covenants set
forth herein), (iv) change any redemption or prepayment provision of any
Subordinated Debt or any other payment obligations thereunder to an earlier
date or add any additional events requiring such redemption, payment or
prepayment, (v) alter the subordination provisions with respect to
obligations under any Subordinated Debt, (vi) other than as permitted
pursuant to Section 11.2(j),  grant
or suffer any holder of any Subordinated Debt to acquire any Lien or security
interest in any assets of the Borrower or any Subsidiary or any other assets
securing the Obligations, or (vii) change or amend any other term of any
Subordinated Debt or any other obligations thereunder if such change or amendment
would result in a Default or Event of Default under this Agreement or the other
Loan Documents.

 

(b)                                 Cancel,
forgive, make any payment or prepayment on, or redeem or acquire for value
(including, without limitation, (i) by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of paying
when due or (ii) at the maturity thereof except for a Permitted Escrow
Deposit made during the applicable Hold Period) any Subordinated Debt, other
than (A) refinancing of the Existing Senior Subordinated Notes and/or
Senior Subordinated Notes to the extent permitted by Section 11.1(j), (B) regularly
scheduled payments of accrued interest on any Permitted Subordinated Debt, to
the extent such payments are permitted under the subordination provisions
applicable to such Permitted Subordinated Debt and (C) a Permitted Escrow
Redemption.

 

(c)                                  Deliver
any “payment blockage notice” (or substantially equivalent notice) under any
instruments and documents, now or in the future, relating to any Subordinated
Debt without the prior written consent of the Administrative Agent and the
Required Lenders.

 

(d)                                 Amend
or modify (or permit the modification or amendment of) any of the terms or
provisions of any Senior Unsecured Notes, the Convertible Notes, or any other
Debt permitted to be incurred in accordance with Section 11.1(m) in any
respect which would materially adversely affect the rights or interests of the
Administrative Agent and Lenders hereunder.

 

(e)                                  Cancel,
forgive, make any payment or prepayment on (including, without limitation, any
sinking fund payment), or redeem or acquire for value (including, without
limitation, by way of depositing with any trustee with respect thereto money or
securities before due for the purpose of paying when due except for a Permitted
Escrow Deposit made during the applicable Hold Period), the Senior Unsecured
Notes, the Convertible Notes or any other Debt permitted to be incurred in
accordance with Section 11.1(m) (including making any offer to do any of
the foregoing), other than (i) refinancing of the Senior Unsecured Notes,
the Convertible Notes or any other Debt permitted to be incurred in accordance
with Section 11.1(m) to the extent permitted by Section 11.1(m), (ii) regularly
scheduled payments of accrued interest on the Senior Unsecured Notes, the
Convertible Notes or any other Debt permitted to be incurred in accordance with
Section 11.1(m), (iii) conversion of any Permitted Senior Unsecured

 

95

 

Convertible Debt into the applicable capital stock or equity instrument
into which such Debt is to be converted pursuant to the Convertible Note
Indenture or any other documentation governing such Debt, (iv) cash
redemptions or conversions into cash of Permitted Senior Unsecured Convertible
Debt (including, without limitation, any cash redemptions or conversions into
cash in lieu of a conversion of such Debt to the applicable capital stock or
other equity instrument); provided that (A) such redemption or
conversion into cash is pursuant to the terms and conditions of the indenture
governing such Debt, (B) the Administrative Agent shall have received
satisfactory written evidence that the Borrower would be in compliance with all
covenants in this Agreement on a pro  forma basis after giving
effect to such redemption or conversion into cash and (C) no Default or
Event of Default shall have occurred and be continuing at the time thereof or
would result therefrom and (v) a Permitted Escrow Redemption.

 

SECTION 11.11                                      Amendments,
Consents and Waivers under the ESSI Merger Documents.  Materially amend, modify, waive (or permit
the material amendment, modification of or waiver of) any of the terms or
provisions of any of the ESSI Merger Documents without the prior approval of
the Administrative Agent and Required Lenders, which shall not be unreasonably
withheld.

 

SECTION 11.12                                      Restrictive
Agreements.

 

(a)                                  Enter
into any Debt which (i) contains any negative pledge on assets or any
covenants more restrictive than the provisions of Articles IX, X, or XI, or (ii) restricts,
limits or otherwise encumbers its ability to incur Liens on or with respect to
any of its assets or properties other than the assets or properties securing
such Debt (excluding, solely for the purposes of this Section 11.12(a),
any Permitted Subordinated Debt or any other Debt issued pursuant to the
Permitted Debt Issuance or Section 11.1(m), in each case, so long as such
Debt does not restrict, limit or otherwise encumber the ability of the Borrower
or any Restricted Subsidiary to incur Liens in favor of the Administrative
Agent or any Lender).

 

(b)                                 Enter
into or permit to exist any agreement which impairs or limits the ability of
any Restricted Subsidiary to pay dividends to the Borrower.

 

SECTION 11.13                                      Nature
of Business.  Alter in any material
respect the character or conduct of the business conducted by the Borrower and
its Restricted Subsidiaries as of the Closing Date.

 

SECTION 11.14                                      Limitation
on Bonding Obligations. Create, incur, assume or suffer to exist Bonding
Obligations in an aggregate amount in excess of $20,000,000 outstanding at any
time during the term hereof.

 

SECTION 11.15                                      Impairment
of Security Interests. Take or omit to take any action, which might or
would have the result of materially impairing the security interests in favor
of the Administrative Agent for the ratable benefit of itself and the Lenders
with respect to the Collateral or grant to any Person (other than the
Administrative Agent for the benefit of itself and the Lenders pursuant to the
Security Documents) any interest whatsoever in the Collateral, except for Liens
permitted under Section 11.2 and asset sales permitted under Section 11.5.

 

96

 

SECTION 11.16                                      Foreign
Subsidiaries. Permit Laurel Technologies Partnership (d/b/a DRS Laurel
Technologies) or MSSC Company LP or any of their respective Subsidiaries to
become Foreign Subsidiaries.

 

ARTICLE XII

 

DEFAULT AND REMEDIES

 

SECTION 12.1                                            Events
of Default.  Each of the following
shall constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment or order of any court or any order, rule or
regulation of any Governmental Authority or otherwise:

 

(a)                                  Default in Payment
of Principal of Loans and Reimbursement Obligations.  The Borrower shall default in any payment of
principal of any Loan, Note or Reimbursement Obligation when and as due
(whether at maturity, by reason of acceleration or otherwise).

 

(b)                                 Other Payment
Default.  The Borrower shall default
in the payment when and as due (whether at maturity, by reason of acceleration
or otherwise) of interest on any Loan, Note or Reimbursement Obligation or the
payment of any other Obligation and such default shall continue for a period of
three (3) Business Days.

 

(c)                                  Misrepresentation.  Any representation or warranty made or deemed
to be made by the Borrower or any of its Restricted Subsidiaries under this
Agreement, any other Loan Document or any amendment hereto or thereto, shall at
any time prove to have been incorrect or misleading in any material respect
when made or deemed made.

 

(d)                                 Default in
Performance of Certain Covenants. 
The Borrower shall default in the performance or observance of any
covenant or agreement contained in Sections 6.4, 8.1, 8.2, or 8.5(e)(i) or
Articles X or XI.

 

(e)                                  Default in
Performance of Other Covenants and Conditions.  The Borrower or any Restricted Subsidiary
shall default in the performance or observance of any term, covenant, condition
or agreement contained in this Agreement (other than as specifically provided
for otherwise in this Section 12.1) or any other Loan Document and such
default shall continue for a period of thirty (30) days after written notice
thereof has been given to the Borrower by the Administrative Agent.

 

(f)                                    Hedging
Agreement.  The Borrower or any of
its Restricted Subsidiaries shall default in the performance or observance of
any terms, covenant, condition or agreement (after giving effect to any
applicable grace or cure period) under any Hedging Agreement and such default
causes the termination of such Hedging Agreement or permits any counterparty to
such Hedging Agreement to terminate any such Hedging Agreement.

 

97

 

(g)                                 Debt Cross-Default.  The Borrower or any of its Restricted
Subsidiaries shall (i) default in the payment of any Debt (other than the
Loans or any Reimbursement Obligation) the aggregate outstanding amount of
which Debt is in excess of $35,000,000 beyond the period of grace if any,
provided in the instrument or agreement under which such Debt was created, or (ii) default
in the observance or performance of any other agreement or condition relating
to any Debt (other than the Loans or any Reimbursement Obligation) the
aggregate outstanding amount of which Debt is in excess of $35,000,000 or
contained in any 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 Debt (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, any such Debt to
become due prior to its stated maturity (any applicable grace period having
expired).

 

(h)                                 Other
Cross-Defaults.  The Borrower or any
of its Restricted Subsidiaries shall default in the payment when due, or in the
performance or observance, of any obligation or condition of any Material
Contract (including, without limitation, the ESSI Merger Agreement), which such
default, either individually, or in the aggregate with all other outstanding
defaults under other Material Contracts (including, for purposes hereof, the
effect of termination of any other Material Contracts that could reasonably be
expected to be terminated as a result of such existing default or defaults),
could reasonably be expected to have a Material Adverse Effect.

 

(i)                                     Change in Control.  (i) Any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act
of 1934, as amended) shall obtain ownership or control in one or more series of
transactions of more than thirty percent (30%) of the common stock or thirty
percent (30%) of the voting power of the Borrower entitled to vote in the
election of members of the board of directors of the Borrower, (ii) there
shall have occurred under any indenture or other instrument evidencing any Debt
in excess of $35,000,000 any “change in control” (as defined in such indenture
or other evidence of Debt) obligating the Borrower to repurchase, redeem or
repay all or any part of the Debt or capital stock or other ownership interest
provided for therein, (iii) there shall have occurred any “Change of
Control” (or equivalent term) under and/or as defined in any Permitted
Subordinated Debt, including, without limitation, the Existing Senior
Subordinated Notes, the Senior Subordinated Notes, the Senior Subordinated Note
Indenture or any document executed in connection therewith or (iv) there
shall have occurred any “Change of Control” (or equivalent term as used in the
Senior Unsecured Note Indenture or the Convertible Note Indenture or any other
indenture entered into in connection with an issuance of Debt under Section 11.1(m))
or “Fundamental Change” (or equivalent term as used in the Senior Unsecured
Note Indenture or the Convertible Note Indenture or any other indenture entered
into in connection with an issuance of Debt under Section 11.1(m)) under
and/or as defined in the Senior Unsecured Notes, the Convertible Notes, the
Senior Unsecured Note Indenture, the Convertible Note Indenture, any notes or
indentures entered into in connection with an issuance of Debt under Section 11.1(m)
or any document executed in connection therewith (any such event, a “Change
in Control”).

 

(j)                                     Voluntary
Bankruptcy Proceeding.  The Borrower
or any Restricted Subsidiary shall (i) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in

 

98

 

effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv) apply
for or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (v) be generally unable to, or admit in writing its inability to,
pay its debts as they become due, (vi) make a general assignment for the
benefit of creditors, or (vii) take any corporate action for the purpose
of authorizing any of the foregoing.

 

(k)                                  Involuntary
Bankruptcy Proceeding.  A case or
other proceeding shall be commenced against the Borrower or any Restricted
Subsidiary in any court of competent jurisdiction seeking (i) relief under
the federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like for the Borrower or any Restricted
Subsidiary or for all or any substantial part of their respective assets, domestic
or foreign, and such case or proceeding shall continue without dismissal or
stay for a period of sixty (60) consecutive days, or an order granting the
relief requested in such case or proceeding (including, but not limited to, an
order for relief under such federal bankruptcy laws) shall be entered.

 

(l)                                     Failure of
Agreements.  Any provision of this
Agreement or any provision of any other Loan Document shall for any reason
cease to be valid and binding on the Borrower or any Restricted Subsidiary
party thereto or any such Person shall so state in writing, or any Loan
Document shall for any reason cease to create a valid and perfected first
priority Lien on, or security interest in, any of the collateral purported to
be covered thereby, in each case other than in accordance with the express
terms hereof or thereof.

 

(m)                               Termination Event.  Except where the failure to do so could not
reasonably be expected to create a Material Adverse Effect, the occurrence of
any of the following events:  (i) the
Borrower or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers
under one or more Multiemployer Plans makes a complete or partial withdrawal
from any such Multiemployer Plan and the plan sponsor of such Multiemployer
Plans notifies such withdrawing employer that such employer has incurred a
withdrawal liability.

 

(n)                                 Judgment.  A judgment or order for the payment of money
which causes the aggregate amount of all such judgments to exceed $15,000,000
in any Fiscal Year (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), shall be entered
against the Borrower or any of its Restricted Subsidiaries by any court and
such judgment or order shall continue for a period of thirty (30) days without
having been bonded pending appeal, discharged or stayed.

 

99

 

(o)                                 Environmental.  Any one or more Environmental Claims shall
have been asserted against the Borrower or any of its Restricted Subsidiaries;
the Borrower and its Restricted Subsidiaries would be reasonably likely to
incur liability as a result thereof; and such liability would be reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect.

 

(p)                                 Government
Contracts. Any of the Borrower, its Restricted Subsidiaries or its
Affiliates, (i) is debarred or suspended by any Governmental Authority, or
has been issued a notice of proposed debarment or notice of proposed suspension
by any Governmental Authority; (ii) is the subject of an investigation by
any Governmental Authority (other than a normal and customary review) involving
or possibly involving fraud or willful misconduct which could reasonably be
expected to result in criminal liability, civil liability or expense in excess
of $10,000,000, suspension, debarment or any other adverse administrative
action; or (iii) is a party to any Material Contract with any Governmental Authority which has
been actually terminated due to the Borrower’s, such Restricted Subsidiary’s or
such Affiliate’s alleged fraud or willful misconduct.

 

SECTION 12.2                                            Remedies.  Upon the occurrence of an Event of Default
(which Event of Default has not previously been cured or waived in accordance
with Section 14.11), with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower:

 

(a)                                  Acceleration; Termination
of Facilities.  Declare the principal
of and interest on the Loans, the Notes and the Reimbursement Obligations at
the time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented or
shall be entitled to present the documents required thereunder) and all other Obligations
(other than Hedging Obligations), to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Credit Facility and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided,
that upon the occurrence of an Event of Default specified in Section 12.1(j)
or (k), the Credit Facility shall be automatically terminated and all
Obligations (other than Hedging Obligations) shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding.

 

(b)                                 Letters of Credit.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit (which cash collateral shall be deposited in the applicable Permitted
Currency in which each such Letter of Credit is denominated).  Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit

 

100

 

shall have expired or been fully drawn upon, if any, shall be applied
to repay the other Obligations on a pro  rata basis.  After all such Letters of Credit shall have
expired or been fully drawn upon, the Reimbursement Obligation shall have been
satisfied and all other Obligations shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower.

 

(c)                                  Rights of
Collection.  Exercise on behalf of
the Lenders all of its other rights and remedies under this Agreement, the
other Loan Documents and Applicable Law, in order to satisfy all of the
Borrower’s Obligations.

 

SECTION 12.3                                            Rights
and Remedies Cumulative; Non-Waiver; etc

 

.  The enumeration of the rights
and remedies of the Administrative Agent and the Lenders set forth in this
Agreement is not intended to be exhaustive and the exercise by the
Administrative Agent and the Lenders of any right or remedy shall not preclude
the exercise of any other rights or remedies, all of which shall be cumulative,
and shall be in addition to any other right or remedy given hereunder or under
the other Loan Documents or that may now or hereafter exist at law or in equity
or by suit or otherwise.  No delay or
failure to take action on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege or shall be construed to be a waiver of any Event of
Default.  No course of dealing between
the  Borrower, the Administrative Agent
and the Lenders or their respective agents or employees shall be effective to
change, modify or discharge any provision of this Agreement or any of the other
Loan Documents or to constitute a waiver of any Event of Default.

 

SECTION 12.4                                            Judgment
Currency.

 

(a)                                  The
obligation of the Borrower to make payments of any amounts payable hereunder or
pursuant to any other Loan Document in the currency specified for such payment
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment, which is expressed in or converted into any other currency,
except to the extent that such tender or recovery shall result in the actual
receipt by each of the Administrative Agent and Lenders of the full amount of the
particular Permitted Currency expressed to be payable pursuant to the
applicable Loan Document.  The
Administrative Agent shall, using all amounts obtained or received from the
Borrower pursuant to any such tender or recovery in payment of principal of and
interest on the Obligations, promptly purchase the applicable currency at the
most favorable spot exchange rate determined by the Administrative Agent to be
available to it.  The obligation of the
Borrower to make payments in the applicable currency shall be enforceable as an
alternative or additional cause of action solely for the purpose of recovering
in the applicable currency the amount, if any, by which such actual receipt
shall fall short of the full amount of the currency expressed to be payable
pursuant to the applicable Loan Document.

 

(b)                                 Without
limiting Section 12.4(a), the Borrower shall indemnify and hold harmless
the Administrative Agent, the Lenders and each Issuing Lender, as applicable,
against any loss incurred by the Administrative Agent, any Lender or any
Issuing Lender as a result of any payment or recovery described in Section 12.4(a) and
as a result of any variation having occurred

 

101

 

in rates of exchange between the date of any such amount becoming due
under this Agreement or any other Loan Document and the date of actual payment
thereof.  The foregoing indemnity shall
constitute a separate and independent obligation of the Borrower and shall
continue in full force and effect notwithstanding any such payment or recovery.

 

ARTICLE XIII

 

THE ADMINISTRATIVE AGENT

 

SECTION 13.1                                            Appointment.  Each of the Lenders hereby irrevocably
designates and appoints Wachovia as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each Lender
irrevocably authorizes Wachovia, as Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Agreement or the other Loan
Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent.  Any reference to
the Administrative Agent in this Article XIII shall be deemed to refer to
the Administrative Agent solely in its capacity as Administrative Agent and not
to the Person serving as the Administrative Agent in such Person’s capacity as
a Lender.  In performing its functions
and duties under this Agreement and each of the other Loan Documents or in
connection with them and in respect of anything relating to them, the
Administrative Agent shall act solely as the administrative agent of (but not
as trustee for (except to the extent specifically required pursuant to the Security
Documents)) the Lenders, and the Administrative Agent shall not have any
fiduciary duty towards any Person (except as expressly referred to above) or be
under any obligation other than those expressly provided for in this Agreement
and any of the other Loan Documents.

 

The Administrative Agent shall not in any way whatsoever assume, nor
shall it be deemed to have assumed, any obligation as agent of or trustee for,
or any relationship of agency or trust with or for, the Borrower or any
Subsidiary.

 

SECTION 13.2                                            Delegation
of Duties.  The Administrative Agent
may execute any of its respective duties under this Agreement and the other
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Administrative Agent with reasonable care.

 

SECTION 13.3                                            Exculpatory
Provisions.  Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for actions
occasioned

 

102

 

solely by its or such Person’s own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer thereof contained in this Agreement or
the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or the other Loan Documents
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for any failure of
the Borrower or any of its Subsidiaries to perform its obligations hereunder or
thereunder.  The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.

 

SECTION 13.4                                            Reliance
by the Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. 
The Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless such Note shall have been transferred in
accordance with Section 14.10.  The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement and the other Loan Documents unless it shall
first receive such advice or concurrence of the Required Lenders (or, when
expressly required hereby or by the relevant other Loan Documents, all the
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the Notes in accordance with a request of the Required Lenders
(or, when expressly required hereby, all the Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.

 

SECTION 13.5                                            Notice
of Default.  The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless it has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the
Lenders.  The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, when expressly required
hereby, all the Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders, except to the
extent that other provisions of this Agreement expressly require that any such
action be taken or not be taken only

 

103

 

with the consent and authorization or the request of the Lenders or
Required Lenders, as applicable.

 

SECTION 13.6                                            Non-Reliance
on the Administrative Agent and Other Lenders.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its respective officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of the  Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender.  Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries and made
its own decision to make its Loans and issue or participate in Letters of
Credit hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries.  Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder or by the other Loan
Documents, the Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.

 

SECTION 13.7                                            Indemnification.  The Lenders severally agree to indemnify the
Administrative Agent in its capacity as such and (to the extent that the
Administrative Agent shall be entitled to be, and shall not have been,
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to the respective amounts of their Revolving
Credit Commitment Percentages and/or applicable Term Loan Percentages, as
applicable, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or
any documents, reports or other information provided to the Administrative
Agent or any Lender or contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the
Administrative Agent’s bad faith, gross negligence or willful misconduct.  The agreements in this Section 13.7
shall survive the payment of the Loans,

 

104

 

any Reimbursement Obligation and all other amounts payable hereunder
and the termination of this Agreement.

 

SECTION 13.8                                            The
Administrative Agent in Its Individual Capacity.  The Person serving as the Administrative
Agent and its respective Subsidiaries and Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Person serving as Administrative Agent were not the Administrative
Agent hereunder.  With respect to any
Loans made or renewed by it and any Note issued to it and with respect to any
Letter of Credit issued by it or participated in by it, the Person serving as
the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms “Lender” and
“Lenders” shall include the Person serving as the Administrative Agent in its
individual capacity.

 

SECTION 13.9                                            Resignation
of the Administrative Agent; Successor Administrative Agent.  Subject to the appointment and acceptance of
a successor as provided below, the Administrative Agent may resign at any time
by giving thirty (30) days notice thereof to the Lenders and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent, which
successor shall have minimum capital and surplus of at least $500,000,000 and,
so long as no Default or Event of Default has occurred and is continuing, be
reasonably acceptable to the Borrower. 
If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the Administrative Agent’s giving of notice of resignation, then the
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000 and, so long as no Default or Event of Default has
occurred and is continuing, be reasonably acceptable to the Borrower.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder.  After
any retiring Administrative Agent’s resignation hereunder as Administrative
Agent, the provisions of this Section 13.9 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Administrative Agent.

 

SECTION 13.10                                      Trustee
Powers.  Except as otherwise expressly
provided in this Agreement and any of the other Loan Documents, in its capacity
as trustee under certain of the Security Documents the Administrative Agent
shall have:

 

(a)                                  the
benefit of all the provisions in this Article XIII and all other agency, indemnification
and exculpatory provisions set forth in any other Loan Documents;

 

(b)                                 all
the powers of an absolute owner of the Lien constituted by such Security
Documents;

 

(c)                                  the
power of appointing new and/or additional trustees; and

 

105

 

(d)                                 all
the powers and discretions conferred on trustees by the Trustee Act 1925 of the
laws of England (to the extent not inconsistent with this Agreement and the
other Loan Documents) and on the Administrative Agent by this Agreement and the
other Loan Documents (including without limitation the power to invest all
monies which are received by the Administrative Agent under the trusts
contained in such Security Documents in its name or under its control in any
investment for the time being authorized by United States, English or other
applicable law for the investment by trustees of trust money or in any other
investments which may be selected by the Administrative Agent).  Additionally, the Administrative Agent shall
have the power to place such monies on deposit in its name or under its control
at such bank or institution (including at the Administrative Agent) and on such
terms as the Administrative Agent may determine.

 

SECTION 13.11                                      Documentation
Agents and Syndication Agent.  Other
than as expressly provided herein, the Documentation and Syndication Agents, in
their respective capacities as documentation and syndication agents, shall have
no duties or responsibilities under this Agreement or any other Loan Document.

 

SECTION 13.12                                      Collateral
and Guaranty Matters.  The Lenders
irrevocably authorize the Administrative Agent, at its option and in its
discretion, to:

 

(a)                                  release
any Lien on any Collateral granted to or held by the Administrative Agent, for
the ratable benefit of itself and the Lenders, under any Loan Document (i) upon
repayment of the outstanding principal of and all accrued interest on the Loans
and the Reimbursement Obligations, payment of all outstanding fees and expenses
hereunder, the termination of the Lenders’ Commitments and the expiration or
termination of all Letters of Credit, (ii) that is sold or to be sold as
part of or in connection with any sale permitted hereunder or under any other
Loan Document, or (iii) subject to Section 14.11, if approved,
authorized or ratified in writing by the Required Lenders;

 

(b)                                 to
subordinate or release any Lien on any Collateral granted to or held by the
Administrative Agent under any Loan Document to the holder of any Permitted
Lien; and

 

(c)                                  to
release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty Agreement if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.

 

Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to
release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty Agreement pursuant to this Section 13.12.

 

106

 

ARTICLE XIV

 

MISCELLANEOUS

 

SECTION 14.1                                            Notices.

 

(a)                                  Method of
Communication.  Except as otherwise
provided in this Agreement, all notices and communications hereunder shall be
in writing, or by telephone subsequently confirmed in writing.  Any notice shall be effective if delivered by
hand delivery or sent via telecopy, recognized overnight courier service or
certified mail, return receipt requested, and shall be presumed to be received
by a party hereto (i) on the date of delivery if delivered by hand or sent
by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date
sent by certified mail, return receipt requested.  A telephonic notice to the Administrative
Agent as understood by the Administrative Agent will be deemed to be the
controlling and proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.

 

(b)                                 Addresses for
Notices.  Notices to any party shall
be sent to it at the following addresses, or any other address as to which all
the other parties are notified in writing.

 

	
  If to the Borrower:

  	
   

  	
  DRS Technologies, Inc.

  
	
   

  	
   

  	
  Corporate Headquarters

  
	
   

  	
   

  	
  5 Sylvan Way

  
	
   

  	
   

  	
  Parsippany, New Jersey 07054

  
	
   

  	
   

  	
  Attention: Richard Schneider, Executive Vice-President Donald
  Hardman, Treasurer

  
	
   

  	
   

  	
  Telephone No.: (973) 898-6021

  
	
   

  	
   

  	
  Telecopy No.: (973) 898-0952

  
	
   

  	
   

  	
   

  
	
  If to Wachovia as

  	
   

  	
  Wachovia Bank, National Association

  
	
  Administrative Agent:

  	
   

  	
  Charlotte Plaza, CP-8

  
	
   

  	
   

  	
  201 South College Street

  
	
   

  	
   

  	
  Charlotte, North Carolina 28288-0680

  
	
   

  	
   

  	
  Attention: Syndication Agency Services

  
	
   

  	
   

  	
  Telephone No.: (704) 374-2698

  
	
   

  	
   

  	
  Telecopy No.: (704) 383-0288

  
	
   

  	
   

  	
   

  
	
  If to any Lender:

  	
   

  	
  To the address set forth in the Register

  

 

(c)                                  Administrative
Agent’s Office.  The Administrative
Agent hereby designates its office located at the address set forth above, or
any subsequent office which shall have been specified for such purpose by
written notice to the Borrower and Lenders, as the Administrative Agent’s
Office referred to herein, to which payments due are to be made and at which
Loans will be disbursed.

 

107

 

SECTION 14.2                                            Expenses;
Indemnity.  The Borrower will (a) pay
all reasonable out-of-pocket expenses of the Administrative Agent in connection
with (i) the preparation, execution and delivery of this Agreement and
each other Loan Document, whenever the same shall be executed and delivered,
including, without limitation, all out-of-pocket syndication and due diligence
expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and (ii) the preparation, execution and delivery of
any waiver, amendment or consent by the Administrative Agent or the Lenders
relating to this Agreement or any other Loan Document, including, without
limitation, reasonable fees and disbursements of counsel for the Administrative
Agent, (b) after the occurrence and during the continuance of an Event of
Default, pay all reasonable out-of-pocket expenses of the Administrative Agent,
and each Lender actually incurred in connection with the administration and
enforcement of any rights and remedies of the Administrative Agent and Lenders
under the Credit Facility including, without limitation, in connection with any
workout, restructuring, bankruptcy or other similar proceeding, creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Security Document, enforcing any Obligations of or collecting any
payments due from the Borrower or any Subsidiary Guarantor by reason of an
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty Agreement, consulting with appraisers, accountants,
engineers, attorneys and other Persons concerning the nature, scope or value of
any right or remedy of the Administrative Agent or any Lender hereunder or
under any other Loan Document or any factual matters in connection therewith,
which expenses shall include without limitation the reasonable fees and
disbursements of such Persons), and (c) defend, indemnify and hold
harmless the Administrative Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, attorneys, advisors, agents,
officers and directors, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans or any Reimbursement
Obligations) be suffered by any such Person in connection with any claim
(including, without limitation, any Environmental Claims), investigation,
litigation or other proceeding (whether brought by any third party, the
Borrower or any Subsidiary Guarantor and whether or not the Administrative
Agent or any Lender is a party thereto) and the prosecution and defense
thereof, arising out of or in any way connected with the Loans, this Agreement,
any other Loan Document, or any documents, reports or other information
provided to the Administrative Agent or any Lender or contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby, including, without limitation, reasonable attorney’s and consultant’s
fees, except to the extent that any of the foregoing directly result from the
gross negligence or willful misconduct of the party seeking indemnification
therefor.

 

SECTION 14.3                                            Set
off.

 

(a)                                  In
addition to any rights now or hereafter granted under Applicable Law and not by
way of limitation of any such rights, upon and after the occurrence of any
Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 14.10, and
the Affiliates of each of them, are hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply

 

108

 

any and all deposits (general or special, time or demand, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
the Lenders, or any such assignee or participant or Affiliate to or for the
credit or the account of the Borrower against and on account of the Obligations
irrespective of whether or not (i) the Lenders shall have made any demand
under this Agreement or any of the other Loan Documents or (ii) the
Administrative Agent shall have declared any or all of the Obligations to be
due and payable as permitted by Section 12.2 and although such Obligations
shall be contingent or unmatured. 
Notwithstanding the preceding sentence, each Lender agrees to notify
within three (3) Business Days the Borrower and the Administrative Agent
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application.

 

(b)                                 Any
amount to be set off pursuant to Section 14.3(a) shall be denominated
in Dollars and any amount denominated in an Alternative Currency shall be in an
amount equal to the Dollar Amount of such amount at the most favorable spot
exchange rate determined by the Administrative Agent to be available to it;
provided that if at the time of any such determination no such spot exchange
rate can reasonably be determined, the Administrative Agent may use any
reasonable method as it deems applicable to determine such rate, any such
determination to be conclusive absent manifest error.

 

(c)                                  Each
Lender and any assignee or participant of such Lender in accordance with Section 14.10
are hereby authorized by the Borrower to combine currencies, as deemed
necessary by such Person, in order to effect any set-off pursuant to Section 14.3(a).

 

SECTION 14.4                                            Governing
Law.  This Agreement, the Notes and
the other Loan Documents, unless otherwise expressly set forth therein, shall
be governed by, construed and enforced in accordance with, the laws of the
State of New York (including Section 5-1401 and Section 5-1402 of the
General Obligations Law of the State of New York), without regard to the
conflicts of law provisions of such state.

 

SECTION 14.5                                            Jurisdiction
and Venue.

 

(a)                                  Jurisdiction.  The Borrower hereby irrevocably consents to
the personal jurisdiction of the state and federal courts located in New York,
New York (and any courts from which an appeal from any of such courts must or
may be taken), in any action, claim or other proceeding arising out of any
dispute in connection with this Agreement, the Notes and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. 
The Borrower hereby irrevocably consents to the service of a summons and
complaint and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the Notes
or the other Loan Documents, any rights or obligations hereunder or thereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 14.1.  Nothing in this Section 14.5 shall
affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding
against the Borrower or its properties in the courts of any other
jurisdictions.

 

109

 

(b)                                 Venue.  The Borrower hereby irrevocably waives any
objection it may have now or in the future to the laying of venue in the
aforesaid jurisdiction in any action, any dispute, claim or controversy arising
out of, connected with or relating to this Agreement or any other Loan Document
(“Disputes”) or the rights and obligations of the parties hereunder or
thereunder.  The Borrower irrevocably
waives, in connection with such action, claim or proceeding, any plea or claim
that the action, claim or other proceeding has been brought in an inconvenient
forum.

 

SECTION 14.6                                            Waiver
of Jury Trial.

 

(a)                                  Jury Trial.  THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

 

(b)                                 Preservation
of Certain Remedies.  The parties
hereto and the other Loan Documents preserve, without diminution, certain
remedies that such Persons may employ or exercise freely, either alone, in
conjunction with or during a Dispute. 
Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted in the Loan Documents or under Applicable Law or by judicial
foreclosure and sale, including a proceeding to confirm the sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (iv) when applicable, a judgment by confession
of judgment.  Preservation of these
remedies does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.

 

SECTION 14.7                                            Reversal
of Payments.  To the extent the
Borrower makes a payment or payments to the Administrative Agent for the
ratable benefit of the Lenders or the Administrative Agent receives any payment
or proceeds of the Collateral which payments or proceeds or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or otherwise required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause (whether by demand, settlement, litigation or otherwise), then,
to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by the
Administrative Agent.

 

110

 

SECTION 14.8                                            Injunctive
Relief; Punitive Damages.

 

(a)                                  The Borrower
recognizes that, in the event the Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement, any
remedy of law may prove to be inadequate relief to the Lenders. Therefore, the
Borrower agrees that the Lenders, at the Lenders’ option, shall be entitled to
seek temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.

 

(b)                                 The Administrative
Agent, the Lenders and the Borrower (on behalf of itself and its Subsidiaries)
hereby agree that no such Person shall have a remedy of punitive, exemplary or
consequential damages against any other party to a Loan Document and each such
Person hereby waives any right or claim to punitive, exemplary or consequential
damages that they may now have or may arise in the future in connection with
any Dispute.

 

SECTION 14.9                                            Accounting
Matters.  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time, provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance therewith.

 

SECTION 14.10                                      Successors
and Assigns; Participations.

 

(a)                                  Benefit of
Agreement.  This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent
and the Lenders, all future holders of the Notes, and their respective
successors and assigns, except that the Borrower shall not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of each Lender (and any attempted such assignment or transfer without
such consent shall be null and void).

 

(b)                                 Assignment by
Lenders.  Each Lender may, in the
ordinary course of its business and in accordance with Applicable Law, sell or
assign to any Lender, any Affiliate of a Lender or in the case of the Term
Loans any Approved Fund and with the consent of the Administrative Agent and,
so long as no Default or Event of Default has occurred and is continuing, the
Borrower, which consents shall not be unreasonably withheld or delayed, assign
to one or more other Eligible Assignees (any of the forgoing assignees or
purchasers, a “Purchasing Lender”) all or a portion of its interests,
rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Notes held by it); provided that:

 

111

 

(i)                                     each such
assignment shall be of a constant, and not a varying, percentage of the
Revolving Credit Commitment and/or the Term Loan Commitment, as applicable, of
the assigning Lender’s rights and obligations under this Agreement;

 

(ii)                                  if
less than all of the assigning Lender’s Revolving Credit Commitment or Term
Loan Commitment, as applicable, is to be assigned, the Commitment so assigned
shall not be less than $5,000,000 with respect to the Revolving Credit Facility
and $1,000,000 with respect to the Term Loan Facility (or otherwise agreed by
the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, consented to by the Borrower, which consent by the
Borrower will not be unreasonably withheld or delayed), unless such sale
or assignment is made to an existing Lender, to an Affiliate thereof, or (with
respect to any Term Loan) to an Approved Fund, in which case no minimum amount
shall apply; provided further that all simultaneous assignments to any
proposed assignee and any Approved Funds that are Affiliates of such assignee
shall be aggregated and treated as a single assignment for purposes of
determining compliance with the minimum assignment amount specified in this
paragraph;

 

(iii)                               the Purchasing Lender
shall have delivered to the Administrative Agent all United States Internal
Revenue Service Forms required pursuant to Section 5.13(e) and all of
the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance substantially in the form of Exhibit G
(an “Assignment and Acceptance”), together with (to the extent requested
by any Purchasing Lender) any Note or Notes subject to such assignment;

 

(iv)                              no assignment of a
Revolving Credit Commitment, or participation in L/C Obligations or Swingline
Loans shall be made without the prior written consent of the Administrative
Agent, the Swingline Lender, each Issuing Lender and (so long as no Default or
Event of Default has occurred and is continuing) the Borrower (which consents
shall not be unreasonably withheld);

 

(v)                                 where consent of the
Borrower to an assignment to a Purchasing Lender is required hereunder
(including consent to an assignment to an Approved Fund), the Borrower shall be
deemed to have given its consent five (5) Business Days after the date
written notice thereof has been delivered by the assigning Lender (through the
Administrative Agent) unless such consent is expressly refused by the Borrower
prior to such fifth (5th) Business Day;

 

(vi)                              such assignment shall
not, without the consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
or qualify the Loans or the Notes under the blue sky laws of any state; and

 

(vii)                           the assigning Lender shall
pay to the Administrative Agent an assignment fee of $2,500 upon the execution
by such Lender of the Assignment and Acceptance;

 

112

 

provided that no such fee shall be payable
upon any assignment by a Lender to an Affiliate thereof; and provided  further
that, in any case of contemporaneous assignments by a Lender (including a group
of affiliated Lenders that are funds managed by the same investment advisor) to
a single assignee or more than one fund managed by the same investment advisor
(which funds are not then Lenders hereunder), only a single $2,500 fee shall be
payable for all such contemporaneous assignments.

 

Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof
(unless otherwise agreed to by the Administrative Agent), (A) the
Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder and (B) the Lender thereunder shall, to the extent
provided in such assignment, be released from its obligations under this
Agreement.  Notwithstanding the
foregoing, in the case of an assignment to a Purchasing Lender, which is,
immediately prior to such assignment, an Affiliate of the assigning Lender,
such assignment shall be effective between such Lender and its Affiliate
immediately without compliance with the conditions for assignment under this Section 14.10(b),
but shall not be effective with respect to the Borrower, the Administrative
Agent, each Issuing Lender, the Swingline Lender or any Lender, and the
Borrower, the Administrative Agent, each Issuing Lender, the Swingline Lender
and each Lender shall be entitled to deal solely with such assigning Lender
under any such assignment, in each case, until the conditions for assignment
under this Section 14.10(b) have been complied with.

 

(c)                                  Rights and Duties
Upon Assignment.  By executing and
delivering an Assignment and Acceptance, the assigning Lender thereunder and
the Purchasing Lender thereunder confirm to and agree with each other and the
other parties hereto as set forth in such Assignment and Acceptance.

 

(d)                                 Register.  The Administrative Agent shall maintain a
copy of each Assignment and Acceptance and each Lender Addition and
Acknowledgement Agreement delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the “Register”).  The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The entries in the Register
applicable to any Lender shall be available for inspection by the Borrower or
such Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

(e)                                  Issuance of New
Notes.  Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and a Purchasing
Lender together with any Note or Notes (if applicable) subject to such
assignment and (if applicable) the written consent to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit G:

 

(i)                                     accept such
Assignment and Acceptance;

 

113

 

(ii)                                  record the
information contained therein in the Register;

 

(iii)                               give prompt notice
thereof to the Lenders and the Borrower; and

 

(iv)                              promptly deliver a copy
of such Assignment and Acceptance to the Borrower.

 

Within five (5) Business Days after receipt of notice, the
Borrower shall execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of such
Purchasing Lender (to the extent requested thereby) in amounts equal to the
Revolving Credit Commitment and/or Term Loan Commitment assumed by it pursuant
to such Assignment and Acceptance and a new Note or Notes to the order of the
assigning Lender (to the extent requested thereby) in an amount equal to the
Revolving Credit Commitment and/or Term Loan Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall otherwise
be in substantially the form of the assigned Notes delivered to the assigning
Lender.  Each surrendered Note or Notes
shall be canceled and returned to the Borrower. 
Notwithstanding anything in this Agreement to the contrary, any Lender
which has not been issued a Note or Notes hereunder may at any time deliver a
written request for a Note or Notes to the Administrative Agent and
Borrower.  Within five (5) Business
Days after receipt of notice, the Borrower shall execute and deliver to the
Administrative Agent, a Note or Notes (as applicable) to the order of such
Lender in amounts equal to the Revolving Credit Commitment and/or Term Loan
Commitment of such Lender.  Upon receipt
thereby, the Administrative Agent shall promptly deliver such Note or Notes to
such Lender.

 

(f)                                    Participations.  Each Lender may, without notice to or the
consent of the Borrower or the Administrative Agent, in the ordinary course of
its commercial banking business and in accordance with Applicable Law, sell
participations to one or more banks or other entities (any such bank or other
entity, a “Participant”) in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Extensions of Credit and the Notes held by it); provided
that:

 

(i)                                     such Lender’s
obligations under this Agreement (including, without limitation, its Revolving
Credit Commitment and/or Term Loan Commitment, as applicable) shall remain
unchanged;

 

(ii)                                  such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations;

 

(iii)                               such Lender shall remain
the holder of the Notes held by it for all purposes of this Agreement;

 

(iv)                              the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement;

 

114

 

(v)                                 such Lender shall not
permit such Participant the right to approve any waivers, amendments or other
modifications to this Agreement or any other Loan Document other than waivers,
amendments or modifications which would reduce the principal of or the interest
rate on any Loan or Reimbursement Obligation, extend the term or increase the
amount of the Revolving Credit Commitment and/or Term Loan Commitment of such
Lender, reduce the amount of any fees to which such Participant is entitled,
extend any scheduled payment date for principal of or interest on any Loan or
any fee or Reimbursement Obligation or, except as expressly contemplated hereby
or thereby, release substantially all of the Collateral or release any
Subsidiary Guarantor (except as expressly contemplated hereby); and

 

(vi)                              any such disposition
shall not, without the consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
qualify the Loans or the Notes under the blue sky law of any state.

 

The Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.7, Section 5.10, Section 5.11, Section 5.12,
Section 5.13 and Section 14.3 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 14.10; provided that a Participant shall not be
entitled to receive any greater payment under Section 5.7, Section 5.10,
Section 5.11, Section 5.12, and Section 5.13 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent and such
Participant shall have delivered to the Administrative Agent all United States
Internal Revenue Service Forms required pursuant to Section 5.13(e).

 

(g)                                 Disclosure
of Information; Confidentiality.  The
Administrative Agent and the Lenders shall hold all non-public information with
respect to the Borrower obtained pursuant to the Loan Documents (or any Hedging
Agreement with a Lender or the Person serving as the Administrative Agent) in
accordance with their customary procedures for handling confidential
information; provided, that the Administrative Agent may disclose
information relating to this Agreement to Gold Sheets and other similar
bank trade publications, such information to consist of deal terms and other
information customarily found in such publications and provided  further,
that the Administrative Agent or any Lender may disclose any such information
to the extent such disclosure is (i) to its Affiliates and its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors on a need-to-know basis (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such information and instructed to keep such information
confidential), (ii) required by law or requested or required pursuant to
any legal process, (iii) requested by, or required to be disclosed to, any
rating agency, or regulatory or similar authority (including, without
limitation, the National Association of Insurance Commissioners), or (iv) used
in any suit, action or proceeding for the purpose of defending itself, reducing
its liability or protecting any of its claims, rights, remedies or interests
under or in connection with the Loan Documents (or any Hedging Agreement with a
Lender or the Administrative Agent).  Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation

 

115

 

pursuant to this Section 14.10, disclose to any pledgee referred
to in Section 14.10(h) or to the Purchasing Lender, proposed
Purchasing Lender, Participant, proposed Participant, or to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty’s professional advisor any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided, that
prior to any such disclosure, each such Purchasing Lender, proposed pledgee,
Purchasing Lender, Participant, proposed Participant, contractual counterparty
or professional advisor shall agree to be bound by the provisions of this Section 14.10(g).

 

(h)                                 Certain Pledges or
Assignments.  Any Lender may at any
time pledge or assign, or grant a security interest in, all or any portion of
its rights under this Agreement or any other Loan Document to secure
obligations of such Lender, including without limitation any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment or grant of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

SECTION 14.11                                      Amendments,
Waivers and Consents.  Except as
specifically provided in any Loan Document, any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be amended
or waived by the Lenders, and any consent given by the Lenders, if, but only
if, such amendment, waiver or consent is in writing signed by the requisite
Lenders specified below (or by the Administrative Agent with the consent of
such requisite Lenders) and delivered to the Administrative Agent and, in the
case of an amendment, signed by the Borrower.

 

(a)                                  Any
consent, waiver or amendment purporting to: (i) increase the Revolving
Credit Commitment of any Lender, (ii) reduce the rate of, or forgive any,
interest payable on any Revolving Credit Loans or Reimbursement Obligation, or
any fees, (iii) reduce or forgive the principal amount of any Revolving
Credit Loans or Reimbursement Obligation, (iv) extend the originally
scheduled time or times of payment of the principal of any Revolving Credit
Loans or Reimbursement Obligation or the time or times of payment of interest
on any Revolving Credit Loan or Reimbursement Obligation or any fee or
commission with respect to the Revolving Credit Facility, (v) permit any
subordination of the principal or interest on, or any Lien securing, any
Revolving Credit Loans or Reimbursement Obligation, (vi) waive any of the
conditions contained in Section 6.3 or (vii) extend the time of the
obligation of the Lenders that have a Revolving Credit Commitment to make or
issue or participate in Letters of Credit or Swingline Loans (including,
without limitation, any consent, waiver or amendment under Section 3.1 to
permit the expiry date of Letters of Credit to extend beyond a date which is
five (5) days prior to the Revolving Credit Maturity Date), shall, in each
case, require the written consent of each Lender having a Revolving Credit
Commitment, which Lender is directly affected thereby;

 

(b)                                 Any
consent, waiver or amendment purporting to: (i) increase the Term Loan
Commitment of any Lender (except as otherwise provided in Section 4.6), (ii) reduce
the rate of, or forgive any, interest payable on any Term Loan or any fees, (iii) reduce
or forgive the principal amount of any Term Loan, (iv) extend the
originally scheduled time or times of payment of the principal of any Term Loan
or the time or times of payment of interest on any Term Loan or any fee or
commission with respect to the Term Loan Facility, or (v) permit any
subordination of the principal or interest on, or any Lien securing any Term
Loan, shall, in each

 

116

 

case, require the written consent of each Lender that has a Term Loan
Commitment or has made Term Loans, which such Lender is directly affected thereby;

 

(c)                                  Any
consent, waiver or amendment purporting to: (i) release any material
portion of the Collateral or release any Security Document or release any
Subsidiary Guarantor (other than in connection with the redesignation of a
Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 9.11,
with a sale of assets permitted pursuant to Section 11.5, or as otherwise
specifically permitted in this Agreement or the applicable Security Document), (ii) amend
the provisions of this Section 14.11, (iii) amend the definition or
percentage of Required Lenders, (iv) change Section 4.4(b)(vi) in
a manner that would alter the order of application of amounts prepaid pursuant
to Section 4.4(b), or (v) release the Borrower from all or any
material portion of the Obligations (other than Hedging Obligations) hereunder
or under any other Loan Document or permit any assignment (other than as
specifically permitted or contemplated in this Agreement or any other Loan
Document) of the Borrower’s rights and obligations hereunder or under any other
Loan Document, shall, in each case, require the written consent of each Lender;
and

 

(d)                                 All
other amendments, waivers or consents not set forth in paragraphs (a), (b) and
(c) above, shall require the written consent of the Required Lenders provided,
that for purposes of Section 6.3, no waiver of a Default or Event of
Default, or of the inaccuracy of, or failure to make any representation or
warranty, shall be effective without the written consent of the Lenders holding
more than fifty percent (50%) of the Revolving Credit Commitments (or, if the
Revolving Credit Facility has been terminated, Lenders holding more than fifty
percent (50%) of the aggregate outstanding Extensions of Credit thereunder).

 

In addition, no amendment, waiver or consent to the provisions of (a) Article XIII
shall be made without the written consent of the Administrative Agent and (b) Article III
without the written consent of each Issuing Lender.

 

Notwithstanding anything in this Agreement to
the contrary, each Lender hereby irrevocably authorizes the Administrative
Agent on its behalf, and without further consent, to enter into amendments or
modifications to this Agreement (including, without limitation, amendments to
this Section 14.11) or any of the other Loan Documents or to enter into
additional Loan Documents as the Administrative Agent reasonably deems
appropriate in order to effectuate the terms of Sections 2.8 and/or 4.6
(including, without limitation, as applicable, (1) to permit the increased
Revolving Credit Commitments and Additional Term Loans to share ratably in the
benefits of this Agreement and the other Loan Documents, and (2) to
include the Increasing Revolving Lenders’ Revolving Credit Commitments or the
Increasing Term Lender’s Commitments or outstanding Additional Term Loans in
any determination of Required Lenders); provided that no amendment or
modification shall result in any increase in the amount of any Lender’s Commitment or any increase in
any Lender’s Commitment Percentage, in each case, without the written consent
of such affected Lender.

 

SECTION 14.12                                      Performance
of Duties.  The Borrower’s
obligations under this Agreement and each of the other Loan Documents shall be
performed by the Borrower at its sole cost and expense.

 

117

 

SECTION 14.13                                      All
Powers Coupled with Interest.  All
powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other
Loan Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any
of the Commitments remain in effect or the Credit Facility has not been
terminated.

 

SECTION 14.14                                      Survival
of Indemnities.  Notwithstanding any
termination of this Agreement, the indemnities to which the Administrative
Agent and the Lenders are entitled under the provisions of this Article XIV
and any other provision of this Agreement (including, without limitation,
Sections 5.10, 5.11, 5.12, 9.7, 12.4 and 14.2) and the other Loan Documents
shall continue in full force and effect and shall protect the Administrative
Agent and the Lenders against events arising after such termination as well as
before.

 

SECTION 14.15                                      Titles
and Captions.  Titles and captions of
Articles, Sections and subsections in, and the table of contents of, this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.

 

SECTION 14.16                                      Severability
of Provisions.  Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

SECTION 14.17                                      Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts (including by virtue of an Authorization),
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement, an Authorization or any document or instrument
delivered in connection herewith by telecopy shall be effective as delivery of
a manually executed counterpart of this Agreement, an Authorization or such
other document or instrument, as applicable.

 

SECTION 14.18                                      Term
of Agreement.  This Agreement shall
remain in effect from the Closing Date through and including the date upon
which all Obligations arising hereunder or under any other Loan Document shall
have been indefeasibly and irrevocably paid and satisfied in full and all
Commitments have been terminated.  No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination or in respect of any provision
of this Agreement which survives such termination.

 

SECTION 14.19                                      Advice
of Counsel.  Each of the parties
represents to each other party hereto that it has discussed this Agreement with
its counsel.

 

SECTION 14.20                                      No
Strict Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent

 

118

 

or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties hereto
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this Agreement.

 

SECTION 14.21                                      Inconsistencies
with Other Documents; Independent Effect of Covenants.

 

(a)                                  In
the event there is a conflict or inconsistency between this Agreement and any
other Loan Document, the terms of this Agreement shall control; provided,
that any provision of the Security Documents which imposes additional burdens
on the Borrower or its Subsidiaries or further restricts the rights of the
Borrower or its Subsidiaries or gives the Administrative Agent or Lenders
additional rights shall not be deemed to be in conflict or inconsistent with
this Agreement and shall be given full force and effect.

 

(b)                                 This
Agreement constitutes an amendment and restatement of the Existing Credit
Agreement, as amended, effective from and after the Closing Date.  The execution and delivery of this Agreement
shall not constitute a novation of any Debt or other obligations owing to the
Lenders or the Administrative Agent under the Existing Credit Agreement based
on facts or events occurring or existing prior to the execution and delivery of
this Agreement.  On the Closing Date, the
credit facilities described in the Existing Credit Agreement, as amended, shall
be amended, supplemented, modified and restated in their entirety by the
facilities described herein, and all loans and other obligations of the
Borrower outstanding as of such date under the Existing Credit Agreement, as
amended, shall be deemed to be loans and obligations outstanding under the
corresponding facilities described herein, without any further action by any
Person, except that the Administrative Agent shall make such transfers of funds
as are necessary in order that the outstanding balance of such Loans, together
with any Loans funded on the Closing Date, reflect the Commitments of the
Lenders hereunder.

 

(c)                                  The
Borrower expressly acknowledges and agrees that each covenant contained in
Articles IX, X and XI shall be given independent effect.  Accordingly, the Borrower shall not engage in
any transaction or other act otherwise permitted under any covenant contained
in Articles IX, X or XI if, before or after giving effect to such transaction
or act, the Borrower shall or would be in breach of any other covenant contained
in Articles IX, X, or XI.

 

SECTION 14.22                                      Continuity
of Contract.  The parties hereto
agree that the occurrence or non-occurrence of EMU, any event or events
associated with EMU and/or the introduction of the euro in all or any part of
the European Union (a) will not result in the discharge, cancellation,
rescission or termination in whole or in part of this Agreement or any other
Loan Document, (b) will not give any party the right to cancel, rescind,
terminate or vary this Agreement or any other Loan Document and (c) will
not give rise to an Event of Default, in each case other than as specifically
provided in this Agreement.

 

SECTION 14.23                                      USA
Patriot Act.  The Administrative
Agent and each Lender hereby notifies the Borrower that, pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower and Subsidiary Guarantors, which
information includes the name and address of the Borrower and each Subsidiary
Guarantor and

 

119

 

other information that will allow such Lender to identify the Borrower
or such Subsidiary Guarantor in accordance with the Act.

 

[Signature pages to follow]

 

120

 

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

 

 

	
  [CORPORATE SEAL]

  	
  DRS TECHNOLOGIES, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard H. Schneider

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Richard H. Schneider

  	
   

  
	
   

  	
   

  	
   Title:

  	
    Executive Vice President

     and Chief Financial Officer

  	
   

  
						

 

 

[Signature Pages Continue]

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, as Administrative Agent

  
	
   

  	
  on behalf of itself and the Lenders who have

  
	
   

  	
  executed an Authorization and as an Issuing Lender

  
	
   

  	
  Swingline Lender and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William F. Fox

  	
   

  
	
   

  	
   

  	
   Name:

  	
  William F. Fox

  	
   

  
	
   

  	
   

  	
   Title:

  	
    Director

  	
   

  
						

 

 

	
   

  	
  BEAR STEARNS CORPORATE LENDING, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Victor Bulzacchelli

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Victor Bulzacchelli

  	
   

  
	
   

  	
   

  	
   Title:

  	
    Vice President

  	
   

  
						

 

 

	
   

  	
  BANK OF AMERICA, N.A., as a Lender and an

  
	
   

  	
  Issuing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Bardwil

  	
   

  
	
   

  	
   

  	
   Name:

  	
  David J. Bardwil

  	
   

  
	
   

  	
   

  	
   Title:

  	
    Senior Vice President

  	
   

  
						

 

 

	
   

  	
  BNP PARIBAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  	
   

  	
   

  
						

 

 

LENDER AUTHORIZATION

 

DRS Technologies, Inc.

Third Amended and Restated Credit Agreement

 

 

January 31, 2006

 

Wachovia Bank, National Association

Charlotte Plaza, CP-8

201 South College Street

Charlotte, North Carolina 28288-0680

Attention:  Syndication Agency
Services

 

 

Re:                               Third
Amended and Restated Credit Agreement dated as of January 31, 2006 (as
amended, the “Credit Agreement”) by and among
DRS Technologies, Inc. (the “Borrower”), the banks and financial
institutions party thereto, as lenders, and Wachovia Bank, National
Association, as administrative agent (the “Administrative Agent”)

 

This
Authorization acknowledges our receipt and review of the Credit Agreement in
the form posted on SyndTrak Online.  By executing this Authorization, we hereby
approve the Credit Agreement and authorize the Administrative Agent to execute
and deliver the Credit Agreement on our behalf.

 

Each
financial institution executing this Authorization agrees or reaffirms that it
shall be a party to the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement) to which Lenders are parties and shall have
the rights and obligations of a Lender (as defined in the Credit Agreement),
and agrees to be bound by the terms and provisions applicable to a “Lender”,
under each such agreement.  In
furtherance of the foregoing, each financial institution executing this
Authorization agrees to execute any additional documents reasonably requested
by the Administrative Agent to evidence such financial institution’s rights and
obligations under the Credit Agreement.

 

	
   

  	
  BNP Paribas

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brooks Tanner

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Brooks
  Tanner

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  
							

 

	
   

  	
  By:

  	
  /s/ Angela B. Arnold

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Angela B. Arnold

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  
						

 

 

	
   

  	
  CALYON, NEW YORK BRANCH, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Schubert

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Philip Schubert

  	
   

  
	
   

  	
   

  	
   Title:

  	
  Director

  	
   

  
						

 

	
   

  	
  By:

  	
  /s/ Yuri Muzichenko

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Yuri Muzichenko

  	
   

  
	
   

  	
   

  	
   Title:

  	
  Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]