Document:

Exhibit 10.2

 

 

 

$290,000,000

 

CREDIT AGREEMENT

 

dated as of February 14, 2007,

 

by and among

 

PGS SOLUTIONS, INC.,
 as Borrower,

 

PGS HOLDING CORP.,
 as Holdings,

 

the Lenders referred to herein

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION,
 as Administrative Agent, Swingline Lender and Issuing
Lender

 

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Lead Arranger and Joint Book Manager

 

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Syndication Agent, Co-Lead Arranger and Joint Book Manager

 

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
  Definitions

  	
  2

  
	
  SECTION 1.2.

  	
  Other
  Definitions and Provisions

  	
  33

  
	
  SECTION 1.3.

  	
  Accounting
  Terms

  	
  34

  
	
  SECTION 1.4.

  	
  UCC Terms

  	
  34

  
	
  SECTION 1.5.

  	
  Rounding

  	
  34

  
	
  SECTION 1.6.

  	
  References
  to Laws

  	
  34

  
	
  SECTION 1.7.

  	
  Times of Day

  	
  34

  
	
  SECTION 1.8.

  	
  Letter of
  Credit Amounts

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  REVOLVING CREDIT FACILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
  Revolving
  Credit Loans

  	
  35

  
	
  SECTION 2.2.

  	
  Swingline
  Loans

  	
  35

  
	
  SECTION 2.3.

  	
  Procedure
  for Advances of Revolving Credit Loans and Swingline Loans

  	
  37

  
	
  SECTION 2.4.

  	
  Repayment
  and Prepayment of Revolving Credit and Swingline Loans

  	
  37

  
	
  SECTION 2.5.

  	
  Permanent
  Reduction of the Revolving Credit Commitment

  	
  38

  
	
  SECTION 2.6.

  	
  Termination
  of Revolving Credit Facility

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  LETTER OF CREDIT FACILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
  L/C
  Commitment

  	
  39

  
	
  SECTION 3.2.

  	
  Procedure
  for Issuance of Letters of Credit

  	
  40

  
	
  SECTION 3.3.

  	
  Commissions
  and Other Charges

  	
  40

  
	
  SECTION 3.4.

  	
  L/C
  Participations

  	
  41

  
	
  SECTION 3.5.

  	
  Reimbursement
  Obligation of Borrower

  	
  42

  
	
  SECTION 3.6.

  	
  Obligations
  Absolute

  	
  42

  
	
  SECTION 3.7.

  	
  Effect of
  Letter of Credit Application

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  TERM LOAN FACILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
  Term Loan

  	
  43

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 4.2.

  	
  Procedure
  for Advance of Term Loan

  	
  43

  
	
  SECTION 4.3.

  	
  Repayment of
  Term Loan

  	
  43

  
	
  SECTION 4.4.

  	
  Prepayments
  of Term Loan

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  GENERAL LOAN PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
  Interest

  	
  46

  
	
  SECTION 5.2.

  	
  Notice and
  Manner of Conversion or Continuation of Loans

  	
  48

  
	
  SECTION 5.3.

  	
  Fees

  	
  48

  
	
  SECTION 5.4.

  	
  Manner of
  Payment

  	
  49

  
	
  SECTION 5.5.

  	
  Evidence of
  Indebtedness

  	
  49

  
	
  SECTION 5.6.

  	
  Adjustments

  	
  50

  
	
  SECTION 5.7.

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

  	
  51

  
	
  SECTION 5.8.

  	
  Changed
  Circumstances

  	
  51

  
	
  SECTION 5.9.

  	
  Indemnity

  	
  52

  
	
  SECTION
  5.10.

  	
  Increased
  Costs

  	
  52

  
	
  SECTION
  5.11.

  	
  Taxes

  	
  54

  
	
  SECTION
  5.12.

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
  56

  
	
  SECTION
  5.13.

  	
  Security

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
  CLOSING; CONDITIONS OF CLOSING AND BORROWING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1.

  	
  Closing

  	
  57

  
	
  SECTION 6.2.

  	
  Conditions
  on Effective Date

  	
  57

  
	
  SECTION 6.3.

  	
  Conditions
  to All Extensions of Credit

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF BORROWER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
  Representations
  and Warranties

  	
  63

  
	
  SECTION 7.2.

  	
  Survival of
  Representations and Warranties, etc.

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  
	
  FINANCIAL INFORMATION AND NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  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

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 8.5.

  	
  Notice of
  Litigation and Other Matters

  	
  75

  
	
  SECTION 8.6.

  	
  Accuracy of
  Information

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  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

  	
  78

  
	
  SECTION 9.5.

  	
  Payment and
  Performance of Obligations

  	
  78

  
	
  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

  	
  79

  
	
  SECTION
  9.10.

  	
  Visits and
  Inspections

  	
  79

  
	
  SECTION
  9.11.

  	
  Additional
  Subsidiaries; Additional Collateral

  	
  79

  
	
  SECTION
  9.12.

  	
  Use of
  Proceeds

  	
  82

  
	
  SECTION
  9.13.

  	
  Further
  Assurances

  	
  82

  
	
  SECTION
  9.14.

  	
  Designation
  as Senior Debt

  	
  82

  
	
  SECTION
  9.15.

  	
  Interest
  Rate Contracts

  	
  82

  
	
  SECTION
  9.16.

  	
  Leases

  	
  82

  
	
  SECTION
  9.17.

  	
  Ratings

  	
  82

  
	
  SECTION
  9.18.

  	
  Post-Closing
  Covenant

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  	
   

  
	
  FINANCIAL COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  10.1.

  	
  Leverage
  Ratio

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  
	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.1.

  	
  Limitations
  on Indebtedness

  	
  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 Asset Dispositions

  	
  91

  
	
  SECTION
  11.6.

  	
  Limitations
  on Dividends and Distributions

  	
  91

  
	
  SECTION
  11.7.

  	
  Limitations
  on Exchange and Issuance of Capital Stock

  	
  94

  
	
  SECTION
  11.8.

  	
  Transactions
  with Affiliates

  	
  94

  
	
  SECTION
  11.9.

  	
  Certain
  Accounting Changes; Organizational Documents

  	
  95

  
	
  SECTION
  11.10.

  	
  Amendment of
  Material Documents

  	
  95

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.11.

  	
  Prepayments
  of Subordinated Indebtedness

  	
  95

  
	
  SECTION
  11.12.

  	
  Restrictive
  Agreements

  	
  95

  
	
  SECTION
  11.13.

  	
  Nature of
  Business

  	
  97

  
	
  SECTION
  11.14.

  	
  Impairment
  of Security Interests

  	
  97

  
	
  SECTION
  11.15.

  	
  No Other
  “Designated Senior Debt”

  	
  97

  
	
  SECTION
  11.16.

  	
  Limitation
  on Creation of Subsidiaries

  	
  98

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  12.1.

  	
  Events of
  Default

  	
  98

  
	
  SECTION
  12.2.

  	
  Remedies

  	
  100

  
	
  SECTION 12.3.

  	
  Rights and
  Remedies Cumulative; Non-Waiver; etc.

  	
  101

  
	
  SECTION
  12.4.

  	
  Crediting of
  Payments and Proceeds

  	
  101

  
	
  SECTION
  12.5.

  	
  Administrative
  Agent May File Proofs of Claim

  	
  102

  
	
  SECTION
  12.6.

  	
  Borrower’s
  Right to Cure

  	
  103

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
   

  
	
   

  	
   

  	
   

  
	
  THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  13.1.

  	
  Appointment
  and Authority

  	
  104

  
	
  SECTION
  13.2.

  	
  Rights as a
  Lender

  	
  104

  
	
  SECTION
  13.3.

  	
  Exculpatory
  Provisions

  	
  104

  
	
  SECTION
  13.4.

  	
  Reliance by
  the Administrative Agent

  	
  105

  
	
  SECTION
  13.5.

  	
  Delegation
  of Duties

  	
  105

  
	
  SECTION
  13.6.

  	
  Resignation
  of Administrative Agent

  	
  106

  
	
  SECTION
  13.7.

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
  107

  
	
  SECTION
  13.8.

  	
  No Other
  Duties, etc.

  	
  107

  
	
  SECTION
  13.9.

  	
  Collateral
  and Guaranty Matters

  	
  107

  
	
  SECTION
  13.10.

  	
  No Fiduciary
  Duty

  	
  107

  
	
  SECTION 13.11.

  	
  UK Trust

  	
  108

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  14.1.

  	
  Notices

  	
  108

  
	
  SECTION
  14.2.

  	
  Amendments,
  Waivers and Consents

  	
  109

  
	
  SECTION
  14.3.

  	
  Expenses;
  Indemnity

  	
  111

  
	
  SECTION
  14.4.

  	
  Right of
  Set-off

  	
  113

  
	
  SECTION
  14.5.

  	
  Governing
  Law

  	
  113

  
	
  SECTION 14.6.

  	
  Waiver of
  Jury Trial

  	
  114

  
	
  SECTION
  14.7.

  	
  Reversal of
  Payments

  	
  114

  
	
  SECTION
  14.8.

  	
  Injunctive
  Relief; Punitive Damages

  	
  115

  

 

iv

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION
  14.9.

  	
  Accounting
  Matters

  	
  115

  
	
  SECTION
  14.10.

  	
  Successors
  and Assigns; Participations

  	
  115

  
	
  SECTION
  14.11.

  	
  Confidentiality

  	
  118

  
	
  SECTION
  14.12.

  	
  Performance
  of Duties

  	
  119

  
	
  SECTION
  14.13.

  	
  All Powers
  Coupled with Interest

  	
  119

  
	
  SECTION
  14.14.

  	
  Survival of
  Indemnities

  	
  119

  
	
  SECTION
  14.15.

  	
  Titles and
  Captions

  	
  119

  
	
  SECTION 14.16.

  	
  Severability
  of Provisions

  	
  119

  
	
  SECTION
  14.17.

  	
  Counterparts

  	
  119

  
	
  SECTION
  14.18.

  	
  Integration

  	
  119

  
	
  SECTION
  14.19.

  	
  Term of
  Agreement

  	
  119

  
	
  SECTION
  14.20.

  	
  Advice of
  Counsel, No Strict Construction

  	
  120

  
	
  SECTION
  14.21.

  	
  USA Patriot
  Act

  	
  120

  
	
  SECTION
  14.22.

  	
  Inconsistencies
  with Other Documents; Independent Effect of Covenants

  	
  120

  

 

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 Assumption

  
	
  Exhibit H

  	
  -

  	
  Form of Guaranty Agreement

  
	
  Exhibit I

  	
  -

  	
  Form of Collateral Agreement

  
	
  Exhibit J

  	
  -

  	
  Form of Joinder Agreement

  
	
  Exhibit K

  	
  -

  	
  Form of Perfection Certificate

  
	
  Exhibit L

  	
  -

  	
  Form of Landlord Access Agreement

  
	
  Exhibit M

  	
  -

  	
  Form of Lender Addendum

  

 

SCHEDULES

 

	
  Schedule 1.1(a)

  	
  -

  	
  Subsidiary Guarantors

  
	
  Schedule 1.1(b)

  	
  -

  	
  EBITDA

  
	
  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(l)

  	
  -

  	
  Material Contracts; Material Government Contracts

  
	
  Schedule 7.1(m)

  	
  -

  	
  Employee Relations

  
	
  Schedule 7.1(t)

  	
  -

  	
  Indebtedness and Guaranty Obligations

  
	
  Schedule 7.1(u)

  	
  -

  	
  Litigation

  

 

v

 

	
  Schedule 7.1(z)

  	
  -

  	
  Acquisition Documents

  
	
  Schedule 7.1(dd)

  	
  -

  	
  Insurance

  
	
  Schedule 9.18(a)

  	
  -

  	
  Post-Closing Landlord Access Agreements

  
	
  Schedule 9.18(b)

  	
  -

  	
  Post-Closing Obligations

  
	
  Schedule 11.2

  	
  -

  	
  Existing Liens

  
	
  Schedule 11.3

  	
  -

  	
  Existing Loans, Advances and Investments

  
	
  Schedule 11.8

  	
  -

  	
  Transactions with Affiliates

  

 

vi

 

CREDIT AGREEMENT, dated as of February 14,
2007, by and among PGS HOLDING CORP., a Delaware corporation (“Holdings”),
PGS Solutions, Inc., a Delaware corporation (the “Borrower”), the
lenders who are or may become a party to this Agreement (collectively, the “Lenders”),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative
Agent for the Lenders, and GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication
Agent.

 

STATEMENT OF PURPOSE

 

WHEREAS, pursuant to a stock purchase
agreement dated as of December 8, 2006 (as amended, supplemented or otherwise
modified through the date hereof, the “Acquisition Agreement”) between
Pearson Inc., a Delaware corporation, and the other entities designated as selling
entities therein (together, the “Seller”), Holdings and, solely for
certain specified purposes, The Veritas Capital Fund III, L.P., the Seller has
agreed to sell to Holdings and Holdings has agreed to purchase (the “Acquisition”)
all of the equity interests of Borrower and certain of Borrower’s subsidiaries
and affiliates;

 

WHEREAS, pursuant to the Acquisition
Documents (as defined herein), substantially simultaneously with the consummation
of the Acquisition, (i) certain of the Equity Investors will (A) make a cash
equity investment in the common equity in PGS Holding LLC (“Holding Parent”)
in an amount not less than $155.0 million, which will in turn contribute such
amounts to the common equity of Holdings, and (B) make a cash equity investment
in the Qualified Preferred Equity in Holdings in an amount not less than $2.0
million and (ii) the Seller will be issued Qualified Preferred Equity in
Holdings in an amount with a liquidation preference of not less than $40.0
million (together, the “Equity Contribution”);

 

WHEREAS, concurrently herewith, Borrower will
issue $190.0 million in aggregate principal amount of unsecured Senior
Subordinated Notes;

 

WHEREAS, the proceeds of the initial
borrowing hereunder, together with the proceeds from the issuance of the Senior
Subordinated Notes and from the Equity Contribution, will be used to pay the consideration
under the Acquisition Agreement and to pay fees and expenses incurred in connection
with the Transactions;

 

WHEREAS, Borrower has requested that (i) the
Term Loan Lenders make Term Loans to Borrower of $240.0 million in the
aggregate and (ii) the Revolving Credit Lenders provide Revolving Credit
Commitments of $50.0 million in the aggregate to be available for Revolving
Credit Loans to Borrower and Letters of Credit issued for the account of Borrower
(of which no more than $15.0 million (without giving effect to Letters of
Credit) will be drawn on the Closing Date (subject to Section 2.1));

 

WHEREAS, Borrower has agreed to secure all of
its Obligations by granting to Administrative Agent, for the benefit of Secured
Parties, a lien and security interest in substantially all of its tangible and
intangible properties and assets, including a pledge of all of the Capital
Stock of each of its Domestic Subsidiaries and the Capital Stock representing
66% of the voting power of all the Capital Stock of each of its first tier
Foreign Subsidiaries;

 

 

WHEREAS, Guarantors have agreed to guarantee
the obligations of Borrower hereunder and to secure their respective Obligations
by granting to Administrative Agent, for the benefit of Secured Parties a lien
and security interest in substantially all of their respective tangible and
intangible properties and assets, including a pledge of all of the Capital
Stock of each of their respective Domestic Subsidiaries (including Borrower)
and the Capital Stock representing 66% of the voting power of all the Capital
Stock of each of their respective first tier Foreign Subsidiaries; and

 

WHEREAS, Borrower has requested, and the
Lenders have agreed, to extend certain credit facilities to Borrower on the
terms and conditions of this Agreement.

 

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:

 

“Account Debtor” means any Person who
is or who may become obligated to Borrower or any of its Subsidiaries under, or
with respect to, or on account of, an Account.

 

“Accounts” means all present or future
accounts receivable of Borrower or any of its Subsidiaries and all rights of Borrower
or any of its Subsidiaries to payment for goods sold or leased or to be sold or
leased or for services rendered or to be rendered, whether or not earned by
performance.

 

“Acquisition” has the meaning assigned
in the recitals hereto.

 

“Acquisition Agreement” has the
meaning assigned in the recitals hereto.

 

“Acquisition Documents” shall mean the
collective reference to the Acquisition Agreement and the other documents
listed on Schedule 7.1(z).

 

“Acquisition Representations” means
the representations made by or with respect to the Seller or the Borrower in
the Acquisition Agreement (but only to the extent that Holdings has the right
to terminate its obligations under the Acquisition Agreement as a result of a
breach of such representations in the Acquisition Agreement).

 

“Acquisition Transaction Costs” means
the fees and expenses incurred by Holdings and its Subsidiaries in connection
with the Transactions, including any severance payments made to former
employees and any transition costs and expenses.

 

“Administrative Agent” means Wachovia,
in its capacity as Administrative Agent hereunder, and any successor thereto
appointed pursuant to Section 13.6.

 

2

 

“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).

 

“Administrative Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to any
Person, any other Person (other than a Subsidiary of Borrower) 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. As used in this definition, 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 (excluding any securities or
equity interests having such power only upon the occurrence of a contingency
which has not yet occurred), 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.

 

“Affiliated Approved Fund” means
Approved Funds that are administered or managed by (i) a single entity or
(ii) an Affiliate of such entity.

 

“Agents” means the Administrative
Agent and the Syndication Agent.

 

“Aggregate Commitment” means the
aggregate amount of the Lenders’ Commitments hereunder, as such amount may be
reduced or otherwise modified at any time or from time to time pursuant to the
terms hereof. On the Effective Date, the Aggregate Commitment shall be two
hundred ninety million dollars ($290,000,000).

 

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

 

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

 

“Applicable Margin” and “Applicable
Revolving Credit Commitment Fee Percentage” means (i) with respect to Term
Loans, the corresponding percentages per annum as set forth below based on the
Consolidated Leverage Ratio:

 

	
  Pricing

  Level

  	
   

  	
  Consolidated Leverage Ratio

  	
   

  	
  LIBOR

  Spread

  	
   

  	
  Base

  Rate Spread

  	
   

  
	
  I

  	
   

  	
  Less than or
  equal to 5.25 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  II

  	
   

  	
  Greater than
  5.25 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  

 

 and (ii)
with respect to Revolving Credit Loans, the corresponding percentages per annum
as set forth below based on the Consolidated Leverage Ratio:

 

3

 

	
  Pricing

  Level

  	
   

  	
  Consolidated Leverage Ratio

  	
   

  	
  Applicable Revolving

  Credit Commitment 

  Fee Percentage

  	
   

  	
  LIBOR

  Spread

  	
   

  	
  Base

  Rate Spread

  	
   

  
	
  I

  	
   

  	
  Less than or
  equal to 2.50 to 1.00

  	
   

  	
  0.375

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
  II

  	
   

  	
  Greater than
  2.50 to 1.00, but less than or equal to 4.50 to 1.00

  	
   

  	
  0.50

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  III

  	
   

  	
  Greater than
  4.50 to 1.00

  	
   

  	
  0.50

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  

 

The Applicable Margin and the Applicable
Revolving Credit Commitment Fee Percentage shall be determined and adjusted
quarterly on the date (each a “Calculation Date”) ten (10) Business Days
after receipt by the Administrative Agent of the Officer’s Compliance
Certificate pursuant to Section 8.2 for the most recently ended Fiscal
Quarter of Borrower; provided that (a) the Applicable Margin and the
Applicable Revolving Credit Commitment Fee Percentage shall be based on Pricing
Level III (for Revolving Credit Loans) and Pricing Level II (for Term Loans)
until the first Calculation Date occurring after the Effective Date, and thereafter
the Pricing Level shall be determined by reference to the Consolidated Leverage
Ratio as of the last day of the most recently ended Fiscal Quarter of Borrower preceding
the applicable Calculation Date, and (b) if Borrower fails to provide the
Officer’s Compliance Certificate as required by Section 8.2 for the
most recently ended Fiscal Quarter of Borrower preceding the applicable
Calculation Date, the Applicable Margin and the Applicable Revolving Credit
Commitment Fee Percentage from such Calculation Date shall be based on Pricing
Level III (for the Revolving Credit Loans) and Pricing Level II (for Term
Loans) 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 Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal
Quarter of Borrower preceding such Calculation Date. The Applicable Margin and
the Applicable Revolving Credit Commitment Fee Percentage shall be effective
from one Calculation Date until the next Calculation Date. Any adjustment in
the Applicable Margin or the Applicable Revolving Credit Commitment Fee
Percentage shall be applicable to all Extensions of Credit then existing or
subsequently made or issued. In the event that any financial statement
or Compliance Certificate delivered pursuant to Section 8.2 is shown to
be inaccurate, and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin or Applicable Revolving Credit
Commitment Fee Percentage for any period (an “Applicable Period”) than
the Applicable Margin or Applicable Revolving Credit Commitment Fee Percentage applied
for such Applicable Period, and only in such case, then (i) Borrower shall
immediately deliver to the Administrative Agent a corrected Compliance
Certificate for such Applicable Period, (ii) the Applicable Margin and the
Applicable Revolving Credit Commitment Fee Percentage shall be determined based
upon the corrected Compliance Certificate, and (iii) Borrower shall
immediately pay to the Administrative Agent the accrued additional interest or
Commitment Fees owing as a result of such increased Applicable Margin or
Applicable Revolving Credit Commitment Fee Percentage for such Applicable
Period, which payment shall be promptly applied by the Administrative Agent in
accordance with Section 5.1(d). This definition shall not limit the
rights of the Administrative Agent and Lenders with respect to Sections
5.1(c) and 12.1.

 

“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 

 

4

 

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.

 

“Arrangers” means Wachovia Capital Markets
LLC and Goldman Sachs Credit Partners L.P..

 

“Asset Disposition” means the
disposition of any or all of the assets (including, without limitation, the
Capital Stock of a Subsidiary or any ownership interest in a joint venture) of
any Credit Party or any Subsidiary thereof whether by sale, lease, transfer or
otherwise, in a single transaction, or in a series of related transactions in
any Fiscal Year for gross proceeds in the aggregate in excess of $1,500,000. The
term “Asset Disposition” shall not include any Equity Issuance.

 

“Assignment and Assumption” means an
assignment and assumption entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by Section 14.10),
and accepted by the Administrative Agent, in substantially the form of Exhibit G
or any other form approved by the Administrative Agent.

 

“Assignment of Claims Act” means
Assignment of Claims Act of 1940 (41 U.S.C. Section 15, 31 U.S.C. Section
3737, and 31 U.S.C. Section 3727), including all amendments thereto and regulations
promulgated thereunder.

 

“Attributable Indebtedness” means, on
any date, (a) in respect of any Capital Lease of any Person, the capitalized
amount thereof that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP, and (b) in respect of any Synthetic
Lease, the capitalized amount or principal amount of the remaining lease
payments under the relevant lease that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP if such lease were accounted
for as a Capital Lease.

 

“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).

 

“Borrower” has the meaning assigned
thereto in the introductory paragraph hereto.

 

“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 commercial banking
business, 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.

 

5

 

“Business Material Adverse Effect”
shall have the meaning assigned to such term in the Acquisition Agreement.

 

“Calculation Date” has the meaning
assigned thereto in the definition of Applicable Margin.

 

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

 

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

 

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

 

“Capital Stock” means (a) in the case
of a corporation, capital stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (c) in the case of a
partnership, partnership interests (whether general or limited), (d) in the
case of a limited liability company, membership interests and (e) any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person
(other than Earnouts or similar consideration payable in connection with a
Permitted Acquisition).

 

“Cash Equivalents” means
(a) United States dollars; (b) securities issued, or directly,
unconditionally and fully guaranteed or insured, by the United States or any
agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition by such Person; (c) time deposits and certificates of deposit
of any Lender or any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any state thereof or the District of Columbia having, capital and surplus
aggregating in excess of $500,000,000 and a rating of “A” (or such other
similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) with maturities of not more than one year from the date of acquisition by
such Person; (d) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (b)
above entered into with any bank meeting the qualifications specified in
clause (c) above, which repurchase obligations are secured by a valid perfected
security interest in the underlying securities; (e) commercial paper
issued by any Person incorporated in the United States rated at least A-1 or
the equivalent thereof by Standard & Poor’s Rating Service or at least P-1
or the equivalent thereof by Moody’s Investors Service Inc., and in each case
maturing not more than one year after the date of acquisition by such Person;
(f) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (b) through
(e) above; and (g) demand deposit accounts located in the United States,
or in the case of Foreign Subsidiaries, located in the applicable foreign
jurisdiction, in each case maintained in the ordinary course of business.

 

6

 

“Casualty Event” means any involuntary
loss of title, any involuntary loss of, damage to or any destruction of, or any
condemnation or other taking (including by any Governmental Authority) of, any
property of Holdings or any of its Subsidiaries. “Casualty Event” shall include
but not be limited to any taking of all or any part of any Real Property of any
person or any part thereof, in or by condemnation or other eminent domain
proceedings pursuant to any Applicable Law, or by reason of the temporary
requisition of the use or occupancy of all or any part of any Real Property of
any person or any part thereof by any Governmental Authority, civil or
military, or any settlement in lieu thereof.

 

“CERCLA” means the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. § 9601 et seq. and all
implementing regulations.

 

“Change in Control” means

 

(a)           (i) prior to the consummation of an
IPO, if the Permitted Holders cease to own or Control directly or indirectly at
least fifty percent (50%) of the aggregate voting power represented by the outstanding
Capital Stock of Holdings entitled to vote in the election of members of the
board of directors of Holdings or (ii) after the consummation of an IPO, any person
or group of persons (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended) other than the Permitted Holders, shall
obtain ownership or Control in one or more series of transactions of more than
33% of the aggregate voting power represented by the outstanding Capital Stock
of Holdings and representing a greater percentage of such aggregate voting
power than that represented by the Capital Stock of Holdings owned or
Controlled directly or indirectly by the Permitted Holders;

 

(b)           Holdings shall cease to own 100% of
the Capital Stock of Borrower; or

 

(c)           there shall have occurred under the
indenture governing the Senior Subordinated Notes or any permitted refinancing
thereof any “change in control” or similar provision (as set forth in the
indenture governing the Senior Subordinated Notes or any such permitted
refinancing) obligating Holdings or Borrower to repurchase, redeem or repay all
or any part of the Indebtedness provided for therein.

 

“Change in Law” means the occurrence,
after the Effective Date, of any of the following:  (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

 

“Class” means, with respect to any
Lender, such Lender’s status as a Revolving Credit Lender or a Term Loan
Lender.

 

“Closing Date” means the date of this
Agreement.

 

“CMS Agreements” means (i) Task Order
0004 Contract #500-014-0050 between Centers for Medicare & Medicaid and Borrower,
effective September 1, 2001 for Telephone 

 

7

 

Customer
Service Strategy and (ii) Task Order 0001 against Contract
#HHSM-500-2007-00001I between US Government Centers for Medicare and Medicaid
through CMS, OAGM, AGG, DBSC and Borrower, effective October 26, 2006, for
customer service functions in support of a contact center environment within
CMS’ CCCS program.

 

 “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 any and all of the
property and assets constituting the collateral securing the Obligations in which
a security interest or lien is granted pursuant to the Security Documents.

 

“Collateral Agreement” means the
collateral agreement of even date executed by the Credit Parties in favor of
the Administrative Agent for the benefit of itself and the Secured Parties,
substantially in the form of Exhibit I.

 

“Collateral Agreement Collateral”
means all property in which a security interest is created pursuant to the
Collateral Agreement (a) on the Closing Date or (b) thereafter pursuant to Section
9.11.

 

“Commitment” means, as to any Lender,
such Lender’s Revolving Credit Commitment and Term Loan Commitment, as applicable.

 

“Commitment Percentage” means, as to
any Lender, such Lender’s Revolving Credit Commitment Percentage or Term Loan
Commitment Percentage, as applicable.

 

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

 

“Consolidated Cash Interest Expense”
means, with respect to Borrower and its Subsidiaries for any period, Consolidated
Interest Expense for such period, less the sum of (without duplication and to
the extent, but only to the extent, included in the determination of
Consolidated Interest Expense for such period): 
(i) amortization of debt discount and debt issuance fees and (ii)
pay-in-kind interest or other non-cash interest expense.

 

“Consolidated Current Assets” means,
as at any date of determination, the total assets of Borrower and its Subsidiaries
on a Consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding (i) Cash Equivalents and (ii) deferred tax assets.

 

“Consolidated Current Liabilities”
means, as at any date of determination, the total liabilities of Borrower and
its Subsidiaries on a Consolidated basis that may properly be classified as
current liabilities in conformity with GAAP, excluding (i) the current portion
of any long-term Indebtedness, (ii) any deferred tax liabilities, (iii)
taxes payable and (iv) interest payable.

 

8

 

“Consolidated EBITDA” means, for any
period, the sum of the following determined on a Consolidated basis, without duplication,
for Borrower and its Subsidiaries in accordance with GAAP:  (a) Consolidated Net Income for such period plus
(b) the sum of the following to the extent deducted in determining Consolidated
Net Income for such period:  (i) taxes
based on income, receipts or profits, paid or accrued, (ii) Consolidated
Interest Expense, (iii) amortization and depreciation expense, (iv) other
non-cash charges (except to the extent that such non-cash charges are reserved
for cash charges to be taken in the future), including long-term asset
impairment charges and loss on disposals of assets, (v) extraordinary,
non-recurring or unusual losses or charges, (vi) Acquisition Transaction Costs
in an aggregate not to exceed $30,000,000, (vii) all reasonable
transaction, restructuring and transition costs and expenses incurred during
such period in connection with any Permitted Acquisition (including reasonable
retention bonuses and any reasonable severance payments made to former employees),
(viii) all expenses and costs incurred and all other payments made or
losses incurred in connection with the TSA Government Investigation and the
negotiation of any related settlement with respect thereto, (ix) to the
extent permitted to be made under this Agreement, Management Fees and reasonable
out-of-pocket expenses in connection with the performance of management,
consulting, monitoring, financial advisory or other services in respect of the
Credit Parties, (x) retention bonuses incurred in connection with the
Transactions not to exceed $5,000,000 and (xi) pension liabilities incurred by
the Borrower which are reimbursed by the Seller pursuant to Section 8.7(j) of
the Acquisition Agreement (to the extent Consolidated Net Income is not
increased as a result of such reimbursement), less (c) interest income,
any extraordinary, non-recurring or unusual gains (other than accruals of
revenue in the ordinary course of business and reversals in such periods of
accruals of, or reserves for, a cash charge in a prior period) and any gains on
the disposal of assets plus (d) without duplication of amounts included
in the determination of Consolidated Net Income, for each of the Fiscal
Quarters ending December 31, 2006, March 31, 2007, June 30, 2007 and September
29, 2007, the amount by which operating income (and associated depreciation and
amortization) from the CMS Agreements was less than $3,800,000 for each such
applicable Fiscal Quarter. For purposes of this Agreement (other than for purposes
of calculating Excess Cash Flow), Consolidated EBITDA shall be adjusted on a
pro forma basis, in a manner reasonably acceptable to the Administrative Agent,
to include, as of the first day of any applicable period, the Acquisition, any
Permitted Acquisition and any Asset Disposition closed during such period,
including, without limitation, adjustments reflecting any non-recurring costs
and any extraordinary expenses of the Acquisition, any Permitted Acquisition
and any Asset Disposition closed during such period and any Pro Forma Cost
Savings attributable to the Acquisition, such Permitted Acquisition or any
Asset Disposition, each calculated on a basis consistent with GAAP or as
approved by the Administrative Agent; provided, that any Pro Forma Cost
Savings for the Acquisition or a Permitted Acquisition may not exceed 15% of
the Consolidated EBITDA of the acquired business for the most recent period of
four quarters for which financial statements are available (with Consolidated
EBITDA and Consolidated Net Income for such acquired business being determined
as if references to “Borrower and its Subsidiaries” were instead to the
acquired business) or if such Pro Forma Cost Savings are greater than 15% of
such Consolidated EBITDA, all such Pro Forma Cost Savings shall be in
compliance with Regulation S-X of the Securities Exchange Act of 1934, as
amended or as approved by the Administrative Agent. Notwithstanding any of the
foregoing, if the Fiscal Quarters ending as of September 30, 2006 and
June 30, 2006 are included in any period for which Consolidated EBITDA is
being determined, 

 

9

 

Consolidated
EBITDA for such Fiscal Quarters shall be deemed to be the amounts set forth on Schedule
1.1(b).

 

“Consolidated Interest Expense” means,
with respect to Borrower and its Subsidiaries for any period, the gross interest
expense (including, without limitation, interest expense attributable to
Capital Leases, Synthetic Leases and all net payment obligations pursuant to
Hedging Agreements) of Borrower and its Subsidiaries, all determined for such
period on a Consolidated basis, without duplication, in accordance with GAAP. For
purposes of this Agreement, Consolidated Interest Expense shall be adjusted on
a pro forma basis, in a manner reasonably acceptable to the Administrative
Agent, to give effect to any Indebtedness incurred, assumed or permanently
repaid or extinguished during the applicable period in connection with the
Transactions, any Permitted Acquisition or any disposition as if such incurrence,
assumption, repayment or extinguishing had been effected on the first day of
such period.

 

“Consolidated Leverage Ratio” means,
as of any date of determination, the ratio of (a) Consolidated Total Indebtedness
on such date, less the aggregate amount of unrestricted Cash Equivalents
greater than $5,000,000 of Borrower and its Subsidiaries on such date to (b)
Consolidated EBITDA for the period of four (4) consecutive Fiscal Quarters
ending on or most recently prior to such date.

 

“Consolidated Net Income” means, with
respect to Borrower and its Subsidiaries, for any period of determination, the
net income (or loss) of Holdings and its Subsidiaries for such period,
determined on a Consolidated basis in accordance with GAAP; provided
that there shall be excluded from Consolidated Net Income:  (a) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of Consolidated Net Income accrued at any time following the Closing
Date, (b) the net income (or loss) of any Person that is not a Subsidiary, in
which Holdings or any of its Subsidiaries has a joint interest with a third
party, except to the extent such net income is actually paid in cash to Holdings
or any of its Subsidiaries by dividend or other distribution during such period,
(c) the net income (if positive) of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
to Holdings or any of its Subsidiaries of such net income is not at the time
permitted by operation of the terms of its charter or any agreement or
instrument applicable to such Subsidiary or Applicable Law, (d) gains or
losses realized in connection with Asset Dispositions (without regard to the
$1,500,000 limitation set forth in the definition thereof) or other dispositions
or the extinguishment of Indebtedness, (e) gains or losses due solely to
fluctuations in currency values and the related tax effects in accordance with
GAAP, (f) income or loss attributable to discontinued operations,
(g) all gains realized on or because of the purchase or other acquisition
by a Credit Party of any securities of such Credit Party or any other Credit
Party, (h) the cumulative effect of a change in accounting principles,
(i) any goodwill impairment charges and (j) any non-cash charges resulting
from the application of the purchase method of accounting in accordance with
GAAP in connection with the Acquisition or any Permitted Acquisition.

 

“Consolidated
Total Indebtedness” means, as of any date of determination with respect to Borrower
and its Subsidiaries on a Consolidated basis, without duplication, the sum of
all Indebtedness (other than Indebtedness of the type referred to in clauses
(f) (so long as undrawn) and (g) of the definition of “Indebtedness”) of Borrower
and its Subsidiaries.

 

10

 

“Contested Collateral Lien Conditions”
shall mean the following conditions:

 

(a)           Borrower shall cause any proceeding
instituted contesting such Lien to stay the sale or forfeiture of any portion
of the Collateral on account of such Lien; and

 

(b)           at the option and at the request of
the Administrative Agent, to the extent such Lien is in an amount in excess of
$500,000, the appropriate Credit Party shall maintain cash reserves in an
amount sufficient to pay and discharge such Lien and the Administrative Agent’s
reasonable estimate of all interest and penalties related thereto; and

 

(c)           such Lien shall in all respects be
subject and subordinate in priority to the Lien and security interest created
and evidenced by the Security Documents, except if and to the extent that the
Applicable Law creating, permitting or authorizing such Lien provides that such
Lien is or must be superior to the Lien and security interest created and
evidenced by the Security Documents.

 

“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

 

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

 

“Credit Parties” means, collectively, Borrower
and the Guarantors.

 

“Cure Proceeds” shall have the meaning
set forth in Section 12.6 hereto.

 

“Cure Right” shall have the meaning
set forth in Section 12.6 hereto.

 

“Debt Issuance” shall mean the
issuance of any Indebtedness by Holdings or any of its Subsidiaries, excluding
any Equity Issuance.

 

“Debt Rating” means, as of any date of
determination, the ratings as determined by either S&P or Moody’s of Borrower’s
non-credit-enhanced, senior secured and unsecured long-term 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.

 

“Defaulting Lender” means any Lender
that (a) has failed to fund any portion of the Revolving Credit Loans, the Term
Loans, participations in L/C Obligations or participations in Swingline Loans
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless such
amount is the subject of a good faith dispute, or (c) has been deemed insolvent
or become the subject of a bankruptcy or insolvency proceeding.

 

11

 

“Dispute” means any dispute, claim or
controversy arising out of, connected with or relating to this Agreement or any
other Loan Document, between or among parties hereto and to the other Loan
Documents.

 

“Disqualified Capital Stock” shall
mean any Capital Stock which, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, (a) matures (excluding any maturity as the result
of an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the option
of the holder thereof, in whole or in part, on or prior to the first
anniversary of the maturity date of the Senior Subordinated Notes, (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or (ii) any Capital Stock referred
to in (a) above, in each case at any time on or prior to the first anniversary
of the maturity date of the Senior Subordinated Notes, or (c) contains any
repurchase obligation which may come into effect prior to payment in full of
all Obligations; provided, however,
that any Capital Stock that would not constitute Disqualified Capital Stock but
for provisions thereof giving holders thereof (or the holders of any security
into or for which such Capital Stock is convertible, exchangeable or
exercisable) the right to require the issuer thereof to redeem such Capital Stock
upon the occurrence of a change in control or an asset sale occurring prior to
the first anniversary of the maturity date of the Senior Subordinated Notes
shall not constitute Disqualified Capital Stock if such Capital Stock provides
that the issuer thereof will not redeem any such Capital Stock pursuant to such
provisions prior to the repayment in full of the Obligations.

 

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

 

“Domestic Subsidiary” means any
Subsidiary organized under the laws of any political subdivision of the United
States (other than Puerto Rico).

 

“Earnout” means (a) any initially
contingent payment obligation related to a Permitted Acquisition, including,
without limitation, in the form of earnout payments, purchase price
adjustments, deferred purchase price payments and bonuses and other forms of
compensation to directors, officers, employees or consultants, in each case so
long as (i) such payment obligations are contingent at the time such
obligation is incurred or entered into, and subject to adjustment based on the
performance of the Person and/or assets so acquired, (ii) such payment obligations
are not subject, at the time such obligation is entered into, to any minimum
payment, in whole or in part by Holdings or any of its Subsidiaries, and
(iii) prior to becoming fixed or matured, such payment obligations are not
evidenced by a promissory note or secured by a pledge of assets by Holdings or
any of its Subsidiaries, or (b) the portion of a payment obligation described
in clause (a) which has become fixed and matured.

 

“Effective 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
reasonably acceptable to the Administrative Agent and the Required Lenders.

 

“Eligible Assignee” means (a) a
Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person
(other than a natural person) approved by (i) the Administrative 

 

12

 

Agent (such
approval not to be unreasonably withheld or delayed), (ii) in the case of any
assignment of a Revolving Credit Commitment, the Swingline Lender and the
Issuing Lender, and (iii) unless an Event of Default described in Section
12.1(a), (b), (i) or (j) has occurred and is
continuing, Borrower (each such approval not to be unreasonably withheld or
delayed); provided that, notwithstanding the foregoing, “Eligible
Assignee” shall not include Holdings or any of Holdings’ Affiliates or Subsidiaries.

 

“Employee Benefit Plan” means any
employee benefit plan within the meaning of Section 3(3) of ERISA which any
Credit Party or Subsidiary of any Credit Party maintains, sponsors, participates
in or has any liability with respect to the employees or former employees of
any Credit Party or any Subsidiary of any Credit Party.

 

“Environmental Claims” means any and
all actions, suits, written demands, demand letters, claims, liens, allegations,
notices of noncompliance or violation or potential responsibility, investigations,
or proceedings relating in any way to any actual or alleged violation of or
liability under any Environmental Law or relating to any Environmental Permit,
including, 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,
codes, rules, standards and regulations and the common law, and permits,
licenses, approvals 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, Release, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

 

“Environmental Permit” means any
permit, license, approval, registration, notification, consent or other
authorization required under any Environmental Law.

 

“Equity Contribution” shall have the meaning
assigned in the recitals hereto.

 

“Equity Investors” shall mean the
Permitted Holders and one or more other investors reasonably satisfactory to the
Administrative Agent.

 

“Equity Issuance” means any issuance
by Holdings or any of its Subsidiaries to any Person which is not a Credit
Party of (a) shares of its Capital Stock, (b) any shares of its Capital Stock
pursuant to the exercise of options or warrants, (c) any shares of its Capital
Stock pursuant to the conversion of any debt securities to equity or (d) the
receipt by Holdings or any of its Subsidiaries of any cash capital
contributions. The term “Equity Issuance” shall not include (i) any Asset Disposition,
(ii) any Debt Issuance, (iii) the Equity Contribution, (iv) Permitted Cure
Securities, (v) shares of Holdings issued upon exercise of options issued
to officers and employees or (vi) shares of Holdings issued as consideration to
sellers in connection with a Permitted Acquisition.

 

13

 

“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 any Credit Party 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.

 

“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 Board of Governors of the Federal Reserve system (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 the following determined on a Consolidated
basis, without duplication, for Borrower and its Subsidiaries in accordance
with GAAP:  (a) Consolidated EBITDA for
such period minus (b) the sum of the following:  (i) cash taxes based on income and profits,
(ii) Consolidated Cash Interest Expense for such period, (iii) all scheduled
principal payments made in respect of Indebtedness during such period, (iv) all
Capital Expenditures made during such period, (v) voluntary principal payments and
voluntary prepayments (other than scheduled principal payments or mandatory prepayments)
with respect to Term Loans and voluntary prepayments or voluntary repayments of
the Revolving Credit Loans to the extent that the Revolving Credit Commitment
is permanently reduced by an equal amount at the time of such payment, (vi) the
cash portion of all Acquisition Transaction Costs paid during such period to
the extent added back in determining Consolidated EBITDA, (vii) the cash
portion of the purchase price and all reasonable transaction, restructuring and
transition costs and expenses paid during such period in connection with any
Permitted Acquisition (including reasonable retention bonuses and any
reasonable severance payments made to former employees), (viii) cash used
for investments made pursuant to Section 11.3(b) or (p), (ix)
retention bonuses associated with the Transactions not to exceed $5,000,000, (x) the
cash portion of all expenses and costs incurred and all other payments made or
losses incurred during such period in connection with the TSA Government
Investigation and the negotiation of any related settlement with respect
thereto, (xi) to the extent permitted to be made under this Agreement, cash
Management Fees and reasonable expenses paid or reimbursed to the Sponsor in
connection with the performance of management, consultant, monitoring,
financial advisory or other services in respect of the Credit Parties, (xii)
permitted distributions made in cash pursuant to Section 11.6(e) and
(xiii) amounts added back to Consolidated EBITDA pursuant to clause (d) of the
definition thereof, minus or plus (c) any cash paid or received
pursuant to a working capital purchase price adjustment pursuant to the
Acquisition Agreement, minus or plus (d) any increases or
decreases in Working Capital plus (e) such amounts in (b)(iv) and
(b)(viii) of this definition made with proceeds of any incurrence of
Indebtedness or Asset Dispositions.

 

14

 

“Excluded Taxes” means, with respect
to the Administrative Agent, any Lender, the Issuing Lender or any other recipient
of any payment to be made by or on account of any obligation of Borrower
hereunder or under any other Loan Document, (a) taxes imposed on or measured by
its net income (however denominated), franchise taxes imposed on it (in lieu of
net income taxes) and branch profits taxes imposed on it, by a jurisdiction (or
any political subdivision thereof) as a result of the recipient being organized
or having its principal office or having any other present or former connection
with such jurisdiction (other than a connection resulting from any transaction
contemplated by this Agreement) or, in the case of any Lender, its applicable
lending office in such jurisdiction and (b) in the case of a Foreign Lender
(other than an assignee pursuant to a request by Borrower under Section
5.12(b)), any U.S. federal withholding tax that (i) is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto or designates a new Lending Office, except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, immediately prior to the
time of designation of a new Lending Office (or assignment), to receive
additional amounts from Borrower with respect to such withholding tax pursuant
to Section 5.11(a) or (ii) is attributable to such Foreign Lender’s
failure to comply with Section 5.11(e).

 

“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 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 Term Loans made by such Lender then outstanding,
or (b) the making of any Loan or participation in any Letter of Credit by
such Lender, as the context requires.

 

“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 and reasonably acceptable to Borrower. If, for any reason,
such rate is not available, then “Federal Funds Rate” shall mean 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. Rates for weekends or holidays shall be the same as
the rate for the most immediately preceding Business Day.

 

“Federal Governmental Contract” means
any written agreement, commitment, contract, instrument or other binding arrangement
between Borrower or any Subsidiary thereof and an agency, department or
instrumentality of the United States.

 

“Fee Letter” means the Fee Letter,
dated December 8, 2006, between Holdings, the Administrative Agent, Wachovia Investment
Holdings, LLC and Wachovia Capital Markets, LLC.

 

“Fiscal Quarter” means a fiscal
quarter of Borrower and its Subsidiaries.

 

“Fiscal Year” means a fiscal year of Borrower
and its Subsidiaries.

 

15

 

“Foreign Lender” means any Lender that
is not a U.S. Person within the meaning of Section 7701(a) of the Code.

 

“Foreign Pledge Agreement” means each
pledge agreement or similar instrument governed by the laws of a country other
than the United States, executed on the Closing Date or from time to time
thereafter in accordance with Section 9.11(b) by Borrower or any
Guarantor that owns Capital Stock of one or more Foreign Subsidiaries organized
in such country, in form and substance reasonably satisfactory to
Administrative Agent.

 

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

 

“GAAP” means 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 Borrower and its Subsidiaries
throughout the period indicated and (subject to Section 14.9)
consistent with the prior financial practice of Borrower and its Subsidiaries.

 

“Governmental Approvals” means all
authorizations, consents, approvals, permits, licenses and exemptions of all
Governmental Authorities.

 

“Governmental Authority” means the
government of the United States or any other nation, or of any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).

 

“Guarantors” means, collectively,
Holdings and each Subsidiary Guarantor.

 

“Guaranty Agreement” means the unconditional
guaranty agreement of even date executed by the Guarantors in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit H.

 

“Guaranty Obligation” means, with
respect to Holdings and its Subsidiaries, without duplication, any obligation,
contingent or otherwise, of any such Person pursuant to which such Person has
directly or indirectly guaranteed any Indebtedness 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
Indebtedness (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 Indebtedness 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 endorsements for collection or deposit in the
ordinary course of business.

 

“Hazardous Materials” means any
substances, materials, wastes, pollutants, contaminants, chemicals, compounds
or constituents, including without limitation, asbestos, polychlorinated 

 

16

 

biphenyls,
urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, radioactive substances, natural gas or
synthetic gas, which are subject to regulation, or can give rise to liability,
under any Environmental Law.

 

“Hedging Agreement” means any agreement
with respect to any Interest Rate Contract, forward rate agreement, 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 or
currency values.

 

“Hedging Obligations” means all
existing or future payment and other obligations owing by Borrower under any
Hedging Agreement (which such Hedging Agreement is permitted hereunder).

 

“Heirs” of any individual means such
individual’s estate, spouse, lineal relatives (including adoptive descendants),
administrator, committee or other personal representative or other estate
planning vehicle and any custodian or trustee for the benefit of any spouse or
lineal relatives (including adoptive descendants) of such individual.

 

“Holdings” has the meaning assigned
thereto in the introductory paragraph hereto.

 

“Indebtedness” means, with respect to
Holdings and its 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, obligations evidenced
by bonds, debentures, notes or other similar instruments of any such Person;

 

(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, Earnout or similar
agreements (that have become fixed and matured, but excluding all other
Earnouts)), except trade payables arising in the ordinary course of business
not more than one hundred twenty (120) days past due;

 

(c)           the Attributable Indebtedness of such
Person with respect to such Person’s obligations in respect of Capital Leases and
Synthetic Leases (in each case, regardless of whether accounted for as
indebtedness under GAAP);

 

(d)           all Indebtedness of any other Person
secured by a Lien on any asset owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse (but to the extent that the recourse
of the holder of such Indebtedness is limited to such asset, the amount of such
Indebtedness shall be deemed to be the lesser of the maximum amount thereof or
the fair market value of such asset);

 

(e)           all Guaranty Obligations of any such Person;

 

17

 

(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; and

 

(g)           all Net Hedging Obligations.

 

For all purposes hereof, the Indebtedness of
any Person shall include the Indebtedness of any partnership in which such Person
is a general partner unless such Indebtedness is expressly made non-recourse to
such Person. For the avoidance of doubt, “Indebtedness” shall not include $42.0
million liquidation preference of Qualified Preferred Equity issued on the Closing
Date.

 

“Indemnified Taxes” means all Taxes
other than Excluded Taxes.

 

“Information” shall have the meaning
set forth in Section 14.11 hereto.

 

“Insurance and Condemnation Event”
means the receipt by Holdings or any of its Subsidiaries of any cash insurance
proceeds or condemnation award payable by reason of theft, loss, physical
destruction or damage, taking or similar event with respect to any of their
respective properties or assets.

 

“Insurance Policies” means the
insurance policies and coverages required to be maintained by each Credit Party
which is an owner of Mortgaged Property with respect to the applicable Mortgaged
Property pursuant to Section 9.3 and all renewals and extensions
thereof.

 

“Insurance Requirements” means,
collectively, all provisions of the Insurance Policies, all requirements of the
issuer of any of the Insurance Policies and all orders, rules, regulations and
any other requirements of the National Board of Fire Underwriters (or any other
body exercising similar functions) binding upon each Credit Party which is an
owner of Mortgaged Property and applicable to the Mortgaged Property or any use
or condition thereof.

 

“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.

 

“IPO” means a bona fide underwritten
initial public offering of voting common Capital Stock in Holdings or a direct
or indirect parent of Holdings.

 

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

 

“Issuing Lender” means Wachovia, in
its capacity as issuer of any Letter of Credit, or any successor thereto.

 

18

 

“Joinder Agreement” means each joinder
agreement executed by a Subsidiary of Holdings in favor of the Administrative
Agent for the benefit of itself and the Secured Parties, substantially in the
form of Exhibit J.

 

“Landlord Access Agreement” means a
Landlord Access Agreement, substantially in the form of Exhibit L, or
such other form as may reasonably be acceptable to the Administrative Agent.

 

“L/C Commitment” means the lesser of
(a) five million dollars ($5,000,000) 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 the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender.

 

“Leases” means any and all leases,
subleases, tenancies, options, concession agreements, rental agreements, occupancy
agreements, franchise agreements, access agreements and any other agreements
(including all amendments, extensions, replacements, renewals, modifications
and/or guarantees thereof), whether or not of record and whether now in
existence or hereafter entered into, affecting the use or occupancy of all or
any portion of any Real Property which is used by Borrower or its Subsidiaries
in connection with their business.

 

“Lender” means each Person executing
this Agreement as a Lender (including, without limitation, the Issuing Lender
and the Swingline Lender unless the context otherwise requires) set forth on
the signature pages hereto, each Person that has become a Lender by executing
and deliver a Lender Addendum on or prior to the Closing Date and each Person
that hereafter becomes a party to this Agreement as a Lender pursuant to Section 14.10.

 

“Lender Addendum” means a Lender
Addendum in the form of Exhibit M, or such other form as may be supplied
by the Administrative Agent, to be executed and delivered by a Lender on or
prior to the date hereof.

 

“Lending Office” means, with respect
to any Lender, the office of such Lender maintaining such Lender’s Extensions
of Credit.

 

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

 

“Letters of Credit” has the meaning
assigned thereto in Section 3.1.

 

“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 

 

19

 

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, then “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) 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 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, deed of trust, 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, each Note, the Letter of Credit Applications, the Guaranty
Agreement, the Security Documents, and each other document, instrument,
certificate and agreement executed and delivered by Borrower or any Subsidiary
thereof in connection with this Agreement or otherwise referred to herein or
contemplated hereby (excluding any Hedging Agreement).

 

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

 

“Management Fees” means management
fees paid to the Sponsor; provided that the Management Fees shall not exceed
in any Fiscal Year the lesser of 2.5% of Borrower’s Consolidated EBITDA
and $3,000,000.

 

“Material Adverse Effect” means the
existence of events, conditions and/or contingencies that have had or are reasonably
likely to have (a) a material adverse effect on the business, assets,
results of operations or financial condition of Borrower and its Subsidiaries,
taken as a whole, or (b) a material impairment of the validity or
enforceability of, or a material impairment of the material rights, remedies or
benefits available to the Lenders, any Issuing Lender, the Administrative Agent
under any Loan Document.

 

20

 

“Material Contract” means (a) any
contract or agreement, written or oral, of Borrower or any of its Subsidiaries
involving aggregate consideration payable to or by any such Person in an amount
in excess of $15,000,000 per annum or (b) any other contract or agreement,
written or oral, of Borrower or any of its Subsidiaries, a material default
under which, or the termination of which prior to its scheduled expiration, could
reasonably be expected to have a Material Adverse Effect.

 

“Material
Government Contract” means any Federal Governmental Contract,
and where applicable individual delivery and individual task orders under any
Federal Governmental Contract, (i) involving monetary liability of or to any
such Person in an amount in excess of $15,000,000 over the remaining term of
such contract and (ii) that has a remaining term of greater than six (6)
months.

 

“Mortgaged Property” means each parcel
of Real Property subject to a Mortgage.

 

“Mortgages” means the collective
reference to each mortgage, deed of trust or other real property security
document creating and evidencing a Lien on a Mortgaged Property, encumbering
all Real Property now or hereafter owned by Borrower or any Subsidiary and with
respect to which Borrower or any Subsidiary is required to deliver such
mortgage, deed of trust or other document pursuant to Section 9.11(c),
in form and substance reasonably acceptable to the Administrative Agent with
such schedules and including such provisions as shall be necessary to conform
such document to applicable local and foreign law or as shall be customary under
applicable or foreign law and executed by Borrower or any Subsidiary in favor
of the Administrative Agent, for the ratable benefit of itself and the Lenders.

 

“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 Borrower or any ERISA
Affiliate is making contributions, is accruing an obligation to make
contributions or has any liability with respect thereto.

 

“Net Cash Proceeds” means, as
applicable, (a) with respect to any Asset Disposition by any Credit Party, the
gross cash proceeds received by Holdings or any of its Subsidiaries from such
sale (net of purchase price adjustments reasonably expected to be payable in
connection therewith; provided that, to the extent such purchase price
adjustment is determined to be not payable or is otherwise not paid within 270
days of such Asset Disposition (other than as a result of a dispute with
respect to such purchase price adjustment which is subject to a resolution procedure
set forth in the applicable transaction documents), such proceeds shall
constitute Net Cash Proceeds), less the sum of (i) all income taxes and
other taxes assessed by or due to a Governmental Authority as a result of such
sale and any other fees, costs and expenses incurred in connection therewith,
(ii) the principal amount of, premium, if any, and interest on any Indebtedness
secured by a Lien on the asset (or a portion thereof) sold, which Indebtedness
is required to be repaid in connection with such sale and (iii) the amount of
any reserves established by Holdings or any of its Subsidiaries to fund any
contingent liabilities reasonably expected to arise (as determined in good
faith by Holdings or such applicable Subsidiary (as applicable)) within one
year of such transaction that are directly attributable to such transaction,
(b) with respect to any Equity Issuance or issuance of Indebtedness, the gross
cash proceeds received by Holdings or

 

21

 

any of its
Subsidiaries therefrom less all legal, underwriting, commissions and
other 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 gross cash proceeds received by Holdings or its Subsidiaries
from an insurance company or Governmental Authority, as applicable, less the
sum of (i) all fees, costs and expenses in connection therewith and (ii) the
principal amount of, premium, if any, and interest on any Indebtedness secured
by a Lien on the asset (or a portion thereof) subject to such loss or
condemnation proceeding, which Indebtedness is required to be repaid in
connection with such loss or condemnation proceeding.

 

“Net Hedging Obligations” means, as of
any date, with respect to a Hedging Agreement, the Termination Value of such
Hedging Agreement on such date.

 

“Non-Consenting Lender” has the
meaning assigned thereto in Section 14.2.

 

“Notes” means the collective reference
to the Revolving Credit Notes, the Swingline Note and the Term 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(b).

 

“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) solely for the purposes of the Security Documents, all Hedging
Obligations with any Person that is a Lender or an Affiliate of a Lender at the
time the related Hedging Agreement is executed and (d) all other fees and
commissions (including attorneys’ fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by Holdings or any of its Subsidiaries to the Lenders or the Administrative
Agent, in each case under any Loan Document with respect to any Loan or Letter
of Credit of every kind, nature and description, direct or indirect, absolute
or contingent, due or to become due, liquidated or unliquidated, and whether or
not evidenced by any note.

 

“OFAC” means the U.S. Department of
the Treasury’s Office of Foreign Assets Control.

 

“Officer’s Compliance Certificate”
means a certificate of the chief financial officer or the treasurer of Borrower
substantially in the form of Exhibit F.

 

“Operating Lease” means, as to any Person
as determined in accordance with GAAP, any lease of property (whether real, personal
or mixed) by such Person as lessee which is not a Capital Lease.

 

22

 

“Organizational Documents” means (i)
with respect to any corporation, its certificate or articles of incorporation
or organization and its by-laws or, as the case may be, its memorandum and
articles, as amended, (ii) with respect to any limited partnership, its certificate
of limited partnership and its partnership agreement, (iii) with respect to any
general partnership, its partnership agreement, (iv) with respect to any
limited liability company, its articles of organization and its operating
agreement, and (v) with respect to any other Person, comparable instruments and
documents. In the event any term or condition of this Agreement or any other
Loan Document requires any Organizational Document to be certified by a
secretary of state or similar governmental official, the reference to any such “Organizational
Document” shall only be to a document of a type customarily certified by such
governmental official.

 

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

 

“Participant” has the meaning assigned
thereto in Section 14.10(d).

 

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

 

“Pension Plan” means any pension plan
within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and (a) which is maintained for the employees of Borrower or any ERISA
Affiliates or (b) with respect to which Borrower or any ERISA Affiliate has any
liability.

 

“Perfection Certificate” means a
certificate in the form of Exhibit K.

 

“Permitted Acquisition” means any
acquisition after the Effective Date (whether by purchase, merger, amalgamation,
consolidation or otherwise), by Holdings, Borrower or any Subsidiary Guarantor
in the form of acquisitions of all or substantially all of the business or a
line of business (whether by the acquisition of all of the capital stock,
assets or any combination thereof) of any other Person if each such other
acquisition meets all of the following requirements:

 

(a)           no less than fifteen (15) Business
Days prior to the proposed closing date of such acquisition, Borrower shall
have delivered written notice and description of such acquisition to the
Administrative Agent and the Lenders, which notice shall include the proposed
closing date of such acquisition;

 

(b)           Borrower shall have certified on or
before the closing date of such acquisition, in writing and in a form reasonably
acceptable to the Administrative Agent, that such acquisition has been approved
by the board of directors or equivalent governing body of the Person to be
acquired;

 

(c)           the Person or business to be acquired
shall be in a substantially similar line of business as Borrower and its Subsidiaries
pursuant to Section 11.13;

 

23

 

(d)           if such transaction is a merger or
consolidation, no Change in Control shall have been effected thereby and the
transaction shall comply with the requirements of Section 11.4;

 

(e)           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;

 

(f)            no later than five (5) Business Days
prior to the proposed closing date of such acquisition, Borrower shall have
delivered to the Administrative Agent and the Lenders an Officer’s Compliance
Certificate for the most recent Fiscal Quarter end preceding such acquisition
demonstrating, in form and substance reasonably satisfactory to the Administrative
Agent and the Lenders, pro forma compliance (after giving effect to the
acquisition and any Extensions of Credit made or to be made in connection
therewith, as if such acquisition had occurred on the first day of the
applicable four quarter period) with each covenant contained in Article X;

 

(g)           no later than five (5) Business Days
prior to the proposed closing date of such acquisition Borrower, to the extent
requested by the Administrative Agent, (A) shall have delivered to the
Administrative Agent promptly upon the finalization thereof copies of
substantially final Permitted Acquisition Documents, which shall be in form and
substance reasonably satisfactory to the Administrative Agent and
(B) shall have delivered to, or made available for inspection by, the Administrative
Agent substantially complete Permitted Acquisition Diligence Information;

 

(h)           no Event of Default shall have
occurred and be continuing both before and after giving effect to such acquisition;

 

(i)            Borrower shall have obtained the
prior written consent of the Administrative Agent and the Required Lenders
prior to the consummation of such acquisition if the Permitted Acquisition
Consideration for such acquisition (or series of related acquisitions) exceeds
$30,000,000 or, together with all other acquisitions consummated during the
term of this Agreement, exceeds $50,000,000 in the aggregate;

 

(j)            Borrower shall demonstrate, in form
and substance reasonably satisfactory to the Administrative Agent, that the
entity to be acquired had positive Consolidated EBITDA (all references to Borrower
and its Subsidiaries in the definition of “Consolidated EBITDA” being deemed to
refer to the entity to be acquired and its Subsidiaries for the purpose of this
clause (j)) for the four (4) Fiscal Quarter period ended prior to the proposed
closing date of such acquisition; and

 

(k)           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 acquisition.

 

“Permitted Acquisition Consideration”
means the aggregate amount of the purchase price (including, but not limited
to, any assumed debt, Earnouts (valued at the maximum 

 

24

 

amount
reasonably expected to be payable thereunder as determined in good faith by Borrower)
or deferred payments, but excluding any Qualified Capital Stock of Holdings issued
to the seller in any such Permitted Acquisition, net of the applicable acquired
company’s cash and cash equivalents (including investments of the type
described in Section 11.3(b)) 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 Holdings
or any of its Subsidiaries in order to consummate the applicable Permitted
Acquisition.

 

“Permitted Acquisition Diligence
Information” means with respect to any acquisition proposed by Holdings, Borrower
or any Subsidiary Guarantor, to the extent applicable, all material financial
information, all material contracts, and all other material information, in
each case, reasonably requested to be delivered to the Administrative Agent in
connection with such acquisition and which is available to Holdings, Borrower
or such Subsidiary Guarantor (except to the extent that any such information is
(a) subject to any confidentiality agreement, unless mutually agreeable
arrangements can be made to preserve such information as confidential, (b)
classified or (c) subject to any attorney-client privilege).

 

“Permitted Acquisition Documents” means
with respect to any acquisition proposed by Holdings, Borrower or any Subsidiary
Guarantor, final copies (or substantially final drafts if not executed at the
required time of delivery) of the purchase agreement, sale agreement, merger
agreement or other agreement evidencing such acquisition, including, without
limitation, all legal opinions and each other document executed, delivered,
contemplated by or prepared in connection therewith and any amendment, modification
or supplement to any of the foregoing.

 

“Permitted Cure Securities” means
unsecured common equity securities or Qualified Preferred Equity of Holdings.

 

“Permitted Holders” means each of
Sponsor and any Person Controlling, Controlled by, or under common Control
with, and any fund or account Controlled or managed by or under common Control
or management with the Sponsor and employees, management and directors of
(including any of their Heirs), and Persons owning accounts managed or advised
by or Controlled by, any of the foregoing and their respective Affiliates.

 

“Permitted Liens” means the Liens
permitted pursuant to Section 11.2.

 

“Person” means any natural person,
corporation, limited liability company, limited liability partnership, trust,
joint venture, association, company, partnership, limited partnership,
governmental authority or other entity.

 

“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.

 

25

 

“Pro Forma Cost Savings” means, with
respect to any period, the reduction in net costs and related adjustments that
(i) were directly attributable to an acquisition that occurred during the
four-quarter period or after the end of the four-quarter period and on or prior
to the applicable calculation date and calculated on a basis that is consistent
with Regulation S-X under the Securities Act of 1933 as in effect and applied
as of the date of this Agreement, (ii) were actually implemented by the
business that was the subject of any such acquisition within six months after
the date of the acquisition and prior to the applicable calculation date that
are supportable and quantifiable by the underlying accounting records of such
business or (iii) relate to the business that is the subject of any such
acquisition and that Borrower reasonably determines are probable based upon
specifically identifiable actions to be taken within six months of the date of
the acquisition and, in the case of each of (i), (ii) and (iii), are described,
as provided below, in an officers’ certificate, as if all such reductions in
costs had been effected as of the beginning of such period. Pro Forma Cost
Savings described above shall be set forth in a certificate delivered to the
Administrative Agent from Borrower’s chief financial officer that outlines the
specific actions taken or to be taken, the net cost savings achieved or to be
achieved from each such action and that, in the case of clause (iii) above,
such savings have been determined to be probable.

 

“Property” shall mean any right, title
or interest in or to property or assets of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible and including Capital Stock or
other ownership interests of any person and whether now in existence or owned,
leased or hereafter entered into or acquired, including all Real Property.

 

“Property Material Adverse Effect” has
the meaning assigned thereto in the Mortgages.

 

“Qualified Capital Stock” of any
person shall mean any Capital Stock of such person that are not Disqualified
Capital Stock.

 

“Qualified Preferred Equity” means
preferred equity that (a) has a perpetual maturity, (b) will not be mandatory redeemable
(except upon a Change in Control) prior to 91 days after the maturity date of
the Senior Subordinated Notes, (c) does not pay cash dividends while the Senior
Subordinated Notes are outstanding, and (d) does not have any remedies other
than the ability to designate board members.

 

“Real Property” shall mean,
collectively, all right, title and interest (including any leasehold, mineral
or other estate) in and to any and all parcels of or interests in real property
owned, leased, otherwise held or operated by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.

 

“Register” has the meaning assigned
thereto in Section 14.10(c).

 

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

 

26

 

“Related Parties” means, with respect
to any Person, such Person’s Affiliates and the directors, officers, employees,
agents and advisors of such Person and of such Person’s Affiliates.

 

“Release” means any spilling, leaking,
pumping, emitting, emptying, discharging, injecting, escaping, leaching, migrating,
dumping or disposing of Hazardous Materials (including the abandonment or discarding
of barrels, containers or other closed receptacles containing Hazardous
Materials) into or through the environment (including, without limitation,
ambient air, indoor air, surface water, groundwater and surface or subsurface
strata) or into or out of any real property, including the movement of
Hazardous Materials through or in the air, soil, surface water, groundwater or
property.

 

“Required Lenders” means, at any date,
any combination of Lenders whose Revolving Credit Commitments and Term Loans outstanding
aggregate more than 50 percent (50%) of the Aggregate Commitment and Term Loans
outstanding or, if the Credit Facilities have been terminated pursuant to Section 12.2,
any combination of Lenders holding more than fifty percent (50%) of the aggregate
Extensions of Credit; provided that the Commitment of, and the portion
of the Extensions of Credit, as applicable, held or deemed held by, any Defaulting
Lender shall be excluded from the Aggregate Commitment and aggregate Extensions
of Credit for purposes of making a determination of Required Lenders.

 

“Required Revolving Lenders” means, at
any date, any combination of Lenders whose Revolving Credit Commitments aggregate
more than 50 percent (50%) of the Aggregate Commitment outstanding or, if the
Revolving Credit Commitments have been terminated pursuant to Section 12.2,
any combination of Lenders holding more than fifty percent (50%) of the
aggregate Extensions of Credit (without giving effect to outstanding Term Loans
in the calculation of aggregate Extensions of Credit); provided that the
Commitment of, and the portion of the Extensions of Credit, as applicable, held
or deemed held by, any Defaulting Lender shall be excluded from the Aggregate
Commitment and aggregate Extensions of Credit for purposes of making a
determination of Required Revolving Lenders.

 

“Requirements of Law” shall mean,
collectively, any and all laws, judgments, orders, decrees, ordinances, rules,
regulations, statutes or case law of any Governmental Authority.

 

“Responsible Officer” means the chief
executive officer, president, chief financial officer, controller, treasurer or
assistant treasurer of a Credit Party or any other officer of a Credit Party
reasonably acceptable to the Administrative Agent. Any document delivered hereunder
that is signed by a Responsible Officer of a Credit Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Credit Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Credit Party.

 

“Restricted Payment” shall have the
meaning set forth in Section 11.6 hereto.

 

“Revolving Credit Commitment” means
(a) as to any Revolving Credit Lender, the obligation of such Revolving Credit
Lender to make Revolving Credit Loans to the account of Borrower hereunder in
an aggregate principal amount at any time outstanding not to exceed 

 

27

 

the amount set
forth in the Lender Addendum delivered by such Revolving Credit Lender under
the caption “Amount of Commitment/Advances for the Lender Party named above” or,
if such Lender has entered into one or more Assignment and Assumptions, the
amount set forth opposite such Revolving Credit Lender’s name on the Register,
as such amount may be reduced or modified at any time or from time to time
pursuant to the terms hereof and (b) as to all Revolving Credit Lenders, the
aggregate commitment of all Revolving Credit 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 aggregate Revolving Credit Commitment of all Revolving
Credit Lenders on the Effective Date shall be fifty million dollars ($50,000,000).

 

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

 

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

 

“Revolving Credit Lenders” means
Lenders with a Revolving Credit Commitment.

 

“Revolving Credit Loans” means any
revolving loan made to Borrower pursuant to Section 2.1, and all such
revolving loans collectively as the context requires.

 

“Revolving Credit Maturity Date” means
the earliest to occur of (a) the fifth anniversary of the Effective Date,
(b) the date of termination by Borrower pursuant to Section 2.5, or
(c) the date of termination by the Administrative Agent on behalf of the
Lenders pursuant to Section 12.2(a).

 

“Revolving Credit Note” means a
promissory note made by Borrower in favor of a Revolving Credit Lender evidencing
the Revolving Credit Loans made by such Lender, substantially in the form of Exhibit A-1.

 

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

 

“Sanctioned Entity” shall mean (i) an
agency of the government of, (ii) an organization directly or indirectly controlled
by, or (iii) a person resident in a country that is subject to a sanctions
program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html,
or as otherwise published by OFAC from time to time as such program may be
applicable to such agency, organization or person.

 

“Sanctioned Person” shall mean a person
named on the list of Specially Designated Nationals or Blocked Persons maintained
by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published by OFAC from time to time.

 

28

 

“SEC” shall mean the Securities and
Exchange Commission (or any successor thereto).

 

“Secured Parties” shall mean,
collectively, the Administrative Agent, the Lenders and each party to a Hedging
Agreement if at the date of entering into such Hedging Agreement such person
was a Lender or an Affiliate of a Lender and such person executes and delivers
to the Administrative Agent a letter agreement in form and substance acceptable
to the Administrative Agent pursuant to which such person (i) appoints the
Administrative Agent as its agent under the applicable Loan Documents and
(ii) agrees to be bound by the provisions of Sections 14.2, 14.3
and 14.5 as if it were a Lender.

 

“Security Documents” means the
collective reference to the Collateral Agreement, each Joinder Agreement, the
Mortgages, the Perfection Certificate, any Foreign Pledge Agreements and each
other agreement or writing pursuant to which any Credit Party purports to
pledge or grant a security interest in, or grant a Lien on, any property or
assets securing the Obligations.

 

“Senior Note Guarantees” shall mean
the guarantees of the Subsidiary Guarantors pursuant to the Senior Subordinated
Note Agreement.

 

“Senior Subordinated Note Agreement”
shall mean any indenture, note purchase agreement or other agreement pursuant
to which the Senior Subordinated Notes are issued as in effect on the date
hereof and thereafter amended from time to time subject to the requirements of
this Agreement.

 

“Senior Subordinated Note Documents”
shall mean the Senior Subordinated Notes, the Senior Subordinated Note Agreement,
the Senior Note Guarantees and all other documents executed and delivered with
respect to the Senior Subordinated Notes or the Senior Subordinated Note Agreement.

 

“Senior Subordinated Notes” shall mean
$190.0 million aggregate principal amount of Borrower’s 9 5/8% Senior Subordinated
Notes due 2015 issued pursuant to the Senior Subordinated Note Agreement on the
Effective Date and any registered notes issued by Borrower in exchange for, and
as contemplated by, such notes with terms no less favorable to the Lenders than
the notes issued pursuant to the Senior Subordinated Note Agreement.

 

“Solvent” means, as to Holdings and
its Subsidiaries taken as a whole on a particular date, that such Persons (a)
have capital sufficient to carry on their business and transactions and all
business and transactions in which they are about to engage and are able to pay
their debts as they mature, (b) have assets having a value, both at fair
valuation and at present fair saleable value, greater than the amount required
to pay their probable liabilities (including contingencies), and (c) do not
believe that they will incur debts or liabilities beyond their ability to pay
such debts or liabilities as they mature.

 

“Specified Representations”  means the representations and warranties contained in Sections
7.1 (a), (c), (d), (j), (k) and (aa)
hereof.

 

29

 

“Sponsor” means The Veritas Capital
Fund Management, L.L.C. and its Controlled affiliates or any other investment
vehicle Controlled by any of them.

 

“Subordinated Indebtedness” means the
collective reference to any Indebtedness of Holdings or any 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 and shall include, without limitation, the Senior Subordinated Notes.

 

“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 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 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 Borrower.

 

“Subsidiary Guarantors” means each
direct or indirect Subsidiary of Borrower in existence on the Effective Date
and listed on Schedule 1.1(a) hereto or which becomes a party to a
Joinder Agreement pursuant to Section 9.11.

 

“Survey” shall mean a survey of any
Mortgaged Property (and all improvements thereon) which is (a)
(i) prepared by a surveyor or engineer licensed to perform surveys in the
jurisdiction where such Mortgaged Property is located, (ii) dated (or redated)
not earlier than six months prior to the date of delivery thereof unless there
shall have occurred within six months prior to such date of delivery any exterior
construction on the site of such Mortgaged Property or any easement, right of
way or other interest in the Mortgaged Property has been granted or become
effective through operation of law or otherwise with respect to such Mortgaged
Property which, in either case, can be depicted on a survey, in which events,
as applicable, such survey shall be dated (or redated) after the completion of
such construction or if such construction shall not have been completed as of
such date of delivery, not earlier than 20 days prior to such date of
delivery, or after the grant or effectiveness of any such easement, right of
way or other interest in the Mortgaged Property, (iii) certified by the surveyor
(in a manner reasonably acceptable to the Administrative Agent) to the
Administrative Agent and the title company, (iv) complying in all respects
with the minimum detail requirements of the American Land Title Association as
such requirements are in effect on the date of preparation of such survey and
(v) sufficient for the title company to remove all standard survey
exceptions from the title insurance policy (or commitment) relating to such
Mortgaged Property and issue the endorsements of the type required by Section 9.11(c)(vi)
or (b) otherwise acceptable to the Administrative Agent.

 

“Swingline Commitment” means the
lesser of (a) seven million five hundred thousand dollars ($7,500,000) and
(b) the Revolving Credit Commitment.

 

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

 

30

 

“Swingline Lender” means Wachovia in
its capacity as swingline lender hereunder, or any Lender that becomes the
Swingline Lender upon Wachovia’s resignation as Administrative Agent.

 

“Swingline Loan” means any swingline
loan made by the Swingline Lender to Borrower pursuant to Section 2.2,
and all such swingline loans collectively as the context requires.

 

“Swingline Note” means a promissory
note made by Borrower in favor of the Swingline Lender evidencing the Swingline
Loans made by the Swingline Lender, substantially in the form of Exhibit A-2.

 

“Swingline Termination Date” means the
Revolving Credit Maturity Date.

 

“Syndication Agent” means Goldman Sachs
Credit Partners L.P., in its capacity as Syndication Agent hereunder.

 

“Synthetic Lease” means any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an Operating
Lease in accordance with GAAP.

 

“Tax Payments” shall have the meaning
set forth in Section 11.6(e) hereto.

 

“Taxes” means all present or future
taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

“Term Loan” means the term loans to be
made to Borrower by the Lenders pursuant to Section 4.1.

 

“Term Loan Commitment” means (a) as to
any Term Loan Lender, the obligation of such Term Loan Lender to make a Term
Loan to Borrower on the Effective Date in an aggregate principal amount not to
exceed the amount set forth in the Lender Addendum delivered by such Term Loan
Lender under the caption “Amount of Commitment/Advances for the Lender Party
Named Above” or, if such Term Loan Lender has entered into one or more
Assignment and Assumptions, the amount set forth opposite such Lender’s name on
the Register, as such amount may be reduced or otherwise 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 Term Loans hereunder on the
Effective Date. The aggregate Term Loan Commitment of all Lenders on the
Effective Date shall be two hundred forty million dollars ($240,000,000).

 

“Term Loan Commitment Percentage”
means, as to any Lender, (a) prior to making the Term Loans, the ratio of (i)
the Term Loan Commitment of such Lender to (ii) the Term Loan Commitments of
all Lenders and (b) after the Term Loans are made, the ratio of (i) the
outstanding principal balance of the Term Loans held by such Lender to (ii) the
aggregate outstanding principal balance of the Term Loan held by all Lenders.

 

31

 

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

 

“Term Loan Lenders” means Lenders with
a Term Loan Commitment or Term Loans outstanding.

 

“Term Loan Maturity Date” means the first
to occur of (a) the sixth anniversary of the Effective Date or
(b) the date of termination by the Administrative Agent on behalf of the
Lenders pursuant to Section 12.2(a).

 

“Term Note” means a promissory note
made by Borrower in favor of a Term Loan Lender evidencing the Term Loans made
by such Lender, substantially in the form of Exhibit A-3.

 

“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 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 Borrower
of 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 (i) 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,
or (j) the “substantial cessation of operations” within the meaning of Section
4062(e) of ERISA with respect to a Pension Plan, or (k) the making of any amendment
to any Pension Plan which could result in the imposition of a lien or the
posting of a bond or other security, or (l) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA).

 

“Termination Value” means, in respect
of any one or more Hedging Agreements, after taking into account the effect of
any legally enforceable netting agreement relating to such Hedging Agreements,
(a) for any date on or after the date such Hedging Agreements have been closed
out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Hedging Agreements, as determined based upon three or more mid-market or other
readily available quotations provided by recognized dealers in such Hedging
Agreements (one of which may be a Lender or any Affiliate of a Lender).

 

“Transaction Affiliate” has the
meaning assigned thereto in Section 13.10.

 

32

 

“Transaction Costs” means all transaction
fees, charges and other amounts related to Permitted Acquisitions (including,
without limitation, any financing fees, merger and acquisition fees, legal fees
and expenses, due diligence fees or any other fees and expenses in connection
therewith).

 

“Transaction Documents” shall mean the
Acquisition Documents, the Senior Subordinated Note Documents and the Loan
Documents.

 

“Transactions” shall mean,
collectively, the transactions to occur on or prior to the Closing Date
pursuant to the Transaction Documents, including (a) the consummation of
the Acquisition; (b) the execution, delivery and performance of the Loan
Documents; (c) the Equity Contribution; (d) the issuance of the Senior Subordinated
Notes; and (e) the payment of all fees and expenses to be paid on or prior
to the Closing Date and owing in connection with the foregoing.

 

“TSA Government Investigation” means
the investigation by the government of the United States of America in connection
with a contract awarded by the Transportation Security Administration to NCS
Pearson, Inc. in 2002.

 

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

 

“Uniform Customs” means the Uniform
Customs and Practice for Documentary Credits (1993 Revision), effective
January, 1994 International Chamber of Commerce Publication No. 500.

 

“United States” or “U.S.” means
the United States of America.

 

“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 of such Subsidiary are, directly
or indirectly, owned or Controlled by 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 Borrower).

 

“Working Capital” means, as at any
date of determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.

 

SECTION 1.2.        Other Definitions and Provisions.
With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:  (a) the definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined, (b)
whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”, (d) the word
“will” shall be construed to have the same meaning and effect as the word “shall”,
(e) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented 

 

33

 

or otherwise modified (subject
to any restrictions on such amendments, supplements or modifications set forth
herein), (f) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (g) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (h) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement, (i) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights, (j)
the term “documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings,
however evidenced, whether in physical or electronic form, (k) in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each
mean “to but excluding”; and the word “through” means “to and including,” and
(l) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

SECTION 1.3.        Accounting
Terms. All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with GAAP as in
effect from time to time, applied in a manner consistent with that used in
preparing the audited financial statements required by Section 8.1(b),
except as otherwise specifically prescribed herein.

 

SECTION 1.4.        UCC
Terms. Terms defined in the UCC in effect on the Closing Date and not
otherwise defined herein shall, unless the context otherwise indicates, have
the meanings provided by those definitions. Subject to the foregoing, the term “UCC”
refers, as of any date of determination, to the UCC then in effect.

 

SECTION 1.5.        Rounding.
Any financial ratios required to be maintained by Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

 

SECTION 1.6.        References
to Laws. Unless otherwise expressly provided herein, references to any
Applicable Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Applicable
Law.

 

SECTION 1.7.        Times
of Day. Unless otherwise specified, all references herein to times of day
shall be references to Eastern time (daylight or standard, as applicable).

 

SECTION 1.8.        Letter
of Credit Amounts. Unless otherwise specified, all references herein to the
amount of a Letter of Credit at any time shall be deemed to mean the maximum
face amount of such Letter of Credit after giving effect to all prospective
increases thereof provided for in such Letter of Credit, whether or not such
maximum face amount is in effect at such time.

 

34

 

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
Revolving Credit Lender severally agrees to make Revolving Credit Loans to Borrower
from time to time from the Closing Date through, but not including, the
Revolving Credit Maturity Date as requested by Borrower in accordance with the
terms of Section 2.3; provided that (a) the aggregate
principal amount of all outstanding Revolving Credit Loans (after giving effect
to any amount requested) shall not exceed the Revolving Credit Commitment less
the sum of all outstanding Swingline Loans and L/C Obligations and (b) the
principal amount of outstanding Revolving Credit Loans from any Revolving
Credit Lender to Borrower shall not at any time exceed such Revolving Credit
Lender’s Revolving Credit Commitment less such Revolving Credit Lender’s
Revolving Credit Commitment Percentage of outstanding L/C Obligations and outstanding
Swingline Loans; provided, further, that no more than $15.0
million (without giving effect to Letters of Credit) of Revolving Credit Loans
will be available on the Closing Date (provided that any amount of the
Revolving Credit Loans made on the Closing Date in excess of $5.0 million will
be available only if (i) Borrower has received cash from the Seller on the
Closing Date in the amount of such excess or otherwise has cash on hand on the
Closing Date in the amount of such excess and (ii) Borrower complies with Section
2.4(e)). Each Revolving Credit Loan by a Revolving Credit Lender shall be
in a principal amount equal to such Revolving 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, Borrower
may borrow, repay and reborrow Revolving Credit Loans hereunder until the
Revolving Credit Maturity Date.

 

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 Borrower from time to time from the Closing Date through,
but not including, the Swingline Termination Date; provided that the
aggregate principal amount of all outstanding Swingline Loans (after giving
effect to any amount requested), shall not exceed the lesser of (i) the Revolving
Credit Commitment less the sum of all outstanding Revolving Credit Loans and
the L/C Obligations and (ii) the Swingline Commitment.

 

(b)           Refunding.

 

(i)            Swingline Loans
shall be refunded by the Revolving Credit Lenders on demand by the Swingline
Lender. Such refundings shall be made by the Revolving Credit Lenders in
accordance with their respective Revolving Credit Commitment Percentages and
shall thereafter be reflected as Revolving Credit Loans of the Revolving Credit
Lenders on the books and records of the Administrative Agent. Each Revolving
Credit Lender shall fund its respective Revolving Credit Commitment Percentage
of Revolving Credit Loans as required to repay Swingline Loans outstanding to
the Swingline Lender upon demand by the Swingline Lender but in no event later
than 1:00 p.m. on the next succeeding Business Day after such demand is
made. 

 

35

 

No Revolving Credit Lender’s obligation to fund its respective
Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by
any other Revolving Credit Lender’s failure to fund its Revolving Credit
Commitment Percentage of a Swingline Loan, nor shall any Revolving Credit
Lender’s Revolving Credit Commitment Percentage be increased as a result of any
such failure of any other Revolving Credit Lender to fund its Revolving Credit
Commitment Percentage of a Swingline Loan.

 

(ii)           Borrower shall pay
to the Swingline Lender on demand the amount of such Swingline Loans to the
extent amounts received from the Revolving Credit Lenders are not sufficient to
repay in full the outstanding Swingline Loans requested or required to be
refunded. In addition, Borrower hereby authorizes the Administrative Agent to
charge any account maintained by 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
Revolving Credit 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 Borrower
from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so
recovered shall be ratably shared among all the Revolving Credit Lenders in
accordance with their respective Revolving Credit Commitment Percentages
(unless the amounts so recovered by or on behalf of 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 14.1 and which such Event of Default
has not been waived by the Required Lenders or the Lenders, as applicable).

 

(iii)          Each Revolving
Credit Lender acknowledges and agrees that its obligation to refund Swingline
Loans in accordance with the terms of this Section 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.
Further, each Revolving Credit Lender agrees and acknowledges that if prior to
the refunding of any outstanding Swingline Loans pursuant to this Section, one
of the events described in Section 12.1(i) or (j) shall have
occurred, each Revolving Credit Lender will, on the date the applicable
Revolving Credit Loan 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 Revolving Credit Lender will immediately transfer to the
Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to
such Revolving Credit 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 Revolving Credit Lender such
Revolving Credit Lender’s participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Revolving Credit Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Revolving Credit Lender’s
participating interest was outstanding and funded).

 

36

 

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

 

(a)           Requests for Borrowing. Borrower
shall give the Administrative Agent irrevocable prior written notice substantially
in the form of Exhibit B (a “Notice of Borrowing”) not later
than 1:00 p.m. (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 $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 $3,000,000 or a whole multiple of $1,000,000 in
excess thereof and (z) with respect to Swingline Loans in an aggregate
principal amount of $100,000 or a whole multiple of $100,000 in excess thereof,
(C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan,
(D) in the case of a Revolving Credit Loan whether the 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 1:00 p.m. shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing.

 

(b)           Disbursement of Revolving Credit
and Swingline Loans. Not later than 2:00 p.m. on the proposed borrowing
date, (i) each Lender will make available to the Administrative Agent, for the
account of Borrower, at the office of the Administrative Agent 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 Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative
Agent, the Swingline Loans to be made on such borrowing date. Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of
each borrowing requested pursuant to this Section in immediately available
funds by crediting or wiring such proceeds to the deposit account of Borrower
identified in the most recent notice substantially in the form of Exhibit C
(a “Notice of Account Designation”) delivered by Borrower to the
Administrative Agent or as may be otherwise agreed upon by Borrower and the
Administrative Agent from time to time. Subject to Section 5.7 hereof,
the Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 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 Revolving
Credit Lenders as provided in Section 2.2(b).

 

SECTION 2.4.        Repayment
and Prepayment of Revolving Credit and Swingline Loans.

 

(a)           Repayment on Termination Date.
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), together, in each
case, with all accrued but unpaid interest thereon.

 

37

 

(b)           Optional Prepayments. Borrower
may at any time and from time to time prepay Revolving Credit Loans and
Swingline Loans, in whole or in part, with irrevocable prior written notice to
the Administrative Agent substantially in the form of Exhibit D (a “Notice
of Prepayment”) given not later than 1:00 p.m. (i) on the same
Business Day for prepayment of a Base Rate Loan or Swingline Loan and
(ii) at least three (3) Business Days prior to the date of prepayment of a
LIBOR Rate Loan, specifying the date and amount of prepayment and whether the
prepayment 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. 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
prepayments shall be in an aggregate amount of $100,000 or a whole multiple of
$100,000 in excess thereof with respect to Base Rate Loans (other than
Swingline Loans), $3,000,000 or a whole multiple of $1,000,000 in excess
thereof with respect to LIBOR Rate Loans and $100,000 or a whole multiple of $100,000
in excess thereof with respect to Swingline Loans. A Notice of Prepayment received
after 1:00 p.m. shall be deemed received on the next Business Day. Each such
repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.

 

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

 

(d)           Limitation on Prepayment of LIBOR
Rate Loans. Borrower may not prepay any LIBOR Rate Loan on any day other
than on the last day of the Interest Period applicable thereto unless such
prepayment is accompanied by any amount required to be paid pursuant to Section
5.9 hereof.

 

(e)           Repayment of Revolving Credit
Loans Made on the Closing Date. If Borrower has borrowed in excess of $5.0
million in Revolving Credit Loans on the Effective Date pursuant to the proviso
of the second proviso of Section 2.1, then Borrower shall repay such excess
amount of Revolving Credit Loans within three Business Days of the Closing
Date.

 

SECTION 2.5.        Permanent
Reduction of the Revolving Credit Commitment.

 

(a)           Voluntary Reduction. 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 $2,000,000
or any whole multiple of $1,000,000 in excess thereof. Any reduction of the
Revolving Credit Commitments shall be applied to the Revolving Credit
Commitment of each Revolving Credit Lender according to its Revolving Credit
Commitment Percentage. All commitment fees accrued until the effective date of
any termination of the Revolving Credit Commitments shall be paid on the
effective date of such termination.

 

38

 

(b)           Corresponding Payment. Each
permanent reduction permitted pursuant to this Section 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, 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 amount of such
Letters of Credit in excess of the Revolving Credit Commitment as so reduced. 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 shall have expired or
been fully drawn upon, if any, shall be returned to Borrower; provided
that, if an Event of Default has occurred and is continuing, all 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 Obligations) and shall result in the termination (subject to all
obligations of Borrower to repay all Revolving Credit Loans, Letters of Credit
and other amounts owing thereunder or in connection therewith and subject to
all indemnification obligations of Borrower that expressly survive such
termination) of the Revolving Credit Commitment and the Swingline Commitment
and the Revolving Credit Facility. Such cash collateral 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 shall
have expired or been fully drawn upon, if any, shall be returned to Borrower; provided
that, if an Event of Default has occurred and is continuing, all cash
collateral shall be applied in accordance with Section 12.2(b). If
the 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 5.9 hereof.

 

SECTION 2.6.        Termination
of Revolving Credit Facility. The Revolving Credit Facility shall terminate
(subject to all obligations of Borrower to repay all Revolving Credit Loans,
Letters of Credit and other amounts owing thereunder or in connection therewith
and subject to all indemnification obligations of Borrower that expressly
survive such termination) on the Revolving Credit Maturity Date.

 

ARTICLE III

LETTER OF CREDIT FACILITY

 

SECTION 3.1.        L/C
Commitment. Subject to the terms and conditions hereof, the 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 (“Letters of Credit”)
for the account of Borrower on any Business Day from the Closing Date through
but not including five Business Days prior to the Revolving Credit Maturity
Date in such form as may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall have no 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 or (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. Each Letter of Credit shall (i)

 

39

 

be denominated
in Dollars in a minimum amount of $100,000 or such lesser amount as the Issuing
Lender may approve, (ii) be a standby letter of credit issued to support
obligations of Borrower or any of its Subsidiaries, contingent or otherwise,
incurred in the ordinary course of business, (iii) expire on a date no more
than twelve (12) months after the date of issuance or last renewal of such
Letter of Credit, which date shall be no later than the fifth (5th) Business
Day prior to the Revolving Credit Maturity Date; provided that each
Letter of Credit initially expiring by its terms more than one year prior to
the Revolving Credit Maturity Date may provide that it will be automatically
extended for an additional term of twelve (12) months or less (with identical
terms as the initial Letter of Credit including, but not limited to, the fees
payable on such Letter of Credit) upon its expiration with no additional action
on the part of Borrower and (iv) be subject to the Uniform Customs and/or
ISP98, as set forth in the Letter of Credit Application or as determined by the
Issuing Lender and, to the extent not inconsistent therewith, the laws of the
State of New York. The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the 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 outstanding Letters of Credit, unless the context otherwise
requires.

 

SECTION 3.2.        Procedure
for Issuance of Letters of Credit. Borrower may from time to time request
that the Issuing Lender issue a Letter of Credit by delivering to the Issuing
Lender at the Administrative Agent’s Office a Letter of Credit Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Letter of Credit Application, the Issuing
Lender shall process such Letter of Credit Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall, subject to Section
3.1 and Article VI, promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Lender be required to
issue any Letter of Credit earlier than three (3) Business Days after its
receipt of the Letter of Credit 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 Issuing Lender and Borrower. The Issuing Lender shall
promptly furnish to Borrower a copy of such Letter of Credit and promptly
notify each Lender of the issuance and upon request by any Lender, furnish to
such Lender a copy of such Letter of Credit and the amount of such Lender’s
participation therein.

 

SECTION 3.3.        Commissions
and Other Charges.

 

(a)           Letter of Credit Commissions. Borrower
shall pay to the Administrative Agent, for the account of the Issuing Lender
and the L/C Participants, a letter of credit commission with respect to each
outstanding Letter of Credit in an amount equal to the undrawn face amount of
such Letter of Credit 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, on the Revolving Credit Maturity Date
and thereafter on demand of the Administrative Agent. The Administrative Agent
shall, promptly following its receipt thereof, distribute to the Issuing Lender
and the L/C Participants all commissions received pursuant to this Section in
accordance with their respective Revolving Credit Commitment Percentages.

 

40

 

(b)           Issuance Fee. In addition to
the foregoing commission, Borrower shall pay to the Administrative Agent, for
the account of the Issuing Lender, an issuance fee with respect to each Letter
of Credit in an amount equal to the face amount of such Letter of Credit multiplied
by 0.125% per annum. Such issuance fee shall be payable quarterly in arrears on
the last Business Day of each calendar quarter commencing with the first such
date to occur after the issuance of such Letter of Credit, on the Revolving
Credit Maturity Date and thereafter on demand of the Administrative Agent.

 

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

 

SECTION 3.4.        L/C
Participations.

 

(a)           The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the 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 the Issuing Lender’s
obligations and rights under and in respect of each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each
L/C Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by Borrower through a Revolving Credit Loan or
otherwise in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for
notices specified herein an amount equal to such L/C Participant’s Revolving
Credit Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed.

 

(b)           Upon becoming aware of any amount
required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.4(a)
in respect of any unreimbursed portion of any payment made by the Issuing
Lender under any Letter of Credit, the Issuing Lender shall notify each L/C Participant
of the amount and due date of such required payment and such L/C Participant
shall pay to the Issuing Lender the amount specified on the applicable due
date. If any such amount is paid to the Issuing Lender after the date such
payment is due, such L/C Participant shall pay to the 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 period from and including the date such payment is due to the date
on which such payment is immediately available to the 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
Issuing Lender with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section, if the
L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be
due on the following Business Day.

 

41

 

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

 

SECTION 3.5.        Reimbursement
Obligation of Borrower. In the event of any drawing under any Letter of
Credit, Borrower agrees to reimburse (either with the proceeds of a Revolving
Credit Loan as provided for in this Section or with funds from other sources),
in same day funds, the Issuing Lender on each date on which the Issuing Lender
notifies Borrower of the date and amount of a draft paid under any Letter of
Credit (if such notice is received prior to 1:00 p.m. on such day, or otherwise
on the next succeeding Business Day) for the amount of (a) such draft so paid
and (b) any amounts referred to in Section 3.3(c) incurred by the
Issuing Lender in connection with such payment. Unless Borrower shall promptly
notify the Issuing Lender that Borrower intends to reimburse the Issuing Lender
for such drawing from other sources or funds, Borrower shall be deemed to have
timely given a Notice of Borrowing to the Administrative Agent requesting that
the Revolving Credit Lenders make a Revolving Credit Loan bearing interest at
the Base Rate on such date in the amount of (a) such draft so paid and (b) any
amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
connection with such payment, and the Revolving Credit Lenders shall make a
Revolving Credit Loan bearing interest at the Base Rate in such amount, the
proceeds of which shall be applied to reimburse the Issuing Lender for the
amount of the related drawing and costs and expenses. Each Revolving Credit
Lender acknowledges and agrees that its obligation to fund a Revolving Credit
Loan in accordance with this Section to reimburse the 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.
If Borrower has elected to pay the amount of such drawing with funds from other
sources and shall fail to reimburse the 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 reimbursement was due and payable until payment in full.

 

SECTION 3.6.        Obligations
Absolute. 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 Borrower may have or have had
against the Issuing Lender or any beneficiary of a Letter of Credit or any
other Person. Borrower also agrees that the Issuing Lender and the L/C
Participants shall not be responsible for, and 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 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 Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in 

 

42

 

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
the Issuing Lender’s bad faith, gross negligence or willful misconduct, as
determined by a court of competent jurisdiction by final nonappealable judgment.
Borrower agrees that any action taken or omitted by the Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of bad faith, gross negligence or willful misconduct shall
be binding on Borrower and shall not result in any liability of the Issuing
Lender or any L/C Participant to Borrower. The responsibility of the Issuing
Lender to 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.

 

SECTION 3.7.        Effect
of Letter of Credit Application. To the extent that any provision of any
Letter of Credit 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.        Term
Loan. Subject to the terms and conditions of this Agreement, each Lender
severally agrees to make a Term Loan to Borrower on the Effective Date in a
principal amount equal to such Lender’s Term Loan Commitment as of the
Effective Date.

 

SECTION 4.2.        Procedure
for Advance of Term Loan. Borrower shall give the Administrative Agent an
irrevocable Notice of Borrowing prior to 11:00 a.m. on the Effective Date
requesting that the Lenders make the Term Loan as a Base Rate Loan on such date.
Upon receipt of such Notice of Borrowing from Borrower, the Administrative
Agent shall promptly notify each Lender thereof. Not later than 1:00 p.m.
on the Effective Date, each Lender will make available to the Administrative
Agent for the account of Borrower, at the Administrative Agent’s Office in immediately
available funds, the amount of such Term Loan to be made by such Lender on such
borrowing date. Borrower hereby irrevocably authorizes the Administrative Agent
to disburse the proceeds of the Term Loan in immediately available funds by
wire transfer to such Person or Persons as may be designated by Borrower in writing.

 

SECTION 4.3.        Repayment
of Term Loan. Borrower shall repay the aggregate outstanding principal
amount of the Term Loan in consecutive quarterly installments on the last
Business Day of the Fiscal Quarter as set forth below, except as the amounts of
individual installments may be adjusted pursuant to Section 4.4
hereof:  

 

	
  Fiscal Quarter

  	
   

  	
  Installments

  	
   

  
	
  Q2 2007

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q3 2007

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2007

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q1 2008

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q2 2008

  	
   

  	
  $

  	
  600,000.00

  	
   

  

 

43

 

	
  Fiscal Quarter

  	
   

  	
  Installments

  	
   

  
	
  Q3 2008

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2008

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q1 2009

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q2 2009

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q3 2009

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2009

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q1 2010

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q2 2010

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q3 2010

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2010

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q1 2011

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q2 2011

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q3 2011

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2011

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q1 2012

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q2 2012

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q3 2012

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Q4 2012

  	
   

  	
  $

  	
  600,000.00

  	
   

  
	
  Term Loan
  Maturity Date

  	
   

  	
  $

  	
  226,200,000.00

  	
   

  

 

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

 

SECTION 4.4.        Prepayments
of Term Loan.

 

(a)           Optional Prepayments. Borrower
shall have the right at any time and from time to time, without premium or penalty,
to prepay the Term Loan, in whole or in part, upon delivery to the
Administrative Agent of a Notice of Prepayment not later than 1:00 p.m.
(i) on the same Business Day as each Base Rate Loan and (ii) at least
three (3) Business Days before each LIBOR Rate Loan, specifying the date and
amount of repayment and whether the repayment is of LIBOR Rate Loans or Base
Rate Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Each optional prepayment of the Term Loan hereunder
shall be in an aggregate principal amount of at least $2,000,000 or any whole
multiple of $1,000,000 in excess thereof and shall be applied, on a pro rata
basis, to the outstanding scheduled principal installments of the Term Loan. Each
repayment shall be accompanied by any amount required to be paid pursuant to Section
5.9 hereof. A Notice of Prepayment received after 1:00 p.m. shall be
deemed received on the next Business Day. The Administrative Agent shall
promptly notify the Lenders of each Notice of Prepayment.

 

(b)           Mandatory Prepayments.

 

(i)            Debt Issuances.
Borrower shall prepay the Loans in the manner set forth in clause (vi) below in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from any Debt Issuance by Holdings or any of its Subsidiaries not permitted
pursuant 

 

44

 

to this Agreement. Such prepayment shall be made within three (3) Business
Days after the date of receipt of Net Cash Proceeds of any such transaction.

 

(ii)           Equity Issuances.
Borrower shall prepay the Loans in the manner set forth in clause (vi) below in
amounts equal to fifty percent (50%) of the aggregate Net Cash Proceeds from
any Equity Issuance by Holdings or any of its Subsidiaries; provided
that, so long as no Event of Default has occurred and is continuing, no
prepayments shall be required from the Net Cash Proceeds from Equity Issuances
the proceeds of which are used to finance a Permitted Acquisition within
ninety (90) days after receipt of such proceeds. Such prepayment shall be made
within three (3) Business Days after the date of receipt of Net Cash Proceeds
of any such transaction.

 

(iii)          Asset
Dispositions. Borrower shall prepay the Loans in the manner set forth in
clause (vi) below in amounts equal to one hundred percent (100%) of the aggregate
Net Cash Proceeds from any Asset Disposition permitted pursuant to Section
11.5(h) by Holdings or any of its Subsidiaries. Such prepayments shall be
made within three (3) Business Days after receipt of Net Cash Proceeds of any
such transaction by Borrower or any of its Subsidiaries; provided that,
so long as no Default or Event of Default has occurred and is continuing, no
prepayments shall be required hereunder in connection with Net Cash Proceeds
from Asset Dispositions by Holdings or any of its Subsidiaries which are
reinvested within two hundred seventy (270) days after receipt of such Net Cash
Proceeds by Holdings or any of its Subsidiaries in assets useful in the
operation of the business; provided that, if such Net Cash Proceeds are
committed to be reinvested pursuant to a binding commitment or binding contract
for use of such proceeds within two hundred seventy (270) days after receipt,
no prepayments shall be required under this clause (iii) so long as such Net
Cash Proceeds are reinvested within three hundred sixty-five (365) days after
receipt of such Net Cash Proceeds by Holdings or any of its Subsidiaries in
similar replacement assets.

 

(iv)          Insurance and
Condemnation Events. Borrower shall prepay the Loans in the manner set
forth in clause (vi) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any Insurance and Condemnation Event by
Holdings or any of its Subsidiaries. Such prepayments shall be made within
three (3) Business Days after receipt of Net Cash Proceeds of any such
transaction by Holdings or any of its Subsidiaries; provided that, so
long as no Default or Event of Default has occurred and is continuing, no
prepayments shall be required hereunder in connection with Net Cash Proceeds
from Insurance and Condemnation Events by Holdings or any of its Subsidiaries
which are reinvested within two hundred seventy (270) days after receipt of
such Net Cash Proceeds by Holdings or any of its Subsidiaries in similar
replacement assets; provided that, if such Net Cash Proceeds are
committed to be reinvested pursuant to a binding commitment or binding contract
for use of such proceeds within two hundred seventy (270) days after receipt,
no prepayments shall be required under this clause (iv) so long as such Net
Cash Proceeds are reinvested within three hundred sixty-five (365) days after
receipt of such Net Cash Proceeds by Holdings or any of its Subsidiaries in
similar replacement assets.

 

(v)           Excess Cash Flow.
No later than 90 days after the end of any Fiscal Year (commencing with the
Fiscal Year ending December 31, 2007), Borrower shall make mandatory principal
prepayments of the Loans in the manner set forth in clause (vi) below in an
amount 

 

45

 

equal to (i) fifty percent (50%) of Excess Cash Flow, if any, for such Fiscal
Year when the Consolidated Leverage Ratio is 4.50:1.0 or greater as of the last
day of such Fiscal Year, (ii) twenty five percent (25%) of Excess Cash Flow, if
any, for such Fiscal Year when the Consolidated Leverage Ratio is equal to or
greater than 2.50:1.0 and less than 4.50:1.0, in each case as of the last day
of such Fiscal Year and (iii) zero percent (0%) of Excess Cash Flow when the
Consolidated Leverage Ratio is less than 2.50:1.0 as of the last day of such
Fiscal Year; provided that the Excess Cash Flow calculation for the Fiscal
Year ending December 31, 2007 shall be calculated from the Closing Date through
December 31, 2007.

 

(vi)          Notice; Manner of
Payment. Upon the occurrence of any event triggering the prepayment
requirement under clauses (i) through (v) above, 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 the Lenders. Subject
to the following sentence, each prepayment of the Loans under this Section
shall be applied as follows:  first,
to reduce on a pro rata basis the remaining
scheduled principal installments of the Term Loans, pursuant to Section 4.3,
second, to the extent of any excess, to repay the Revolving Credit Loans pursuant
to Section 2.4(c) and third, to cash collateralize Letters of Credit by
depositing 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. Any mandatory prepayment of the Term Loan Facility may be applied at
Borrower’s option, first, to the next eight scheduled quarterly principal payment
installments thereof, and then, to the remaining scheduled principal repayment
installments on a pro  rata basis.

 

Amounts prepaid under the Term Loan pursuant
to this Section may not be reborrowed. Each prepayment shall be accompanied by
any amount required to be paid pursuant to Section 5.9.

 

ARTICLE V

GENERAL LOAN PROVISIONS

 

SECTION 5.1.        Interest.

 

(a)           Interest Rate Options. Subject
to the provisions of this Section, at the election of Borrower, (i) Revolving
Credit Loans and the Term Loans shall bear interest at (A) the Base Rate plus
the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin (provided
that the LIBOR Rate shall not be available for Loans made on the Effective Date
until three (3) Business Days after the Effective Date) and (ii) any Swingline
Loan shall bear interest at the Base Rate plus the Applicable Margin. 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. Any Loan or
any portion thereof as to which Borrower has not duly specified an interest
rate as provided herein shall be deemed a Base Rate Loan, and any LIBOR Rate
Loan for which Borrower fails to specify an Interest Period shall be deemed to
have an Interest Period of one month.

 

(b)           Interest Periods. In
connection with each LIBOR Rate Loan, Borrower, by giving notice at the times described
in Section 2.3 or 5.2, as applicable, shall elect an interest 

 

46

 

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 (or nine or twelve months if agreed to by
all relevant Lenders); 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 with respect to a LIBOR Rate Loan 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
with respect to a LIBOR Rate Loan 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 Borrower
so as to permit Borrower to make the quarterly principal installment payments
pursuant to Section 4.3 without payment of any amounts pursuant to Section
5.9; and

 

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

 

(c)           Default Rate. Immediately upon
the occurrence and during the continuance of an Event of Default under Sections
12.1(a) and (b), all overdue amounts in respect of outstanding 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%) in excess of the
rate then applicable to such Loans or such other Obligations. Immediately upon
the occurrence and during the continuance of an Event of Default under Sections
12.1(i) and (j), or at the election of the Required Lenders upon the
occurrence and during the continuance of any other Event of Default under any
other provision of Section 12.1, all amounts in respect of outstanding
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%) in excess of
the rate then applicable to such Loans or such other Obligations. Upon the
occurrence and during the continuance of an Event of Default, all outstanding LIBOR
Rate Loans shall be converted to Base Rate Loans at the end of the applicable
Interest Period. Interest shall continue to accrue on the Obligations after the
filing by or against 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.

 

(d)           Interest Payment and Computation.
Interest on each Base Rate Loan shall be due and payable in arrears on the last
Business Day of each calendar quarter commencing March 31, 2007; and
interest on each LIBOR Rate Loan shall be due and payable on the last day 

 

47

 

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 Base Rate Loans based upon the Federal Funds Rate 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 based
upon the Prime Rate shall be computed on the basis of a 365/366-day year and
assessed for the actual number of days elapsed.

 

(e)           Maximum Rate. In no
contingency or event whatsoever shall the aggregate of all amounts deemed
interest under this Agreement charged or collected pursuant to the terms of
this Agreement 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 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 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 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, Borrower shall have
the option to (a) convert at any time following the third Business Day after
the Effective Date all or any portion of any outstanding Base Rate Loans (other
than Swingline Loans) in a principal amount equal to $3,000,000 or any whole
multiple of $1,000,000 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 $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
Borrower desires to convert or continue Loans as provided above, Borrower shall
give the Administrative Agent irrevocable prior written notice in the form
attached as Exhibit E (a “Notice of Conversion/Continuation”)
not later than 11:00 a.m. 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, (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.

 

SECTION 5.3.        Fees.

 

(a)           Commitment Fee. Commencing on
the Closing Date, Borrower shall pay to the Administrative Agent, for the account
of the Revolving Credit Lenders, a non-refundable commitment fee at a rate per
annum equal to the Applicable Revolving Credit Commitment Fee Percentage 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 

 

48

 

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
commencing March 31, 2007 and ending on the Revolving Credit Maturity Date.
Such commitment fee shall be distributed by the Administrative Agent to the
Revolving Credit Lenders pro rata in accordance with the Lenders’ respective
Revolving Credit Commitment Percentages.

 

(b)           Administrative Agent’s and Other
Fees. In order to compensate the Administrative Agent for structuring and
syndicating this Agreement and the Lenders for their obligations hereunder, Borrower
agrees to pay to the Administrative Agent, for the account of the Administrative
Agent, the Lenders and their Affiliates, any fees set forth in the Fee Letter.

 

SECTION 5.4.        Manner
of Payment. Each payment by Borrower on account of the principal of or
interest on the Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement shall be
made not later than 1:00 p.m. 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 Commitment Percentages,
(except as specified below), in Dollars, 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. 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. shall be deemed to have
been made on the next succeeding Business Day for all purposes. 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 Commitment
Percentage, (except as specified below) and shall wire advice of the amount of
such credit to each Lender. Each payment to the Administrative Agent of the
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 Section 5.9, 5.10, 5.11
or 14.3 shall be 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 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.        Evidence
of Indebtedness.

 

(a)           Extensions of Credit. The
Extensions of Credit made by each Lender shall be evidenced by one or more accounts
or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Extensions of Credit made by the Lenders to Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of Borrower
hereunder to pay any amount owing with respect to the Obligations. 

 

49

 

In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error. Upon
the request of any Lender made through the Administrative Agent, Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a
Revolving Credit Note, Term Note and/or Swingline Note, as applicable, which
shall evidence such Lender’s Revolving Credit Loans, Term Loans or Swingline
Loans, as the case may be, in addition to such accounts or records. Each Lender
may attach schedules to its Notes and endorse thereon the date, amount and
maturity of its Loans and payments with respect thereto.

 

(b)           Participations. In addition to
the accounts and records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice
accounts or records evidencing the purchases and sales by such Lender of participations
in Letters of Credit and Swingline Loans. In the event of any conflict between
the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.

 

SECTION 5.6.        Adjustments.
If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such obligations (other than pursuant to Section 5.9,
5.10, 5.11 or 14.3 hereof) greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and such other obligations of the other Lenders, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them; provided that

 

(a)           if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and

 

(b)           the provisions of
this paragraph shall not be construed to apply to (x) any payment made by Borrower
pursuant to and in accordance with the express terms of this Agreement or (y)
any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Loans or participations in Swingline Loans and
Letters of Credit to any assignee or participant, other than to Borrower or any
Subsidiary thereof (as to which the provisions of this paragraph shall apply).

 

Each Credit
Party consents to the foregoing and agrees, to the extent it may effectively do
so under Applicable Law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against each Credit Party rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of each Credit Party in the amount of such
participation.

 

50

 

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 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 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 shall be conclusive,
absent manifest error. If such Lender’s Commitment Percentage 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 Base Rate Loans hereunder,
on demand, from Borrower. The failure of any Lender to make available its
Commitment Percentage of any Loan requested by Borrower shall not relieve it or
any other Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Loan available on the borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the borrowing date. Notwithstanding
anything set forth herein to the contrary, any Defaulting Lender shall not (a)
have any voting or consent rights under or with respect to any Loan Document or
(b) constitute a “Lender” (or be included in the calculation of Required
Lenders hereunder) for any voting or consent rights under or with respect to
any Loan Document.

 

SECTION 5.8.        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 Borrower. Thereafter, until the Administrative
Agent notifies Borrower that such circumstances no longer exist, the obligation
of the Lenders to make LIBOR Rate Loans and the right of Borrower to convert
any Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and 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 

 

51

 

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 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 shall make it unlawful or impossible
for any of the Lenders (or any of their respective Lending Offices) to honor
its 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 Borrower and the other
Lenders. Thereafter, until the Administrative Agent notifies Borrower that such
circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of Borrower to convert any Loan or continue any Loan
as a LIBOR Rate Loan shall be suspended and thereafter 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.

 

SECTION 5.9.        Indemnity.
Borrower hereby indemnifies each of the Lenders against any loss or expense
which may arise or be attributable to each 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 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 Borrower to borrow, continue or convert on a date specified therefor
in a Notice of Borrowing or Notice of Conversion/Continuation, (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 or (d) as a consequence of
the replacement of a Lender pursuant to Section 5.12(b). 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 Commitment
Percentage 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 Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.

 

SECTION 5.10.      Increased
Costs.

 

(a)           Increased Costs Generally. If
any Change in Law shall:

 

(i)            impose, modify or
deem applicable any reserve, special deposit, compulsory loan, insurance charge
or similar requirement against assets of, deposits with or for the account of,
or advances, loans or other credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBOR Rate) or the Issuing
Lender;

 

52

 

(ii)           subject any Lender
or the Issuing Lender to any tax of any kind whatsoever with respect to any
Loan or any Letter of Credit made by it under this Agreement, or change the
basis of taxation of payments to such Lender or the Issuing Lender in respect
thereof (except for Indemnified Taxes or Other Taxes indemnified by Section 5.11
or the imposition of, or any change in the rate of any Excluded Tax payable by
such Lender or the Issuing Lender); or

 

(iii)          impose on any
Lender or the Issuing Lender or the London interbank market any other
condition, cost or expense affecting LIBOR Rate Loans made by such Lender or
any Letter of Credit or participation therein;

 

and the result
of any of the foregoing shall be to increase the cost to such Lender of making,
converting into or maintaining any LIBOR Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or
the Issuing Lender of issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder in respect thereof (whether of principal, interest or
any other amount) then, upon written request of such Lender or the Issuing
Lender, Borrower shall promptly pay to any such Lender or the Issuing Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.

 

(b)           Capital Requirements. If any
Lender or the Issuing Lender determines that any Change in Law affecting such
Lender or the Issuing Lender or any lending office of such Lender or such
Lender’s or the Issuing Lender’s holding company, if any, regarding capital requirements
has or would have the effect of reducing the rate of return on such Lender’s or
the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing
Lender’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Lender, to a level below that which such Lender or the Issuing Lender or such
Lender’s or the Issuing Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing
Lender’s policies and the policies of such Lender’s or the Issuing Lender’s
holding company with respect to capital adequacy), then from time to time upon
written request of such Lender or such Issuing Lender, Borrower shall promptly
pay to such Lender or the Issuing Lender, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Lender or such
Lender’s or the Issuing Lender’s holding company for any such reduction suffered.

 

(c)           Certificates for Reimbursement.
A certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and delivered to Borrower shall be conclusive absent manifest
error. Borrower shall pay such Lender or the Issuing Lender, as the case may
be, the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

 

(d)           Delay in Requests. Failure or
delay on the part of any Lender or the Issuing Lender to demand compensation pursuant
to this Section shall not constitute a waiver of such 

 

53

 

Lender’s or the Issuing Lender’s right to
demand such compensation; provided that Borrower shall not be required
to compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than six (6) months prior
to the date that such Lender or the Issuing Lender, as the case may be,
notifies Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation
therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six- (6) month period referred to above
shall be extended to include the period of retroactive effect thereof).

 

SECTION 5.11.      Taxes.

 

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

 

(b)           Payment of Other Taxes by Borrower.
Without limiting the provisions of paragraph (a) above, Borrower shall timely
pay any Other Taxes to the relevant Governmental Authority in accordance with
Applicable Law.

 

(c)           Indemnification by Borrower. Borrower
shall indemnify the Administrative Agent, each Lender and the Issuing Lender
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) payable by the Administrative Agent, such
Lender or the Issuing Lender, as the case may be, and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. Such indemnification shall be
paid within ten (10) days from the date on which Borrower receives written demand
therefor specifying in reasonable detail the nature and amount of such Indemnified
Taxes or Other Taxes. A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender or the Issuing Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest
error.

 

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

 

54

 

(e)           Status of Lenders. Any Foreign
Lender shall, to the extent it is legally entitled to do so, deliver to Borrower
and the Administrative Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is
applicable:

 

(i)            duly completed
copies of Internal Revenue Service Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States is a party,

 

(ii)           duly completed
copies of Internal Revenue Service Form W-8ECI,

 

(iii)          in the case of a
Foreign Lender claiming the benefits of the exemption for portfolio interest
under section 881(c) of the Code, (x) a certificate to the effect that such Foreign
Lender is not (A) a bank within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a controlled foreign corporation described in
section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or

 

(iv)          any other form
prescribed by Applicable Law as a basis for claiming exemption from or a
reduction in United States federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by Applicable Law to
permit Borrower to determine the withholding or deduction required to be made.

 

To the extent it is legally entitled to do
so, any Lender that is a U.S. Person (as that term is defined in Section
7701(a)(30) of the Code), other than a Lender that may be treated as an exempt
recipient based on the indicators described in Treas. Reg. Section
1.6049-4(c)(1)(ii), hereby agrees that it shall, no later than the date on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrower or the Administrative Agent,
but only if such Lender is legally entitled to do so), deliver to Borrower and
the Administrative Agent (in such number of copies as shall be requested by the
recipient) duly completed copies of Internal Revenue Service Form W-9 or successor
form, certifying that such Lender is on the date of delivery thereof entitled
to an exemption from United States backup withholding tax on payments made hereunder.

 

(f)            Treatment of Certain Refunds.
If the Administrative Agent, a Lender or the Issuing Lender receives a refund
of any Indemnified Taxes or Other Taxes (as determined by the Lender in its
sole good faith discretion) as to which it has been indemnified by Borrower or
with respect to which Borrower has paid additional amounts pursuant to this
Section, it shall pay to Borrower an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by Borrower
under this Section with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent, such Lender or the Issuing Lender, as the case may be, paid in
connection with obtaining such refund, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund);
provided that Borrower, upon the request of the Administrative Agent,
such Lender or the Issuing Lender, agrees to repay the amount paid over to
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental

 

55

 

Authority) to the Administrative Agent, such
Lender or the Issuing Lender in the event the Administrative Agent, such Lender
or the Issuing Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Administrative
Agent, any Lender or the Issuing Lender to make available its tax returns (or
any other information relating to its taxes which it deems confidential) to Borrower
or any other Person. Notwithstanding anything to the contrary, in no event will
any Lender be required to pay any amount to Borrower the payment of which would
place such Lender in a less favorable net after-tax position than such Lender
would have been in if the Indemnified Taxes or Other Taxes giving rise to the
additional amounts or indemnification payments in question had never been
imposed in the first instance.

 

(g)           Survival. Without prejudice to
the survival of any other agreement of Borrower hereunder, the agreements and
obligations of Borrower contained in this Section shall survive the payment in
full of the Obligations and the termination of the Commitments.

 

SECTION 5.12.      Mitigation
Obligations; Replacement of Lenders.

 

(a)           Designation of a Different Lending
Office. If any Lender requests compensation under Section 5.10, or requires
Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.11, then
such Lender shall use 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 judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 5.10 or Section 5.11,
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. Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)           Replacement of Lenders. If any
Lender requests compensation under Section 5.10, or if Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 5.11, or if any Lender
defaults in its obligation to fund Loans hereunder, then 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, and consents required by, Section 14.10),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that

 

(i)            Borrower shall have
paid to the Administrative Agent the assignment fee, if any, specified in
Section 14.10(b),

 

(ii)           such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in Letters of Credit, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 5.9) from the
assignee (to the extent 

 

56

 

of such outstanding
principal and accrued interest and fees) or Borrower (in the case of all other
amounts),

 

(iii)          in the case of any
such assignment resulting from a claim for compensation under Section 5.10
or payments required to be made pursuant to Section 5.11, such
assignment will result in a reduction in such compensation or payments
thereafter,

 

(iv)          such assignment does
not conflict with Applicable Law, and

 

(v)           a Lender shall not
be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling Borrower
to require such assignment and delegation cease to apply.

 

SECTION 5.13.      Security.
The Obligations of Borrower shall be secured as provided in the Security
Documents.

 

ARTICLE VI

CLOSING; CONDITIONS OF CLOSING AND BORROWING

 

SECTION 6.1.        Closing.
The closing shall take place at the offices of Schulte Roth & Zabel LLP at
10:00 a.m. on February 14, 2007, or on such other place, date and
time as the parties hereto shall mutually agree.

 

SECTION 6.2.        Conditions
on Effective Date. The obligation of the Lenders to close this Agreement
and to make the Loans is subject to the satisfaction of each of the following
conditions:

 

(a)           Executed Loan
Documents. This Agreement, a Revolving Credit Note in favor of each Lender
requesting a Revolving Credit Note, a Term Note in favor of each Lender
requesting a Term Note, a Swingline Note in favor of the Swingline Lender (if
requested thereby), the Security Documents, the Guaranty Agreement, together
with any other applicable Loan Documents, shall have been duly authorized,
executed and delivered to the Administrative Agent by the parties thereto,
shall be in full force and effect and no Default or Event of Default shall
exist hereunder or thereunder.

 

(b)           Closing
Certificates; etc. The Administrative Agent shall have received each of the
following in form and substance reasonably satisfactory to the Administrative
Agent:

 

(i)            Officer’s
Certificate of Borrower. A certificate from a Responsible Officer signed on
behalf of Borrower to the effect that the Specified Representations and the
Acquisition Representations are true, correct and complete in all respects;
that none of the Credit Parties is 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 each of the Credit Parties, as applicable,
has satisfied each of the conditions set forth in Section 6.2 and Section 6.3.

 

57

 

(ii)           Certificate
of Secretary of Each Credit Party. A certificate of a Responsible Officer
signed on behalf of each Credit Party certifying as to the incumbency and
genuineness of the signature of each officer of such Credit Party executing
Loan Documents to which it is a party and certifying that attached thereto is a
true, correct and complete copy of (A) the Organizational Documents of such
Credit Party, certified as of a recent date by the appropriate Governmental
Authority in its jurisdiction of organization, (B) resolutions duly adopted by
the board of directors or other governing body of such Credit Party authorizing
the transactions contemplated hereunder and the execution, delivery and performance
of this Agreement and the other Loan Documents to which it is a party, and
(C) each certificate required to be delivered pursuant to Section
6.2(b)(iii).

 

(iii)          Certificates
of Good Standing. Certificates as of a recent date of the good standing of
each Credit Party under the laws of its jurisdiction of organization and, to
the extent requested by the Administrative Agent, each other jurisdiction where
such Credit Party is qualified to do business.

 

(iv)          Opinions
of Counsel. Favorable opinions of counsel to the Credit Parties addressed
to the Administrative Agent and the Lenders as to such matters with respect to
the Credit Parties and the Loan Documents as are customary for transactions of
this type and as the Lenders shall reasonably request.

 

(v)           Solvency.
The Administrative Agent shall have received a certificate dated the Effective
Date and signed by the chief financial officer of Borrower certifying that the
Credit Parties are, and after giving effect to the Acquisition will be, Solvent.

 

(c)           Personal Property
Collateral.

 

(i)            Filings and
Recordings. The Administrative Agent shall have received all filings,
recordations, control agreements and any other agreements and instruments that
are necessary to perfect the security interests of the Administrative Agent, on
behalf of itself and the Lenders, in the Collateral and the Administrative
Agent shall have received evidence reasonably satisfactory to the
Administrative Agent that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens thereon, subject
only to Permitted Liens.

 

(ii)           Pledged
Collateral. The Administrative Agent shall have received (A) original stock
certificates evidencing any certificated Capital Stock pledged pursuant to the
Security Documents, 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 Security Documents.

 

(iii)          Lien Search.
The Administrative Agent shall have received the results of a Lien search
(including a search as to judgments, pending litigation and tax matters and
intellectual property), in form and substance reasonably satisfactory thereto,
made against the Credit Parties in any Uniform Commercial Code filings office
(or applicable judicial 

 

58

 

docket) as in
effect in any state in which the jurisdiction of incorporation or any of the
assets of such Credit Party are located, indicating among other things that its
assets are free and clear of any Lien except for Permitted Liens.

 

(iv)          Hazard and
Liability Insurance. The Administrative Agent shall have received
certificates of property hazard, business interruption and liability insurance,
evidence of payment of all insurance premiums for the current policy year of
each (naming the Administrative Agent as loss payee (and mortgagee, as
applicable) on all certificates for property hazard insurance and as additional
insured on all certificates for liability insurance), and, if requested by the
Administrative Agent, copies of insurance policies in the form required under
the Security Documents and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.

 

(v)           Foreign Pledge
Agreements. With respect to stock of each Foreign Subsidiary organized
under the laws of the United Kingdom held directly by any Credit Party (unless
otherwise agreed to by Administrative Agent), (a) the Administrative Agent
shall have received executed Foreign Pledge Agreements representing (i) 66% of
the combined voting power of all classes of the Capital Stock of any Foreign
Subsidiary entitled to vote (to the extent such Foreign Subsidiary is not
treated as a disregarded entity for United States federal income taxation
purposes), and (ii) 100% of any other class of the Capital Stock of such
Foreign Subsidiary, and (b) the Credit Parties shall have taken all such other
actions under the laws of such jurisdictions as Administrative Agent may
reasonably request in order to perfect or otherwise protect such Liens.

 

(vi)          Assignment of
Claims Act. The Administrative Agent shall have received (but shall not
have filed) completed and executed Assignment Agreements (as defined in the
Collateral Agreement) for each Required Federal Government Contract (as defined
in the Collateral Agreement) in existence on the Closing Date in accordance
with the terms of the Collateral Agreement.

 

(d)           Consents;
Defaults.

 

(i)            Governmental and
Third Party Approvals. The Credit Parties shall have received all material
governmental, shareholder and third party consents and approvals necessary in
connection with the Transactions and all applicable waiting periods shall have
expired without any action being taken by any Person that could reasonably be
expected to restrain, prevent or impose any material adverse conditions on any
of the Credit Parties or such transactions or that could seek or threaten any
of the foregoing, and no law or regulation shall be applicable which in the
reasonable judgment of the Administrative Agent could reasonably be expected to
have such effect.

 

(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,
this Agreement or the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby.

 

59

 

(e)           Financial Matters.

 

(i)            Financial
Statements. The Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, (i) copies of audited
financial statements for Borrower and its Subsidiaries for the three fiscal
years ended December 31, 2005, (ii) a copy of the unaudited financial
statements for Borrower and its Subsidiaries for the nine month period ended
September 30, 2006 and interim unaudited financial statements for each
quarterly period ended more than 45 days prior to the Closing Date for which
financial statements are available since the last audited financial statements,
(iii) pro forma combined financial
statements of Borrower and its Subsidiaries for the four-quarter period ended
September 30, 2006 (December 31, 2006 if the Closing Date occurs after February
14, 2006), after giving effect to the Transactions (prepared in accordance with
Regulation S-X and the SEC’s rules and including Pro Forma Cost Savings and
other adjustments deemed appropriate by the Administrative Agent in its sole
discretion) (iv) a pro  forma balance sheet of Borrower and its
Subsidiaries as of September 30, 2006 and (v) unless previously provided, forecasts
prepared by management of balance sheets, income statements and cashflow statements
of Borrower and its Subsidiaries, which will be quarterly through the first
Fiscal Year after the Closing Date and annually thereafter for the term of this
Agreement (and which shall not be inconsistent in any material and adverse
respect with information provided to the Administrative Agent prior hereto).

 

(ii)           Financial
Condition Certificate. Borrower shall have delivered to the Administrative
Agent and the Lenders a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, and certified as accurate by a Responsible
Officer (signing on behalf of Borrower), that the financial projections
previously delivered to the Administrative Agent and the Lenders represent the
good faith estimates (utilizing reasonable assumptions) of the financial
condition and operations of Borrower and its Subsidiaries (it being recognized
that actual results may differ from the projected results by a material
amount).

 

(iii)          Consolidated Leverage
Ratio. Borrower shall have delivered to the Administrative Agent and the
Lenders a certificate, in form and substance reasonably satisfactory to the
Administrative Agent, and certified as accurate by a Responsible Officer
(signing on behalf of Borrower), that after giving pro forma effect to the Transactions, (i) the ratio of Consolidated
Total Indebtedness (excluding any drawing under the Revolving Credit Facility
on the Closing Date in excess of $5.0 million) of Borrower and its Subsidiaries
to Consolidated EBITDA for the twelve months ended as of the most recent month
end (it being understood that if the Closing Date occurs after February 14,
2007, the most recent month end will at least be December 31, 2006) prior to
the Closing Date for which financial statements are available (calculated on a pro
forma basis prepared in accordance with Regulation S-X under the
Securities Act of 1933, as amended, and all other rules and regulations of the
SEC under such Securities Act, and including other adjustments reasonably
acceptable to the Administrative Agent) does not exceed 6.5:1.0.

 

(iv)          Payment at
Closing; Fee Letters. Borrower shall have paid to the Administrative Agent
and the Lenders the fees set forth or referenced in Section 5.3 and
any 

 

60

 

other accrued
and unpaid fees or commissions due hereunder (including, without limitation,
reasonable legal fees and out of pocket 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).

 

(f)            Other Transactions.

 

(i)            Acquisition.
The Administrative Agent shall have received evidence reasonably satisfactory
to it that prior to or substantially concurrently with the initial Extension of
Credit, the Acquisition, the Equity Contribution and the other Transactions
shall have been consummated or shall be consummated contemporaneously on the Effective
Date, in each case in all material respects in accordance with the terms hereof
and the terms of the Transaction Documents without any waiver, modification or
consent thereunder that is materially adverse to the Lenders (as reasonably
determined by the Administrative Agent) unless approved by the Administrative
Agent and no Business Material Adverse Effect shall have occurred. The Administrative
Agent shall have received copies of documentation for the Acquisition and other
aspects of the Transaction, including the Acquisition Agreement and all
exhibits and schedules thereto, and such Acquisition Agreement will include the
agreement of the Seller and Holdings to cause an election to be made pursuant
to Section 338(h)(10) of the Internal Revenue Code of 1986 (and any similar
election pursuant to any state or local tax law) with respect to the stock of Borrower.

 

(ii)           Borrower shall have
received at least $190,000,000 in gross cash proceeds from the sale of the
Senior Subordinated Notes.

 

(g)           Miscellaneous.

 

(i)            Existing Borrower
Indebtedness. All of Borrower’s existing indebtedness (except for any such indebtedness
listed on Schedule 7.1(t)) shall be repaid in full (except that
outstanding letters of credit may be supported by Letters of Credit under this
Agreement) and terminated and all collateral security therefor shall be
released, and the Administrative Agent shall have received any pay-off letters
in form and substance reasonably satisfactory to it evidencing such repayment,
termination, reconveyance and release.

 

(ii)           Ratings. This
Agreement, the Loans hereunder and the Senior Subordinated Notes shall have
received a debt rating from Moody’s and from S&P. Borrower shall have
received a corporate or “family” credit rating from Moody’s and S&P.

 

(iii)          Fees. The
Arrangers and Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses (including
the reasonable legal fees and out-of-pocket expenses of Cahill Gordon &
Reindel LLP, special counsel to the Administrative Agent, and the
reasonable fees and expenses of any local counsel, foreign counsel, appraisers,
consultants and other advisors) required to be reimbursed or paid by Borrower
hereunder or under any other Loan Document.

 

61

 

(iv)          Other Documents.
All opinions, certificates and other instruments and all proceedings in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance 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.

 

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), convert or
continue any Loan and/or the Issuing Lender to issue or extend any Letter of
Credit are subject to the satisfaction 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 that are subject to materiality or
Material Adverse Effect qualifications, shall be true, correct and complete on
and as of such borrowing, continuation, conversion, issuance, or extension
date, and the representations and warranties that are not subject to
materiality or Material Adverse Effect qualifications, shall be true and
correct in all material respects on and as of such borrowing, continuation, conversion,
issuance or extension date in each case, with the same effect as if made on and
as of such date, except for any representation and warranty made as of an
earlier date, which representation and warranty shall remain true, correct and
complete in such respects as of such earlier date; provided that, with
respect to the initial borrowings on the Effective Date, the only
representations the accuracy of which shall be a condition to the availability
of the Loans and other Credit Extensions on the Closing Date shall be (A) the Acquisition
Representations and (B) the Specified Representations.

 

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

 

(c)           Notices. The
Administrative Agent shall have received a Notice of Borrowing, a Letter of
Credit Application or a Notice of Conversion/Continuation, as applicable, from Borrower
in accordance with Section 2.3(a), Section 4.2 or and Section 5.2.

 

(d)           Additional
Documents. The Administrative Agent shall be entitled, but not obligated,
to request in writing and receive, prior to the making of any Extension of
Credit, additional documentary information reasonably satisfactory to the Administrative
Agent confirming the satisfaction of any of the foregoing conditions in this Section
6.3 if, in the good faith judgment of Administrative Agent, such request is
warranted under the circumstances.

 

62

 

ARTICLE VII

 

REPRESENTATIONS
AND WARRANTIES OF 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,
each Credit Party 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 Credit Party (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, (ii) 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 (iii) 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 except in jurisdictions
where the failure to be so qualified or in good standing could not reasonably
be expected to result in a Material Adverse Effect. The jurisdictions in which the
Credit Parties are organized and qualified to do business as of the Effective
Date are described on Schedule 7.1(a).

 

(b)           Ownership. Each
Subsidiary of Holdings as of the Effective Date is listed on Schedule 7.1(b).
As of the Effective Date, the capitalization of Holdings and its Subsidiaries
consists of the number of shares, authorized, issued and outstanding, of such
classes and series, with or without par value (or, in the case of a Subsidiary
that is a limited liability company, number of units issued and percentage of
ownership), described on Schedule 7.1(b). All outstanding shares or
other ownership interests as of the Effective Date 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, except as described in Schedule 7.1(b). The shareholders
or beneficial owners of Holdings and its Subsidiaries and the number of shares
(or percentage of ownership) owned by each as of the Effective Date are
described on Schedule 7.1(b). As of the Effective 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 of Holdings or its Subsidiaries, except as described on Schedule
7.1(b).

 

(c)           Authorization of
Agreement, Loan Documents and Borrowing. Each Credit Party has the right,
power and authority to execute, deliver and perform, and has taken all
necessary corporate, company or 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. This Agreement and
each of the other Loan Documents have been duly executed and delivered by the
duly authorized officers of each Credit Party that is party thereto, and each
such document constitutes the legal, valid and binding obligation of each such Credit
Party to the extent 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

 

63

 

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 Holdings and its 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 Holdings or any of its Subsidiaries where the failure to obtain
such Governmental Approval or such violation of Applicable Law could reasonably
be expected to have a Material Adverse Effect, (ii) conflict with, result
in a breach of or constitute a default under the Organizational Documents of
any Credit Party, (iii) conflict with, result in a breach of or constitute a
default under any material 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, in each case, which could
reasonably be expected to have a Material Adverse Effect, (iv) 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 Permitted
Liens or (v) require any consent or authorization of, filing with, or other act
in respect of, an arbitrator or Governmental Authority or consent of any other Person
other than consents, authorizations, filings or other acts or consents already
obtained and in full force and effect, or which the failure to obtain or make
could not reasonably be expected to have a Material Adverse Effect, and other
than consents or filings under the UCC.

 

(e)           Compliance with
Law; Governmental Approvals. Each Credit Party (i) 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, (ii) 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 (iii) has timely filed all material reports, 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 except in each case (i), (ii) or (iii) where the
failure to have, comply, file or retain could not reasonably be expected to
have a Material Adverse Effect.

 

(f)            Tax Returns and
Payments. Each Credit Party has timely and duly filed or caused to be filed
all federal, and all material state, local and other Tax returns required by
Applicable Law to be filed, and has timely paid, or made adequate provision for
the payment of, all federal, state, local and other Taxes upon it and its
property, income, profits and assets which are due and payable, except where
such Taxes are being contested in good faith and by appropriate proceedings
(where such proceedings stay the sale or forfeiture of any portion of the
Collateral) and where adequate reserves are maintained to the extent required
by GAAP. Such returns accurately reflect in all material respects all liability
for Taxes of each Credit Party for the periods covered thereby. There is no
ongoing or proposed audit or examination or, to the knowledge of Holdings or Borrower,
other 

 

64

 

investigation by any Governmental Authority of the Tax liability of any
Credit Party. Neither Borrower nor any subsidiary thereof has ever been a party
to a “listed transaction” within the meaning of Treas. Reg. Section
1.6011-4(b)(2), except as would not be reasonably expected to, individually or
in the aggregate, result in a Material Adverse Effect.

 

(g)           Intellectual
Property Matters. Each Credit Party owns or possesses rights to use all
material franchises, licenses, copyrights, copyright applications, patents,
patent rights or licenses, patent applications, trademarks, trademark rights,
service mark, service mark rights, trade names, trade name rights, copyrights
and other rights with respect to the foregoing which are reasonably necessary
to conduct its business. 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, and no Credit Party is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations, except revocations, terminations and liability which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

(h)           Environmental
Matters.

 

(i)            Except as, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect:

 

(A)          Holdings and its
Subsidiaries and their businesses, operations and properties owned, operated
and leased are in compliance with, and have no liability under, any applicable
Environmental Law;

 

(B)           Holdings and its
Subsidiaries have obtained all Environmental Permits required for the conduct
of their businesses and operations, and the ownership, operation and use of
their property, under Environmental Law, and all such Environmental Permits are
valid and in good standing;

 

(C)           There has been no
Release or threatened Release of Hazardous Material on, at, under or from any
property or facility presently or, to the knowledge of Holdings or its
Subsidiaries, formerly owned, leased or operated by Holdings and its
Subsidiaries or their predecessors in interest, that could reasonably be
expected to result in liability under, or violation of, any applicable
Environmental Law on the part of Holdings and its Subsidiaries; and

 

(D)          There is no
Environmental Claim pending or, to the knowledge of Holdings threatened,
against Holdings and its Subsidiaries or relating to the property currently or,
to the knowledge of Holdings and its Subsidiaries, formerly owned, leased or
operated by Holdings and its Subsidiaries or their predecessors in interest, or
relating to the operations of Holdings and its Subsidiaries, and there are no
actions, activities, circumstances, conditions, events or incidents that could reasonably
be expected to form the basis of such an Environmental Claim;

 

(E)           None of Holdings or
any of its Subsidiaries is obligated to perform any action or otherwise incur
any expense under Environmental Law pursuant to 

 

65

 

any order,
decree, judgment or agreement by which it is bound or has assumed by contract,
agreement or operation of law, and no Credit Party is conducting or financing
any investigation, remediation or other corrective action pursuant to any Environmental
Law at any location; and

 

(F)           No property or
facility owned, operated or leased by Holdings and its Subsidiaries and, to the
knowledge of Holdings, no Real Property or facility formerly owned, operated or
leased by Holdings and its Subsidiaries or their predecessors in interest, is
(i) listed or proposed for listing on the National Priorities List promulgated
pursuant to CERCLA or (ii) listed on the Comprehensive Environmental
Response, Compensation and Liability Information System promulgated pursuant to
CERCLA or (iii) included on any similar list maintained by any
Governmental Authority including any such list relating to petroleum;

 

(ii)           (A)  No Lien has been recorded or, to the
knowledge of any Holdings or any of its Subsidiaries, threatened under any
Environmental Law with respect to any property or other assets currently owned,
operated or leased by any of them;

 

(B)           The execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated
hereby will not require any notification, registration, filing, reporting,
disclosure, investigation, response or corrective action pursuant to any
applicable Environmental Law; and

 

(C)           Holdings and its Subsidiaries have
made available to the Lenders all material records and files in the possession,
custody or control of, or otherwise reasonably available to, them concerning
actual or potential compliance with or liability under Environmental Law of any
of them or any of their respective predecessors in interest, including those
concerning the actual or suspected existence of Hazardous Material at Real
Property or facilities currently or formerly owned, operated, leased or used by
Holdings or any of its Subsidiaries.

 

(i)            ERISA.

 

(i)            As of the Effective
Date, Holdings and its Subsidiaries do not maintain or contribute to, or have
any obligation under, any Employee Benefit Plans other than those identified on
Schedule 7.1(i);

 

(ii)           Borrower 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
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 

 

66

 

has not yet
expired. No liability has been incurred by Borrower 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 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, 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 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 Borrower nor, with respect to clauses (B), (C) or (D), any ERISA
Affiliate has:  (A) engaged in a
nonexempt prohibited transaction described in Section 406 of ERISA or Section
4075 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;

 

(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 Borrower
threatened concerning or involving any Employee Benefit Plan; and

 

(vii)         The present value of
all accumulated benefit obligations of all underfunded Pension Plans (based on
the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Pension Plans by an amount that could reasonably be
expected to have a Material Adverse Effect.

 

(j)            Margin Stock.
No Credit Party 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 

 

67

 

of any of the Loans or Letters of Credit will be used for purchasing or
carrying margin stock or for any 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 Holdings nor any Subsidiary thereof is an “investment
company” or a company “controlled” by a “ registered investment company” (as
each such term is defined or used in the Investment Company Act of 1940, as
amended).

 

(l)            Material
Contracts; Material Government Contracts. Schedule 7.1(l) sets forth
a complete and accurate list of all Material Contracts and Material Government Contracts
of Borrower and its Subsidiaries in effect as of the Effective Date; each such
Material Contract or Material Government Contract, to the knowledge of Borrower,
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. To the extent requested by the
Administrative Agent and the Lenders, Borrower has delivered to the
Administrative Agent a true and complete copy of each Material Contract or
Material Government Contract required to be listed on Schedule 7.1(l). Neither
Borrower nor any Subsidiary (nor, to the knowledge of Borrower, any other party
thereto) is in breach of or in default under any Material Contract in any
material respect.

 

(m)          Employee Relations.
Neither Holdings nor any of its Subsidiaries are party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of its employees except as described in Schedule 7.1(m). Borrower
knows of no pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees or those of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect.

 

(n)           Burdensome
Provisions. No Credit Party is party to any material 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 to Borrower or any Subsidiary or
to transfer any of its assets or properties to Borrower or any other Subsidiary
in each case other than existing under or by reason of the Loan Documents, the
Senior Subordinated Note Documents, Applicable Law or as permitted by Section
11.11.

 

(o)           Financial
Statements. The (i) audited financial statements delivered pursuant to
Section 8.1(b) and (ii) unaudited financial statements delivered
pursuant to Section 8.1(a), are complete and correct and fairly
present in all material respects on a Consolidated basis the assets,
liabilities and financial position of Borrower and its 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. Such
financial statements show all material indebtedness and other material
liabilities, direct or contingent, of Borrower and its Subsidiaries as of the
date thereof, including material liabilities for taxes, material commitments,
and Indebtedness, in each case, to the extent required to be disclosed under 

 

68

 

GAAP. The annual business plan and projections delivered pursuant to Section
8.1(c) were prepared in good faith on the basis of the assumptions stated
therein, which assumptions are believed to be reasonable in light of then
existing conditions, it being recognized that actual results may differ from
the projected results by a material amount.

 

(p)           No Material
Adverse Change. Since December 31, 2005, there has been no Material
Adverse Effect.

 

(q)           Solvency. As
of the Effective Date and after giving effect to each Extension of Credit made
hereunder, Holdings and its Subsidiaries will be Solvent.

 

(r)            Properties.

 

(i)            Titles to
Properties. Each of Holdings and its Subsidiaries has good title to the
Real Property owned or a valid leasehold interest in the Real Property leased
by it as is necessary or desirable to the conduct of its business as currently
conducted and valid and legal title to all of its personal property and assets
free and clear of all Liens except for Permitted Liens and in the case of all
other material property, Permitted Liens and minor irregularities or
deficiencies in title that, individually or in the aggregate, do not interfere
with its ability to conduct its business as currently conducted or to utilize
such property for its intended purpose, including, but not limited to, those
reflected on the balance sheets of Holdings and its Subsidiaries delivered
pursuant to Section 7.1(o), except those which have been disposed
of by Holdings or its Subsidiaries subsequent to such date in the ordinary
course of business or as otherwise expressly permitted hereunder.

 

(ii)           Condition and
Location of Property. The property of the Holdings and its Subsidiaries,
taken as a whole, (x) is in good operating order, condition and repair
(ordinary wear and tear excepted) and (y) constitutes all the property
which is required for the business and operations of the Holdings and any Subsidiary
as presently conducted.

 

(iii)          Real Property.
Schedules 8(a) and 8(b) to the Perfection Certificate dated the
Effective Date contain a true and complete list of each interest in Real
Property (i) owned by Holdings, Borrower and the Subsidiary Guarantors as
of the date hereof and describes the type of interest therein held by Holdings,
Borrower and each Subsidiary Guarantor and whether such owned Real Property is
leased and if leased whether the underlying Lease contains any option to
purchase all or any portion of such Real Property or any interest therein or
contains any right of first refusal relating to any sale of such Real Property
or any portion thereof or interest therein and (ii) leased, subleased or
otherwise occupied or utilized by Holdings, Borrower or the Subsidiary
Guarantors, as lessee, sublessee, franchisee or licensee, as of the date hereof
and describes the type of interest therein held by Holdings, Borrower or any
Subsidiary Guarantor and, whether any Lease requires the consent of the
landlord or tenant thereunder, or other party thereto, to the Transactions.

 

(iv)          No Casualty Event. No Credit Party has received any notice of, nor
has any knowledge of, the occurrence or pendency or contemplation of any Casualty Event affecting all or any portion of its
property, except for any Casualty Event, written notice 

 

69

 

of which has
been given to the Administrative Agent or which could not reasonably be
expected to have a Material Adverse Effect. Based on the Federal Emergency
Agency Standard Flood Hazard Determination required pursuant to Section 9.3(b)
hereto, no Mortgage encumbers improved Real Property that is located in an area
that has been identified by the Secretary of Housing and Urban Development as
an area having special flood hazards within the meaning of the National Flood
Insurance Act of 1968 unless flood insurance available under such Act has been
obtained in accordance with Section 9.3.

 

(s)           Liens. None
of the properties and assets of Holdings or any Subsidiary is subject to any
Lien, except Permitted Liens. Neither Holdings nor any Subsidiary thereof has
signed any financing statement or any security agreement authorizing any
secured party thereunder to file any financing statement, except to perfect
Permitted Liens.

 

(t)            Indebtedness and
Guaranty Obligations. Schedule 7.1(t) is a complete and correct
listing of all Indebtedness and Guaranty Obligations of Holdings and its Subsidiaries
as of the Effective Date in excess of $1,000,000, after giving effect to the Acquisition
and the application of the proceeds therefrom (other than Indebtedness and
Guaranty Obligations pursuant to the Senior Subordinated Note Documents). Holdings
and its Subsidiaries have performed and are in compliance with all of the
material terms of such Indebtedness and Guaranty Obligations and all
instruments and agreements relating thereto, and no default or event of default,
or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of Holdings or any of
its Subsidiaries exists with respect to any such Indebtedness or Guaranty Obligation.

 

(u)           Litigation. There
are no actions, suits or proceedings pending nor, to the knowledge of Borrower,
threatened against Holdings or any Subsidiary thereof or any of their
respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority that could reasonably be expected to
have a Material Adverse Effect except as described on Schedule 7.1(u).

 

(v)           Absence of
Defaults. No event has occurred and is continuing which (i) constitutes
a Default or an Event of Default, or (ii) constitutes, or which with the
passage of time or giving of notice or both would constitute, a default or
event of default by any Credit Party under any Material Contract or judgment,
decree or order to which such Credit Party is a party or by which such Credit
Party or any of their respective properties may be bound, which default or
event of default could reasonably be expected to have a Material Adverse
Effect.

 

(w)          OFAC and Patriot
Act. None of Holdings, any Subsidiary of Holdings or any Affiliate of Holdings
or any Guarantor:  (i) is a
Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned Entities,
(iii) derives more than 10% of its operating income from investments in, or
transactions with Sanctioned Persons or Sanctioned Entities, or (iv) is, or
after the applications of the proceeds of any Loan will be, in violation of the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56. The proceeds
of any 

 

70

 

Loan will not be used and have not been used to fund any operations in,
finance any investments or activities in, or make any payments to, a Sanctioned
Person or a Sanctioned Entity.

 

(x)            Disclosure. Holdings
and/or its Subsidiaries have disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to
which Holdings or any of its Subsidiaries are subject, and all other matters
known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No financial statement,
material report, material certificate or other material information furnished
(in writing), taken together as a whole, by or on behalf of any of Holdings or
any of its Subsidiaries to the Administrative Agent or any Lender in connection
with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, pro forma financial
information, estimated financial information and other projected or estimated
information, such information was prepared in good faith based upon assumptions
believed to be reasonable at the time, it being recognized that actual results
may differ from the projected results by a material amount.

 

(y)           Use of Proceeds.
Borrower will use the proceeds of (i) the Loans made on the Closing Date
to finance the consummation of the Acquisition and to finance the payment of
fees and expenses incurred in connection with the Transactions and
(ii) the Revolving Loans and Swingline Loans made after Effective Date for
working capital, performance of any contracts including Material Government
Contracts and other general corporate purposes (including to effect Permitted Acquisitions
and capital expenditures).

 

(z)            Acquisition Documents.
The Lenders have been furnished true and complete copies of the Acquisition Document,
including all schedules and exhibits thereto to the extent executed and
delivered on or prior to the Effective Date.

 

(aa)         Security Documents.

 

(i)            Collateral
Agreement The Collateral Agreement is effective to create in favor of the Administrative
Agent for the benefit of the Secured Parties, legal, valid and enforceable
security interests in all right, title and interest of the Loan Parties in the
Collateral Agreement Collateral (subject to any limitations specified therein)
and, (i) when financing statements and other filings in appropriate form
are filed in the offices specified on Schedule 7 to the Perfection
Certificate and (ii) upon the taking of possession or control by the Administrative
Agent of the Collateral Agreement Collateral with respect to which a security interest
may be perfected only by possession or control, the Liens created by the
Collateral Agreement shall (to the extent provided therein) constitute
perfected Liens on, and security interests in, all right, title and interest of
the grantors in the applicable Collateral Agreement Collateral (other than such
Collateral Agreement Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant
jurisdiction), subject to no Liens other than Permitted Liens.

 

71

 

(ii)           PTO Filing;
Copyright Office Filing. When the Collateral Agreement or a short form
thereof is filed in the United States Patent and Trademark Office and the
United States Copyright Office, the Liens created by such Collateral Agreement
shall constitute fully perfected Liens on, and security interests in, all
right, title and interest of the grantors thereunder in Patents (as defined in
the Collateral Agreement) and Trademarks (as defined in the Collateral
Agreement) registered or applied for with the United States Patent and
Trademark Office or Copyrights (as defined in such Collateral Agreement)
registered or applied for with the United States Copyright Office, as the case
may be, in each case subject to no Liens other than Permitted Liens.

 

(iii)          Mortgages. To
the best of Borrower’s knowledge, each Mortgage is effective to create, in
favor of the Administrative Agent, for its benefit and the benefit of the
Secured Parties, legal, valid and enforceable first priority Liens on, and
security interests in, all of the Loan Parties’ right, title and interest in
and to the Mortgaged Properties thereunder and the proceeds thereof, subject
only to Permitted Liens or other Liens acceptable to the Administrative Agent,
and when the Mortgages are filed in the offices specified in the local counsel
opinion delivered with respect thereto in accordance with the provisions of Section
9.11), the Mortgages shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, in each case prior and superior
in right to any other person, other than Liens permitted by such Mortgage.

 

(bb)         Collateral. Each Credit Party
owns or has rights to use all of the Collateral and all rights with respect
thereto used in, necessary for or material to Holdings’ and each other Credit
Party’s business as currently conducted. No claim has been made and remains
outstanding that any Credit Party’s use of any Collateral does or may violate
the rights of any third party that could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

 

(cc)         Senior
Indebtedness Status. The Obligations of Holdings and each of its
Subsidiaries under this Agreement and each of the other Loan Documents ranks
and shall continue to rank at least senior in priority of payment to all Subordinated
Indebtedness of each such Person and is designated as “Senior Indebtedness”
under all instruments and documents, now or in the future, relating to all
Subordinated Indebtedness (including the Senior Subordinated Notes) of such Person.

 

(dd)         Insurance. Schedule 7.1(dd)
sets forth a true, complete and correct description of all insurance maintained
by each Credit Party as of the Closing Date. All insurance maintained by each
Credit Party is in full force and effect, all premiums have been duly paid, no
Company has received notice of violation or cancellation thereof, the premises,
and the use, occupancy and operation thereof, comply in all material respects
with all Insurance Requirements, and there exists no default under any
Insurance Requirement. Each Credit Party has insurance in such amounts and
covering such risks and liabilities as are customary for companies of a similar
size engaged in similar businesses in similar locations.

 

72

 

(ee)         No Broker’s Fees.
No broker’s or finder’s fee or commission will be payable with respect to transactions
contemplated by this Agreement, except as payable to the Arrangers, the
Administrative Agent and the Lenders.

 

(ff)           Location of
Collateral. Set forth in Schedule 2 to the Perfection Certificate is
the chief executive office of each of the Credit Parties.

 

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 Effective Date (except those that are expressly made as of a
specific date), shall survive the Effective 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 borrowing 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 14.2, Borrower will furnish or cause
to be furnished to the Administrative Agent at the Administrative Agent’s
Office at the address set forth in Section 14.1 and to the Lenders at
their respective addresses as set forth on the Register, or 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 (or, if
earlier, on the date of any required public filing thereof) after the end of
each Fiscal Quarter (other than the fourth such quarter) of each Fiscal Year,
an unaudited Consolidated and consolidating balance sheet of Borrower and its
Subsidiaries as of the close of such Fiscal Quarter and unaudited Consolidated
and consolidating statements of income, retained earnings and cash flows and a
report containing management’s discussion and analysis of such financial
statements for the Fiscal Quarter then ended and that portion of the Fiscal
Year then ended, including the notes thereto for any Fiscal Quarter ending
subsequent to the first Fiscal Quarter of 2008, 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 (other than for
any Fiscal Quarter ending prior to the second Fiscal Quarter of 2008) and
prepared by 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 Borrower to present
fairly in all material respects the financial condition of Borrower and its
Subsidiaries as of their respective dates and the results of operations of Borrower
and its Subsidiaries for the respective periods then ended, subject to normal
year end adjustments and to the extent permitted above, 

 

73

 

the absence of footnotes. The filing with the
SEC within the period specified above of the Quarterly Report on Form 10-Q for
Borrower or Holdings for the applicable Fiscal Quarter shall constitute
compliance with this subsection.

 

(b)           Annual Financial Statements. As
soon as practicable and in any event within ninety (90) days (or, if earlier,
on the date of any required public filing thereof) after the end of each Fiscal
Year (or within one hundred twenty (120) days thereafter in the case of the
Fiscal Year ended December 31, 2006), an audited Consolidated and
consolidating balance sheet of Borrower and its Subsidiaries as of the close of
such Fiscal Year and audited Consolidated and consolidating statements of
income, retained earnings and cash flows and a report containing management’s
discussion and analysis of such financial statements 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 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. Such annual financial statements shall be audited by an
independent certified public accounting firm acceptable to the Administrative
Agent, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by Borrower or
any of its Subsidiaries, with respect to the ability of the Borrower to
continue as a “going concern” or with respect to accounting principles followed
by Borrower or any of its Subsidiaries not in accordance with GAAP. The filing
with the SEC within the period specified above of the Annual Report on Form
10-K for Borrower or Holdings for the applicable Fiscal Year shall constitute
compliance with this subsection.

 

(c)           Annual Business Plan and Financial
Projections. As soon as practicable and in any event within forty-five (45)
after the beginning of each Fiscal Year, a business plan of Borrower and its
Subsidiaries for the ensuing four 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, accompanied
by a certificate from a Responsible Officer of Borrower to the effect that, to
the best of such officer’s knowledge, such projections are good faith estimates
(utilizing reasonable assumptions) of the financial condition and operations of
Borrower and its Subsidiaries for such four quarter period, it being recognized
that actual results may differ from the projected results by a material amount.

 

SECTION 8.2.        Officer’s
Compliance Certificate. At each time financial statements are delivered
pursuant to Section 8.1(a) or (b), 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 that in connection with their audit, nothing came to their
attention that caused them to believe that Holdings or Borrower failed to
comply with the terms, covenants, provisions or conditions of Article X
or, if such is not the case, specifying such non-compliance and its nature and
period of existence (it being understood that such certificate shall be limited
to the items and scope that independent certified public accountants are permitted
to cover in such certificates pursuant to their professional standards and
customs).

 

74

 

SECTION 8.4.        Other
Reports.

 

(a)           Promptly upon receipt thereof, copies
of all reports, if any, submitted to 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)           Together with the delivery of the
Officer’s Compliance Certificate for each Fiscal Quarter (other than the fourth
Fiscal Quarter of a Fiscal Year) and each Fiscal Year (and, upon the occurrence
and during the continuation of a Default, on a more frequent basis if requested
by the Administrative Agent), an accounts receivable aging report listing all
Accounts of Borrower and its Subsidiaries as of the last Business Day of such Fiscal
Quarter or Fiscal Year, which report shall include the amount and age of each
Account and such other information as the Administrative Agent may reasonably
require, all in form and substance reasonably satisfactory to the Administrative
Agent. Within thirty (30) days upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of an Event of
Default, Borrower shall provide the name and mailing address of each Account
Debtor to the Administrative Agent.

 

(c)           Together with the delivery of the
Officer’s Compliance Certificate for each Fiscal Quarter (other than the fourth
Fiscal Quarter of a Fiscal Year) and each Fiscal Year together with the
delivery of the Officer’s Compliance Certificate for a Fiscal Year, a list of
all Material Government Contracts and Material Contracts which have (i) been
completed or have lapsed, expired or terminated or (ii) been entered into, in
each case, since the most recent list provided by Borrower and signed by a
Responsible Officer of Borrower.

 

(d)           As soon as practicable and in any
event by the last day of each Fiscal Year, a report in form and substance satisfactory
to the Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Borrower and its Subsidiaries and
all material insurance coverage planned to be maintained by Borrower and its
Subsidiaries in the immediately succeeding Fiscal Year.

 

(e)           Such other information regarding the
operations, business affairs and financial condition of Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender may reasonably request.

 

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

 

(a)           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 Holdings or any Subsidiary thereof or any of their respective
properties, assets or businesses that if adversely determined could reasonably
be expected to result in a Material Adverse Effect;

 

(b)           any notice of any
violation received by Holdings or any Subsidiary thereof from any Governmental
Authority including, without limitation, any notice of violation 

 

75

 

of Environmental Laws which in any such case could reasonably be
expected to have a Material Adverse Effect;

 

(c)           any labor
controversy that has resulted in, or is reasonably likely to result in, a
strike or other work action against Holdings or any Subsidiary thereof and
could reasonably be expected to result in Material Adverse Effect;

 

(d)           any attachment, judgment,
lien, levy or order exceeding $2,000,000 that may be assessed against or threatened
against Holdings or any Subsidiary thereof;

 

(e)           (i) any Default or
Event of Default or (ii) 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 Holdings or any of its Subsidiaries
is a party or by which Holdings or any Subsidiary thereof or any of their
respective properties may be bound which could reasonably be expected to have a
Material Adverse Effect;

 

(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 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
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) Borrower obtaining knowledge or reason to know that 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, in each case, which could result in liability to a
Credit Party or a Subsidiary of a Credit Party in an aggregate amount exceeding
$1,000,000;

 

(g)           any changes in the
board of directors of Holdings or Borrower;

 

(h)           promptly upon
becoming aware thereof, any announcement by Moody’s or S&P of any change in
a Debt Rating;

 

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

 

(j)            the occurrence of a
Casualty Event; and

 

(k)           (i) the
incurrence of any material Lien (other than Permitted Liens) on, or claim
asserted against any of the Collateral or (ii) the occurrence of any other
event which could materially affect the value of the Collateral.

 

SECTION 8.6.        Accuracy
of Information. All written information, reports, statements and other
papers and data furnished by or on behalf of 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(x).

 

76

 

ARTICLE IX

 

AFFIRMATIVE
COVENANTS

 

Until all of the Obligations have been paid
and satisfied in full, all Letters of Credit have expired, terminated or been
fully cash collateralized and the Commitments terminated, unless consent has
been obtained in the manner provided for in Section 14.2, Holdings
will, and will cause each of its Subsidiaries to:

 

SECTION 9.1.        Preservation
of Corporate Existence and Related Matters. Except as permitted by Section
11.4, preserve and maintain (i) its separate corporate existence and (ii)
all rights, franchises, licenses, approvals, consents 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, in the case of clause (ii), as could not reasonably be expected to have
a Material Adverse Effect.

 

SECTION 9.2.        Maintenance
of Property. In addition to the requirements of any of the Security
Documents, protect and preserve all properties necessary in and necessary for
the conduct of its business, including copyrights, patents, trade names,
service marks and trademarks; maintain in good working order and condition, ordinary
wear and tear excepted, all buildings, equipment and other tangible real and personal
property necessary for the conduct of its business; and from time to time make
or cause to be made all repairs, renewals and replacements thereof 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.

 

(a)           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 (including,
without limitation, hazard and business interruption insurance), and on the
Closing Date and from time to time thereafter deliver to the Administrative
Agent upon its request information in reasonable detail as to 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.

 

(b)           Flood Insurance. With respect
to each Mortgaged Property, obtain flood insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time reasonably require,
if at any time the area in which any improvements located on any Mortgaged
Property is designated a “flood hazard area” in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
and otherwise comply with the National Flood Insurance Program as set forth in
the Flood Disaster Protection Act of 1973, as amended from time to time.

 

(c)           Mortgaged Properties. No
Credit Party that is an owner of Mortgaged Property shall take any action that
is reasonably likely to be the basis for termination, revocation

 

77

 

or denial of any insurance coverage required
to be maintained under such Credit Party’s respective Mortgage or that could be
the basis for a defense to any claim under any Insurance Policy maintained in
respect of the Real Property, and each Credit Party shall otherwise comply in
all material respects with all Insurance Requirements in respect of the Real Property;
provided,  however, that each Credit
Party may, at its own expense and after written notice to the Administrative
Agent, (i) contest the applicability or enforceability of any such
Insurance Requirements by appropriate legal proceedings, the prosecution of
which does not constitute a basis for cancellation or revocation of any insurance
coverage required under this Section 9.3 or (ii) cause the
Insurance Policy containing any such Insurance Requirement to be replaced by a
new policy complying with the provisions of this Section 9.3.

 

SECTION 9.4.        Accounting
Methods and Financial Records. Maintain a system of accounting, and keep
proper 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) all taxes,
assessments and other governmental charges that may be levied or assessed upon
it or any of its property, and (b) all Indebtedness and other obligations
and liabilities in accordance with customary trade practices; provided
that Holdings or such Subsidiary may contest any item described in clauses (a)
or (b) of this Section in good faith so long as (i) adequate reserves are
maintained with respect thereto in accordance with GAAP and (ii) appropriate
protective actions are taken so that all or any part of the Collateral is not
subject to a sale or foreclosure during such a contest.

 

SECTION 9.6.        Compliance
With Laws and Approvals. Observe and remain in compliance in all material
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
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 9.7.        Environmental
Laws. In addition to and without limiting the generality of Section 9.6,
(a) comply with, and ensure such compliance by all tenants and subtenants
with all applicable Environmental Laws, and (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,
except in each case as would not reasonably be expected to have a Material Adverse
Effect.

 

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 have 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, and (ii) not participate in any prohibited transaction that could result
in any civil penalty under ERISA or tax under the Code and (b) furnish to 

 

78

 

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. Comply in all material respects with each term, condition
and provision of all leases, agreements and other instruments entered into in
the conduct of its business including, without limitation, any Material
Contract, except if such noncompliance would not reasonably be expected to have
a Material Adverse Effect.

 

SECTION 9.10.      Visits
and Inspections. Permit representatives of the Administrative Agent or any
Lender, from time to time upon prior reasonable notice and at such times during
normal business hours, to visit and inspect its properties; inspect, audit and
make extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects,
in each case, other than (x) materials and affairs protected by the
attorney-client privilege and (y) materials which Holdings or its
Subsidiaries may not disclose without violating confidentiality restrictions
binding on it. Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent or any Lender may do any of the foregoing at
any time without advance notice.

 

SECTION 9.11.      Additional
Subsidiaries; Additional Collateral.

 

(a)           Additional Domestic Subsidiaries.
Notify the Administrative Agent of the creation or acquisition of any Domestic
Subsidiary and promptly thereafter (and in any event within thirty (30) days
after such creation or acquisition), cause such Person, to (i) become a
Guarantor by delivering to the Administrative Agent a duly executed Joinder
Agreement, (ii) grant to the Administrative Agent a security interest in
all assets owned by such Subsidiary (other than assets of a type that are
excluded from the definition of “Collateral” under the Collateral Agreement) by
delivering to the Administrative Agent a Joinder Agreement or such other
document as the Administrative Agent shall deem appropriate for such purpose
and comply with the terms of each Security Document, (iii) deliver to the Administrative
Agent such documents and certificates referred to in Section 6.2 as
may be reasonably requested by the Administrative Agent, (iv) deliver to the
Administrative Agent such original Capital Stock or other certificates, if any,
and stock or other transfer powers, if any, evidencing the Capital Stock of
such Person held by Holdings or any of its Subsidiaries, (v) deliver to
the Administrative Agent such updated Schedules to the Loan Documents as
requested by the Administrative Agent with respect to such Person, and (vi) deliver
to the Administrative Agent such other documents as may be reasonably requested
by the Administrative Agent, all in form, content and scope reasonably
satisfactory to the Administrative Agent; provided that no Domestic
Subsidiary shall be required to pledge the stock or assets of a “controlled
foreign corporation” within the meaning of Section 957 of the Code (a “CFC”)
except such Domestic Subsidiary shall pledge sixty-six percent (66%) of the
total outstanding voting Capital Stock and all outstanding non-voting Capital
Stock of any first tier CFC.

 

(b)           Additional Foreign Subsidiaries.
Notify the Administrative Agent of the creation or acquisition of any Foreign
Subsidiary, and promptly thereafter (and in any event within forty-five (45)
days after notification), (i) if such Foreign Subsidiary is a first tier
Foreign 

 

79

 

Subsidiary, deliver to the Administrative
Agent a Foreign Pledge Agreement pledging sixty-six percent (66%) of the total
outstanding voting Capital Stock and all outstanding non-voting Capital Stock
of such new Foreign Subsidiary and a consent thereto executed by such new
Foreign Subsidiary (including, without limitation, if applicable, original
stock certificates (or the equivalent thereof pursuant to the Applicable Laws
and practices of any relevant foreign jurisdiction) evidencing the Capital
Stock of such new Foreign Subsidiary, together with an appropriate undated
stock power for each certificate duly executed in blank by the registered owner
thereof), (ii) cause such Person to become a Guarantor by delivering to the
Administrative Agent a duly executed Joinder Agreement or such other document
as the Administrative Agent shall deem appropriate for such purpose, (iii) cause
such Person to deliver to the Administrative Agent such documents and certificates
referred to in Section 6.2 (to the extent the same would have been
required to be delivered on the Effective Date if such Foreign Subsidiary had
been a Subsidiary of Borrower on such date) as may be reasonably requested by
the Administrative Agent, (iv) deliver to the Administrative Agent such
updated Schedules to the Loan Documents as requested by the Administrative Agent
with regard to such Person and (v) deliver to the Administrative Agent such
other documents as may be reasonably requested by the Administrative Agent, all
in form, content and scope reasonably satisfactory to the Administrative Agent;
provided that no Subsidiary that is a CFC shall be required to become a
Guarantor or pledge any assets hereunder.

 

(c)           Real Property Collateral. Notify
the Administrative Agent, within ten (10) days after the acquisition by any
Credit Party of fee title to any Real Property that is not subject to the
existing Security Documents and that has a fair market value of at least $2,000,000,
and within sixty (60) days following request by the Administrative Agent or the
Required Lenders, the Credit Parties will deliver the following:

 

(i)            Mortgage. The
Administrative Agent shall have received a first priority Mortgage encumbering
each Real Property that has a fair market value of at least $2,000,000 in favor
of the Administrative Agent, for the benefit of the Secured Parties, duly
executed and acknowledged by each Credit Party that is the owner of or holder
of any interest in such Mortgaged Property, and otherwise in form for recording
in the recording office of each applicable political subdivision where each
such Mortgaged Property is situated, together with such certificates,
affidavits, questionnaires or returns as shall be required in connection with
the recording or filing thereof to create a lien under applicable Requirements
of Law, and such financing statements and any other instruments necessary to
grant a mortgage lien under the laws of any applicable jurisdiction, all of
which shall be in form and substance reasonably satisfactory to Administrative
Agent.

 

(ii)           Consents. With
respect to each Mortgaged Property, the Administrative Agent shall have
received such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as shall reasonably be deemed
necessary by the Administrative Agent in order for the owner or holder of the
fee or leasehold interest constituting such Mortgaged Property to grant the
Lien contemplated by the Mortgage with respect to such Mortgaged Property.

 

(iii)          Title Insurance.
With respect to each Mortgage, the Administrative Agent shall have received a
policy of title insurance (or a marked-up title insurance commitment having the
effect of a policy of title insurance) along with all endorsements in form and 

 

80

 

substance
reasonably acceptable to the Administrative Agent, insuring Lenders’ first
priority Liens and showing no Liens prior to Lenders’ Liens other than Permitted
Liens, in the amount equal to not less than 105% of the fair market value of
such Mortgaged Property with title insurance companies reasonably acceptable to
the Administrative Agent on the Mortgaged Property subject to a Mortgage. Further,
Borrowers agree to provide or obtain any customary affidavits and indemnities
as may be required or necessary to obtain title insurance satisfactory to the
Administrative Agent.

 

(iv)          Title Exceptions.
The Administrative Agent shall have received copies of all recorded documents
creating exceptions to the title policy referred to therein.

 

(v)           Matters Relating
to Flood Hazard Properties. The Administrative Agent shall have received a
completed Federal Emergency Management Agency Standard Flood Hazard
Determination from the National Research Center, or any successor agency
thereto, regarding each parcel of real property subject to a Mortgage.

 

(vi)          Surveys. The
Administrative Agent shall have received copies of existing as-built Surveys of
a recent date or, if an existing Survey does not exist, a new Survey complying
with the minimum detail requirements of the American Land Title Association for
each parcel of Real Property, subject to a Mortgage. Each such Survey shall be
accompanied by an affidavit (a “Survey Affidavit”) of an authorized
signatory of the owner of such property stating that there have been no improvements
or encroachments to the property since the date of the respective Survey such
that the existing Survey is no longer accurate.

 

(vii)         Environmental
Assessments. The Administrative Agent shall have received a Phase I
environmental assessment and such other environmental report reasonably
requested by the Administrative Agent regarding each parcel of real property subject
to a Mortgage by an environmental engineering firm acceptable to the
Administrative Agent showing no environmental conditions in violation of
Environmental Laws or liabilities under Environmental Laws, either of which
could reasonably be expected to have a Material Adverse Effect.

 

(viii)        Other Real
Property Information. The Administrative Agent shall have received such
other certificates, documents and information as are reasonably requested by
the Lenders, including, without limitation, engineering and structural reports,
permanent certificates of occupancy and evidence of zoning compliance, each in
form and substance satisfactory to the Administrative Agent.

 

(ix)           Taxes, Fees and
Charges. The Administrative Agent shall have received evidence reasonably
acceptable to the Administrative Agent of payment by Borrower, each of Holdings
or any of its Subsidiaries of all title policy premiums, search and examination
charges, escrow charges and related charges, mortgage recording taxes, fees,
charges, costs and expenses required for the recording of the Mortgages and
issuance of the title insurance policies referred to above.

 

81

 

(x)            Leases on
Mortgaged Property. With respect to each Real Property or Mortgaged
Property, the Administrative Agent shall have received copies of all Leases in
which Borrower, Holdings or any of its Subsidiaries holds the lessor’s interest
or other agreements relating to possessory interests, if any. To the extent any
of the foregoing materially affects any Mortgaged Property, such agreement
shall be subordinate to the Lien of the Mortgage to be recorded against such
Mortgaged Property, either expressly by its terms or pursuant to a
subordination, non-disturbance and attornment agreement, and shall otherwise be
acceptable to the Administrative Agent.

 

(xi)           Opinions of
Counsel. A legal opinion covering customary matters in connection with the
Mortgage in form and substance reasonably acceptable to the Administrative
Agent.

 

SECTION 9.12.      Use
of Proceeds. On the Effective Date, Borrower shall use the proceeds of the
Extensions of Credit only for the purposes set for in Section 7.1(y).

 

SECTION 9.13.      Further
Assurances. Make, do, execute and deliver all such additional and further
acts, things, deeds and instruments as the Administrative Agent or the Required
Lenders (through the Administrative Agent) may reasonably require to document
and consummate the transactions contemplated hereby and to vest completely in
and insure the Administrative Agent and the Lenders their respective rights
under this Agreement, the Letters of Credit and the other Loan Documents.

 

SECTION 9.14.      Designation
as Senior Debt. Cause all Obligations under this Agreement to be “Designated
Senior Debt” (or similar term) under all Subordinated Indebtedness.

 

SECTION 9.15.      Interest
Rate Contracts. Not later than ninety (90) days after the Closing Date,
execute Interest Rate Contracts with respect to interest rate exposure under
this Agreement with durations of at least 3 years and an aggregate notional
principal amount thereunder equal to at least fifty percent (50%) of the Term
Loans on terms reasonably satisfactory to the Administrative Agent and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent.

 

SECTION 9.16.      Leases.
With respect to each Lease pursuant to which a Credit Party is the landlord,
the respective Credit Party shall perform all of the obligations imposed upon
the landlord under such Lease and enforce all of the tenant’s obligations
thereunder, and pursuant to which a Credit Party is the tenant, the respective
Credit Party shall perform all of its obligations under such Lease, except
where the failure to so perform or enforce could not reasonably be expected to
result in a Property Material Adverse Effect.

 

SECTION 9.17.      Ratings.
Use commercially reasonable efforts to maintain (i) Debt Ratings from Moody’s
and S&P on the credit facilities provided hereunder and (ii) corporate or “family”
credit ratings from Moody’s and S&P on Holdings or Borrower.

 

SECTION 9.18.      Post-Closing
Covenant. (a) Within 60 (sixty) days of the Closing Date (unless extended
in the Administrative Agent’s sole discretion) use commercially reasonable efforts
to deliver Landlord Access Agreements in form and substance reasonably
satisfactory 

 

82

 

to the Administrative
unless the Administrative Agent, in its reasonable judgment, waives such
delivery, with respect to each of the leased Real Properties set forth on Schedule
9.18(a) and (b) take all such actions to deliver and/or
execute the certificates or documents set forth on Schedule 9.18(b)
within the time frames specified on Schedule 9.18(b) (unless waived or
extended in the Administrative Agent’s sole discretion).

 

ARTICLE X

 

FINANCIAL
COVENANTS

 

Until all of the Obligations have been paid
and satisfied in full, all Letters of Credit have expired, terminated or been
fully cash collateralized and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 14.2, Borrower and
its Subsidiaries on a Consolidated basis will not:

 

SECTION 10.1.      Leverage
Ratio. As of any Fiscal Quarter end beginning with the Fiscal Quarter ended
March 31, 2007, permit the Consolidated Leverage Ratio to be greater than the
corresponding ratio set forth below:

 

	
  Period

  	
   

  	
  Maximum Ratio

  	
   

  
	
  Q1 Fiscal Year 2007 – Q3 Fiscal Year 2007

  	
   

  	
  7.75 to 1.00

  	
   

  
	
  Q4 Fiscal Year 2007 – Q1 Fiscal Year 2008

  	
   

  	
  7.25 to 1.00

  	
   

  
	
  Q2 Fiscal Year 2008

  	
   

  	
  7.00 to 1.00

  	
   

  
	
  Q3 Fiscal Year 2008

  	
   

  	
  6.75 to 1.00

  	
   

  
	
  Q4 Fiscal Year 2008 – Q1 Fiscal Year 2009

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  Q2 Fiscal Year 2009 – Q3 Fiscal Year 2009

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  Q4 Fiscal Year 2009 – Q1 Fiscal Year 2010

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  Q2 Fiscal Year 2010 – Q3 Fiscal Year 2010

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  Q4 Fiscal Year 2010 – Q1 Fiscal Year 2011

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  Q2 Fiscal Year 2011 – Q4 Fiscal Year 2011

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  Thereafter

  	
   

  	
  5.00 to 1.00

  	
   

  

 

ARTICLE XI

 

NEGATIVE
COVENANTS

 

Until all of the Obligations have been paid
and satisfied in full, all Letters of Credit have expired, terminated or been
fully cash collateralized and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 14.2, Holdings has not
and will not, and will not permit any of its Subsidiaries to:

 

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

 

83

 

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

 

(b)           Indebtedness
incurred in connection with a Hedging Agreement entered into for
non-speculative purposes; provided that if the Hedging Obligations
pursuant to any such Hedging Agreement relate to interest rates, (i) such
Hedging Obligations relate to payment obligations on Indebtedness otherwise
permitted to be incurred by the Loan Documents and (ii) the notional
principal amount of such Hedging Obligations at the time incurred does not
exceed the principal amount of the Indebtedness to which such Hedging
Obligations relate;

 

(c)           Indebtedness
existing on the Effective Date and listed on Schedule 7.1(t), and any
refinancings, refundings, renewals or extensions thereof; provided that
(i) the principal amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension except by accrued but
unpaid interest on the refinanced Indebtedness and an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) any refinancing,
refunding, renewal or extension of any Subordinated Indebtedness shall be
(A) on subordination terms at least as favorable to the Lenders as, and no
more restrictive on Holdings and its Subsidiaries than, the Subordinated
Indebtedness being refinanced, refunded, renewed or extended and (B) in a
principal amount not less than the principal amount outstanding at the time of
such refinancing, refunding, renewal or extension;

 

(d)           Indebtedness of
Holdings and its Subsidiaries incurred in connection with Capital Leases,
purchase money Indebtedness or mortgage financings of Holdings and its Subsidiaries,
and any refinancings, refundings, renewals or extensions thereof meeting the
conditions set forth in the proviso to clause 11.1(c), in an aggregate
amount not to exceed $10,000,000 on any date of determination;

 

(e)           Indebtedness of a Person
existing at the time such Person became a Subsidiary or assets were acquired
from such Person, to the extent such Indebtedness was not incurred in
connection with or in contemplation of, such Person becoming a Subsidiary or
the acquisition of such assets, not to exceed in the aggregate at any time
outstanding $5,000,000 and any refinancings, refundings, renewals or extensions
thereof; provided that (i) the principal amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to the accrued but unpaid interest on such refinanced
Indebtedness and a reasonable premium or other reasonable amount paid, and fees
and expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder and (ii) any
refinancing, refunding, renewal or extension of any Subordinated Indebtedness
shall be (A) on subordination terms at least as favorable to the Lenders as,
and no more restrictive on Holdings and its Subsidiaries than the Subordinated
Indebtedness being refinanced, refunded, renewed or extended and (B) in a
principal amount not less than the principal amount outstanding at the time of
such refinancing, refunding, renewal or extension;

 

84

 

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

 

(g)           Guaranty Obligations
with respect to Indebtedness permitted pursuant to subsections (a) through (d)
and (j) through (m) of this Section; provided that (i) any Guaranty
Obligations with respect to Indebtedness permitted pursuant to clause (j) of
this Section shall be considered an investment in the Foreign Subsidiary and
shall be permitted under this clause (g) only to the extent such investment is
permitted under Section 11.3 and (ii) any Guaranty Obligation with
respect to Indebtedness permitted pursuant to clause (k) of this Section shall
be subordinated to the same extent as the subordination of such Indebtedness;

 

(h)           Indebtedness of (i)
any Credit Party owed to another Credit Party, (ii) any Credit Party owed
to a Subsidiary that is not a Credit Party, (iii) any Subsidiary that is
not a Credit Party owed to any Credit Party and (iv) any Subsidiary that is not
a Credit Party owed to any other Subsidiary that is not a Credit Party; provided
that (i) the aggregate amount of Indebtedness permitted by clause (iii) of this
Section 11.1(h), together with the aggregate amount of investments
permitted pursuant to Section 11.3(p), shall not exceed $10,000,000,
(ii) all such intercompany Indebtedness of a Credit Party owed to a Subsidiary
that is not a Credit Party shall be unsecured and (subject to any limitation
under laws applicable to such Subsidiary that is not a Credit Party, its
directors or its stockholders) subordinated in right of payment to the payment
in full in cash of the Obligations solely in connection with any bankruptcy,
insolvency or liquidation proceeding and (iii) if any intercompany Indebtedness
of any Subsidiary that is not a Credit Party owed to any Credit Party is
represented by a physical note, such note shall be pledged to the
Administrative Agent for the benefit of the Secured Parties;

 

(i)            Indebtedness
secured by Liens permitted by clause (j) of Section 11.2; provided
that such Indebtedness is extinguished within five (5) Business Days of its incurrence;

 

(j)            Indebtedness of
Foreign Subsidiaries in an aggregate principal amount not exceeding $7,500,000
at any date of determination;

 

(k)           additional
Subordinated Indebtedness of Holdings or any of its Subsidiaries in an
aggregate amount outstanding not to exceed $15,000,000; provided
that, in the case of each issuance of Subordinated Indebtedness, (i) no Default
or Event of Default shall have occurred and be continuing or would be caused by
the issuance of such Subordinated Indebtedness, and (ii) the Administrative
Agent shall have received reasonably satisfactory written evidence that the
Credit Parties would be in compliance with all covenants contained in this
Agreement on a pro  forma basis after giving effect to the issuance
of any such Subordinated Indebtedness;

 

(l)            additional unsecured
Indebtedness of Borrower or any of its Subsidiaries not otherwise permitted pursuant
to this Section in an aggregate amount outstanding not to exceed $30,000,000;
and

 

85

 

(m)          Indebtedness pursuant
to the Senior Subordinated Note Documents; and any refinancings, refundings, renewals
or extensions thereof; provided that (i) the principal amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to the accrued but unpaid
interest on such refinanced Indebtedness and a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such refinancing and by an amount equal to any existing commitments
unutilized thereunder and (ii) the terms of any such refinancings, refundings,
renewals or extensions thereof, taken as a whole, are no less favorable to the
Lenders or Borrower;

 

provided
that, except as provided in Section 11.11, no agreement or instrument
with respect to Indebtedness permitted to be incurred by this Section shall
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of Borrower to make any payment to Borrower or any of its
Wholly-Owned Subsidiaries (in the form of dividends, intercompany advances or
otherwise) for the purpose of enabling 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), real or personal, whether now owned or hereafter acquired,
except:

 

(a)           Liens for taxes,
assessments and other governmental charges or levies not yet due or as to which
the period of grace, if any, related thereto has not expired or which are being
or will be contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP; provided that
such proceedings instituted contesting such Lien shall stay the sale or
forfeiture of any portion of the Collateral on account of such a Lien;

 

(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 sixty (60) days
or (ii) which are being contested in good faith and by appropriate proceedings
if adequate reserves are maintained to the extent required by GAAP; provided
that such proceedings instituted contesting such Lien shall stay the sale or forfeiture
of any portion of the Collateral on account of such a Lien;

 

(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, old age pensions, and other types of social security and employee
health and disability benefits, or casualty-liability insurance or self insurance;

 

(d)           (i) Liens
constituting encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of Real Property and defects,
irregularities in the title thereto, and similar encumbrances which in the aggregate
are not substantial in amount and which do not, in any case, materially detract
from the value of such property or impair the use thereof in the ordinary
conduct of business and (ii) any 

 

86

 

interest or title of a lessor in property leased to Holdings and any of
its Subsidiaries, or any encumbrances on any such interest or title of such
lessor;

 

(e)           Liens of the
Administrative Agent for the benefit of the Administrative Agent and the
Secured Parties under the Loan Documents;

 

(f)            Liens existing on
any asset of any Person at the time such Person becomes a Subsidiary of
Holdings or is merged or consolidated with or into a Subsidiary of Holdings
which (i) were not created in contemplation of or in connection with such
event and (ii) do not extend to or cover any other property or assets of
Holdings or any Subsidiary, so long as any Indebtedness related to any such
Liens is permitted under Section 11.1(e);

 

(g)           Liens not otherwise
permitted by this Section and in existence on the Effective Date and described
on Schedule 11.2; provided that such Liens shall secure only
those obligations that they secure on the Effective Date (and any extensions, renewals
and refinancings of such obligations permitted by Section 11.1(c)) and
shall not subsequently apply to any other property or assets of Holdings or any
of its Subsidiaries;

 

(h)           Liens arising out of
judgments, attachments or awards not resulting in an Event of Default and in
respect of which Holdings or its Subsidiary, as applicable, shall in good faith
be prosecuting an appeal or proceedings for review in respect of which there
shall be secured a subsisting stay of execution pending such appeal or
proceedings and, in the case of any such Lien which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions;

 

(i)            Liens on assets of
Foreign Subsidiaries securing Indebtedness permitted under Section 11.1(j);

 

(j)            normal and
customary Liens, rights of setoff and recoupment rights upon deposits of cash
in favor of banks or other depository institutions relating to due and unpaid
bank fees, bank charges, returned checks and chargebacks, and other normal and
customary obligations associated with the maintenance of deposit accounts by
such banks or other depository institutions;

 

(k)           Liens given in
replacement of Liens otherwise permitted under this Section 11.2; provided
that such replacement Liens extend only to the assets subject to the Lien being
replaced or substitutions for such assets;

 

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

 

87

 

(m)          with respect to each
Mortgaged Property, those Liens set forth in Schedule B to the Mortgages
encumbering such Mortgaged Property which shall be reasonably acceptable to the
Administrative Agent;

 

(n)           Liens in favor of a
Credit Party that are subordinate to the Liens under the Security Documents;

 

(o)           Liens upon specific
items of inventory or other goods and proceeds of any Person securing such Person’s
obligations in respect of bankers’ acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;

 

(p)           Liens securing
Hedging Obligations that relate to Indebtedness that is otherwise permitted
hereunder;

 

(q)           precautionary
financing statements filed with respect to operating leases or other transactions
not involving the incurrence of Indebtedness; and

 

(r)            pledges and
deposits to secure the performance of bids, trade contracts, insurance
contracts, leases (other than Capital Lease obligations), statutory
obligations, tender, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business.

 

Notwithstanding
the foregoing, with respect to Mortgaged Property, “Permitted Liens” shall mean
only those Liens described in clauses (a), (b), (d), (e) and (m) above; provided,
however, that on the date of delivery of any Mortgage under Section
9.11(c), “Permitted Liens”, with respect to the Mortgaged Property subject
to such Mortgage shall mean only those Liens described in clause (m) above.

 

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 joint venture (including, without limitation, the creation or
capitalization of any Subsidiary), evidence of Indebtedness 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 in
Subsidiaries outstanding on the Effective Date, (ii) investments in
Subsidiaries formed or acquired after the Effective Date so long as Holdings
and its Subsidiaries comply with the applicable provisions of Section 9.11
and such newly formed or acquired Subsidiary becomes a Subsidiary Guarantor, (iii)
investments in the form of the other loans, advances and investments
described on Schedule 11.3 existing on the Effective Date and (iv)
investments in Borrower or the Subsidiary Guarantors;

 

(b)           investments in Cash
Equivalents;

 

88

 

(c)           investments by
Holdings or any of its Subsidiaries in the form of Permitted Acquisitions;

 

(d)           investments in
securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers in exchange for claims against such trade
creditors or customers or in good faith settlement of delinquent obligations of
such trade creditors and customers;

 

(e)           Hedging Agreements
permitted pursuant to Section 11.1;

 

(f)            purchases of assets
in the ordinary course of business;

 

(g)           investments in the
form of loans and advances to employees in the ordinary course of business,
which, in the aggregate, do not exceed at any time $500,000;

 

(h)           intercompany
Indebtedness permitted pursuant to Section 11.1;

 

(i)            in the case of
investments by Foreign Subsidiaries, substantially similar foreign equivalents
of those investments described in Section 11.3(b);

 

(j)            investments in the
form of notes or other deferred payment obligations received as part of the
consideration for Asset Dispositions pursuant to Section 11.5(h);

 

(k)           investments
represented by guarantees that are otherwise permitted under this Agreement;

 

(l)            advances to
suppliers or customers in the ordinary course of business;

 

(m)          investments in joint
ventures engaged in a business conducted by Borrower and its Subsidiaries as of
the Closing Date, and other businesses that are ancillary or related thereto,
having an aggregate value (measured on the date such investment was made and
without giving effect to subsequent changes in value), when taken together with
all other investments made pursuant to this clause (m) since the Effective Date
not to exceed $10,000,000;

 

(n)           investments
resulting from reimbursements to or indemnification of the issuer of any
tender, surety and appeal bonds, performance bonds and other obligations or
guarantees of a like nature for the benefit of Subsidiaries that are not Credit
Parties in respect of such Subsidiaries’ performance of bids, trade contracts,
insurance contracts, leases (other than Capital Lease obligations) in each case
in the ordinary course of business;

 

(o)           investments by a
Subsidiary that is not a Credit Party in another Subsidiary that is not a
Credit Party; and

 

(p)           other investments in
any Person having an aggregate fair market value (measured on the date each
such investment was made and without giving effect to subsequent 

 

89

 

changes in value), when taken together with all other outstanding investments
made pursuant to this clause (p) since the Effective Date, not to exceed $10,000,000.

 

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 Wholly-Owned
Subsidiary of Borrower may be merged or consolidated with or into Borrower (provided
that Borrower shall be the continuing or surviving Person) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving Person);

 

(b)           any Wholly-Owned
Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to Borrower or any other
Wholly-Owned Subsidiary (provided that if the transferor in such a transaction
is a Subsidiary Guarantor, then the transferee must either be Borrower or a
Subsidiary Guarantor);

 

(c)           any Wholly-Owned
Subsidiary of Borrower may merge into the Person such Wholly-Owned Subsidiary
was formed to acquire in connection with a Permitted Acquisition;

 

(d)           any Subsidiary of Borrower
may wind-up into Borrower or any Subsidiary of Borrower; provided that
if the Subsidiary being wound up is a Guarantor, it may be wound up into Borrower
or any Subsidiary that is, or will become concurrently with the transaction, a
Guarantor; and

 

(e)           Holdings may merge
with or into or consolidate with, or wind-up or liquidate into or otherwise
transfer all of its assets to, a direct or indirect parent, so long as (i) the Person
surviving such transaction, if not Holdings, shall become a Guarantor and assume
all of Holdings’ covenants and obligations hereunder and under the other Loan
Documents pursuant to a Joinder Agreement (and each reference to Holdings in
this Agreement or any Loan Document shall thereafter be deemed to refer and
apply to such Surviving Person), (ii) after giving effect to such transactions,
Holdings and its Subsidiaries shall be in compliance with the covenants set
forth in Articles IX and XI hereto, (iii) the representations and
warranties contained in Article VII that are subject to materiality or
Material Adverse Effect qualifications shall be true, correct and complete in
all respects and all representations and warranties that are not subject to
materiality or Material Adverse Effect qualification are true, correct and
complete in all material respects, after giving effect to such transaction,
(iv) no material liabilities are acquired in connection with the transactions
described in this Section 11.4(e), (v) the Person surviving such
transaction shall take all steps necessary to maintain the Administrative Agent’s
perfected security interest in the Collateral and (vi) the Borrower shall have
delivered a customary legal opinion in form and substance reasonably
satisfactory to the Administrative Agent which opines to (A) the due
authorization, execution, delivery and enforceability of the guaranty by the
surviving entity and (B) the continuity of the Administrative Agent’s perfected
security interest in the Collateral; provided that for the purposes of
subclauses (ii) 

 

90

 

and (iii) of this Section 11.4(e) and any test related thereto,
any reference to Holdings shall be deemed to refer to the Person surviving such
transaction, if not Holdings.

 

SECTION 11.5.      Limitations
on Asset Dispositions. Make any Asset Disposition (including, without
limitation, the sale of any receivables and leasehold interests and any
sale-leaseback or similar transaction) except:

 

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

 

(b)           the sale, lease or
sublease of obsolete, unused, worn-out or surplus assets (other than Mortgaged
Property) no longer used or usable in the business of Borrower or any of its Subsidiaries;

 

(c)           the transfer of
assets to Borrower or a Subsidiary in accordance with Section 11.4;
provided such transfer shall be made subject to Liens of the applicable Security
Document and in accordance with the provisions of Section 9.11;

 

(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;

 

(e)           the disposition of
any Hedging Agreement;

 

(f)            licensing and
sublicensing of patents, trademarks and other intellectual property rights in
the ordinary course of business;

 

(g)           the compromise or
settlement of any dispute, claim or legal proceeding with respect to any
receivable or other claim under contracts for less than the balance thereof in
the ordinary course of business;

 

(h)           additional Asset
Dispositions not otherwise permitted pursuant to this Section in an aggregate
amount not to exceed $2,500,000 in any Fiscal Year and $5,000,000 in the
aggregate from the Effective Date; provided that (i) the Credit Party
(or its Subsidiary, as the case may be) shall receive consideration in
connection with such Asset Disposition at least equal to the fair market value
of the assets or Capital Stock issued or sold or otherwise disposed of and (ii)
at least 75% of the consideration therefor received by the Credit Party or its
Subsidiary is in the form of cash, Cash Equivalents or a combination thereof;
and

 

(i)            transfers of assets
pursuant to investments permitted by Section 11.3.

 

SECTION 11.6.      Limitations
on Dividends and Distributions. Declare or pay any dividends upon any of
its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its Capital Stock, or make any distribution of cash,
property or assets among the holders of shares of its Capital Stock, (collectively,
a “Restricted Payment”); provided that:

 

(a)           Holdings or any
Subsidiary may pay dividends in shares of its own Capital Stock;

 

91

 

(b)           any Subsidiary may
pay cash dividends to Borrower or a Subsidiary of Borrower that is a Credit
Party and, so long as no Default or Event of Default has occurred or is
continuing, to other equity holders of such Subsidiary on a pro rata basis;

 

(c)           so long as no Event
of Default exists, Borrower may (i) make payments in an amount not to exceed in
any Fiscal Year the lesser of 2.5% of Borrower’s Consolidated EBITDA for such
Fiscal Year and $3,000,000 for Management Fees to the Sponsor and (ii) reimburse
the reasonable out-of-pocket reasonable expenses of Sponsor incurred in
connection with providing or obtaining management, consulting, monitoring,
financial advisory, accounting or other services to or for the benefit of the
Credit Parties;

 

(d)           Borrower may make
payments to Holdings, and Holdings may make payments to any direct or indirect
parent of Holdings, to pay franchise taxes, directors fees and reasonable
accounting, legal and administrative expenses of Holdings and such parents when
due, in an aggregate amount not to exceed $1,000,000 per annum;

 

(e)           for so long as Borrower
is a member of a group filing a consolidated or combined tax return with
Holdings or any direct or indirect parent of Holdings, Borrower may make
payments to Holdings and Holdings may make payments to such Person in respect
of an allocable portion of the tax liabilities of such group that is
attributable to Holdings, Borrower or their Subsidiaries (limited, in the case
of Holdings, to taxes attributable to its ownership of Borrower) (“Tax
Payments”). The Tax Payments shall not exceed the lesser of (i) the
amount of the relevant tax (including any penalties and interest) that Borrower
would owe if Borrower were filing a separate tax return (or a separate
consolidated or combined return with its Subsidiaries that are members of the
consolidated or combined group), taking into account any carryovers and
carrybacks of tax attributes (such as net operating losses) of Borrower and
such Subsidiaries from other taxable years and (ii) the net amount of the
relevant tax that Holdings or such Person actually owes to the appropriate
taxing authority. Any Tax Payments received from Borrower shall be paid over to
the appropriate taxing authority within 30 days of Holdings’ or any direct or indirect
parent of Holdings’ receipt of such Tax Payments or refunded to Borrower;

 

(f)            if no Event of
Default shall exist or would occur after giving effect thereto, Borrower may
repurchase, redeem, or otherwise acquire for value any Capital Stock of Borrower,
and Borrower may make distributions, loans and advances to Holdings and
Holdings may make distributions, loans and advances to any direct or indirect
parent to enable the repurchase, redemption or other acquisition or retirement
for value of any Capital Stock of Holdings, or any direct or indirect parent of
Holdings, in each case, held by any current or former officer, director,
consultant or employee of Holdings or any of its Subsidiaries (or Heirs or
other permitted transferees thereof); provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired Capital Stock may
not exceed $1,000,000 in any calendar year; provided, further,
that Borrower may carry over and make in subsequent calendar years, in addition
to the amounts permitted for such calendar year, the amount of such purchases,
redemptions or other acquisitions or retirements for value permitted to have
been made but not made in any preceding calendar year up to a maximum of $2,000,000
in any calendar year; provided, further, that such amount in any
calendar year may be increased by an amount not to exceed (1) the 

 

92

 

net cash proceeds from the sale of Capital Stock of Borrower (or
Holdings or any direct or indirect parent of Holdings to the extent such net
cash proceeds are contributed to the common equity of Holdings) to employees,
officers, directors or consultants of Holdings and its Subsidiaries that occurs
after the Effective Date (to the extent the cash proceeds from the sale of such
Capital Stock have not otherwise been applied to the payment of Restricted
Payments) plus (2) the cash proceeds of key man life insurance policies received
by Holdings and its Subsidiaries after the Effective Date less any amounts previously
applied to the payment of Restricted Payments pursuant to this clause (f); provided,
further, that cancellation of Indebtedness owing to Holdings or any of
its Subsidiaries from employees, officers, directors and consultants of
Holdings or any of its Subsidiaries in connection with the repurchase of
Capital Stock of Borrower, Holdings or any direct or indirect parent from such Persons
will not be deemed to constitute a Restricted Payment for purposes of this
Section.

 

(g)           there shall be
permitted hereunder (i) the repurchase of Capital Stock deemed to occur upon
the exercise of options, warrants or other convertible securities to the extent
such Capital Stock represent a portion of the exercise price of those options,
warrants or other convertible securities and (ii) cash payments in lieu of the
issuance of fractional shares in connection with the exercise of options,
warrants, or other convertible securities;

 

(h)           the purchase, redemption,
acquisition, cancellation or other retirement for value of Capital Stock of any
Credit Party to the extent necessary, in the good faith judgment of the board
of directors of Borrower, to prevent the loss or secure the renewal or
reinstatement of any license, permit or eligibility held by any Credit Party
under any applicable law or governmental regulation or the policies of any
governmental authority or other regulatory body in an aggregate amount not to
exceed $250,000;

 

(i)            Holdings and Borrower
may make payments in connection with or as a result of the Acquisition to the extent
contemplated by the Acquisition Documents.

 

(j)            the redemption,
repurchase or other acquisition for value of any Capital Stock of any Foreign
Subsidiary that is held by any Person that is not an Affiliate of Borrower to
the extent required by applicable laws, rules or regulations; provided
that the amount of any such redemptions, repurchases or other acquisitions
shall not exceed $5,000,000 during the term of this Agreement;

 

(k)           Holdings and Borrower
may make Restricted Payments in exchange for, or out of the net proceeds of the
substantially concurrent sale (other than to a Subsidiary) of, Qualified
Capital Stock (other than any Permitted Cure Securities), to the extent such
proceeds are not required to be applied to the prepayment of Loans in
accordance with this Agreement and, in the case of any Restricted Payment made
by Borrower pursuant to this Section 11.6(k), so long as Borrower’s
Consolidated Leverage Ratio is less than 4.0:1.0 on the last day of the most
recently ended Fiscal Quarter; and

 

93

 

(l)            additional payments
by Holdings and its Subsidiaries not otherwise permitted pursuant to this
Section in an aggregate amount outstanding not to exceed $7,500,000.

 

SECTION 11.7.      Limitations
on Exchange and Issuance of Capital Stock. Issue, sell or otherwise dispose
of any class or series of Capital Stock 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 Indebtedness 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 prior to the Term Loan Maturity Date.

 

SECTION 11.8.      Transactions
with Affiliates. 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 other than:

 

(i)            transactions
permitted by Section 11.3, 11.4, 11.6 and 11.7;

 

(ii)           transactions
existing on the Effective Date or any amendment thereto or transactions
contemplated thereby and described on Schedule 11.8 (and any replacement
or amendment of any such agreement so long as any such amendment or replacement
thereof is not materially less favorable to the Lenders than the original
agreement in effect on the Effective Date);

 

(iii)          compensation,
reimbursement of reasonable expenses and indemnification of officers, directors
and employees pursuant to customary employment, consulting and benefit arrangements;

 

(iv)          other transactions
in the ordinary course of business on terms as favorable as would be obtained
by it on a comparable arms-length transaction with an independent, unrelated
third party as determined in good faith by the board of directors of Borrower;

 

(v)           so long as no Event
of Default exists, (i) the payment of Management Fees to the Sponsor in an
amount not to exceed in any Fiscal Year the lesser of 2.5% of Borrower’s
Consolidated EBITDA for such Fiscal Year and $3,000,000 and (ii) the reimbursement
for reasonable out-of-pocket expenses of Sponsor incurred in connection with
providing or obtaining management, consulting, monitoring, financial advisory,
accounting or other services to or for the benefit of the Credit Parties;

 

(vi)          Equity Issuances of
Holdings and the granting of registration rights in respect of any such Capital
Stock, which rights have been approved by the board of directors of Holdings or
Borrower;

 

94

 

(vii)         the purchase or sale
of goods or provision of services to an Affiliate in the ordinary course of
business on terms comparable to those offered to or available from third party
customers or suppliers;

 

(viii)        agreements to
reimburse or indemnify the issuer of any tender, surety and appeal bonds,
performance bonds and other obligations or guarantees of a like nature for the
benefit of Subsidiaries that are not Credit Parties in respect of such Subsidiaries’
performance of bids, trade contracts, insurance contracts, leases (other than
Capital Lease obligations) in each case in the ordinary course of business; and

 

(ix)           transactions
between and among Credit Parties.

 

SECTION 11.9.      Certain
Accounting Changes; Organizational Documents (a). (a) Change its
Fiscal Year end, or make any change in its accounting treatment and reporting
practices except as required by GAAP or Applicable Law or (b) amend, modify or
change its Organizational Documents, other than amendments, modifications or
waivers (as the case may be) which (i) would not have a material adverse
effect on the ability of such Person to perform its obligations under the Loan
Documents or (ii) are not adverse in any material respect to the interests of
the Lenders.

 

SECTION 11.10.    Amendment of Material Documents.

 

(a)           Amend or modify, or permit the
amendment or modification of, any provision of any Transaction Document, in
each case other than amendments, modifications or waivers (as the case may be)
which are not adverse in any material respect to the interests of the Lenders.

 

(b)           Amend or modify (or permit the
modification or amendment of) any of the terms or provisions of any Subordinated
Indebtedness in any respect that is adverse in any material respect to the interests
of the Lenders.

 

SECTION 11.11.    Prepayments of Subordinated Indebtedness.
Make (or give any notice in respect thereof) any voluntary or optional payment
or prepayment on or redemption or acquisition for value of, or any prepayment
or redemption as a result of any asset sale, change of control or similar event
of, any Subordinated Indebtedness, other than payments of accrued interest when
due or in connection with a refinancing, refunding, renewal or extension of
such Subordinated Indebtedness permitted by Section 11.1(c) or (m).

 

SECTION 11.12.    Restrictive Agreements.

 

(a)           Enter into any Indebtedness which
contains any negative pledge on assets or any covenants more restrictive than
the provisions of Articles IX, X and XII hereof, or which
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 Indebtedness.

 

(b)           Enter into or permit to exist any
agreement which impairs or limits the ability of any Subsidiary of Borrower to
pay dividends to Borrower. However, this restriction set forth in Sections
11.12(a) and (b) will not apply to restrictions existing under or by
reason of:

 

95

 

(i)            the Senior Subordinated
Notes Documents or the Loan Documents,

 

(ii)           Applicable Law,

 

(iii)          any instrument
governing Indebtedness or Capital Stock of a Person acquired by Holdings or any
of its Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness or Capital Stock was incurred or issued in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of this Agreement to be incurred,

 

(iv)          any agreement for
the sale or other disposition of Capital Stock or assets of a Subsidiary or an
agreement entered into for the sale of specified assets that restrict
distributions by that Subsidiary pending such sale,

 

(v)           Indebtedness
permitted by Section 11.1(c), (d), (e) or (m) as a
refinancing, renewal or extension of other Indebtedness permitted by such
sections, provided that the restrictions contained in the agreements
governing such Indebtedness are no more materially restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being
refinanced,

 

(vi)          provisions limiting
the disposition or distribution of assets or property in joint venture
agreements, partnership agreements, limited liability company operating agreements,
asset sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into with the approval of the board of
directors of Borrower, which limitation is applicable only to the assets that
are the subject of such agreements,

 

(vii)         restrictions on cash
or other deposits or net worth imposed by customers under contracts entered
into in the ordinary course of business,

 

(viii)        provisions in
agreements or instruments that prohibit the payment of dividends or the making
of other distributions with respect to any Capital Stock of a Person other than
on a pro rata basis,

 

(ix)           restrictions in
other Indebtedness incurred in compliance with Section 11.1; provided
that such restrictions, taken as a whole, are, in the good faith judgment of Borrower’s
board of directors, no more materially restrictive with respect to such encumbrances
and restrictions than those contained in this Agreement and the Senior Subordinated
Note Agreement,

 

(x)            customary
non-assignment provisions in leases, contracts, licenses and other agreements
entered into in the ordinary course of business and consistent with past practices,

 

96

 

(xi)           purchase money
obligations for property acquired in the ordinary course of business and
Capital Lease obligations that impose restrictions on the ability of any
Subsidiary to transfer any of such acquired properties or assets to Borrower or
any of its Subsidiaries,

 

(xii)          secured
Indebtedness otherwise permitted to be incurred pursuant to Section 11.2
that limits the right of the debtor to dispose of assets securing Indebtedness;

 

(xiii)         agreements
governing existing Indebtedness as in effect on the Effective Date and any
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements; provided
that the amendments, restatements, modifications, renewals, increases,
supplements, refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such encumbrances and
restrictions than those contained in those agreements on the Closing Date,

 

(xiv)        any encumbrances or
restrictions imposed by any amendments, modifications restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (i) through (xii) above; provided
that the encumbrances or restrictions in such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
not materially more restrictive, in the good faith judgment of the board of
directors of Borrower, taken as a whole, than the encumbrances or restrictions
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing.

 

SECTION 11.13.    Nature of Business. Alter in any material respect the
character or conduct of the business conducted by Borrower and its Subsidiaries
as of the Closing Date, and other businesses that are ancillary or related
thereto. In the case of Holdings, engage at any time in any business or
business activity other than (i) ownership of the Capital Stock of Borrower,
together with activities directly related thereto, (ii) performance of its
obligations under and in connection with the Loan Documents, (iii) actions
incidental to the consummation of the Transaction, (iv) actions required by law
to maintain its existence, (v) the holding of cash in amounts reasonably
required to pay for its own costs and expenses, (vi) owing and paying legal,
registered office and auditing fees, (vii) the issuance of common or preferred Capital
Stock, (viii) making investments to the extent permitted by this Agreement
and (ix) the issuance of Indebtedness to the extent permitted by this Agreement.

 

SECTION 11.14.    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 with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Secured Parties pursuant to the Security Documents)
any interest whatsoever in the Collateral, except for Permitted Liens and asset
sales permitted under Section 11.5.

 

SECTION 11.15.    No Other “Designated Senior Debt”. Neither of Holdings or Borrower
shall designate, or permit the designation of, any Indebtedness (other than
under this 

 

97

 

Agreement and
the other Loan Documents) as “Designated Senior Debt” or any other similar term
for the purpose of the definition of the same or the subordination provisions
contained in any indenture or other agreement governing any Subordinated
Indebtedness permitted under Section 11.1.

 

SECTION 11.16.    Limitation on Creation of Subsidiaries. Establish, create
or acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that, without such consent, Borrower may establish
or create one or more Subsidiaries of Borrower.

 

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. Borrower shall
default in any payment of principal of any Loan or Reimbursement Obligation
when and as due (whether at maturity, by reason of acceleration or otherwise).

 

(b)           Other Payment
Default. Borrower or any other Credit Party shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise)
of interest on any Loan or Reimbursement Obligation or the payment of any other
Obligation, and such default shall continue for a period of five (5) Business Days.

 

(c)           Misrepresentation.
Any representation, warranty, certification or statement of fact made or deemed
made by Borrower or any other Credit Party herein, in any other Loan Document,
or in any document delivered in connection herewith or therewith that is
subject to materiality or Material Adverse Effect qualifications, shall be
incorrect or misleading in any respect when made or deemed made; or any
representation, warranty, certification or statement of fact made or deemed
made by Borrower or any other Credit Party herein, any other Loan Document, or
in any document delivered in connection herewith or therewith that is not
subject to materiality or Material Adverse Effect qualifications, shall be
incorrect or misleading in any material respect when made or deemed made.

 

(d)           Default in
Performance of Certain Covenants. Borrower or any other Credit Party shall
default in the performance or observance of any covenant or agreement contained
in Section 8.5(e)(i) or Article X or XI.

 

(e)           Default in
Performance of Other Covenants and Conditions. Borrower or any other Credit
Party 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) or any other Loan Document and such
default shall 

 

98

 

continue for a period of thirty (30) days after written notice thereof
has been given to Borrower by the Administrative Agent.

 

(f)            Hedging Agreement.
Borrower or any other Credit Party 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 and the Termination
Value owed by such Credit Party as a result thereof exceeds $7,500,000.

 

(g)           Indebtedness
Cross-Default. Borrower or any other Credit Party shall (i) default in the
payment of any Indebtedness (other than the Loans or any Reimbursement
Obligation) the aggregate outstanding amount of which Indebtedness is in excess
of $7,500,000 beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created, or (ii) default in the
observance or performance of any other agreement or condition relating to any
Indebtedness (other than the Loans or any Reimbursement Obligation) the
aggregate outstanding amount of which Indebtedness is in excess of $7,500,000
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 such Indebtedness, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, with the giving of notice if required or
lapse of time, or both, to become due prior to its stated maturity (any applicable
grace period having expired).

 

(h)           Change in Control.
Any Change in Control shall occur.

 

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

 

(j)            Involuntary
Bankruptcy Proceeding. A case or other proceeding shall be commenced
against Borrower or any Credit Party thereof 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 Borrower
or any Credit Party thereof 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 

 

99

 

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.

 

(k)           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 Borrower or
any other Credit Party 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.

 

(l)            Termination
Event. The occurrence of any of the following events:  (i) an accumulated funding deficiency occurs
or exists, whether or not waived, with respect to any Pension Plan which could
reasonably be expected to have a Material Adverse Effect, or (ii) a Termination
Event.

 

(m)          Judgment. A
judgment or order for the payment of money (other than any judgment or order
for the payment of money in connection with the TSA Government Investigation
and the negotiation of any related settlement) which causes the aggregate
amount of all such judgments to exceed $5,000,000 in any Fiscal Year shall be
entered against Borrower or any Credit Party by any court and such judgment or
order shall continue without having been discharged, vacated or stayed for a
period of sixty (60) days after the entry thereof (and such judgment is not
covered by insurance provided by insurers that are solvent and have
acknowledged coverage to the reasonable satisfaction of the Required Lenders
with respect to such judgment or judgments).

 

(n)           Junior Financing
Documentation. (i) Any of the Obligations of the Credit Parties under the
Loan Documents for any reason shall cease to be “Designated Senior Debt” (or
any comparable term) under, and as defined in, any indenture or other agreement
governing any Subordinated Indebtedness permitted under Section 11.1 or
(ii) the subordination provisions set forth in any indenture or other agreement
governing any Subordinated Indebtedness permitted under Section 11.1
shall, in whole or in part, cease to be effective or cease to be legally valid,
binding and enforceable against the holders of any Subordinated Indebtedness
permitted under Section 11.1.

 

SECTION 12.2.      Remedies.
Upon the occurrence of an Event of Default, 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 Borrower:

 

(a)           Acceleration;
Termination of Facilities. Terminate the Commitments and declare the
principal of and interest on the Loans 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 

 

100

 

expressly waived by each Credit Party, anything in this Agreement or
the other Loan Documents to the contrary notwithstanding, and terminate the
Credit Facility and any right of Borrower to request borrowings or Letters of
Credit thereunder; provided that, upon the occurrence of an Event of
Default specified in Section 12.1(i) or (j), 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
by each Credit Party, 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, 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. 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 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 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 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 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.      Crediting
of Payments and Proceeds. In the event that 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
Obligations and all net proceeds from the enforcement of the Obligations shall
be applied:

 

101

 

First,
to payment of that portion of the Obligations constituting fees and expenses,
including attorney fees, payable to the Administrative Agent in its capacity as
such and the Issuing Lender in its capacity as such (ratably among the Administrative
Agent and the Issuing Lender in proportion to the respective amounts described
in this clause First payable to them);

 

Second,
to payment of that portion of the Obligations constituting fees payable to the
Lenders (excluding any commitment fees and Letters of Credit fees), including
attorney fees (ratably among the Lenders in proportion to the respective
amounts described in this clause Second payable to them);

 

Third,
to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and Reimbursement Obligations, regularly scheduled payments
with respect to Hedging Obligations (excluding, for the avoidance of doubt,
termination payments thereon) and any commitment fees and Letters of Credit
fees (ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them);

 

Fourth,
to payment of that portion of the Obligations constituting unpaid principal of
the Loans and Reimbursement Obligations and termination payments with respect
to Hedging Obligations (ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them);

 

Fifth,
to the Administrative Agent for the account of the Issuing Lender, to cash
collateralize any L/C Obligations then outstanding; and

 

Last,
the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to Borrower or as otherwise required by Law.

 

SECTION 12.5.      Administrative
Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Credit
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

 

(a)           to file and prove a
claim for the whole amount of the principal and interest owing and unpaid in
respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 3.3, 5.3 and 14.3) allowed in such judicial
proceeding; and

 

(b)           to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same;

 

102

 

and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 5.3 and 14.3.

 

Nothing contained herein shall be deemed to
authorize the Administrative Agent to authorize or consent to or accept or
adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.

 

SECTION 12.6.      Borrower’s Right to Cure.

 

(a)           Notwithstanding anything to the
contrary contained in Section 12.1, if Borrower shall fail, at the end
of or for any four (4) consecutive Fiscal Quarters or as at the last day of any
Fiscal Quarter to comply with the requirements of Section 10.1, then
Borrower shall be deemed to be in compliance with such Section if on or prior
to the 10th Business Day after the earlier of (i) the date on
which financial statements shall be required to be delivered for the last
Fiscal Quarter in such period pursuant to Section 8.1 and (ii) the
actual date of delivery of such financial statements, Holdings issues (the “Cure
Right”) Permitted Cure Securities to any Person other than a Subsidiary and
contributes such net cash proceeds to the capital of Borrower (in exchange for
common equity) for aggregate net cash proceeds (the “Cure Proceeds”) in
an amount no greater than the amount necessary to cure the relevant failure to
comply with Section 10.1, on a pro forma basis as provided in paragraph
(b) below.

 

(b)           Immediately upon the receipt by
Borrower of the net cash proceeds resulting from the issuance of the Permitted
Cure Securities, Consolidated EBITDA for the last Fiscal Quarter in the
relevant period of four (4) consecutive Fiscal Quarters shall be increased,
solely for the purpose of measuring the covenants set forth in Section 10.1
and not for any other purpose under this Agreement, by an amount equal to the
Cure Proceeds.

 

(c)           If, after giving pro forma effect to such
increase in Consolidated EBITDA, Borrower shall be in compliance with the
requirements of Section 10.1, any Default eliminated by such increase in
Consolidated EBITDA shall be deemed to have been fully cured.

 

(d)           Notwithstanding anything herein to
the contrary, in each four Fiscal Quarter period there shall be at least two
Fiscal Quarters in which the Cure Right is not exercised and the Cure Right
shall not be exercised more than five times during the term of this Agreement.

 

103

 

ARTICLE XIII

THE ADMINISTRATIVE AGENT

 

SECTION 13.1.      Appointment
and Authority. Each of the Lenders and the Issuing Lender hereby
irrevocably appoints Wachovia to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated
to the Administrative Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of the Administrative Agent, the Lenders and
the Issuing Lender, and neither Holdings nor any Subsidiary thereof shall have
rights as a third party beneficiary of any of such provisions.

 

SECTION 13.2.      Rights
as a Lender. The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with Holdings
or any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

 

SECTION 13.3.      Exculpatory
Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

 

(a)           shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing;

 

(b)           shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby or by the
other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that the Administrative Agent shall not be required
to take any action that, in its opinion or the opinion of its counsel, may
expose the Administrative Agent to liability or that is contrary to any Loan
Document or Applicable Law; and

 

(c)           shall not, except as
expressly set forth herein and in the other Loan Documents, have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to Borrower or any of its Affiliates that is communicated to or obtained
by the Person serving as the Administrative Agent or any of its Affiliates in
any capacity.

 

The Administrative Agent shall not be liable
for any action taken or not taken by it (i) with the consent or at the request
of the Required Lenders (or such other number or percentage 

 

104

 

of the Lenders
as shall be necessary, or as the Administrative Agent shall believe in good
faith shall be necessary, under the circumstances as provided in Section 12.2)
or (ii) in the absence of its own gross negligence or willful misconduct
as determined by a court of competent jurisdiction by final nonappealable
judgment. The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until notice describing such Default is given to the
Administrative Agent by Borrower, a Lender or the Issuing Lender.

 

The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability, effectiveness
or genuineness of this Agreement, any other Loan Document or any other
agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.

 

SECTION 13.4.      Reliance
by the Administrative Agent. The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person. The Administrative Agent also
may rely upon any statement made to it orally or by telephone and believed by
it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Lender prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

SECTION 13.5.      Delegation
of Duties. The Administrative Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Loan Document
by or through any one or more sub-agents appointed by the Administrative Agent.
The Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

 

105

 

SECTION 13.6.      Resignation
of Administrative Agent.

 

(a)           The Administrative Agent may at any
time give notice of its resignation to the Lenders, the Issuing Lender and Borrower.
Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, with the consent of Borrower (such consent not to be unreasonably
withheld and which, in any event, will not be required during the continuance
of a Default or an Event of Default) to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent
meeting the qualifications set forth above, provided that if the
Administrative Agent shall notify Borrower and the Lenders that no qualifying Person
has accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders
or the Issuing Lender under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the Issuing Lender directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this paragraph. Upon
the acceptance of a successor’s appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of
its duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this paragraph). The fees
payable by Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between Borrower and
such successor. After the retiring Administrative Agent’s resignation hereunder
and under the other Loan Documents, the provisions of this Article and Section 14.2
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

(b)           Any resignation by Wachovia as
Administrative Agent pursuant to this Section shall also constitute its resignation
as Issuing Lender and Swingline Lender. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring Issuing Lender and Swingline Lender, (b) the retiring Issuing
Lender and Swingline Lender shall be discharged from all of their respective duties
and obligations hereunder or under the other Loan Documents, and (c) the
successor Issuing Lender shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangement satisfactory to the retiring Issuing Lender to effectively
assume the obligations of the retiring Issuing Lender with respect to such
Letters of Credit.

 

106

 

SECTION 13.7.      Non-Reliance
on Administrative Agent and Other Lenders. Each Lender and the Issuing
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.

 

SECTION 13.8.      No Other Duties, etc.

 

Anything herein to the contrary
notwithstanding, none of the Syndication Agent, documentation agents,
co-agents, book manager, lead manager, arranger, lead arranger or co-arranger
listed on the cover page or signature pages hereof shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the
Issuing Lender hereunder.

 

SECTION 13.9.      Collateral
and Guaranty Matters. The Lenders irrevocably authorize the Administrative
Agent, at its option and in its discretion,

 

(a)           to 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, 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 14.2,
if approved, authorized or ratified in writing by the Required Lenders;

 

(b)           to subordinate any
Lien on any Collateral, except Mortgaged Property, granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such Collateral that
is permitted by Section 11.2(g); and

 

(c)           to release any
Guarantor from its obligations under the 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 Guarantor
from its obligations under the Guaranty Agreement pursuant to this Section.

 

SECTION 13.10.    No Fiduciary Duty. Each of Borrower and the Guarantors
acknowledges and agrees that in connection with all aspects of each transaction
contemplated by this Agreement, Borrower and the Guarantors and Wachovia
Capital Markets, LLC, and any affiliate through which it may be acting (each, a
“Transaction Affiliate”), have an arm’s-length 

 

107

 

business
relationship that creates no fiduciary duty on the part of Wachovia Capital
Markets, LLC or any Transaction Affiliate and each expressly disclaims any
fiduciary relationship.

 

SECTION 13.11.    UK Trust . Each of the Secured Parties acknowledges the
terms of the trust (as set out in the share charge in respect of certain shares
in Pearson Government Solutions Limited dated on or about the date of this
Agreement between the Borrower and the Administrative Agent (the “English
Charge”)) upon which the rights, property and assets charged by the
Borrower to the Administrative Agent pursuant to the English Charge are held.

 

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 (for purposes hereof, the term “writing” shall
include information in electronic format such as electronic mail and internet
web pages), or by telephone subsequently confirmed in writing. Any notice shall
be effective if delivered by hand delivery or sent via electronic mail, posting
on an internet web page, 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
electronic mail, posting on an internet web page, or 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 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
  Borrower:

  	
  PGS
  Solutions, Inc.

  
	
   

  	
  4250 North
  Fairfax Drive

  
	
   

  	
  Suite 1200

  
	
   

  	
  Arlington,
  VA 22203

  
	
   

  	
  Attention:
  Christine Bailey

  
	
   

  	
  Telephone
  No.: (703) 284-5685

  
	
   

  	
  Telecopy
  No.: (703) 284-5852

  
	
   

  	
   

  
	
  With copies
  to:

  	
  Schulte Roth
  & Zabel LLP

  
	
   

  	
  919 Third
  Ave.

  
	
   

  	
  New York, NY
  10022

  
	
   

  	
  Attention:
  Ronald B. Risdon, Esq.

  
	
   

  	
  Telephone No.:
  (212) 756-2000

  
	
   

  	
  Telecopy
  No.: (212) 593-5955

  

 

108

 

	
  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

  
	
   

  	
   

  
	
  With copies
  to:

  	
  Wachovia
  Bank, National Association

  
	
   

  	
  301 South
  College Street, NC5562

  
	
   

  	
  Charlotte,
  NC 28288

  
	
   

  	
  Attention:
  Mark Felker

  
	
   

  	
  Telephone
  No.: (704) 374-7074

  
	
   

  	
  Telecopy
  No.: (704) 383-7611

  
	
   

  	
   

  
	
   

  	
  Cahill
  Gordon & Reindel LLP

  
	
   

  	
  80 Pine
  Street

  
	
   

  	
  New York,
  New York 10005

  
	
   

  	
  Attention:
  Michael J. Ohler, Esq.

  
	
   

  	
  Telephone
  No.: (212) 701-3000

  
	
   

  	
  Telecopy
  No.: (212) 378-2549

  
	
   

  	
   

  
	
  If to any
  Lender:

  	
  To the
  address set forth on 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 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 and Letters of Credit requested.

 

SECTION 14.2.      Amendments,
Waivers and Consents. Except as set forth below or 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 Required Lenders (or by the
Administrative Agent with the consent of the Required Lenders) and delivered to
the Administrative Agent and, in the case of an amendment, signed by Borrower; provided
that no amendment, waiver or consent shall:

 

(a)           waive any condition
set forth in Section 6.2 without the written consent of each Lender;

 

(b)           extend or increase
the Commitment of any Lender (or reinstate any Commitment terminated pursuant
to Section 12.2) or the amount of Loans or L/C Obligations of any
Lender without the written consent of such Lender;

 

(c)           postpone any date
fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
(other than with respect to mandatory prepayments pursuant to Sections
4.4(b)(i)-(iv)) 

 

109

 

or any scheduled or mandatory reduction of the Revolving Credit
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

 

(d)           reduce the principal
of, or the rate of interest specified herein on, any Loan or Reimbursement
Obligation, or (subject to clause (iv) of the second proviso to this Section)
any fees or other amounts payable hereunder or under any other Loan Document,
or change the manner of computation of any financial ratio (including any
change in any applicable defined term) used in determining the Applicable Margin
that would result in a reduction of any interest rate on any Loan or any fee
payable hereunder without the written consent of each Lender directly affected
thereby; provided that only the consent of the Required Lenders shall be
necessary to waive any obligation of Borrower to pay interest at the rate set
forth in Section 5.1(c) during the continuance of an Event of Default;

 

(e)           change Section
5.4 or Section 12.4 or any other provision that provides for the pro
rata allocation of amounts by or to Lenders in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender affected thereby;

 

(f)            change Section
4.4(b)(vi) in a manner that would alter the order of application of amounts
between Classes of Lenders prepaid pursuant thereto without the written consent
of each Lender affected thereby;

 

(g)           change any provision
of this Section or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to amend, waive
or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender;

 

(h)           release all of the
Guarantors or release Guarantors comprising substantially all of the credit
support for the Obligations, in either case, from the Guaranty Agreement (other
than as authorized in Section 13.9), without the written consent of
each Lender affected thereby;

 

(i)            release all or a
material portion of the Collateral or release any Security Document (other than
as authorized in Section 13.9 or as otherwise specifically permitted or
contemplated in this Agreement or the applicable Security Document) without the
written consent of each Lender affected thereby; or

 

(j)            after the Closing
Date, expressly change or waive any condition precedent in Section 6.3
to any Revolving Credit Loan without the written consent of the Required
Revolving Lenders;

 

provided,
further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Lender in addition to the Lenders required
above, affect the rights or duties of the Issuing Lender under this Agreement
or any Letter of Credit Application relating to any Letter of Credit issued or
to be issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Swingline Lender in addition to the Lenders required
above, affect the rights or duties of the Swingline Lender under this Agreement;
(iii) no amendment, waiver or consent

 

110

 

shall, unless
in writing and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; and (iv) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or
consent hereunder, except that the Commitment of such Lender may not be
increased or extended without the consent of such Lender.

 

If, in connection with any proposed change,
waiver, discharge or termination of or to any of the provisions of this Agreement
as contemplated by Section 14.2, the consent of the Required Lenders has
been obtained and the consent of all Lenders required hereunder would have been
obtained but for any Lender’s failure to consent (such Lender, a “Non-Consenting
Lender”), then Borrower shall have the right to replace each such
Non-Consenting Lender or Lenders (or, at the option of Borrower if the
respective Lender’s consent is required with respect to less than all Loans (or
related Commitments), to replace only the Commitments and/or Loans of the
respective Non-Consenting Lender that gave rise to the need to obtain such
Lender’s individual consent) with one or more assignees pursuant to, and with
the effect of an assignment under, Section 14.10 so long as at the time
of such replacement, each such assignee consents to the proposed change,
waiver, discharge or termination; provided that such Non-Consenting
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in Letters of Credit, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder
and under the other Loan Documents (including any amounts under Section 5.9)
from the assignee (to the extent of such outstanding principal and accrued interest
and fees) or Borrower (in the case of all other amounts).

 

SECTION 14.3.      Expenses;
Indemnity.

 

(a)           Costs and Expenses. Borrower
and any other Credit Party, jointly and severally, shall pay (i) all
reasonable out-of-pocket expenses incurred by the Agents, the Arrangers and
each of their respective Affiliates (including the reasonable fees, charges and
disbursements of one primary counsel for the Administrative Agent (and local
counsel)), in connection with the syndication of the credit facilities provided
for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Lender
in connection with the issuance, amendment, renewal or extension of any Letter
of Credit or any demand for payment thereunder and (iii) all out-of-pocket
expenses incurred by the Agents, any Lender or the Issuing Lender (including
the fees, charges and disbursements of any counsel for the Administrative
Agent, any Lender or the Issuing Lender), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)           Indemnification by the Loan
Parties. Except for Taxes which shall be covered by Section 5.11,
the Loan Parties shall indemnify each Agent (and any sub-agent 

 

111

 

thereof), each Lender and the Issuing Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims (including, without limitation, any Environmental
Claims and any civil penalty or fine assessed by OFAC, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee but excluding losses, claims, damages, liabilities and
related expenses related to Taxes), incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by Borrower or any other Credit
Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit),
(iii) the presence or Release or threatened Release of Hazardous Materials
at, on, under or from any property or facility owned or operated by Holdings or
any of its Subsidiaries, or any Environmental Claim related in any way to Holdings
or any of its Subsidiaries, (iv) any actual claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by Borrower or any
other Credit Party, and regardless of whether any Indemnitee is a party
thereto, (v) any conduct of any Credit Party that violates a sanction enforced
by OFAC, or (vi) any claim (including, without limitation, any Environmental
Claims or civil penalties or fines assessed by OFAC), investigation, litigation
or other proceeding (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 contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby, including without limitation,
reasonable attorneys and consultant’s fees, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the bad faith, gross negligence or willful misconduct of such
Indemnitee, (y) result from a claim brought by Borrower or any other
Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if Borrower or such
Credit Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction or (z) are Taxes.

 

(c)           Reimbursement by Lenders. To
the extent that Borrower for any reason fails to indefeasibly pay any amount required
under clause (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Lender or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
the Administrative Agent (or any such sub-agent), the Issuing Lender or such
Related Party, as the case may be, such Lender’s pro rata share (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the Issuing Lender in its capacity as such, or against any
Related Party of any of the foregoing acting for the Administrative 

 

112

 

Agent (or any such sub-agent) or Issuing
Lender in connection with such capacity. The obligations of the Lenders under
this clause (c) are subject to the provisions of Section 5.7.

 

(d)           Waiver of Consequential Damages,
etc. To the fullest extent permitted by Applicable Law, Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred
to in clause (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

(e)           Payments. All amounts due
under this Section shall be payable promptly after demand therefor.

 

SECTION 14.4.      Right
of Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Lender, the Swingline Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by Applicable Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the Issuing Lender, the Swingline Lender or any such
Affiliate to or for the credit or the account of Borrower or any other Credit
Party against any and all of the obligations of Borrower or such Credit Party
now or hereafter existing under this Agreement or any other Loan Document to
such Lender, the Issuing Lender or the Swingline Lender, irrespective of
whether or not such Lender, the Issuing Lender or the Swingline Lender shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of Borrower or such Credit Party may be contingent or
unmatured or are owed to a branch or office of such Lender, the Issuing Lender
or the Swingline Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender, the
Issuing Lender, the Swingline Lender and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the Issuing Lender, the Swingline Lender or their respective
Affiliates may have. Each Lender, the Issuing Lender and the Swingline Lender
agrees to notify Borrower and the Administrative Agent promptly after any such
setoff and application; provided that the failure to give such notice
shall not affect the validity of such setoff and application.

 

SECTION 14.5.      Governing
Law.

 

(a)           Governing Law. This Agreement
and the other Loan Documents, unless expressly set forth therein, shall be governed
by, construed and enforced in accordance with, the law of the State of New
York, without reference to the conflicts or choice of law principles thereof.

 

113

 

(b)           Submission to Jurisdiction. Borrower
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the courts of the State of New York sitting in New
York County and of the United States District Court of the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment in such action or proceeding, and
each of the parties hereto irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State court or, to the fullest extent permitted by Applicable
Law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement or in any other Loan Document shall affect
any right that the Administrative Agent, any Lender or the Issuing Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against Borrower or its properties in the courts of any
jurisdiction.

 

(c)           Waiver of Venue. Borrower and
each other Credit Party irrevocably and unconditionally waives, to the fullest
extent permitted by Applicable Law, any objection that it may now or hereafter
have to the laying of venue of any action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Applicable Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(d)           Service of Process. Each party
hereto irrevocably consents to service of process in the manner provided for notices
in Section 14.1. Nothing in this Agreement will affect the right of
any party hereto to serve process in any other manner permitted by Applicable
Law.

 

SECTION 14.6.      Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 14.7.      Reversal
of Payments. To the extent 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, 

 

114

 

set aside
and/or 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, 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.

 

SECTION 14.8.      Injunctive
Relief; Punitive Damages.

 

(a)           Borrower recognizes that, in the
event 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, Borrower agrees that the Lenders, at the
Lenders’ option, shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.

 

(b)           The Administrative Agent, the Lenders
and Borrower (on behalf of itself and the Credit Parties) hereby agree that no
such Person shall have a remedy of punitive or exemplary damages against any
other party to a Loan Document and each such Person hereby waives any right or
claim to punitive or exemplary damages that they may now have or may arise in
the future in connection with any Dispute, whether such Dispute is resolved
through arbitration or judicially.

 

SECTION 14.9.      Accounting
Matters. If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either Borrower
or the Required Lenders shall so request, the Administrative Agent, the Lenders
and Borrower shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP
(subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

SECTION 14.10.    Successors and Assigns; Participations.

 

(a)           Successors and Assigns Generally.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that neither Borrower nor any other Credit Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of paragraph (b)
of this Section, (ii) by way of participation in accordance with the provisions
of paragraph (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent 

 

115

 

provided in paragraph (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders. Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided
that

 

(i)            except in the case
of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect
to a Lender, the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000 in the case
of any assignment in respect of the Revolving Credit Facility or $1,000,000 in
the case of any assignment of the Term Loan Facility (in each case aggregating
concurrent assignments to or by two or more Affiliated Approved Funds for the
purposes of determining such minimum amount) unless (A) such assignment is
made to an existing Lender, to an Affiliate thereof or to an Approved Fund, in
which case no minimum amount shall apply, or (B) with the consent of each
of the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed); provided that 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 Borrower
prior to such fifth (5th) Business Day;

 

(ii)           each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loan or the Commitment assigned;

 

(iii)          any assignment of a
Revolving Credit Commitment must be approved by the Administrative Agent, the
Swingline Lender and the Issuing Lender unless the Person that is the proposed
assignee is itself a Lender with a Revolving Credit Commitment (whether or not
the proposed assignee would otherwise qualify as an Eligible Assignee); and

 

(iv)          the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500 for
each assignment, and the Eligible Assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire; provided
that only one such processing and recordation fee shall be required in
connection with concurrent assignments to or by two or more Affiliated Approved
Funds.

 

116

 

Subject to
acceptance and recording thereof by the Administrative Agent pursuant to paragraph
(c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the Eligible Assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 5.9, 5.10, 5.11 and 14.3
with respect to facts and circumstances occurring prior to the effective date
of such assignment. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d)
of this Section.

 

(c)           Register. The Administrative
Agent, acting solely for this purpose as an agent of Borrower, shall maintain
at one of its offices in Charlotte, North Carolina, a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amount of
and stated interest on each of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive (absent manifest error), and Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice. The Loans and L/C Obligations
may be assigned in whole or in part only by registration of such assignment on
the Register. Any assignment of all or part of such Loans or L/C Obligations
may be effected only by registration of such assignment on the Register.

 

(d)           Participations. Any Lender may
at any time, without the consent of, or notice to, Borrower or the Administrative
Agent, sell participations to any Person (other than a natural person or Borrower
or any of Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans owing
to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) 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.

 

Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver or
modification described in the first proviso of Section 14.2 that
directly affects such Participant. Subject to paragraph (e) and the foregoing
provisions of this paragraph (d) of this Section, Borrower agrees that each Participant

 

117

 

shall be
entitled to the benefits of Sections 5.9, 5.10 and 5.11
(subject to the requirements of those sections, including delivery by such Participant
of the documents required by Section 5.11(e)) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section (subject to the foregoing provisions of this paragraph
(d)). To the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 14.4 as though it were a Lender, provided
such Participant agrees to be subject to Section 5.6 as though it were a
Lender.

 

(e)           Limitations upon Participant
Rights. A Participant shall not be entitled to receive any greater payment
under Sections 5.10 and 5.11 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 Borrower’s prior written consent.

 

(f)            Certain Pledges. Any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement 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 shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

 

SECTION 14.11.    Confidentiality. Each of the Agents and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential and such information shall be disclosed
solely in furtherance of the transactions contemplated by the Loan Documents),
(b) to the extent requested by, or required to be disclosed to, any rating
agency, or regulatory or similar authority (including any self-regulatory authority,
such as the National Association of Insurance Commissioners), (c) to the extent
required by Applicable Laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies under this Agreement or under any other Loan Document (or any
Hedging Agreement with a Lender or the Administrative Agent) or any action or
proceeding relating to this Agreement or any other Loan Document (or any
Hedging Agreement with a Lender or the Administrative Agent) or the enforcement
of rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any purchasing
Lender, proposed purchasing Lender, Participant or proposed Participant, (ii)
to any Pledgee referred to in Section 14.10(f) or (iii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower and its obligations, (g) with the consent
of Borrower, (h) to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information customarily found in
such publications, (i) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y) becomes available
to the Administrative Agent or any Lender on a nonconfidential basis from a
source other than Borrower or (j) to governmental regulatory authorities in
connection with any regulatory examination of the Administrative Agent or any
Lender or in accordance with the Administrative Agent’s or any Lender’s
regulatory compliance policy if the Administrative Agent or such Lender deems
necessary for the mitigation of claims by those authorities against the
Administrative Agent or

 

118

 

such Lender or
any of its subsidiaries or affiliates. For purposes of this Section, “Information”
means all information received from any Credit Party relating to any Credit
Party or any of their respective businesses, other than any such information
that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by any Credit Party. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

SECTION 14.12.    Performance of Duties. Each of the Credit Party’s
obligations under this Agreement and each of the other Loan Documents shall be
performed by such Credit Party at its sole cost and expense.

 

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 Agents and the Lenders are entitled
under the provisions of this Article XIV and any other provision of
this Agreement and the other Loan Documents shall continue in full force and
effect and shall protect the Agents 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, 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.

 

SECTION 14.18.    Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter.

 

SECTION 14.19.    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 

 

119

 

satisfied in
full, all Letters of Credit have terminated or expired 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 14.20.    Advice of Counsel, No Strict Construction. Each of the
parties represents to each other party hereto that it has discussed this
Agreement with its counsel. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent 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.    USA Patriot Act. The Administrative Agent and each Lender
hereby notifies 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 Borrower
and Guarantors, which information includes the name and address of each
Borrower and Guarantor and other information that will allow such Lender to
identify such Borrower or Guarantor in accordance with the Act.

 

SECTION 14.22.    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 Holdings or its
Subsidiaries or further restricts the rights of Holdings 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)           Borrower expressly acknowledges and
agrees that each covenant contained in Article IX, X or XI
hereof shall be given independent effect. Accordingly, Borrower shall not
engage in any transaction or other act otherwise permitted under any covenant
contained in Article IX, X or XI if, before or after
giving effect to such transaction or act, Borrower shall or would be in breach
of any other covenant contained in Article IX, X or XI.

 

[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.

 

	
   

  	
  PGS SOLUTIONS, INC., as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John M. Curtis

  
	
   

  	
   

  	
  Name:

  	
  John M. Curtis

  
	
   

  	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PGS HOLDING CORP., as Holdings

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  
	
   

  	
   

  	
  Name:

  	
  Robert B. McKeon

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

S-1

 

	
   

  	
  AGENTS AND LENDERS:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as Administrative Agent,
  Swingline Lender, Issuing Lender and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rit N. Amin

  
	
   

  	
   

  	
  Name:

  	
  Rit N. Amin

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

S-2

 

	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  as Syndication Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce H. Mendelsohn

  
	
   

  	
   

  	
  Name:

  	
  Bruce H. Mendelsohn

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

S-1QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.15    
    

 
 

KEY ENERGY GROUP, INC.
  1997 INCENTIVE PLAN
  RESTRICTED STOCK AWARD AGREEMENT    
    

        This Restricted Stock Award Agreement (the "Incentive Agreement"), made effective as of
the            day of
                                    ,
200            (the "Grant Date") by and between Key Energy Services, Inc., a Maryland corporation (the
"Company"),
and                                    (the "Grantee"), evidences the grant by the Company of a stock
award of restricted stock (the "Award") to the Grantee on such date and the Grantee's acceptance of the Award in accordance with the provisions
of the Key Energy Group, Inc. 1997 Incentive Plan (the "Plan"). All capitalized terms not defined herein shall have the meaning
ascribed to them as set forth in the Plan. The Company and the Grantee agree as follows: 

        1.    Basis for Award.    This Award is made under the Plan pursuant
to Section 3 thereof for service rendered (or to be rendered) to the Company by the Grantee, subject to all of the terms and conditions of this Incentive Agreement. 

        2.    Stock Awarded.    

        (a)   The
Company hereby awards to the Grantee, in the aggregate,                        shares of the Company's common stock, par value of
$.10 per share
(the "Shares") as Restricted Stock, which shall be subject to the restrictions and conditions set forth in the Plan and in this Incentive
Agreement. 

        (b)   Reasonably
promptly following the Grant Date, the Company shall cause to be issued to the Grantee a certificate in respect of the Shares of Restricted Stock registered
in the name of the Grantee, evidencing such Shares. The certificate shall bear appropriate legends referring to the terms, conditions, and restrictions applicable to such Award, substantially in the
following form or in such other form approved by the Company: 

"THE TRANSFERABILITY OF THIS CERTIFICATE AND THE COMMON STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN THE KEY ENERGY GROUP, INC. 1997 INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT DATED AS OF
[                                    ],
200            , ENTERED
INTO BETWEEN THE REGISTERED OWNER AND KEY ENERGY SERVICES, INC. A COPY OF THE PLAN AND INCENTIVE AGREEMENT ARE ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY AT ITS CORPORATE
HEADQUARTERS.

THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER."

The
Committee shall require that the certificate evidencing such Shares be delivered upon issuance to the Secretary of the Company or to such other depository as may be designated by the Committee as
a depository for safekeeping until the forfeiture of such Restricted Stock occurs or the Forfeiture Restrictions (as defined below) lapse pursuant to the terms of the Plan and this Award and
that the Grantee shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award. At the expiration of the restrictions, the Company shall redeliver to the Grantee
(or his or her legal representative, beneficiary or heir) share certificates for the Shares deposited with it without any legend except as otherwise provided by the Plan, this Incentive
Agreement or applicable law, including that the Shares were not registered under the Securities Act. The Grantee agrees to complete and sign 

 

any
documents and take additional action that the Company may request to enable it to deliver the Shares on the Grantee's behalf. 

        (c)   During
the period that the Grantee holds the Shares of Restricted Stock, the Grantee shall have all of the rights of a shareholder of the Company with respect to the
Restricted Stock, including, without limitation, voting rights and the right to receive dividends (provided, however, that dividends paid in Shares of the Company's stock shall be subject to the
Forfeiture Restrictions). 

        (d)   A
breach of the terms of this Incentive Agreement by Grantee shall cause forfeiture of the Restricted Stock. By accepting the Award, the Grantee acknowledges that the
Company does not have an adequate remedy in damages for the breach by the Grantee of the conditions and covenants set
forth in this Incentive Agreement and agrees that the Company is entitled to and may obtain an order or a decree of specific performance against the Grantee issued by any court having jurisdiction. 

        (e)   Except
as provided in the Plan or this Incentive Agreement, the restrictions on the Restricted Stock are that prior to vesting, the Restricted Stock may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extent then subject to the Forfeiture Restrictions, and in the event of the Grantee's termination
of employment for any reason other than death, Disability, Involuntary Termination (as defined below) or Retirement, the Grantee shall, for no consideration, forfeit to the Company all of the
Restricted Stock to the extent then subject to the Forfeiture Restrictions. The prohibition against transfer and the obligation to forfeit and surrender the Restricted Stock to the Company upon
termination of employment are herein referred to as the "Forfeiture Restrictions." 

        3.    Lapse of Forfeiture Restrictions/Vesting.    Except as otherwise
provided in this Incentive Agreement, the restrictions described in Section 2(e) of this Incentive Agreement will lapse on the date or dates, as the case may be, set forth on Exhibit A
to this Incentive Agreement (each a "Vesting Date"); provided,  that, the Grantee is still
employed by the Company on each such Vesting Date. In the event of the Grantee's termination of employment prior to the date
that all of the Restricted Stock is vested, except as otherwise provided in this Incentive Agreement, all Restricted Stock still subject to restriction shall be forfeited. 

        (a)   If
the Grantee's termination of employment is due to death, Disability, Involuntary Termination (as defined below) or Retirement and such death, Disability,
Involuntary Termination or Retirement occurs prior to the date that all of the Restricted Stock is vested, all restrictions will lapse with respect to 100% of the Restricted Stock still subject to
restriction on the date of such death, Disability, Involuntary Termination or Retirement. For purposes hereof, "Involuntary Termination" shall mean an involuntary termination of the Grantee's
employment by the Company for any reason other than Cause and which does not result from a resignation by the Grantee. 

        (b)   If
the Grantee's termination of employment is for any other reason and such termination occurs prior to the date that all of the Restricted Stock is vested, the
Restricted Stock still subject to restriction shall, for no consideration, automatically be forfeited upon such cessation of employment. 

        4.    Change in Control.    Notwithstanding Section 3 of this
Incentive Agreement, in the event of a Change in Control, the restrictions described in Section 2(e) of this Incentive Agreement shall lapse with respect to 100% of the Restricted Stock still
subject to restriction; provided, that the Grantee is employed by the Company immediately prior to such
Change in Control. 

        5.    Compliance with Laws and Regulations.    The Restricted Stock
issued under this Incentive Agreement will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. The certificates
representing the Restricted Stock 

2

 

(i) will
bear such legend or legends as the Committee deems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with applicable laws, regulations or
governmental authorities and the requirements of any securities exchange on which the Shares are registered, (ii) the Company may refuse to register the transfer of the Restricted Stock on the
stock transfer records of the Company if such proposed transfer would constitute a violation of the Forfeiture Restrictions or any applicable law, regulation or governmental authority and the
requirements of any securities exchange on which the Shares are registered, and (iii) the Company may give related instructions to its transfer agent, if any, to stop registration of the
transfer of the Restricted Stock. 

        6.    Tax Withholding.    

        (a)   The
Grantee agrees that, subject to clause 6(b) below, no later than the day after the date as of which the restrictions on the Restricted Stock shall lapse with
respect to all or any of the Restricted Stock covered by this Incentive Agreement, the Grantee shall pay to the Company (in cash or Shares, including Restricted Stock, held by the Grantee whose
Fair Market Value is equal to the amount of the Grantee's tax withholding liability) any federal, state or local taxes of any kind required by law to be withheld, if any, with respect to the
Restricted Stock for which the restrictions shall lapse; provided, that, if the Grantee pays such tax
withholding liability in Shares, including Restricted Stock, such Shares (A) if acquired from the Company, have been held for at least six months or such other period as has been determined by
the Committee, or (B) have been purchased on the open market. The Company or its affiliates shall, to the extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Grantee any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock. The Company may refuse to instruct the transfer agent to
release the Restricted Stock or redeliver Share certificates if the Grantee fails to comply with any withholding obligation. 

        (b)   If
the Grantee properly elects, within thirty (30) days of the Grant Date, to include in gross income for federal income tax purposes an amount equal to the Fair
Market Value as of the Grant Date of the Restricted Stock granted hereunder pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, the Grantee shall pay to the Company, or
make other arrangements satisfactory to the Committee to pay to the Company in the year of such grant, any federal, state or local taxes required to be withheld with respect to such Shares. If the
Grantee fails to make such payments, the Company or its affiliates shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Grantee any
federal, state or local taxes of any kind required by law to be withheld with respect to such Shares. The Company may refuse to instruct the transfer agent to release the Shares or redeliver share
certificates if Grantee fails to comply with any withholding obligation. 

        7.    No Right to Continued Employment.    Nothing in this Incentive
Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the Company or any of its affiliates to
terminate the Grantee's employment at any time, in the absence of a specific written agreement to the contrary. 

        8.    Amendment of Award.    The Award may be amended by the Board or
the Committee at any time (i) if the Board or the Committee determines, in its sole discretion, that amendment is necessary or advisable to conform to any changes in the law which occur after
the Grant Date and by its terms applies to the Award; or (ii) which the Board may deem to be in the best interests of the Company, provided that no amendment shall impair or negate any of the
rights or obligations under this Incentive Agreement, without the consent of the Grantee (except as otherwise provided in Section 10 of this Incentive Agreement). Notwithstanding anything in
the Plan or this Agreement to the contrary, if the Committee determines that the provisions of new Section 409A of the Code apply to this Agreement and that the terms of this Agreement do not,
in whole or in part, satisfy the requirements of such section, then the Committee, in its sole discretion, may unilaterally modify this Agreement in such 

3

 

manner
as it deems appropriate to comply with such section and any regulations or guidance issued thereunder. 

        9.    Representations and Warranties of Grantee.    The Grantee
represents and warrants to the Company that: 

        (a)   Agrees to Terms of the Plan.    The Grantee has received a copy of the Plan and has read and understands the
terms of the Plan and this Incentive Agreement and agrees to be bound by their terms and conditions. The Grantee understands that the Company is in a restatement and audit process of its financial
statements and does not have current financial information on file with the Securities and Exchange Commission (the "SEC") and that the issuance
of these Shares of Restricted Stock was not in a transaction registered under the Securities Act of 1933, as amended (the "Securities Act"). The
Grantee acknowledges that the Company shall be under no obligation to effect the registration pursuant to the Securities Act of any Shares, including the Restricted Stock, or to effect similar
compliance under any state laws, unless the Company enters into a separate registration rights agreement with the Grantee. Notwithstanding anything herein to the contrary, the Grantee acknowledges
that the Company shall not be obligated to cause to be issued or delivered any certificates evidencing these Shares unless and until the Company is advised by its counsel that the issuance and
delivery of certificates is in compliance with applicable laws, regulations of governmental authorities, and the requirements of any securities exchange on which the Shares are registered. The Grantee
acknowledges that the Shares have been delisted from the New York Stock Exchange. The Grantee acknowledges that there may be adverse tax consequences upon the vesting of Restricted Stock or
disposition of the Shares once vested, and that the Grantee should consult a tax adviser prior to such time. 

        (b)   Cooperation.    The Grantee agrees to sign such additional documentation as may reasonably be required from
time to time by the Company. 

        10.    Adjustment Upon Changes in Capitalization.    Awards may be
adjusted as provided in the Plan, including, without limitation, Section 6.5 of the Plan. 

        11.    Parachute Payment.    It is possible that the receipt of the
Restricted Stock or the lapse of any Forfeiture Restrictions may constitute a parachute payment (within the meaning of section 280G of the Code). In such event, the amount of such parachute
payment shall be included in the calculation for purposes of determining the amount of any gross-up payment to be made to the Grantee under the terms of any employment, severance or other
agreement which may provide for such a gross-up to compensate the Grantee for any excise tax imposed by Section 4999 of the Code. Notwithstanding the foregoing, the Company is under
no obligation to provide for a gross-up payment in any agreement. 

        12.    Incorporation of Plan by Reference.    The Award is granted
pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and the Award shall in all respects be interpreted in accordance with the Plan. The Committee shall
interpret and construe the Plan and this Incentive Agreement, and its interpretations and determinations shall be conclusive and binding on the parties hereto and any other person claiming an interest
hereunder, with respect to any issue arising hereunder or thereunder. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Incentive
Agreement, the Plan shall govern and control. In the event of a conflict or inconsistency between the terms and provisions of this Incentive Agreement (including the Plan) and any employment agreement
with Grantee, the employment agreement shall govern and control as interpreted and determined by the Committee. 

        13.    Governing Law; Modification.    The validity, construction,
interpretation and effect of this Incentive Agreement shall exclusively be governed by and determined in accordance with the law of the State of Maryland without regard to its conflict of law
principles, except to the extent preempted by federal law. 

4

 

        14.    Severability.    Every provision of this Incentive Agreement is
intended to be severable, and any illegal or invalid term shall not affect the validity or legality of the remaining terms. 

        15.    Counterparts.    This Incentive Agreement may be executed in
one or more counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts shall together constitute the same instrument. 

        16.    Miscellaneous.    The masculine pronoun shall be deemed to
include the feminine, and the singular number shall be deemed to include the plural unless a different meaning is plainly required by the context. 

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

	 	 	KEY ENERGY SERVICES, INC.
	

 	
 	
By:	

    
 Name:

Title:

	 	 	Address:	 	1301 McKinney Street, Suite 1800

Houston, Texas 77010

        The
undersigned hereby accepts the terms of this Incentive Agreement and the Plan. 

	

 	

 Grantee
	

 	

Address:

	

 	

	

 	

5

 
 
 

EXHIBIT A    
    

	SHARES
 
	 	VESTING DATE

6

QuickLinks

Exhibit 10.15

KEY ENERGY GROUP, INC. 1997 INCENTIVE PLAN RESTRICTED STOCK AWARD AGREEMENT

EXHIBIT A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]