Document:

Exhibit 10.4

 

FIRST AMENDMENT TO CREDIT
AGREEMENT

 

This
FIRST AMENDMENT TO CREDIT AGREEMENT (“Amendment”) dated as of June 16,
2010, is made by and among TRIUMPH GROUP, INC., a Delaware corporation (“TGI”);
PNC BANK, NATIONAL ASSOCIATION, a national banking association as
Administrative Agent for the Banks under the Credit Agreement referred to
herein (hereinafter referred to in such capacity as the “Administrative
Agent”); and the BANKS party hereto (the “Consenting Banks”).

 

Reference
is made to the Credit Agreement dated as of May 10, 2010, by and among the
Borrowers, the Guarantors, the Banks, the Administrative Agent and the other
Agents party thereto (the “Credit Agreement”).  (Capitalized terms used herein and not
otherwise defined shall have the meanings provided for in the Credit
Agreement).

 

The
Borrowers, the Guarantors, the Consenting Banks and the Administrative Agent
have agreed that the Credit Agreement be amended as provided herein, effective
as of the date hereof.

 

NOW,
THEREFORE, in consideration of the foregoing and for other consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1.             Amendments to Credit Agreement.

 

(a)           Section 1.1 [Certain Definitions] of the Credit
Agreement is hereby amended to add the following new definitions:

 

 

“BBH
Obligations shall mean the obligations of TGI to Brown Brothers Harriman &
Co. arising under the IDB Guaranty.”

 

“Chatsworth
Property shall mean that certain land and improvements thereon commonly
known as 9301 Mason Avenue, Chatsworth, Los Angeles County, CA 91311.”

 

“Collateral
Agency Agreement shall mean the Collateral Agency Agreement dated as of June 16,
2010, by and among the Loan Parties, Royal Bank of Canada, Brown Brothers
Harriman & Co. and the Administrative Agent.”

 

“IDB Guaranty shall
mean the Amended and Restated Guaranty and Suretyship Agreement, dated as of April 18,
2008, among TGI and Brown Brothers Harriman & Co., as amended from
time to time (including in connection with the Acquisition) provided that the
principal amount of indebtedness guaranteed thereunder shall not exceed in the
aggregate $10,800,000.00.”

 

“Indiana
Financing Agreement shall mean the Financing Agreement dated as of November 29,
2005, by and among The Triumph Group Operations, Inc., City of Shelbyville, Indiana
and Brown Brothers Harriman & Co., as amended from time to time
(including in connection with the Acquisition.)”

 

“Pennsylvania
Financing Agreement shall mean Financing Agreement, dated April 18,
2008, by and among Triumph Controls, LLC, Montgomery County Industrial
Development Authority and Brown Brothers Harriman & Co., as amended
from time to time (including in connection with the Acquisition.)”

 

“Specified
IDB Obligations shall mean the Indebtedness and related obligations of The
Triumph Group Operations, Inc., Triumph Controls, LLC and TGI arising
pursuant to the Indiana Financing Agreement, the Pennsylvania Financing
Agreement and the IDB Guaranty, respectively provided that in no event shall
the aggregate principal amount of Specified IDB Obligations exceed
$10,800,000.00.”

 

(b)           Section 1.1 [Certain Definitions] of the Credit
Agreement is hereby amended to amend and restate the following definitions:

 

“Bank-Provided
Hedge” shall mean an Interest Rate Hedge or other hedging transaction which
is provided by any Bank or any Affiliate thereof,  and meets the following requirements: such
Interest Rage Hedge or other hedging transaction (i) is documented in a
standard International Swap Dealer Association agreement, (ii) provides
for the method of calculating the reimbursable amount of the provider’s credit
exposure in a reasonable and customary manner, and (iii) is entered into
for hedging (rather than speculative) purposes. The liabilities of any Borrower
or any Guarantor to the provider of any Bank-Provided Hedge (the “Hedge
Liabilities”) shall be “Obligations” hereunder, guaranteed obligations under
the Guarantee and Collateral Agreement and otherwise treated as Obligations for
purposes of each of

 

2

 

the
other Loan Documents. The Liens securing the Hedge Liabilities shall be pari
passu with the Liens securing all other Obligations under this Agreement
and the other Loan Documents.”

 

“Prior
Security Interest shall mean a valid and enforceable perfected
first-priority security interest in the Collateral; provided that (i) the
Vought Term Loan Obligations (and any Permitted Refinancing Debt in respect
thereof), the BBH Obligations and the obligations under the B&R Promissory
Note shall be permitted to be secured by the Collateral on a pari passu basis
with such security interest in the Collateral securing the Obligations and (ii) Liens
which both (a) are Permitted Liens and (b) have priority over the
Liens granted to the Administrative Agent pursuant to the Loan Documents by
operation of Law shall be permitted on the Collateral.”

 

“Term
Lender Provided Hedge shall mean an Interest Rate Hedge or other hedging
transaction which is provided by any lender under the Vought Term Loans or
Incremental Term Loans or any Affiliate thereof to the extent that the
obligations of the Loan Parties thereunder are secured jointly with the Vought
Term Loans or Incremental Term Loans, respectively and provided, that each such
Interest Rate Hedge or other hedging transaction meets the following
requirements: such Interest Rate Hedge or other hedging transaction (i) is
documented in a standard International Swap Dealer Association agreement, (ii) provides
for the method of calculating the reimbursable amount of the provider’s credit
exposure in a reasonable and customary manner, and (iii) is entered into
for hedging (rather than speculative) purposes.”

 

“2010 Bonds shall
mean notes issued by TGI to finance a portion of the Acquisition or to
refinance the Vought Bridge Loans; provided the aggregate principal amount
thereof does not exceed $400,000,000, plus or minus, as the case may be, the
amount by which the aggregate initial principal amount of the Vought Term Loans
is less than or greater than, respectively, $300,000,000; provided, further,
that the 2010 Bonds shall, in any case, meet the Vought Financing Parameters.”

 

(c)           Section 5.1.23 [Senior Debt
Status] of the Credit Agreement is hereby amended by adding the following
sentence to the end thereof:

 

“The
Obligations of each Loan Party under this Agreement are not superior in right
of payment to the B&R Promisory Note.”

 

(d)           Section 6.1.3 [Delivery of Loan
Documents] of the Credit Agreement is hereby amended by adding the Collateral
Agency Agreement in form and substance acceptable to the Administrative Agent
to the documents required to be delivered on the Closing Date.

 

(e)           Section 7.1.16 [Collateral and
Additional Collateral; Execution and Delivery of Additional Collateral
Documents] of the Credit Agreement is hereby amended to:

 

(i)            insert a new paragraph immediately
prior to paragraph (a) thereof to read:

 

3

 

“In the case of each of
clauses (a), (b), (c) and (d) below, the Borrower shall, and shall
cause each of its Subsidiaries, to:”;

 

(ii)           provide that each of the references
in clause (d) of Section 7.1.16 to 66% are amended to read “65%”;

 

(iii)          provide that each of the references in
clause (d) of Section 7.1.16 to “Loan Party” is amended to read “Domestic
Loan Party”; and

 

(iv)          provide that the last paragraph of Section 7.1.16
is hereby amended to  replace the words “condition
precedent” therein with the word “covenant.”

 

(f)            Section 7.1.18 [Intercreditor
Issues] of the Credit Agreement is hereby amended in its entirety to read as
follows:

 

“7.1.18        Intercreditor
Issues.

 

In
the event of a breach or default (i) under the Intercreditor Agreement or
the Collateral Agency Agreement by any party thereto (other than the
Administrative Agent), or (ii) by any holder of any Indebtedness which is
subordinated to the Obligations, of such subordination provisions, in each
case, which circumstance is capable of being cured or mitigated by action or
inaction by any of the Loan Parties, the Loan Parties shall take any
practicable action or refrain from taking action available to it to cure or
mitigate such breach or default.  By way
of example only, and without limiting the generality of the foregoing, if, the
collateral agent for the lenders of the Vought Term Loan receives a Lien on the
assets which is not also provided to the Administrative Agent, the Loan Parties
shall grant a Lien to the Administrative Agent thereon. “

 

(g)           Section 7.1.19 [Chatsworth
Property] is hereby added to the end of Section 7.1 [Affirmative
Covenants] of the Credit Agreement, and shall read as follows:

 

“7.1.19
Chatsworth Property.

 

On
or prior to December 31, 2010 (or such later date as may be agreed to by
the Administrative Agent in its sole discretion), the Loan Parties will take,
or will cause to be taken, the actions specified in Section 7.1.16(b) with
respect to the Chatsworth Property (irrespective of its value), unless the
Chatsworth Property shall have been transferred or otherwise disposed of,

 

4

 

in
each case to a third party, prior to such date in a transaction otherwise
permitted pursuant to this Agreement.”

 

(h)           Clauses (i)(e), (i)(g) and (i) (l) of Section 7.2.1
[Indebtedness] of the Credit Agreement are hereby amended, respectively, to
read in their entirety as follows:

 

“(e) the
IDBs existing on the date hereof so long as the principal amount thereof is not
hereafter increased and no additional assets (other than as provided in the
Collateral Documents) become subject to Liens associated therewith;

 

“(g) Indebtedness
secured by Purchase Money Security Interests and Capital Lease Obligations
incurred after the date hereof in an aggregate amount outstanding at any time
(including additional IDBs) not to exceed $50,000,000;

 

“(l) Guaranties
by any Loan Party of secured Indebtedness of any other Loan Party otherwise
permitted to be incurred under this Section 7.2.1(i) (other than (i) Sections
(b), (f), (g), (j), (k) and (m) of this Section 7.2.1(i) and
(ii) Section (e) of this Section 7.2.1(i), other than
pursuant to the IDB Guaranty and the Collateral Documents;”

 

(i)            Clause (viii) of Section 7.2.4
[Loans and Investments] of the Credit Agreement is hereby amended to read as
follows:

 

“(viii)      other investments not identified above so
long as the aggregate amount of such investments made and outstanding after the
date hereof shall not at any time exceed $15,000,000;”

 

(j)            Section 7.2.20 [Repayment of
Convertible Notes: Repayment of the Subordinated Indebtedness] is hereby
amended by deleting the final “.” thereof and replacing it with the following:

 

“provided
that no such repayment of subordinated indebtedness may be made if an Event of
Default shall have occurred and be continuing or would result from such
repayment.”

 

(k)           Section 8.1.5 [Defaults in Other
Agreements or Indebtedness] of the Credit Agreement is hereby amended to read
in its entirety as follows:

 

5

 

“8.1.5      Defaults in Other Agreements or
Indebtedness.

 

(a) A
default or event of default shall occur at any time under the terms of any
other agreement involving borrowed money or the extension of credit or any
other Indebtedness under which any Borrower or Subsidiary of any Borrower may
be obligated as a borrower or guarantor in excess of $25,000,000.00 in the
aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether
waived or not) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any Indebtedness (and such right shall not have been waived) or
the termination of any commitment to lend thereunder, or (b) without
limiting the foregoing, there occurs and is continuing any event of default
giving rise to a right of acceleration or termination under (i) the
Convertible Debt Documents (ii) the Vought Term Loans, (iii) the 2009
Bonds, (iv) the Vought Bridge Loans, (v) the 2010 Bonds, or (vi) the
Specified IDB Obligations, or (c) without limiting the foregoing, the
Receivables Facility is terminated prior to maturity as a result of a breach,
default, event of default, or Termination Event (as defined in the Receivables
Purchase Agreement).”

 

(l)            Section 8.2.5.1 [Application of
Proceeds] of the Credit Agreement is hereby amended in its entirety to read as
follows:

 

“8.2.5.1   Application of Proceeds.

 

From
and after the date on which the Administrative Agent has taken any action
pursuant to this Section 8.2, and until all Obligations of the Borrowers
have been paid in full, any and all proceeds received by the Administrative
Agent from any sale or other disposition of the Collateral, or any part thereof,
or on account of the exercise of other remedies by the Administrative Agent,
shall, subject to the Intercreditor Agreement and the Collateral Agency
Agreement, be applied as described in Section 6.5 of the Guarantee and
Collateral Agreement.”

 

(m)          Section 8.2.5.2 [Collateral
Sharing] of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:

 

“8.2.5.2
Collateral Sharing.

 

All
Liens granted under the Collateral Documents and any other Loan Document shall
secure ratably and on a pari  passu basis (i) the Obligations
in favor of the Administrative Agent and the Banks hereunder and (ii) the
Obligations incurred by any of the Loan Parties in favor of any Bank (or any
Affiliate of any Bank) which provides a Bank-Provided Hedge or an Other Bank
Provided Financial Service Product (the “IRH Provider”), and (iii) the
BBH Obligations.  The Administrative
Agent under the Collateral Documents shall be deemed to serve as the collateral
agent (the “Collateral Agent”) for Brown Brothers Harriman &
Co. (solely with respect to the Collateral granted for the benefit of Brown
Brothers Harriman & Co. pursuant to the Guarantee and Collateral
Agreement and the Mortgages, and subject to the Collateral Agency Agreement),
the IRH Providers and the Banks hereunder; provided  that the
Collateral Agent shall comply with the instructions and directions of the
Administrative Agent (or the Banks under this Agreement to the extent that this
Agreement or any other Loan

 

6

 

Document
empowers the Banks to direct the Administrative Agent), as to all matters
relating to the Collateral, including the maintenance and disposition
thereof.  Neither Brown Brothers Harriman &
Co. nor any IRH Provider (except in its capacity as a Bank hereunder) shall be
entitled or have the power to direct or instruct the Collateral Agent on any
such matters or to control or direct in any manner the maintenance or
disposition of the Collateral.”

 

(n)           Section 10.11.1 [Successors;
Assignments] is amended by adding the following sentence at the end thereof:

 

“Notwithstanding
anything to the contrary provided in this Section, to the extent TGI’s consent
is required for any assignment by a Bank, such consent shall be deemed given
unless TGI shall have objected thereto by written notice to the Administrative
Agent within five (5) Business Days after having received notice thereof.”

 

(o)           Section 10.22 [Intercreditor
Agreement] of the Credit Agreement is amended to read in its entirety as
follows:

 

“10.22     Intercreditor Agreement; Collateral
Agency Agreement.

 

The
Administrative Agent is authorized and directed to enter into the Intercreditor
Agreement and the Collateral Agency Agreement on behalf of the Banks and each
of the Banks hereby approves and agrees to be bound by the terms of the
Intercreditor Agreement and the Collateral Agency Agreement.”

 

(p)           The Credit Agreement is further
amended by deleting Schedule 1.1(P) [Permitted Liens] therefrom and
replacing it with Schedule 1.1(P) [Permitted Liens] attached to this
Amendment.

 

(q)           The Credit Agreement is further
amended by deleting Exhibit 10.20(A) [Form of Borrower Joinder]
therefrom and replacing it with Exhibit 10.20(A) [Form of
Borrower Joinder] attached to this Amendment.

 

(r)            The Credit Agreement is further
amended by deleting Exhibit 10.20(B) [Form of Guarantor Joinder]
therefrom and replacing it with Exhibit 10.20(B) [Form of
Guarantor Joinder] attached to this Amendment.

 

7

 

2.             Effectiveness of This Amendment.  This Amendment shall be effective upon
execution by (i) each of the Borrowers and each of the Guarantors party to
any Loan Document at the time of such effectiveness, and (ii) the Banks
constituting the Required Banks; it being understood that this Amendment, if
executed and delivered on the Closing Date, shall be deemed to be effective
prior to the consummation of the Acquisition and satisfaction of the condition
set forth in Section 6.1.19 of the Credit Agreement. On such date the Loan
Parties shall cause the president or chief financial officer of TGI to deliver
to the Administrative Agent a certificate as to the solvency of TGI and its
Subsidiaries on a consolidated basis.

 

3.             Miscellaneous.

 

(a)           All of the terms, conditions,
provisions and covenants in the Notes, the Credit Agreement, the Loan
Documents, and all other documents delivered to the Banks and the
Administrative Agent in connection with any of the foregoing documents and
obligations secured thereby shall remain unaltered and in full force and effect
except as modified by this Amendment and are hereby ratified and confirmed.

 

(b)           This Amendment shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

(c)           The Borrowers shall reimburse the
Administrative Agent for all expenses for which the Administrative Agent is
entitled to be reimbursed, including the fees of counsel for the Administrative
Agent in connection with this Amendment.

 

(d)           Each and every one of the terms and
provisions of this Amendment shall be binding upon and shall inure to the
benefit of the Borrowers, the Banks and the Administrative Agent and their
respective successors and assigns.

 

8

 

(e)           This Amendment may be executed in one
or more counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute but one and the same instrument.

 

(f)            The execution and delivery of this
Amendment shall not be construed to establish a course of conduct or imply that
any other, future or further waivers, consents or forbearance shall be
considered, provided or agreed to.

 

(g)           Each Borrower represents and warrants
that there exists no Event of Default or Potential Default.

 

(h)           Each Borrower represents and warrants
that as of the execution hereof (i) the only Loan Party is TGI; and (ii) no
other Person is required to be a “Loan Party” hereunder.

 

(i)            The Loan Parties hereby represent
and warrant to the Administrative Agent and the Banks that after giving effect
to this Amendment, (1) the representations and warranties of the Loan
Parties contained in the Credit Agreement and the other Loan Documents are true
and correct on and as of the date hereof with the same force and effect as
though made by the Loan Parties on such date, except to the extent that any
such representation or warranty expressly relates solely to a previous date,
and (2) the Loan Parties are in compliance with all terms, conditions,
provisions, and covenants contained in the Credit Agreement, as amended hereby,
and the other Loan Documents.  This
Amendment has been duly executed by an authorized officer of each Loan
Party.  The execution, delivery, and
performance of this Amendment have been duly authorized by all necessary
corporate action, require no governmental approval, and will neither
contravene, conflict with, nor result in the breach of any Law, charter,
articles, or certificate of incorporation or organization, bylaws, operating

 

9

 

agreement or other
agreement governing or binding upon any of the Loan Parties or any of their
property.

 

10

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
  Title: Executive Vice President, Chief Financial
  Officer and Treasurer

  

 

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION,
  individually and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian T. Vesey

  
	
   

  	
  Name:
  Brian T. Vesey

  
	
   

  	
  Title:
  Vice President

  

 

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  CITIZENS BANK OF PENNSYLVANIA, individually
  and as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carol Castle

  
	
   

  	
  Name:
  Carol Castle

  
	
   

  	
  Title:
  Senior Vice President

  

 

2

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  MANUFACTURERS
  AND TRADERS TRUST COMPANY, individually
  and as Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tracey E. Sawyer-Calhoun

  
	
   

  	
  Name:
  Tracey E. Sawyer-Calhoun

  
	
   

  	
  Title:
  Vice President

  

 

3

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., individually
  and as Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah R. Winkler

  
	
   

  	
  Name:
  Deborah R. Winkler

  
	
   

  	
  Title:
  Vice President

  

 

4

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  SOVEREIGN BANK, individually and as Managing
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Francis D. Phillips

  
	
   

  	
  Name:
  Francis D. Phillips

  
	
   

  	
  Title:
  Senior Vice President

  

 

5

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  BRANCH BANKING AND TRUST COMPANY, individually
  and as Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Roberts A. Bass

  
	
   

  	
  Name:
  Roberts A. Bass

  
	
   

  	
  Title:
  Senior Vice President

  

 

6

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick McGraw

  
	
   

  	
  Name:
  Patrick McGraw

  
	
   

  	
  Title:
  Vice President

  

 

7

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  TRISTATE CAPITAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy A. Merriman

  
	
   

  	
  Name:
  Timothy A. Merriman

  
	
   

  	
  Title:
  Senior Vice President

  

 

8

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  TORONTO DOMINION (NEW YORK) LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jackie Barrett

  
	
   

  	
  Name:
  Jackie Barrett

  
	
   

  	
  Title:
  Authorized Signatory

  

 

9

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  FIRST COMMONWEALTH BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Misty L. Cleary

  
	
   

  	
  Name:
  Misty L. Cleary

  
	
   

  	
  Title:
  Assistant Vice President

  

 

10

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  ROYAL BANK OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scott Umbs

  
	
   

  	
  Name:
  Scott Umbs

  
	
   

  	
  Title:
  Authorized Signatory

  

 

11

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  UBS LOAN FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Irja R. Otsa

  
	
   

  	
  Name:
  Irja R. Otsa

  
	
   

  	
  Title:
  Associate Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary E. Evans

  
	
   

  	
  Name:
  Mary E. Evans

  
	
   

  	
  Title:
  Associate Director

  
				

 

12

 

[SIGNATURE PAGE TO THE

FIRST AMENDMENT TO CREDIT AGREEMENT]

 

	
   

  	
  FIRST NIAGARA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tara Handforth

  
	
   

  	
  Name:
  Tara Handforth

  
	
   

  	
  Title:
  Vice President

  

 

13Exhibit 10.5

	
   

  	
   

  	
   

  

 

$350,000,000

 

CREDIT AGREEMENT

 

by and among

 

TRIUMPH GROUP, INC.,

 

and

 

THE BANKS PARTY HERETO

 

and

 

ROYAL BANK OF CANADA, 

as Administrative Agent

 

RBC CAPITAL MARKETS, 

as Lead Arranger

 

RBC CAPITAL MARKETS, PNC
BANK, NATIONAL ASSOCIATION and CITIZENS BANK OF PENNSYLVANIA, 

as Joint Bookrunners

 

CITIZENS BANK OF PENNSYLVANIA
and U.S. BANK, NATIONAL ASSOCIATION, 

as Documentation Agents

 

and

 

PNC BANK, NATIONAL
ASSOCIATION, 

as Syndication Agent

	
   

  	
   

  	
   

  

 

Dated as of June 16,
2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1. CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
  Construction

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
  Accounting
  Principles

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Term Commitments

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
  Procedure for
  Borrowing

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
  Fees

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
  Repayment of
  Loans

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
  Optional
  Prepayments

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
  Mandatory
  Prepayments

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
  Conversion and
  Continuation Options

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
  Limitations on
  Tranches

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
  Interest Rates and
  Payment Dates

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
  Computation of
  Interest and Fees

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
  Inability to
  Determine Interest Rate

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
  Pro Rata
  Treatment and Payments

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
  Requirements of
  Law

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
  Taxes

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  2.15

  	
  Indemnity

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
  Change of Lending
  Office

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  2.17

  	
  Replacement of
  Banks

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  2.18

  	
  Incremental
  Credit Extensions

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Representations
  and Warranties

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4. CONDITIONS OF LOANS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Conditions of
  Loans

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5. COVENANTS

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Affirmative
  Covenants

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
  Negative
  Covenants

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
  Reporting
  Requirements

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6. DEFAULT

  	
   

  	
  66

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Events of Default

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
  Consequences of
  Event of Default

  	
   

  	
  69

  

 

i

 

	
  ARTICLE 7. THE AGENT

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Appointment

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
  Delegation of
  Duties

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
  Exculpatory
  Provisions

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
  Reliance by
  Administrative Agent

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
  Notice of Default

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
  Non-Reliance on
  Agents and Other Banks

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
  Indemnification

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
  Agent in its
  Individual Capacity

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
  Successor
  Administrative Agent

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
  Documentation
  Agents and Syndication Agent

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8. MISCELLANEOUS

  	
   

  	
  73

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Amendments and
  Waivers

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
  Notices

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
  No Waiver;
  Cumulative Remedies

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  8.4

  	
  Survival of
  Representations and Warranties

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  8.5

  	
  Payment of
  Expenses

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  8.6

  	
  Successors and
  Assigns; Participations and Assignments

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  8.7

  	
  Adjustments;
  Set-Off

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.8

  	
  Counterparts

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.9

  	
  Severability

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.10

  	
  Integration

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.11

  	
  GOVERNING LAW

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.12

  	
  Submission to
  Jurisdiction; Waivers

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  8.13

  	
  Acknowledgements

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  8.14

  	
  Release of
  Guaranties and Liens

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  8.15

  	
  Confidentiality

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  8.16

  	
  WAIVERS OF
  JURY TRIAL

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
  8.17

  	
  USA Patriot Act

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
  8.18

  	
  Intercreditor
  Agreement and Collateral Agency Agreement

  	
   

  	
  81

  

 

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES

 

	
  SCHEDULE 1.1(B)

  	
   

  	
  -

  	
  BANKS

  
	
  SCHEDULE 1.1(C)

  	
   

  	
  -

  	
  ACQUISITION RELATED EXPENSES

  
	
  SCHEDULE 1.1(E)

  	
   

  	
  -

  	
  EXCLUDED LETTERS OF CREDIT

  
	
  SCHEDULE 1.1(M)

  	
   

  	
  -

  	
  MORTGAGED PROPERTY

  
	
  SCHEDULE 1.1(P)

  	
   

  	
  -

  	
  PERMITTED LIENS

  
	
  SCHEDULE 3.1.2

  	
   

  	
  -

  	
  CAPITALIZATION

  
	
  SCHEDULE 3.1.3

  	
   

  	
  -

  	
  SUBSIDIARIES

  

 

ii

 

	
  SCHEDULE 3.1.7

  	
   

  	
  -

  	
  LITIGATION

  
	
  SCHEDULE 3.1.8

  	
   

  	
  -

  	
  TITLE TO PROPERTY

  
	
  SCHEDULE 3.1.20

  	
   

  	
  -

  	
  EMPLOYEE BENEFIT PLAN DISCLOSURES

  
	
  SCHEDULE 3.1.21

  	
   

  	
  -

  	
  EMPLOYMENT MATTERS

  
	
  SCHEDULE 3.1.22

  	
   

  	
  -

  	
  ENVIRONMENTAL MATTERS

  
	
  SCHEDULE 3.1.25(a)

  	
   

  	
  -

  	
  UCC FILING JURISDICTIONS

  
	
  SCHEDULE 3.1.25(b)

  	
   

  	
  -

  	
  MORTGAGE FILING JURISDICTIONS

  
	
  SCHEDULE 3.1.26

  	
   

  	
  -

  	
  PARTNERSHIP AGREEMENTS AND

  
	
   

  	
   

  	
   

  	
  LIMITED LIABILITY COMPANY
  AGREEMENTS

  
	
  SCHEDULE 5.2.1

  	
   

  	
  -

  	
  EXISTING INDEBTEDNESS

  
	
  SCHEDULE 5.2.4

  	
   

  	
  -

  	
  EXISTING INVESTMENTS

  
	
  SCHEDULE 5.2.7

  	
   

  	
  -

  	
  PAYMENT DISCOUNT ARRANGEMENTS

  

 

	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT 1.1(A)

  	
   

  	
  -

  	
  ASSIGNMENT AND ASSUMPTION

  
	
  EXHIBIT 1.1(E)

  	
   

  	
  -

  	
  EXEMPTION CERTIFICATE

  
	
  EXHIBIT 1.1(G)

  	
   

  	
  -

  	
  GUARANTEE AND COLLATERAL AGREEMENT

  
	
  EXHIBIT 1.1(I)(1)

  	
   

  	
  -

  	
  INTERCOMPANY SUBORDINATION
  AGREEMENT

  
	
  EXHIBIT 1.1(I)(2)

  	
   

  	
  -

  	
  INTERCREDITOR AGREEMENT

  
	
  EXHIBIT 5.3.3

  	
   

  	
  -

  	
  COMPLIANCE CERTIFICATE

  

 

iii

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is dated as of
June 16, 2010, and is made by and among TRIUMPH GROUP, INC., a
Delaware corporation (the “Borrower”), the BANKS (as hereinafter
defined) from time to time party hereto, ROYAL BANK OF CANADA, in its capacity
as Administrative Agent for the Banks under this Agreement (hereinafter
referred to in such capacity as the “Administrative Agent”), PNC BANK,
NATIONAL ASSOCIATION, in its capacity as syndication agent for the Banks under
this Agreement (hereinafter referred to in such capacity as the “Syndication
Agent”), and CITIZENS BANK OF PENNSYLVANIA and U.S. BANK, NATIONAL
ASSOCIATION, in their capacities as documentation agent for the Banks under
this Agreement (herein referred to in such capacity as the “Documentation
Agents”).

 

The parties hereto hereby agree as
follows:

 

ARTICLE 1.

CERTAIN
DEFINITIONS

 

1.1           Certain Definitions.

 

In addition to words and terms
defined elsewhere in this Agreement, the following words and terms shall have
the following meanings, respectively, unless the context hereof clearly
requires otherwise:

 

“ABR” shall mean for any day,
a rate per annum equal to the greater of (a) 2.5 % and (b) the
greatest of (i) the Prime Rate in effect on such day, (ii) the
Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1.0% and (iii) the
Eurodollar Base Rate announced on that day (or the next preceding day for which
the Eurodollar Base Rate is announced if there is no announcement on such day)
for an interest period of one month plus 1.0%; provided, however,
that during the period commencing on the Closing Date and ending on the date
that is thirty days following the Closing Date (or such earlier date as shall
be specified by the Administrative Agent on which Eurodollar Loans have become
available), “ABR” shall mean the higher of 1.5 % and the rate per annum equal to
the rate determined by the Administrative Agent to be the offered rate that
appears on the page of the LIBOR01 screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement Rate for
deposits in Dollars with a term equivalent to one month, determined as of
approximately 11:00 a.m. (London time) on the Closing Date plus 1.0%.  Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively, and each rate determined by
reference to the Eurodollar Base Rate shall take effect on the day of
announcement of such rate.

 

“ABR Loans” shall mean Loans
the rate of interest applicable to which is based upon the ABR

 

“Acquisition” shall mean the
acquisition of all of the equity ownership interests of Vought by the Borrower
pursuant to the Acquisition Agreement.

 

“Acquisition Agreement” shall
mean the Agreement and Plan of Merger dated as of March 23, 2010 by and
among Vought, the Borrower, Spitfire Merger Corporation and TC Group, L.L.C.

 

“Additional Bank” shall have
the meaning assigned to such term in Section 2.18.

 

“Adjusted Funding Target Attainment
Percentage” shall mean the adjusted funding target attainment percentage as
defined in Sections 206(g)(9) of ERISA and 436(j)(2) of the Internal
Revenue Code.

 

“Adjustment Date” shall have
the meaning assigned to such term in the definition of “Applicable Pricing Grid”.

 

“Administrative Agent” shall
mean Royal Bank of Canada, and its successors and assigns, as Administrative
Agent, together with any of its successors.

 

 

“Administrative Agent’s Fee
Letter” shall mean the Fee Letter, dated as of March 23, 2010, between
the Borrower and the Administrative Agent.

 

“Affiliate” as to any Person
shall mean any other Person (i) which directly or indirectly controls, is
controlled by, or is under common control with such Person, (ii) which
beneficially owns or holds 10% or more of any class of the voting or other
equity interests of such Person, or (iii) 10% or more of any class of
voting interests or other equity interests of which is beneficially owned or
held, directly or indirectly, by such Person. 
“Control”, as used in this definition, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, including the power to elect a majority
of the directors or trustees of a corporation or trust, as the case may be.

 

“Agents” shall mean the
collective reference to the Syndication Agent, the Documentation Agents and the
Administrative Agent.

 

“Aggregate Exposure” shall
mean, with respect to any Bank at any time, an amount equal to (a) until
the Closing Date, the aggregate amount of such Bank’s Commitments at such time
and (b) thereafter, the aggregate then unpaid principal amount of such
Bank’s Loans then outstanding.

 

“Aggregate Exposure Percentage”
shall mean, with respect to any Bank at any time, the ratio (expressed as a
percentage) of such Bank’s Aggregate Exposure at such time to the Aggregate
Exposure of all Banks at such time.

 

“Agreement” shall mean this
Credit Agreement, as the same may be supplemented, amended, amended and
restated or otherwise modified from time to time, including all schedules and
exhibits.

 

“Ancillary Security Documents”
shall mean title insurance, existing or otherwise available surveys, lien
searches, flood insurance certifications, phase I environmental assessments or
phase II environmental assessments, as applicable, opinions of counsel and such
other documents and certifications as may be reasonably requested by the
Administrative Agent, all as of a recent date and reasonably satisfactory to
the Administrative Agent.

 

“Anti-Terrorism Laws” shall
mean any Laws relating to terrorism or money laundering, including Executive
Order No. 13224, the USA Patriot Act, the Laws comprising or implementing
the Bank Secrecy Act, and the Laws administered by the United States Treasury
Department’s Office of Foreign Asset Control (as any of the foregoing Laws may
from time to time be amended, renewed, extended, or replaced).

 

“Applicable Margin” shall
mean a percentage per annum equal to (a) with respect to ABR Loans, 2.00%
and (b) with respect to Eurodollar Loans, 3.00%; provided that,
that on and after the first Adjustment Date occurring after the completion of
one full fiscal quarter of the Borrower after the Closing Date, the Applicable
Margin will be determined pursuant to the Applicable Pricing Grid.

 

“Applicable Percentage” shall
mean 50%; provided  that, on any date of determination, the
Applicable Percentage shall be reduced to (i) 25% if the Total Leverage
Ratio for the Test Period then in effect is greater than or equal to 2.5 : 1.0
but less than 3.5 : 1:0 and (ii) 0% if the Total Leverage Ratio for the
Test Period then in effect is less than 2.5 : 1.0.

 

“Applicable Pricing Grid”
shall mean the table set forth below:

 

	
  Total Leverage Ratio

  	
   

  	
  Applicable
  Margin for

  Eurodollar Loans

  	
   

  	
  Applicable
  Margin for

  ABR Loans

  	
   

  
	
  >2.0
  : 1.00

  	
   

  	
  3.0

  	
  %

  	
  2.0

  	
  %

  
	
  <2.0 : 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  

 

2

 

For the purposes of the Applicable
Pricing Grid, changes in the Applicable Margin resulting from changes in the
Total Leverage Ratio shall become effective on the date (the “Adjustment
Date”) that is three Business Days after the date on which financial
statements are delivered to the Banks pursuant to Section 5.3.1 or 5.3.2,
as applicable, and shall remain in effect until the next change to be effected
pursuant to this paragraph.  If any
financial statements referred to above are not delivered within the time
periods specified in Section 5.3.1 or 5.3.2, as applicable, then, until
the date that is three Business Days after the date on which such financial
statements are delivered, the highest rate set forth in each column of the
Applicable Pricing Grid shall apply. Each determination of the Total Leverage
Ratio pursuant to the Applicable Pricing Grid shall be made in a manner
consistent with the determination thereof pursuant to Section 5.2.16.

 

“Applicable Pro Forma Reporting
Period” shall mean with respect to any Permitted Acquisition, the most
recent 4-quarter period ending prior to the date of such Permitted Acquisition
for which financial statements have been delivered (or were due to be
delivered) by the Borrower in accordance with Sections 5.3.1 or 5.3.2.

 

“Approved Fund” shall have
the meaning assigned to such term in Section 8.6.

 

“Asset Sale” shall mean any
Disposition of property or series of related Dispositions of property
(excluding any such Disposition permitted by clauses (i), (ii), (iii), (iv), (vi) and
(viii) of Section 5.2.7) that yields gross proceeds to the Borrower
and its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess
of $3,000,000.

 

“Assignee” shall have the
meaning assigned to such term in Section 8.6(b).

 

“Assignment and Assumption”
shall mean an Assignment and Assumption, substantially in the form of Exhibit 1.1(A).

 

“Authorized Officer” shall
mean those individuals, designated by written notice to the Administrative
Agent from the Borrower, authorized to execute notices, reports and other
documents on behalf of the Borrower required hereunder.  The Borrower may
amend such list of individuals from time to time by having the Borrower give
written notice of such amendment on its behalf to the Administrative Agent.

 

“Availability” shall have the
meaning assigned to such term in the Revolving Credit Agreement as in effect on
the date hereof.

 

“B&R” shall mean B. &
R. Machine & Tool Corp.

 

“B&R Promissory Note”
shall mean that Promissory Note issued by the Borrower to B. & R.
Machine & Tool Corp. in an aggregate principal amount not to exceed
$9,500,000.

 

“Bank-Provided Hedge” shall
mean an Interest Rate Hedge or other hedging transaction which is provided by
any Bank or any Affiliate thereof and meets the following requirements: such
Interest Rate Hedge or other hedging transaction (i) is documented in a
standard International Swap Dealer Association agreement, (ii) provides
for the method of calculating the reimbursable amount of the provider’s credit
exposure in a reasonable and customary manner, and (iii) is entered into
for hedging (rather than speculative) purposes.  The liabilities of the Borrower
or any Guarantor to the provider of any Bank-Provided Hedge (the “Hedge
Liabilities”) shall be “Obligations” hereunder, guaranteed obligations
under the Guarantee and Collateral Agreement and otherwise treated as
Obligations for purposes of each of the other Loan Documents.  The Liens
securing the Hedge Liabilities shall be pari  passu with the Liens
securing all other Obligations under this Agreement and the other Loan
Documents.

 

“Banks” shall mean the
financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Bank.

 

3

 

“Benefit Arrangement” shall
mean at any time any material “employee benefit plan,” within the meaning of
Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer
Plan and which is maintained, sponsored or otherwise contributed to by any
member of the ERISA Group.

 

“Benefitted Bank” shall have
the meaning assigned to such term in Section 8.7(a).

 

“Blocked Person” shall have
the meaning assigned to such term in Section 3.1.24.2.

 

“Borrower” shall have the
meaning assigned to such term in introductory paragraph of this Agreement.

 

“Borrowing Date” shall mean
any Business Day specified by the Borrower as a date on which the Borrower
requests the relevant Banks to make Loans hereunder.

 

“Business Day” shall mean any
day other than a Saturday or Sunday or a legal holiday on which commercial
banks are authorized or required to be closed for business in New York City and
if the applicable Business Day relates to any Eurodollar Loan, such day must
also be a day on which dealings are carried on in the London interbank market.

 

“Capital Expenditures” shall
mean for any period, with respect to any Person, the aggregate of all
expenditures by such Person and its Subsidiaries for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) that should be capitalized under GAAP on a consolidated balance
sheet of such Person and its Subsidiaries.

 

“Capital Lease Obligations”
shall mean, as to any Person, any obligation of such Person under a lease that
is required to be capitalized for financial reporting purposes in accordance
with GAAP; and (x) the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligation determined in
accordance with GAAP and (y) the stated maturity thereof shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.

 

“Capital Stock” shall mean
any and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.

 

“Carlyle Affiliated Institutional
Lender” shall mean (x) any investment fund managed or advised by
Affiliates of Carlyle that is a bona fide debt fund and (y) any bank,
insurance company, investment bank or commercial finance company that is an
Affiliate of Carlyle, in the case of each of clauses (x) and (y) that
extends credit or buys loans in the ordinary course of business and makes
investment (and, where applicable, voting) decisions under the supervision of
an investment committee that is independent of any investment committee that
supervises the equity-related investment and voting decisions of Carlyle.

 

“Carlyle Affiliated Bank”
shall mean Carlyle or any Affiliate thereof (other than the Borrower or any
Subsidiary thereof) that is not a Carlyle Affiliated Institutional Lender.

 

“Carlyle” shall mean The
Carlyle Group and its Affiliates (but excluding any operating portfolio
companies of the foregoing), in each case so long as it is an Affiliate of the
Borrower.

 

“Cash Equivalents” shall
mean, at any time, (i) any evidence of Indebtedness with a maturity date
of ninety (90) days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof; provided
that the full faith and credit of the United States of America is
pledged in support thereof; (ii) certificates of deposit or bankers’
acceptances with a maturity of (a) ninety (90) days or less of any
financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than
$500,000,000.00 and (b) twenty-four months or less of any financial
institution

 

4

 

that meets the requirements of
clause (ii)(a) and is a Bank hereunder; (iii) commercial paper
(including variable rate demand notes) with a maturity of ninety (90) days or
less issued by a corporation (except the Borrower, any Guarantor or any
Affiliate of any of them) organized under the laws of any State of the United
States of America or the District of Columbia and rated at least A-1 by
Standard & Poor’s Ratings Service, a division of The McGraw-Hill
Companies, Inc. or at least P-1 by Moody’s Investors Service, Inc.;
(iv) repurchase obligations with a term of not more than thirty (30) days
for underlying securities of the types described in clause (i) above
entered into with any financial institution having combined capital and surplus
and undivided profits of not less than $500,000,000.00; (v) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or issued by any governmental agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
ninety (90) days or less from the date of acquisition; provided  that,
the terms of such agreements comply with the guidelines set forth in the
Federal Financial Agreements of Depository Institutions with Securities Dealers
and Others, as adopted by the Comptroller of the Currency on October 31,
1985; and (vi) investments in money market funds and mutual funds which invest
substantially all of their assets in securities of the types described in
clauses (i) through (v) above.

 

“Cash Management Agreement”
shall have the meaning assigned to such term in the Revolving Credit Agreement
as in effect on the date hereof.

 

“Change in Law” shall mean (a) the
adoption of any law, rule, regulation, directive or documentation requirement,
or (b) any change in any law, rule, regulation, directive or documentation
requirement or in the interpretation or application thereof by any Official
Body.

 

“Chatsworth Property” shall
mean that certain land and improvements thereon commonly known as 9301 Mason
Avenue, Chatsworth, Los Angeles County, CA 91311.

 

“Closing Date” shall mean the
date on which the conditions precedent set forth in Section 4.1 shall have
been satisfied, which date is June 16, 2010.

 

“Collateral” shall mean the
Pledged Collateral, the UCC Collateral, the Intellectual Property Collateral
and the Real Property Collateral.

 

“Collateral Agent” shall have
the meaning assigned to such term in Section 6.2.5.2.

 

“Collateral Documents” shall
mean the Guarantee and Collateral Agreement, the Mortgages, the IDB Mortgages
and any other documents delivered under this Agreement granting Liens in favor
of the Administrative Agent as collateral security for the Obligations.

 

“Collateral Agency Agreement”
shall mean the Collateral Agency Agreement dated as of June 16, 2010, by
and among the Loan Parties, PNC Bank, National Association, Brown Harriman &
Co. and the Administrative Agent.

 

“Commitment” shall mean, as
to any Bank, the obligations of such Bank, if any, to make a Loan to the
Borrower in a principal amount not to exceed the amount set forth under the
heading “Commitment” opposite such Bank’s name on Schedule 1.1(B).  The original aggregate amount of the
Commitments is $350,000,000.

 

“Company Material Adverse Change”
shall mean (in each case, prior to giving effect to the Acquisition) any
change, effect, event, occurrence, circumstance, state of fact or development
that has a material adverse effect on the financial condition, business or
results of operations of the Borrower or Vought, as applicable, and its
Subsidiaries, taken as a whole (provided, however, that a “Company
Material Adverse Change” shall not be deemed to include any change, effect,
event, occurrence, circumstance, state of fact or development to the extent
resulting from, or any change, effect, event, occurrence, circumstance, state
of fact or development arising out of, (A) any change after March 23,
2010 in law, rules, regulations or accounting standards or authoritative
interpretations thereof; (B) any change arising after December 31,
2009 in general U.S. or global economic conditions, or changes therein,
including interest rates or currency exchange rates; (C) general political
conditions or

 

5

 

changes therein, acts of war,
sabotage or terrorism or natural disasters occurring after December 31,
2009 and not specifically related to the Borrower or Vought, as applicable, or
its Subsidiaries (including the commencement, continuation or escalation of
armed hostilities or other material national or international calamity); (D) the
announcement of the transactions contemplated by the Acquisition Agreement or
the performance of the Acquisition Agreement, including the consummation of the
transactions contemplated thereby; (E) any change affecting the aerospace
and defense industries generally; or (F) any action or omission required
pursuant to the terms of the Acquisition Agreement, in each case of (A), (B), (C) and
(E), except to the extent that the effects of such changes are
disproportionately adverse to the Borrower or Vought, as applicable, and its
Subsidiaries, taken as a whole, as compared to other companies in the industry
in which such party and its Subsidiaries operate).

 

“Conduit Bank” shall mean any
special purpose corporation organized and administered by any Bank for the
purpose of making Loans otherwise required to be made by such Bank and
designated by such Bank in a written instrument; provided, that the
designation by any Bank of a Conduit Bank shall not relieve the designating
Bank of any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Bank fails to fund any such Loan, and the designating Bank
(and not the Conduit Bank) shall have the sole right and responsibility to
deliver all consents and waivers required or requested under this Agreement
with respect to its Conduit Bank, and provided, further, that no
Conduit Bank shall (a) be entitled to receive any greater amount pursuant
to Section 2.13, 2.14, 2.15 or 8.5 than the designating Bank would have
been entitled to receive in respect of the extensions of credit made by such
Conduit Bank or (b) be deemed to have any Commitment.

 

“Confidential Information
Memorandum” shall mean the Confidential Information Memorandum dated May 6,
2010 and furnished to certain Banks.

 

“Consideration shall mean
with respect to any Permitted Acquisition, the aggregate of (i) the cash
paid by any Loan Party, or a Subsidiary thereof, directly or indirectly, to the
seller in connection therewith, (ii) the Indebtedness incurred or assumed
by any Loan Party or a Subsidiary thereof, whether in favor of the seller or
otherwise and whether fixed or contingent, (iii) any Guaranty (whether or
not constituting Indebtedness) given or incurred by any Loan Party or a
Subsidiary thereof, in connection therewith, and (iv) any other
consideration given or obligation incurred by any Loan Party or a Subsidiary
thereof in connection therewith.

 

“Consolidated Adjusted EBITDA”
shall mean, for any period of determination, Consolidated EBITDA of the
Borrower and its Subsidiaries subject to the following adjustments:

 

(1)           For
any period in which the Borrower or one of its Subsidiaries has completed a
Permitted Acquisition, the calculation of Consolidated Adjusted  EBITDA for such period shall reflect, on a
pro forma basis, the financial performance of the acquired entity or
assets, as though the acquisition had been completed at the beginning of the
period of determination, provided  that any of the following
conditions is met with respect to such acquisition:

 

(i)            Either: (a) the financial
statements of the Person acquired for the fiscal year immediately preceding the
date of such Permitted Acquisition have been audited or (b) the financial
statements of the Person acquired for the Applicable Pro Forma Reporting Period
have been supported by a third party due diligence report, provided  that
such audit or due diligence report was performed by a nationally recognized
firm (or another firm acceptable to the Administrative Agent) and is in form
and substance reasonably satisfactory to the Administrative Agent;

 

OR

 

(ii)           the acquired EBITDA for the
Applicable Pro Forma Reporting Period is less than (15%) of the Consolidated
Adjusted EBITDA for such period, excluding such acquired EBITDA;

 

OR

 

6

 

(iii)          the Required Banks shall have approved
the inclusion of such acquired EBITDA in the computation of “Consolidated
Adjusted EBITDA” for the Applicable Pro Forma Reporting Period and subsequent
fiscal periods of the Borrower.

 

(2)           For
any period in which the Borrower or one of its Subsidiaries has completed a
sale or disposition permitted under Sections 5.2.7(v) or 5.2.7(vii) [Dispositions
of Assets or Subsidiaries], the calculation of Consolidated Adjusted  EBITDA for such period shall omit the
financial performance of the entity or assets sold or disposed of, as though
such sale or disposition had been completed at the beginning of the period of
determination.

 

Consolidated Adjusted EBITDA shall
be determined at the end of each fiscal quarter for the previous four quarters.

 

Notwithstanding the definition of
Consolidated Adjusted EBITDA, and in order to give effect to the Acquisition,
on a pro forma basis, in determining Consolidated Adjusted EBITDA for all
purposes under this Agreement, (i) the following amounts: shall be added
to Consolidated Adjusted EBITDA for the following fiscal quarters completed
immediately preceding the Closing Date: $61,300,000 for the fiscal quarter
ended March 31, 2010, $70,900,000 for the fiscal quarter ended December 31,
2009, $62,400,000 for the fiscal quarter ended September 30, 2009 and
$63,100,000 for the fiscal quarter ended June 30, 2009  and (ii) up to $40,000,000 of
nonrecurring, third party expenses directly incurred in connection with the
Acquisition and the financing thereof, identified on Schedule 1.1(C) to
be delivered prior to the date of required delivery of the first Compliance
Certificate following the Closing Date, shall be added to Consolidated Adjusted
EBITDA for the fiscal quarter in which the Closing Date occurs, but only to the
extent that such expenses were actually expensed during such fiscal quarter

 

“Consolidated Current Assets”
shall mean at any date, all amounts (other than cash and Cash Equivalents) that
would, in conformity with GAAP, be set forth opposite the caption “total
current assets” (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.

 

“Consolidated Current Liabilities”
shall mean at any date, all amounts that would, in conformity with GAAP, be set
forth opposite the caption “total current liabilities” (or any like caption) on
a consolidated balance sheet of the Borrower and its Subsidiaries at such date,
but excluding (a) the current portion of any Funded Debt of the Borrower
and its Subsidiaries and (b) without duplication of clause (a) above,
all Indebtedness consisting of Revolving Loans or Swingline Loans (or like
liabilities under agreements other than the Revolving Credit Agreement) to the
extent otherwise included therein.

 

“Consolidated EBITDA” shall
mean, with respect to any Person for any period:

 

(i) 
the sum of, without duplication, the amounts for such period, taken as a single
accounting period of (in each case (other than clause (a) below), to the
extent the same was deducted in computing Consolidated Net Income):

 

(a) 
Consolidated Net Income;

 

(b) 
Consolidated Non-Cash Charges;

 

(c) 
Consolidated Interest Expense;

 

(d) Consolidated
Income Tax Expense;

 

(ii) 
any non-recurring expenses or charges related to any equity offering,
investments permitted under Section 5.2.4(v) (but only if such
investment is made in a Joint Venture), (vi), (viii) and (x),
recapitalization or Indebtedness permitted to be made under this Agreement
(whether or not successful); less

 

7

 

(ii) 
the amount of extraordinary, non-recurring or unusual gains, including gains
from asset sales outside the ordinary course of business and pension income
recognized under FAS 87 or otherwise, to the extent the same were included in
calculating Consolidated Net Income

 

“Consolidated Income Tax Expense”
shall mean, with respect to any Person for any period, the provision for
federal, state, local and foreign income taxes of such Person and its
Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP paid or accrued during such period, including any
penalties and interest related to such taxes or arising from any tax
examinations, to the extent the same were deducted in computing Consolidated
Net Income.

 

“Consolidated Interest Expense”
shall mean, with respect to any Person for any period, without duplication, the
sum of:

 

(i) 
the total interest expense of such Person and its Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP, including,
without limitation:

 

(a) 
any amortization of Indebtedness discount;

 

(b) the
net cost under any Interest Rate Hedge (including any amortization of
discounts);

 

(c) 
the interest portion of any deferred payment obligation;

 

(d) 
all commissions, discounts and other fees and charges owed with respect to
letters of credit, bankers’ acceptances, financing activities or similar
activities; and

 

(e) 
all accrued interest;

 

(ii) the
interest component of Capital Lease Obligations paid, accrued and/or scheduled
to be paid or accrued by such Person and its Subsidiaries during such period
determined on a consolidated basis in accordance with GAAP; and

 

(iii) all
capitalized interest of such Person and its Subsidiaries for such period;

 

provided, however, that Consolidated Interest Expense will
exclude (I) the amortization or write-off of debt issuance costs and
deferred financing fees, commissions, fees and expenses, (II) any
expensing of interim loan commitment and other financing fees and (III) any
interest on the Convertible Notes to the extent not paid in cash.

 

“Consolidated Net Income”
shall mean for any fiscal period the net income of the Borrower and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP; provided that:

 

(i)            the net income (but not loss) of any
Person that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the specified Person or a Subsidiary thereof;

 

(ii)           the net income of any Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that net income is not at the date
of determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its equity holders;

 

(iii)          the net income of any Person acquired
during the specified period for any period prior to the date of such
acquisition shall be excluded, except to the extent permitted in the definition
of Consolidated Adjusted EBITDA;

 

8

 

(iv)          gains or losses on asset sales (other
than sales of inventory and other assets in the ordinary course of business)
shall be excluded;

 

(v)           the cumulative effect of a change in
accounting principles shall be excluded;

 

(vi)          notwithstanding clause (i) above,
the net income (or loss) attributable to any discontinued operations shall be
excluded; and

 

(vii)         settlement or curtailment charges
recognized under FAS 88 shall be excluded.

 

“Consolidated Net Worth” shall
mean as of any date of determination total stockholders’ equity of the Borrower
and its Subsidiaries as of such date determined and consolidated in accordance
with GAAP.

 

“Consolidated Non-Cash Charges”
shall mean, with respect to any Person for any period, the aggregate
depreciation, amortization (including amortization of goodwill, other
intangibles, deferred financing fees, debt issuance costs, commissions, fees
and expenses) and non-cash charges and non-cash expenses of such Person and its
Subsidiaries, including, without limitation, non-cash charges and non-cash
expenses related to stock-based compensation, goodwill impairments or fixed
asset writedowns and non-cash pension expense, reducing Consolidated Net Income
of such Person and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding such charges constituting
an extraordinary item of loss or any charge which requires an accrual of or a
reserve for cash charges for any future period).

 

“Consolidated Senior Net
Indebtedness” shall mean Consolidated Total Net Indebtedness less
Subordinated Indebtedness.

 

“Consolidated Total Indebtedness”
shall mean as of any date of determination the aggregate of all Indebtedness of
the Borrower and its Subsidiaries as of such date determined and consolidated
in accordance with GAAP.

 

“Consolidated Total Net
Indebtedness” shall mean as of any date of determination the aggregate of
all Indebtedness of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP minus unrestricted cash and
Cash Equivalents in excess of $25,000,000 which are held by the Borrower or any
other Loan Party and maintained or managed by a Bank or an Affiliate of a Bank
or any Revolving Credit Bank or Affiliate thereof.  Consolidated Total Net
Indebtedness shall be measured at the end of each fiscal quarter.

 

“Consolidated Working Capital”
shall mean at any date, the excess of Consolidated Current Assets on such date
over Consolidated Current Liabilities on such date.

 

“Convertible Debt Documents”
shall mean the Convertible Note Indenture and the Convertible Notes, in each
case as amended, supplemented or modified from time to time.

 

“Convertible Note Indenture”
shall mean the indenture pursuant to which the Convertible Notes are issued.

 

“Convertible Notes” shall
mean the $179,050,000 Senior Subordinated Notes due 2026 of the Borrower.

 

“Cumulative Credit” shall
mean, as of any date of determination, $50,000,000 plus 25% of cumulative
Consolidated Net Income (excluding nonrecurring, noncash charges to
Consolidated Net Income) from and including the first full fiscal quarter after
the Closing Date through and including the last full fiscal quarter for which
financial statements have been delivered in accordance with Section 5.3.1
[Quarterly Financial Statements] or Section 5.3.2 [Annual Financial
Statements] as of such date of determination, less (i) any amounts thereof
used to make repurchases or pay dividends pursuant to clause (ii) Section 5.2.5
[Dividends and Related Distributions], (ii) any amounts thereof used to
make investments pursuant to clause (x) of Section 5.2.4 [Loans and
Investments] and (iii) any amounts thereof used to make payments of
Indebtedness pursuant to clause (z) of the second paragraph of

 

9

 

Section 5.2.20[Repayment of
Convertible Notes; Repayment of other Indebtedness], in each case after the
Closing Date and prior to such date of determination.

 

“Debt Rating” shall mean the
corporate / family credit rating assigned to the Borrower by Standard &
Poor’s and the Issuer Rating assigned to the Borrower by Moody’s.

 

“Defaulting Bank” means any
Bank that has (a) failed to fund any portion of the Loans required to be
funded by it hereunder within one Business Day of the date required to be
funded by it hereunder unless such failure has been cured and all interest
accruing as a result of such failure has been fully paid in accordance with the
terms hereof, (b) otherwise failed to pay over to the Administrative Agent
or any other Bank any other amount required to be paid by it hereunder within
one Business Day of the date when due, unless the subject of a good faith
dispute or unless such failure has been cured and all interest accruing as a
result of such failure has been fully paid in accordance with the terms hereof,
(c) notified the Borrower or the Administrative Agent in writing or has
made any public statement to the effect that it does not intend to comply with
any of its funding obligations under this Agreement, (d) failed, within
one Business Day after request by the Administrative Agent, to confirm that it
will comply with the terms of this Agreement relating to its obligations to
fund prospective Loans or (e) has or has a parent company that has been
deemed insolvent or become the subject of an Insolvency Proceeding.

 

“Disposition” shall mean with
respect to any property, any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed
of” shall have correlative meanings.

 

“Documentation Agents” shall
mean, individually and collectively, Citizens Bank of Pennsylvania and U.S.
Bank, National Association, and each of their successors and assigns, as
Documentation Agents.

 

“Dollar, Dollars, U.S. Dollars”
and the symbol $ shall mean lawful money of the United States of
America.

 

“Domestic” shall mean with
respect to a Loan Party or a Subsidiary, one which is organized under the laws
of the United States of America, any state thereof or the District of Columbia
other than a Loan Party or Subsidiary described in clause (ii) of the
definition of “Foreign”.

 

“ECF Percentage” shall mean
50%; provided  that, so long as no Vought Bridge Loans remain
outstanding, the ECF Percentage shall be reduced to (i) 25% if the Total
Leverage Ratio for the Test Period ending on the last day of the applicable
fiscal year is greater than or equal to 2.0 : 1.0 but less than 3.0 : 1:0 and (ii) 0%
if the Total Leverage Ratio for the Test Period ending on the last day of such
fiscal year is less than 2.0 : 1.0.

 

“Environmental Complaint”
shall mean any written complaint setting forth a cause of action for personal
or property damage or natural resource damage or equitable relief, order,
notice of violation, citation, request for information issued pursuant to any
Environmental Laws by an Official Body, subpoena or other written notice
asserting or threatening a claim relating to, arising out of, or issued
pursuant to any of the Environmental Laws or any Environmental Conditions, as
the case may be.

 

“Environmental Conditions”
shall mean any conditions of the environment, including the workplace, the
ocean, natural resources (including flora or fauna), soil, surface water,
groundwater, any actual or potential drinking water supply sources, substrata
or the ambient air, relating to or arising out of, or caused by the use,
handling, storage, treatment, recycling, generation, transportation, release,
spilling, leaking, pumping, emptying, discharging, injecting, escaping,
leaching, disposal, dumping, threatened release or other management or
mismanagement of Regulated Substances resulting from the use of, or operations
on, the Property.

 

“Environmental Laws” shall
mean all federal, state, local and foreign Laws and regulations, including
permits, licenses, authorizations, bonds, orders, judgments, consent decrees
issued, or entered into, pursuant thereto, relating to pollution or protection
of human health or the environment or employee safety in the workplace.

 

10

 

“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

 

“ERISA Group” shall mean, at
any time, the Borrower and all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
and all other entities which, together with the Borrower, are treated as a
single employer under Section 414 of the Internal Revenue Code.

 

“Eurodollar Base Rate” shall
mean with respect to each day during each Interest Period pertaining to a
Eurodollar Loan, the greater of (a) 1.50% per annum and (b) (i) the
rate of interest per annum, expressed on the basis of a year of 360 days,
determined by the Administrative Agent, which is equal to the offered rate that
appears on the page of the Reuters LIBOR01 screen (or any successor thereto
as may be selected by the Administrative Agent) that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest Period, or (ii) if the rates referenced in the preceding
subsection (i) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest, expressed on a basis of 360 days
at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Loan being
made, continued or converted by the Administrative Agent and with a term and
amount comparable to such Interest Period and principal amount of such
Eurodollar Loan as would be offered by the Administrative Agent’s London Branch
to major banks in the offshore Dollar market at their request at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest Period.

 

“Eurodollar Loans” shall mean
Loans the rate of interest applicable to which is based upon the Eurodollar
Base Rate.

 

“Eurodollar Tranche” shall
mean the collective reference to Eurodollar Loans the then current Interest
Periods with respect to all of which begin on the same date and end on the same
later date (whether or not such Loans shall originally have been made on the
same day).

 

“Event of Default” shall mean
any of the Events of Default described in Section 6.1.

 

“Excess Cash Flow” shall
mean  for any fiscal year of the
Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year, (ii) the amount of all non-cash charges
(including depreciation and amortization and charges resulting from fair value
accounting required by Statement of Financial Accounting Standards No. 133)
deducted in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such fiscal year, and (iv) the aggregate
net amount of non cash loss on the Disposition of property by the Borrower and
its Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income over (b) the sum, without duplication, of (i) the
amount of all non-cash credits included in arriving at such Consolidated Net
Income (including credits resulting from fair value accounting required by
Statement of Financial Accounting Standards No. 133), (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred in connection with such expenditures
and any such expenditures financed with any Reinvestment Amount), (iii) the
aggregate amount of all prepayments of Revolving Loans and Swingline Loans
during such fiscal year to the extent accompanying permanent optional
reductions of the commitments under the Revolving Credit Agreement, (iv) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including the Loans) and, to the extent not reflected in Consolidated Net
Income, any cash payments or contributions in respect of employee or retiree
pension, medical or other benefit plans of the Borrower and its Subsidiaries
made during such fiscal year, (v) increases in Consolidated Working
Capital for such fiscal year, (vi) dividends and distributions made during
such fiscal year in compliance with this Agreement pursuant to Section 5.2.5(iii),
(iv) and (vii), and (vii) the aggregate net amount of non-cash gain
on the Disposition of property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent included in arriving at such Consolidated Net Income; provided,
for the avoidance of doubt, that Excess Cash Flow shall not include customer
prepayments and other advance payments to the extent not yet earned in such
fiscal period (it being understood that

 

11

 

any such customer prepayments or
advance payments shall be included in Excess Cash Flow in the fiscal period in
which such payments are earned).

 

“Excess Cash Flow Application
Date” shall have the meaning assigned to such term in Section 2.6.4.

 

“Executive Order No. 13224”
shall mean the Executive Order No. 13224 on Terrorist Financing, 
effective September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

 

“Existing Vought Credit Agreement”
shall mean that certain Credit Agreement, dated as of December 22, 2004,
by and among Vought and the other parties thereto, as the same shall have been
amended, amended and restated, supplemented or otherwise modified prior to the
date hereof.

 

“Existing Vought Indenture”
shall mean that certain Indenture, dated as of July 2, 2003, among Vought
and the other parties thereto, as the same shall have been amended, amended and
restated, supplemented or otherwise modified prior to the date hereof.

 

“Federal Funds Effective Rate”
shall mean for any day, the rate per annum equal to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day;
provided, that (a), if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the immediately
preceding Business Day as so published on the next succeeding Business Day and (b) if
no such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.

 

“Flood Insurance Laws” shall
mean, collectively, (i) the National Flood Insurance Act of 1968 as now or
hereafter in effect or any successor statute thereto, (ii) the Flood
Disaster Protection Act of 1973 as now or hereafter in effect or any successor
statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as
now or hereafter in effect or any successor statute thereto and (iv) the
Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto.

 

“Foreign” shall mean with
respect to a Loan Party or a Subsidiary, (i) one which is organized under
the laws of a jurisdiction other than the United States of America, any state
thereof or the District of Columbia and (ii) any Subsidiary of a Loan
Party or Subsidiary that is described in clause (i) of this definition
that is organized under the laws of the United States of America, any state of,
or the District of Columbia and is not treated as a corporation for United
States federal tax purposes.

 

“Funded Debt” as to any
Person, all Indebtedness of such Person that matures more than one year from
the date of its creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one
year from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year from such date, including all current maturities and current
sinking fund payments in respect of such Indebtedness whether or not required
to be paid within one year from the date of its creation and, in the case of
the Borrower, including Indebtedness in respect of the Loans, the Revolving
Credit Loans, the Swingline Loans and the Convertible Notes.

 

“Funding Office” shall mean
the office of the Administrative Agent specified in Section 8.2 or such
other office as may be specified from time to time by the Administrative Agent
as its funding office by written notice to the Borrower and the Banks.

 

“GAAP” shall mean United
States generally accepted accounting principles as are in effect in the United
States from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.

 

12

 

“Guarantee and Collateral
Agreement” shall mean the Guarantee and Collateral Agreement dated as of
the Closing Date, in substantially the form of Exhibit 1.1(G).

 

“Guarantor” shall mean a
guarantor under the Guarantee and Collateral Agreement and the other Loan
Documents, provided that, for the avoidance of doubt, no Foreign
Subsidiary shall be a Guarantor.

 

“Guaranty” of any Person
shall mean any obligation of such Person guaranteeing any liability or
obligation of any other Person in any manner, whether directly or indirectly,
including any performance bond or other suretyship arrangement and any other
form of assurance against loss.

 

“Historical Statements” shall
have the meaning assigned to that term in Section 3.1.9(i).

 

“IDB’s” shall have the
meaning assigned to such term in clause (xi) of the definition of “Permitted
Liens”.

 

“IDB Guaranty” shall mean the
Amended and Restated Guaranty and Suretyship Agreement, dated as of April 18,
2008, among the Borrower and Brown Brothers Harriman & Co., as amended
from time to time; provided that the principal amount of indebtedness
guaranteed thereunder shall not exceed, in the aggregate $11,300,000.

 

“IDB Mortgages” shall mean,
individually and collectively, (i) the Mortgage, Security Agreement,
Assignment of Rents and Leases and Fixture Filing, dated as of November 29,
2005, between The Triumph Group Operations, Inc. and Brown Brothers
Harriman & Co., as amended from time to time, including pursuant to
the Indiana Mortgage Amendment and (ii) the Open-End Mortgage and Security
Agreement, dated as of April 16, 2008, between Triumph Controls, LLC and
Brown Brothers Harriman & Co, as amended from time to time, including
pursuant to the Pennsylvania Mortgage Amendment .

 

“Immaterial Subsidiary”  shall
mean (i) Triumph Group Charitable Foundation, (ii) while the
Receivables Facility remains in place and so long as the SP Sub owns no assets
other than trade accounts receivable, related rights, related lock-box bank
accounts and proceeds thereof and sufficient other assets that, when added to
the foregoing, enables it to satisfy the minimum tangible net worth test set forth
in the Receivables Purchase Agreement and any such immaterial other assets that
are necessary or appropriate for the SP Sub to maintain an arm’s-length
relationship with the Borrower and the Guarantors, the SP Sub, and (iii) any
Subsidiary (a) in which the aggregate Investment (without duplication) by
the Loan Parties is less than $10,000,000 and (b) which represented less
than 5% of Consolidated Adjusted EBITDA for the most recently ended four (4) fiscal
quarters; provided, however, that all Immaterial Subsidiaries
described in clause (iii) of this definition shall not represent, in the
aggregate, (x) more than 5% of Consolidated Adjusted EBITDA or (y) more
than 5% of consolidated total assets of the Borrower and its Subsidiaries.

 

“Incremental Amendment” has
the meaning specified in Section 2.18.

 

“Incremental Availability”
has the meaning specified in Section 2.18.

 

“Incremental Facility Closing
Date” has the meaning specified in Section 2.18.

 

“Incremental Term Loans” has
the meaning specified in Section 2.18.

 

“Indebtedness” shall mean, as
to any Person at any time, any and all indebtedness, obligations or liabilities
(whether matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, or joint or several) of such Person for or in respect
of all of the following, without duplication:  (i) borrowed money,
(ii) amounts raised under or liabilities in respect of any note purchase
or acceptance credit facility, (iii) reimbursement obligations under any
letter of credit, currency swap agreement, interest rate swap, cap, collar or
floor agreement or other interest rate management device, (iv) any other
transaction (including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of a borrowing
of money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not more than 90 days

 

13

 

overdue and not including the
Payment Discount Arrangements), or (v) any Guaranty of Indebtedness for
borrowed money.  Without limiting the generality of the foregoing, Indebtedness
of the Borrower and its Subsidiaries, determined on a consolidated basis, shall
include, without duplication and without limitation, the obligations of the
Borrower and/or its Subsidiaries (including without limitation, the SP Sub)
under the Transaction Documents (as defined in the Receivables Purchase
Agreement); provided however that the provisions of this
sentence shall not apply for purposes of calculation of the Senior Secured
First Lien Leverage Ratio.

 

“Indiana Financing Agreement”
shall mean the Financing Agreement, dated as of November 29, 2005, by and
among The Triumph Group Operations, Inc., the City of Shelbyville, Indiana
and Brown Brothers Harriman & Co., as amended from time to time.

 

“Indiana Mortgage Amendment”
shall mean the Modification of Mortgage, Security Agreement, Assignment of
Rents and Leases and Fixture Filing, dated as of June 16, 2010, between
The Triumph Group Operations, Inc. and Brown Brothers Harriman &
Co.

 

“Insolvency Proceeding” shall
mean, with respect to any Person, (a) a case, action or proceeding with
respect to such Person (i) before any court or any other Official Body
under any bankruptcy, insolvency, reorganization or other similar Law now or
hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of such Person or otherwise relating to the liquidation, dissolution,
winding-up or relief of such Person, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors, or
other, similar arrangement in respect of such Person’s creditors or any
substantial portion of its creditors; undertaken under any Law.

 

“Intellectual Property Collateral”
shall mean all of the Intellectual Property, as defined in the Guarantee and
Collateral Agreement.

 

“Intercompany Subordination
Agreement” shall mean a Subordination Agreement among the Loan Parties in
the form attached hereto as Exhibit 1.1(I)(1).

 

“Intercreditor Agreement”
shall mean that Intercreditor Agreement among the Administrative Agent, PNC
Bank, National Association and other parties thereto from time to time in
substantially the form attached hereto as Exhibit 1.1(I)(2), as the
same may be amended, modified, supplemented or restated from time to time.

 

“Interest Coverage Ratio”
shall mean, with respect to any Test Period, the ratio of (i) Consolidated
EBITDA for such Test Period to (ii) Consolidated Interest Expense for such
period.

 

“Interest Payment Date” shall
mean (a) as to any ABR Loan, the last Business Day of each March, June, September and
December (or, if an Event of Default is in existence, the last day of each
calendar month) to occur while such Loan is outstanding and the final maturity
date of such Loan, (b) as to any Eurodollar Loan having an Interest Period
of three months or less, the last day of such Interest Period, (c) as to
any Eurodollar Loan having an Interest Period longer than three months, each
day that is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period, and (d) as
to any Loan, the date of any repayment or prepayment made in respect thereof.

 

“Interest Period” shall mean,
as to any Eurodollar Loan, (a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the
date that is three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:

 

14

 

(i)            if any Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;

 

(ii)           the Borrower may
not select an Interest Period that would extend beyond the Termination Date;

 

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

 

(iv)          the Borrower shall
select Interest Periods so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.

 

“Interest Rate Hedge” shall
mean an interest rate exchange, collar, cap, swap, adjustable strike cap,
adjustable strike corridor or similar agreements entered into by the Borrower
or any Guarantor or any of their Subsidiaries in order to provide protection
to, or minimize the impact upon, the Borrower, the Guarantors and/or their Subsidiaries
of increasing floating rates of interest applicable to Indebtedness.

 

“Internal Revenue Code” shall
mean the Internal Revenue Code of 1986, as the same may be amended or
supplemented from time to time, and any successor statute of similar import, and
the rules and regulations thereunder, as from time to time in effect.

 

“Investment” shall mean, with
respect to any Subsidiary of the Borrower or any Joint Venture in which the
Loan Parties or any of their Subsidiaries hold an interest, (i) all
consideration (whether cash, property, assumption of liabilities or otherwise)
paid or given by the Loan Parties or their Subsidiaries for the ownership
interests or assets of such Subsidiary or Joint Venture, (ii) any cash or
other property contributed by the Loan Parties or their Subsidiaries to the
capital of such Subsidiary or Joint Venture, (iii)  any loans made by the
Loan Parties or their Subsidiaries to such Subsidiary or Joint Venture,
(iv) any Guaranty made by or on behalf of any Loan Party or any Subsidiary
of any Loan Party for the benefit of such Subsidiary or Joint Venture, or
(v) any other consideration paid to or provided for the benefit of such
Subsidiary or Joint Venture by the Loan Parties or their Subsidiaries in the
nature of an equity contribution or loan.

 

“Joint Venture” shall mean
any entity in which the Loan Parties or their Subsidiaries, directly or
indirectly, hold an ownership interest and the total of the ownership interests
held by the Loan Parties and their wholly-owned Subsidiaries is less than 100%.

 

“Labor Contracts” shall mean
all material employment agreements, material employment contracts, collective
bargaining agreements and other material agreements among the Borrower or any
Subsidiary of the Borrower and its employees.

 

“Law” shall mean any law
(including common law), constitution, statute, treaty, regulation, rule,
ordinance, opinion, release, ruling, order, injunction, writ, decree or award
of any Official Body.

 

“Letters of Credit” shall
mean “Letters of Credit” under and as defined in the Revolving Credit
Agreement.

 

“Lien” shall mean any
mortgage, deed of trust, pledge, lien, security interest, charge or other
encumbrance or security arrangement of any nature whatsoever, whether
voluntarily or involuntarily given, including any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing
statement or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

 

“LLC Interests” shall have
the meaning given to such term in Section 3.1.3.

 

15

 

“Loan Documents” shall mean
this Agreement, the Guarantee and Collateral Agreement, the Intercompany
Subordination Agreement, the Mortgages, the Collateral Agency Agreement and the
Intercreditor Agreement, each executed by the Borrower or the Guarantors or
both, as applicable, and the other parties thereto, and any other instruments,
certificates or documents delivered or contemplated to be delivered hereunder
or thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and “Loan Document” shall mean any of the Loan Documents.

 

“Loan Party” shall mean
either the Borrower or any Guarantor and “Loan Parties” shall mean
collectively the Borrower and the Guarantors.

 

“Loans” shall have the
meaning assigned to such term in Section 2.1.

 

“Long-Term Issue Credit Rating”
shall mean the long-term unenhanced rating assigned to the senior secured debt
of the Borrower as determined from time to time by Moody’s and Standard &
Poor’s.

 

“Material Adverse Change”
shall mean any event, development or circumstance that has had or would
reasonably be expected to have a material adverse effect on (a) the
business, operations, property or condition of the Borrower and its
Subsidiaries taken as a whole, or (b) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or remedies of
the Administrative Agent or the Banks hereunder or thereunder.

 

“Material Subsidiary” shall
mean any Subsidiary of the Borrower other than an Immaterial Subsidiary.

 

“Maturity Date” shall mean June 16,
2016

 

“Mortgage” shall mean each
mortgage in form and substance reasonably satisfactory to the Administrative
Agent (modified as appropriate to conform with the specific requirements of the
jurisdiction in which recorded) with respect to the Real Property Collateral
executed and delivered by the relevant Loan Party to the Administrative Agent
for the benefit of the Banks.

 

“Multiemployer Plan” shall
mean any employee benefit plan which is a “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA and to which the Borrower or
any member of the ERISA Group is then making or accruing an obligation to make
contributions or, within the preceding five plan years, has made or had an
obligation to make such contributions.

 

“Multiple Employer Plan”
shall mean a Plan which has two or more contributing sponsors (including the
Borrower or any member of the ERISA Group) at least two of whom are not under
common control, as such a plan is described in Sections 4063 and 4064 of ERISA.

 

“Net Cash Proceeds” shall
mean (a) in connection with any Asset Sale or any Recovery Event, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise,
but only as and when received), net of attorneys’ fees, accountants’ fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Collateral Document or a Revolving Credit Collateral Document)
and other customary fees and expenses actually incurred in connection therewith
and net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements reasonably expected to be utilized in respect of the
taxable year in which such Asset Sale or Recovery Event occurs) and (b) in
connection with any issuance or sale of Capital Stock or any incurrence of
Indebtedness, the cash proceeds received from such issuance or incurrence, net
of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.

 

“Non-Excluded Taxes” shall
have the meaning assigned to such term in Section 2.14.1.

 

16

 

“Non-U.S. Bank” shall have
the meaning assigned to such term in Section 2.14.4.

 

“Notes” shall mean the
collective reference to any promissory note evidencing Loans.

 

“Obligation” shall mean the
unpaid principal of and interest on (including interest accruing after the
maturity of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative Agent or to
any Bank (or, in the case of any Hedge Liabilities or Other Bank Provided
Financial Service Products, any affiliate of any Bank), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, any agreement governing any Hedge
Liabilities or any Other Bank Provided Financial Service Product, or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative
Agent or to any Bank that are required to be paid by the Borrower pursuant
hereto) or otherwise.

 

“Official Body” shall mean
any national, federal, state, local or other government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court or tribunal in each case whether
foreign or domestic, with jurisdiction to act with the force of law with
respect to pertinent matters.

 

“Other Bank Provided Financial
Service Product” shall mean an Other Financial Service Product under which
any Bank or Affiliate of a Bank provides the applicable service to any of the
Loan Parties.

 

 “Other Financial Service Product” shall
mean agreements or other arrangements under which any Person provides any of
the following products or services to any of the Loan Parties: (a) credit
cards, (b) credit card processing services, (c) debit cards, (d) purchase
cards, (e) ACH transactions, (f) cash management, including controlled
disbursement, accounts or services, or (g) foreign currency exchange.

 

“Other Revolving Credit Lender
Provided Financial Service Product” shall mean an Other Financial Service
Product provided to a Loan Party by a lender (or an Affiliate of a lender)
under the Revolving Credit Agreement, to the extent the obligations thereunder
are secured jointly with the Revolving Credit Obligations.

 

“Other Taxes” shall mean any
and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document including any interest,
additions to tax or penalties applicable thereto.

 

“Participant” shall have the
meaning assigned to such term in Section 8.6(c).

 

“Participant Register” shall
have the meaning assigned to such term in Section 8.6(d).

 

“Partnership Interests” shall
have the meaning given to such term in Section 3.1.3.

 

“Payment Discount Arrangements”
shall mean the arrangements among the Subsidiaries of the Borrower and
Citibank, N.A. and the Borrower and General Electric Capital Corporation -
Trade Payables Services Division as described on Schedule 5.2.7 [Payment
Discount Arrangements] or similar arrangements, provided that in each case the
receivables sold under such arrangements shall be sold without recourse to the
Borrower or any of its Subsidiaries.

 

“PBGC” shall mean the Pension
Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of
ERISA or any successor.

 

17

 

“Pennsylvania Financing Agreement”
shall mean the Financing Agreement, dated as of April 18, 2008, by and among
Triumph Controls, LLC, Montgomery County Industrial Development Authority and
Brown Brothers Harriman & Co., as amended from time to time.

 

“Pennsylvania Mortgage Amendment”
shall mean the Modification of Open-End Mortgage and Security Agreement, dated
as of June 16, 2010, between Triumph Controls, LLC and Brown Brothers Harriman
& Co, as amended from time to time.

 

 “Permitted Acquisition” shall have the
meaning assigned to such term in Section 5.2.6.

 

“Permitted Investments” shall
mean:

 

(i)                                     direct obligations of the
United States of America or any agency or instrumentality thereof or
obligations backed by the full faith and credit of the United States of America
maturing in twelve (12) months or less from the date of acquisition;

 

(ii)                                  commercial paper maturing in
180 days or less rated not lower than A-1, by Standard & Poor’s
Corporation or P-1 by Moody’s Investors Service, Inc. on the date of
acquisition;

 

(iii)                               demand deposits, time
deposits, money market account deposits or certificates of deposit maturing
within one year in commercial banks whose obligations are rated A-1, A or the
equivalent or better by Standard & Poor’s Corporation on the date of
acquisition;

 

(iv)                              investments in Cash
Equivalents;

 

(v)                                 shares of money market
mutual funds that (a) invest substantially all of their assets in the
investments described in clauses (i) through (iv) above and/or
(b) are otherwise rated at least AAA by Standard & Poor’s or at
least Aaa by Moody’s;

 

(vi)                              investments made under the
Cash Management Agreements;

 

(vii)                           Interest Rate Hedges, any
Bank Provided Hedge or Revolving Bank Provided Hedge, in each case, otherwise
permitted hereunder;

 

(viii)                        investments (including debt
obligations) received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business; and

 

(ix)                                debt obligations received as
consideration in connection with a sale of assets which is permitted hereunder.

 

“Permitted Liens” shall mean:

 

(i)                                     Liens for taxes,
assessments, custom duties or similar charges, incurred in the ordinary course
of business and which are not yet due and payable;

 

(ii)                                  Pledges or deposits made in
the ordinary course of business to secure payment of worker’s compensation, or
to participate in any fund in connection with worker’s compensation,
unemployment insurance, old-age pensions or other social security programs;

 

(iii)                               Liens of mechanics,
materialmen, warehousemen, carriers, or other like Liens, securing obligations
incurred in the ordinary course of business that are not yet due and payable
and Liens of landlords securing obligations to pay lease payments that are not
yet due and payable or in default;

 

18

 

(iv)                              Good-faith pledges or
deposits made in the ordinary course of business to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed money) or leases,
not in excess of the aggregate amount due thereunder, or to secure statutory
obligations, or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;

 

(v)                                 Encumbrances consisting of
zoning restrictions, easements or other restrictions on or with respect to the
use of real property, none of which materially impairs the use of such property
for the purposes intended by the Borrower and its Subsidiaries, and none of
which is violated in any material respect by existing or proposed structures or
land use;

 

(vi)                              Liens, security interests
and mortgages in favor of the Administrative Agent for the benefit of the Banks
securing the Obligations, including Hedge Liabilities and any Other Bank
Provided Financial Service Product;

 

(vii)                           Liens on property leased by
the Borrower or any Subsidiary of the Borrower under operating leases securing
obligations of the Borrower or such Subsidiary to the lessor under such leases;

 

(viii)                        Any Lien existing on the
date of this Agreement and described on Schedule 1.1(P); provided
that the principal amount secured thereby is not hereafter increased, and no
additional assets (other than proceeds and products of such assets and after
acquired assets pursuant to customary after acquired property provisions)
become subject to such Lien;

 

(ix)                                Purchase Money Security
Interests and Liens on property leased by the Borrower or any Subsidiary of the
Borrower under capital leases securing obligations of such Borrower or
Subsidiary to the lessor under such leases, provided  that the
aggregate amount of loans and Capital Lease Obligations secured by such
Purchase Money Security Interests and Liens on such leased property shall not
exceed the amount permitted under Section 5.2.1(g) (excluding for the purpose
of this computation any loans or deferred payments secured by Liens described
on Schedule 1.1(P));

 

(x)                                   The following, (a) if
the validity or amount thereof is being contested in good-faith by appropriate
and lawful proceedings diligently conducted so long as levy and execution
thereon have been stayed and continue to be stayed or (b) if a final
judgment is entered and such judgment is discharged within sixty (60) days of
entry, and in either case they do not materially impair the Collateral or, in
the aggregate, materially impair the ability of the Loan Parties to perform
their Obligations hereunder or under the other Loan Documents:

 

(1)                                  Claims or Liens
for taxes, assessments or charges due and payable and subject to interest or
penalty, provided  that the appropriate Loan Party maintains such
reserves or other appropriate provisions as shall be required by GAAP and pays
all such taxes, assessments or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;

 

(2)                                  Claims, Liens
or encumbrances upon, and defects of title to, real or personal property other
than the Collateral, including any attachment of personal or real property or
other legal process prior to adjudication of a dispute on the merits; or

 

(3)                                  Claims or Liens
of mechanics, materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens.

 

(4)                                  Liens resulting
from final judgments or orders for the payment of money that do not constitute
an Event of Default pursuant to Section 6.1.6 [Final Judgments or Orders];

 

(xi)                                subject to Section 5.2.1,
Liens on fixed assets securing tax-exempt, fixed-rate industrial development
bonds (“IDB’s) or notes or similar financing;

 

19

 

(xii)                             Liens on accounts receivable
sold pursuant to Payment Discount Arrangements;

 

(xiii)                          Liens on the Pool Assets
granted by the SP Sub and the Liens granted by the Originators on the
Receivables and the Related Rights in accordance with the Receivables Purchase
and Sale Agreement, in each case in connection with the Receivables Facility;

 

(xiv)                         the Triumph Excluded LC
Liens and the Vought Excluded LC Liens;

 

(xv)                            the Vought Financing Liens;

 

(xvi)                         Permitted Refinancing Liens;

 

(xvii)                      Liens on assets to the
extent that (a) the Banks do not have a Lien on such assets pursuant to the
Loan Documents (and the Loan Documents do not purport to grant a Lien on such
assets) or in the case of Liens on Collateral, such Liens are involuntary Liens
arising by operation of law that are bonded or discharged within 45 days after
entry thereof and (b) the aggregate amount of Indebtedness secured by such
Liens does not exceed $25,000,000; and

 

(xviii)                   Liens securing obligations described under
clauses (e) and (m) of Section 5.2.1(i); provided that such Liens securing
obligations described in such clause (m) shall be solely on assets owned by
non-Loan Parties.

 

 “Permitted Refinancing Debt” shall mean
Indebtedness that refunds, refinances, renews, replaces or extends Indebtedness
(such refunded, refinanced, renewed, replaced or extended Indebtedness referred
to in this definition as “Refinanced Debt”) permitted to be incurred pursuant
to the terms of Section 5.2.1 [Indebtedness] (other than, for the avoidance of
doubt, the 8% Senior Notes due 2011 of Vought described on Schedule 5.2.1
hereto) whether involving the same or any other lender or creditor or group of
lenders or creditors, but only to the extent that (i) such Indebtedness is
scheduled to mature either (a) no earlier than the Refinanced Debt or (b) at
least 91 days after the Termination Date, and, in either case, such
Indebtedness has a weighted average life to maturity equal to or greater than
the weighted average life to maturity of the Refinanced Debt; (ii) such
Indebtedness is in an aggregate principal amount that is less than or equal to
the amount of the then currently outstanding Refinanced Debt (plus any unpaid,
accrued interest, fees or premia in connection with such Refinanced Debt and
any reasonable costs associated with such refinancing); (iii) such Indebtedness
is not secured by Liens on any assets other than such assets that secured the
Refinanced Debt and provided that such Liens are permitted by this Agreement;
(iv) if the Refinanced Debt is subordinated to the Obligations, such
Indebtedness shall be subordinated to the Obligations on terms not less
favorable to the Banks; and (v) no obligor shall be liable with respect to such
Indebtedness other than an obligor that was liable in respect of such
Refinanced Debt; and (vi) no Event of Default exists at the time of such
refinancing or results after giving effect to such refinancing.

 

“Permitted Refinancing Liens”
shall mean Liens on assets of the Borrower or any Subsidiary of the Borrower
securing Permitted Refinancing Debt; provided that such Liens were otherwise permitted
by this Agreement with respect to the Indebtedness which was refunded,
refinanced or extended and that no other assets (other than proceeds and
products thereof and after acquired assets pursuant to customary after acquired
property provisions) are subject to such Liens.

 

“Person” shall mean any
individual, natural person, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, joint venture, government or
political subdivision or agency thereof, or any other entity.

 

“Plan” shall mean at any time
an employee pension benefit plan (including a Multiple Employer Plan, but not a
Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained by any entity which was at such time a
member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.

 

20

 

“Pledged Collateral” shall
mean all Pledged Notes and Pledged Stock, in each case as such terms are
defined in the Guarantee and Collateral Agreement.

 

“Pool Assets” has the meaning
given to such term in the Receivables Purchase Agreement.

 

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

 

“Prime Rate” shall mean the
rate of interest per annum publicly announced from time to time by the
Administrative Agent as its base rate in effect at its principal office in
New York City (the Base Rate not being intended to be the lowest rate of interest
charged by the Administrative Agent in connection with extensions of credit to
debtors).  Any change in such rate announced by the Administrative Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change

 

 “Prior Security Interest” shall mean a
valid and enforceable perfected first-priority security interest in the
Collateral; provided that (i) the Revolving Credit Obligations (and any
Permitted Refinancing Debt in respect thereof), the obligations under the
B&R Promissory Note and the Specified IDB Obligations shall be permitted to
be secured by the Collateral on a pari passu basis with such security interest
in the Collateral securing the Obligations and (ii) Liens which both (a) are Permitted
Liens and (b) have priority over the Liens granted to the Administrative Agent
pursuant to the Loan Documents by operation of Law shall be permitted on the
Collateral.

 

“Pro Forma Balance Sheet”
shall have the meaning assigned to such term in Section 4.1.19.

 

“Prohibited Transaction”
shall mean any prohibited transaction as defined in Section 4975 of the
Internal Revenue Code or Section 406 of ERISA which is not covered by a
statutory exemption and for which neither an individual nor a class exemption
has been issued by the United States Department of Labor.

 

“Property” shall mean all
real property, both owned and leased, of any Loan Party.

 

“PTC Filings” shall mean the
short form security agreements for U.S. Intellectual Property registrations and
applications.

 

“Purchase Money Security Interest”
shall mean Liens upon tangible personal property securing loans to the Borrower
or any Subsidiary or deferred payments by the Borrower or such Subsidiary for
the purchase of such tangible personal property.

 

“Real Property” shall mean
the real estate owned by the respective Loan Parties and located in the
respective locations identified on Schedule 3.1.8 hereto and any real
estate acquired by any Loan Party after the Closing Date.

 

“Real Property Collateral”
shall mean the Real Property of the Loan Parties identified on Schedule
1.1(M) in which Liens are to be granted under the Mortgages and such other
Real Property as is required to be mortgaged pursuant to Section 5.1.15 hereof.

 

“Receivables Facility” means
(a) the receivables financing facility structured by PNC Capital Markets LLC
and administered by PNC Bank, National Association dated on or about August 7,
2008, evidenced by the Receivables Purchase Agreement and the other Transaction
Documents (as defined in the Receivables Purchase Agreement) whereby the
Borrower and certain of its Subsidiaries (collectively, with the Borrower, the “Originators”)
from time to time shall sell, transfer, convey, assign or contribute the
Receivables (as defined in the Receivables Purchase Agreement) and the Related
Rights (as defined in the Receivables Purchase and Sale Agreement) to the SP
Sub, which, in turn, shall sell undivided variable percentage interests in the
Purchased Interests (as defined in the Receivables Purchase Agreement) to the
Purchasers (as defined in the Receivables Purchase Agreement); provided that
the receivables of Vought and its Subsidiaries other than Contour Aerospace
Corporation shall be excluded from such receivables financing facility unless
the Required Banks agree in writing to include such receivables in such
receivables financing facility and (b) to the extent the existing Receivables
Facility 

 

21

 

is terminated, any other similar
replacement facility entered into on market terms (as determined in the
reasonable good faith judgment of the Administrative Agent), subject to the
proviso in clause (a) above, and so long as such terms are not materially
adverse to the Banks compared with the terms of the facility described in
clause (a) above (as determined in the reasonable good faith judgment of the
Administrative Agent).

 

“Receivables Performance Guaranty”
means (a) the Performance Guaranty executed by the Borrower on or about August
7, 2008, as a performance guarantor, in favor of PNC Bank, National
Association, as the Administrator under the Receivables Facility, as the same
may be amended, supplemented, restated or otherwise modified from time to time
and (b) to the extent the existing Receivables Facility is terminated, any
other similar guaranty relationship entered into on market terms (as determined
in the reasonable good faith judgment of the Administrative Agent), so long as
such terms are not materially adverse to the Banks compared with the terms of
the agreement described in clause (a)above (as determined in the reasonable
good faith judgment of the Administrative Agent).

 

“Receivables Purchase Agreement”
means (a) that certain Receivables Purchase Agreement, dated on or about August
7, 2008, among the SP Sub, the Borrower, as the Servicer thereunder, PNC Bank,
National Association, as the Administrator thereunder, and the Purchasers, as
the same may be amended, supplemented, restated or otherwise modified from time
to time and (b) to the extent the existing Receivables Facility is terminated,
any other similar agreement entered into on market terms (as determined in the
reasonable good faith judgment of the Administrative Agent), so long as such
terms are not materially adverse to the Banks compared with the terms of the
agreement described in clause (a) above (as determined in the reasonable good
faith judgment of the Administrative Agent).

 

“Receivables Purchase and Sale
Agreement” means (a) that certain Purchase and Sale Agreement, dated on or about
August 7, 2008, amount the SP Sub, the Originators and the Borrower, as the
initial Servicer thereunder, as the same may be amended, supplemented, restated
or otherwise modified from time to time and (b) to the extent the existing
Receivables Facility is terminated, any other similar agreement entered into on
market terms (as determined in the reasonable good faith judgment of the
Administrative Agent), so long as such terms are not materially adverse to the
Banks compared with the terms of the agreement described in clause (a) above.

 

“Recovery Event” shall mean
any settlement of or payment in respect of any property or casualty insurance
claim or any condemnation proceeding relating to any asset of the Borrower or
any of its Subsidiaries that yields gross proceeds to the Borrower and its
Subsidiaries in excess of $3,000,000.

 

“Refinanced Debt” shall have
the meaning assigned to such term in the definition of Permitted Refinancing
Debt.

 

“Register” shall have the
meaning assigned to such term in Section 8.6(b).

 

“Regulated Substances” shall
mean any substance, including any solid, liquid, semisolid, gaseous, thermal,
thoriated or radioactive material, refuse, garbage, wastes, chemicals,
petroleum products, by-products, coproducts, impurities, dust, scrap, heavy
metals, any substance defined as a “hazardous substance,” “pollutant,” “pollution,”
“contaminant,” “hazardous or toxic substance,” “extremely hazardous substance,”
“toxic chemical,” “toxic waste,” “hazardous waste,” “industrial waste,” “residual
waste,” “solid waste,” “municipal waste,” “mixed waste,” “infectious waste,” “chemotherapeutic
waste,” “medical waste,” “regulated substance” or any related materials,
substances or wastes as now or hereafter defined pursuant to any Environmental
Laws, ordinances, rules, regulations or other directives of any Official Body,
the generation, manufacture, extraction, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge, escape,
release or other management or mismanagement of which is regulated by the
Environmental Laws.

 

“Regulation S-X” shall mean
Regulation S-X of the Securities Act of 1933, as amended.

 

“Regulation U” shall mean
Regulation U, T or X as promulgated by the Board of Governors of the Federal
Reserve System, as amended from time to time.

 

22

 

“Reinvestment Amount” shall
have the meaning assigned to such term in the definition of “Reinvestment
Notice.”

 

“Reinvestment Event” shall
mean any Asset Sale or Recovery Event in respect of which the Borrower has
delivered a Reinvestment Notice.

 

“Reinvestment Notice” shall
mean a written notice executed by an Authorized Officer stating that no Event
of Default has occurred and is continuing and that the Borrower (directly or
indirectly through a Subsidiary) intends and expects to use all or a specified
portion (such amount, the “Reinvestment Amount”) of the Net Cash
Proceeds of an Asset Sale or Recovery Event 
to consummate a Specified Permitted Acquisition or to acquire or repair
assets used or useful in the business of the Borrower and/or its Subsidiaries.

 

“Reinvestment Prepayment Amount”
shall mean with respect to any Reinvestment Event, the Reinvestment Amount
relating thereto less any amount expended prior to the relevant Reinvestment
Prepayment Date to consummate a Specified Permitted Acquisition or to acquire
or repair assets used or useful in the business of the Borrower and/or its
Subsidiaries.

 

“Reinvestment Prepayment Date”
shall mean with respect to any Reinvestment Event, the date occurring twelve
months after such Reinvestment Event, or such earlier date as the Borrower
shall determine not to reinvest, in accordance with the terms hereof, the Net
Cash Proceeds of such Reinvestment Event with respect to which a Reinvestment
Notice has been delivered previously.

 

“Reportable Event” means a
reportable event described in Section 4043 of ERISA and regulations
thereunder with respect to a Plan or Multiemployer Plan.

 

“Required Banks” shall mean,
at any time, the holders (other than Defaulting Banks or any Carlyle Affiliated
Bank) of more than 50% of (a) until the Closing Date, the Commitments then in
effect (other than the Commitments of Defaulting Banks or any Carlyle
Affiliated Bank) and (b) thereafter, the aggregate unpaid principal amount of
the Loans then outstanding (other than Loans held by Defaulting Banks or any
Carlyle Affiliated Bank).

 

“Requirement of Law” shall
mean, as to any Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court or other Official
Body, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

 

“Revolving Bank Provided Hedge”
shall mean an Interest Rate Hedge or other hedging transaction which is
provided by any lender under the Revolving Credit Agreement (or any Affiliate
thereof) to the extent that the obligations of the Loan Parties thereunder are
secured jointly with the Revolving Loans and provided that each such Interest
Rate Hedge or other hedging transaction meets the following requirements: such
Interest Rate Hedge or other hedging transaction (i) is documented in a
standard International Swap Dealer Association agreement, (ii) provides for the
method of calculating the reimbursable amount of the provider’s credit exposure
in a reasonable and customary manner, and (iii) is entered into for hedging
(rather than speculative) purposes.

 

 “Revolving Credit Agreement” shall mean
that certain Credit Agreement, dated as of May 10, 2010, by and among the
Borrower, certain Subsidiaries of the Borrower party thereto, the banks party
thereto, PNC Bank, National Association, as administrative agent, and the other
agents party thereto, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time as permitted pursuant to
the terms hereof; provided, that the Revolving Credit Agreement shall,
in any case, meet the Vought Financing Parameters.

 

“Revolving Credit Bank” shall
mean a “Bank” under and as defined in the Revolving Credit Agreement.

 

“Revolving Credit Collateral
Document” shall mean a “Collateral Document” under and as defined in the
Revolving Credit Agreement.

 

23

 

“Revolving Credit Obligations”
shall mean the “Obligations” as defined in the Revolving Credit Agreement; provided
that the Revolving Credit Obligations shall, in any case, meet the Vought
Financing Parameters.

 

“Revolving Loans” shall mean
the “Revolving Credit Loans” as defined in the Revolving Credit Agreement.

 

“Sellers” shall mean the holders
of the Capital Stock of Vought immediately prior to giving effect to the
Acquisition.

 

“Senior Leverage Ratio” shall
mean, with respect to any Test Period, the ratio of Consolidated Senior Net
Indebtedness as of the last day of such Test Period to Consolidated Adjusted
EBITDA for such Test Period.

 

“Senior Secured First Lien
Leverage Ratio” shall mean, with respect to any Test Period, the ratio of
(x) Consolidated Senior Net Indebtedness (other than Indebtedness in respect of
the Receivables Facility) minus Indebtedness not secured by a first priority
Lien on any assets of the Borrower or any of its Subsidiaries, all as of the
last day of the Test Period, to (y) Consolidated Adjusted EBITDA for such Test
Period.

 

“Shares” shall have the
meaning assigned to that term in Section 3.1.2.

 

“Specified IDB Obligations”
shall mean the Indebtedness and related obligations of The Triumph Group
Operations, Inc., Triumph Controls, LLC and the other Loan Parties arising
pursuant to the Indiana Financing Agreement, the Pennsylvania Financing
Agreement and the IDB Guaranty, respectively; provided, that in no event
shall the aggregate principal amount of the Specified IDB Obligations exceed
$11,300,000.

 

“Specified Permitted Acquisition”
shall mean a Permitted Acquisition; provided  that to the extent
such Permitted Acquisition is consummated using Net Cash Proceeds from any
Asset Sale or Recovery Event in respect of assets owned by the Borrower or any
Domestic Subsidiary, such Permitted Acquisition (to the extent an acquisition
of Capital Stock) must consist of an acquisition of Capital Stock of a Person
that, following such acquisition, shall be a Loan Party hereunder and shall
comply with the provisions of Section 5.1.15.

 

“SP Sub” means Triumph
Receivables, LLC, a wholly owned, bankruptcy remote Subsidiary of the Borrower.

 

“Standard Securitization
Undertakings” shall mean representations, warranties, covenants and
indemnities entered into by the Borrower or any Subsidiary which are reasonable
and customary in an accounts receivable securitization transaction as
determined in good faith by the Borrower, including Guaranties by the Borrower
or any Subsidiary of any of the foregoing obligations of the Borrower or a
Subsidiary.

 

“Subordinated Indebtedness”
shall mean (i) Indebtedness of the Borrower under the Convertible Debt
Documents (provided  that such Indebtedness shall at all times be
subordinated pursuant to the subordination provisions contained therein),
(ii) subordinated Indebtedness incurred under Section 5.2.1(ii)(b) and
(iii) any other subordinated Indebtedness of the Loan Parties provided
that such Indebtedness is subordinated to the Indebtedness under the
Loan Documents on typical market terms for similar subordinated Indebtedness
(including maturity dates which extend beyond 365 days after the Termination
Date, and other appropriate provisions), reasonably acceptable to, and approved
in writing by, the Administrative Agent.

 

“Subsidiary” of any Person at
any time shall mean (i) any corporation or trust of which 50% or more (by
number of shares or number of votes) of the outstanding capital stock or shares
of beneficial interest normally entitled to vote for the election of one or
more directors or trustees (regardless of any contingency which does or may
suspend or dilute the voting rights) is at such time owned directly or
indirectly by such Person or one or more of such Person’s Subsidiaries, or
(ii) any partnership of which such Person is a general partner or of which
50% or more of the partnership interests is at the time directly or indirectly
owned by such Person or one or more of such Person’s Subsidiaries,
(iii) any limited liability company of which such Person is a managing
member or of 

 

24

 

which 50% or more of the limited
liability company interests is at the time directly or indirectly owned by such
Person or one or more of such Person’s Subsidiaries, or (iv) any
corporation, trust, partnership, limited liability company or other entity
which is controlled or capable of being controlled by such Person or one or
more of such Person’s Subsidiaries.

 

“Subsidiary Shares” shall
have the meaning assigned to that term in Section 3.1.3.

 

 “Swingline Loans” shall mean “Swing
Loans” under and as defined in the Revolving Credit Agreement.

 

“Syndication Agent” shall
mean PNC Bank, National Association, and its successors and assigns, as
Syndication Agent.

 

“Termination Date” shall mean
the earliest to occur of (i) the Maturity Date or (ii) the acceleration of the
Loans and the termination of the Commitments in accordance with the terms
hereof.

 

“Test Period” in effect at
any time shall mean the most recent period of four consecutive fiscal quarters
of the Borrower ended on or prior to such time (taken as one accounting period)
in respect of which financial statements for each quarter or fiscal year in
such period have been or are required to be delivered pursuant to Section 5.3.1
or 5.3.2; provided that, prior to the first date that financial
statements have been or are required to be delivered pursuant to Section 5.3.1
or 5.3.2, the Test Period in effect shall be the period of four consecutive
fiscal quarters ended March 31, 2010.  A
Test Period may be designated by reference to the last day thereof (i.e., the “March
31, 2010 Test Period” refers to the period of four consecutive fiscal quarters
of the Borrower ended March 31, 2010), and a Test Period shall be deemed to end
on the last day thereof.

 

“Total Leverage Ratio” shall
mean, for any date of determination, the ratio of Consolidated Total Net
Indebtedness as of such date to Consolidated Adjusted EBITDA for the four
fiscal quarters then ended.

 

 “Transferee” shall mean any Assignee or
Participant.

 

“Triumph Excluded LCs” shall
mean the letters of credit identified on Schedule 1.1(E) issued for the
account of the Borrower and its Subsidiaries and outstanding on the Closing
Date which will not be “Letters of Credit” deemed issued under the Revolving
Credit Agreement.

 

“Triumph Excluded LC Liens”
shall mean cash collateral in an amount not exceeding 105% of the aggregate
face amount of the Triumph Excluded LCs deposited with the issuer of such
Triumph Excluded LCs solely to secure repayment of the reimbursement
obligations under the Triumph Excluded LCs.

 

“Type” shall mean, as to any
Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“UCC Collateral” shall mean
the property of the Loan Parties in which security interests are to be granted
under the Guarantee and Collateral Agreement.

 

“United States” shall mean
the United States of America.

 

“U.S.-Owned DRE” shall mean
any entity that (A) is organized under the laws of the United States, any State
thereof or the District of Columbia; (B) is not treated as a corporation for
U.S. federal tax purposes; (C) is directly owned by a Loan Party; and (D) owns
stock or interests in a Foreign Subsidiary.

 

“USA Patriot Act” shall mean
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same
has been, or shall hereafter be, renewed, extended, amended or replaced.

 

“Vought” shall mean
Vought Aircraft Industries, Inc., a Delaware corporation.

 

25

 

“Vought Acquisition Debt”
shall mean the 2010 Bonds, the Vought Bridge Loans or any of them; provided the
aggregate principal amount thereof does not exceed $400,000,000, plus or minus,
as the case may be, the amount by which the aggregate initial principal amount
of the Loans incurred hereunder is less than or greater than, respectively,
$300,000,000; provided further, that each of the 2010 Bonds and the Vought
Bridge Loans shall, in any case, meet the Vought Financing Parameters.

 

“Vought Bridge Loans” shall
mean bridge loans to be used by the Borrower to finance a portion of the
Acquisition and any other Indebtedness which the Vought Bridge Loans are, by
their terms, exchanged for or converted into.

 

“Vought Excluded LCs” shall
mean the letters of credit identified on Schedule 1.1(E) issued for the
account of Vought and its Subsidiaries and outstanding on the date of the
Acquisition which are not issued or deemed issued under the Revolving Credit
Agreement.

 

“Vought  Excluded LC Liens” shall mean cash
collateral in an amount not exceeding 105% of the aggregate face amount of the
Vought Excluded LCs deposited with the issuer of such Vought Excluded LCs
solely to secure repayment of the reimbursement obligations under the Vought
Excluded LCs.

 

“Vought Financing” shall
mean, the (i) the Revolving Credit Loans which shall meet each of the
conditions set forth in the definition of Vought Financing Parameters with
respect to Revolving Credit Loans and (ii) the Vought Acquisition Debt, which
shall meet each of the conditions set forth in the definition of Vought
Financing Parameters with respect to the Vought Acquisition Debt.

 

“Vought Financing Liens”
shall mean (a) a security interest in the Collateral in favor of the collateral
agent or the administrative agent, as applicable, under the Revolving Credit Agreement,
provided that such security interest is subject to the Intercreditor Agreement
and secures solely the payment and performance of the Revolving Credit
Obligations and the Specified IDB Obligations and (b) Liens securing the Vought
Acquisition Debt that are junior in priority to those securing the Obligations
pursuant to intercreditor arrangements satisfactory to the Administrative
Agent.

 

“Vought Financing Parameters”
shall mean the following terms and conditions, except to the extent that any
such term or condition is expressly waived or amended in writing by the
Required Banks:

 

(A) with respect to the Revolving
Credit Loans, such loans shall and shall continue to (i) have a maximum
aggregate principal amount of $550,000,000, 
(ii) rank no higher than pari  passu with the Obligations,
(iii) not be secured by Liens on any asset which (a) does not constitute
Collateral for the Obligations under the Loan Documents or (b) is not subject
to the Intercreditor Agreement and (iv) not be guaranteed by or be in favor of
a borrower or other obligor thereunder (other than any Foreign Subsidiary that
is a borrower thereunder or a Foreign Subsidiary that is a guarantor of the
obligations of a Foreign Subsidiary that is a borrower thereunder) unless such
Person is also a Borrower, Guarantor or obligor of the Obligations.

 

(B) with respect to the Vought
Acquisition Debt, such Indebtedness shall and shall continue to (i) have a
maximum aggregate principal amount of $400,000,000; provided that any such
amount may be increased or decreased by the amount by which the aggregate
initial principal amount of the Loans hereunder are decreased or increased
below or in excess of, as the case may be, of $300,000,000, (ii) be unsecured
or secured by Liens junior in priority to those securing the Obligations
pursuant to intercreditor arrangements reasonably satisfactory to the
Administrative Agent, (iii) not be guaranteed by or be in favor of a borrower
or other obligor thereunder unless such Person is also a Borrower, Guarantor or
obligor of the Obligations, and (iv) either (a) have a maturity date not
earlier than one year after the Termination Date hereunder (as such Termination
Date exists on the date hereof) or (b) upon its maturity date, be, by its
terms, convertible into or exchangeable for Indebtedness that has such a
maturity date.

 

 “Vought Purchase Parameters” shall mean
that the aggregate of (a) all indebtedness for borrowed money assumed by the
Loan Parties in connection with the Acquisition, (b) all indebtedness of Vought
and its subsidiaries satisfied in connection with the Acquisition and (c) all
cash consideration paid by the Borrower to the shareholders of Vought in
connection with the Acquisition, shall not exceed $1,150,000,000.

 

26

 

“Weighted Average Life to
Maturity” means, when applied to any Indebtedness at any date, the number
of years obtained by dividing: (i) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment by (ii) the then outstanding principal amount of such
Indebtedness.

 

“Withdrawal Liability” shall
have the meaning assigned to such term under Part I of Subtitle E of Title IV
of ERISA.

 

“2009 Bonds” shall mean the
Borrower’s 8% Senior Subordinated Notes due 2017.

 

“2009 Credit Agreement” shall
mean that Amended and Restated Credit Agreement dated as of August 14, 2009, as
amended among the Borrower, certain subsidiaries of the Borrower, the lenders
from time to time party thereto and PNC Bank, National Association, as administrative
agent.

 

“2010 Bonds” shall mean notes
issued by the Borrower to finance a portion of the Acquisition or to refinance
the Vought Bridge Loans; provided the aggregate principal amount thereof
does not exceed $400,000,000, plus or minus, as the case may be, the amount by
which the aggregate initial principal amount of the Loans incurred hereunder is
less than or greater than, respectively, $300,000,000; provided, further,
that the 2010 Bonds shall, in any case, meet the Vought Financing Parameters.

 

1.2                                 Construction.

 

Unless the context of this Agreement
otherwise clearly requires, the following rules of construction shall
apply to this Agreement and each of the other Loan Documents:

 

1.2.1                        Number; Inclusion.

 

references to the plural include the
singular, the plural, the part and the whole; “or” has the inclusive meaning
represented by the phrase “and/or,” and “including” has the meaning represented
by the phrase “including without limitation”;

 

1.2.2                        Determination.

 

references to “determination” of or
by the Administrative Agent or the Banks shall be deemed to include good-faith
estimates by the Administrative Agent or the Banks (in the case of quantitative
determinations) and good-faith beliefs by the Administrative Agent or the Banks
(in the case of qualitative determinations) and such determination shall be
conclusive absent manifest error;

 

1.2.3                        Administrative Agent’s Discretion and Consent.

 

whenever the Administrative Agent or
the Banks are granted the right herein to act in its or their sole discretion
or to grant or withhold consent such right shall be exercised in good-faith;

 

1.2.4                        Documents Taken as a Whole.

 

the words “hereof,” “herein,” “hereunder,”
“hereto” and similar terms in this Agreement or any other Loan Document refer
to this Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document;

 

27

 

1.2.5                        Headings.

 

the section and other headings
contained in this Agreement or such other Loan Document and the Table of
Contents (if any), preceding this Agreement or such other Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Loan Document or the interpretation thereof in any
respect;

 

1.2.6                        Implied References to this Agreement.

 

article, section, subsection,
clause, schedule and exhibit references are to this Agreement or other Loan
Document, as the case may be, unless otherwise specified;

 

1.2.7                        Persons.

 

reference to any Person includes
such Person’s successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement or other Loan Document,
as the case may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;

 

1.2.8                        Modifications to Documents.

 

reference to any agreement
(including this Agreement and any other Loan Document together with the
schedules and exhibits hereto or thereto), document or instrument means such
agreement, document or instrument as amended, modified, replaced, substituted
for, superseded or restated;

 

1.2.9                        From, To and Through.

 

relative to the determination of any
period of time, “from” means “from and including,” “to” means “to but excluding,”
and “through” means “through and including”; and

 

1.2.10                  Shall; Will.

 

references to “shall” and “will” are
intended to have the same meaning.

 

1.3                                 Accounting Principles.

 

Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, this shall be done in accordance with GAAP as
in effect on the Closing Date, to the extent applicable, except as otherwise
expressly provided in this Agreement. If there are any changes in GAAP after
the Closing Date that would affect the computation of the Total Leverage Ratio,
Senior Leverage Ratio, Senior Secured First Lien Leverage Ratio or Interest
Coverage Ratio, such changes shall only be followed, with respect to such
financial covenants, from and after the date this Agreement shall have been
amended to take into account any such changes.

 

ARTICLE
2.

 

AMOUNT
AND TERMS OF COMMITMENTS

 

2.1                                 Term Commitments.

 

Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth,
each Bank severally agrees to make a term loan (each a “Loan” and,
collectively, the “Loans”) in Dollars to the Borrower on the Closing Date
in an amount not to exceed the amount of such Bank’s Commitment.  The
Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Section 2.2 and 2.7.  Amounts repaid or
prepaid in respect of Loans may not be reborrowed.

 

28

 

2.2                                 Procedure for Borrowing.

 

The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Banks make the Loans
on the Closing Date and specifying the amount to be borrowed.  The Loans made on the Closing Date shall initially
be ABR Loans and, unless otherwise agreed by the Administrative Agent in its
sole discretion, no Loan may be converted into or continued as a Eurodollar
Loan having an Interest Period in excess of one month prior to the date that is
60 days after the Closing Date.  Upon
receipt of such notice the Administrative Agent shall promptly notify each Bank
thereof.  Not later than 12:00 Noon, New
York City time, on the Closing Date each Bank shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Loan or Loans to be made by such Bank.  The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Banks in immediately available funds.

 

2.3                     Fees.  The
Borrower agrees to pay to the Administrative Agent the fees in the amounts and
on the dates as set forth in the Administrative Agent’s Fee Letter and to
perform any other obligations required to be performed by it contained therein.

 

2.4                                 Repayment of Loans.  The
Borrower shall repay to the Banks the aggregate principal amount of all Loans
outstanding on the following dates in the respective amounts set forth opposite
such dates:

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
  October 1, 2010

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2011

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2011

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  July 1, 2011

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  October 1, 2011

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2012

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2012

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  July 1, 2012

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  October 1, 2012

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2013

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2013

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  July 1, 2013

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  October 1, 2013

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2014

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2014

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  July 1, 2014

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  October 1, 2014

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2015

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2015

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  July 1, 2015

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  October 1, 2015

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  January 1, 2016

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  April 1, 2016

  	
   

  	
  $

  	
  875,000

  	
   

  
	
  Maturity Date

  	
   

  	
  $

  	
  329,875,000

  	
   

  

 

29

 

provided, however,
that the final principal repayment installment of the Loans shall be repaid on
the Termination Date and in any event shall be in an amount equal to the
aggregate principal amount of all Loans outstanding on such date.

 

2.5                                 Optional Prepayments.

 

The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent no later
than 11:00 A.M., New York City time, three Business Days prior thereto, in the
case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one
Business Day prior thereto, in the case of ABR Loans, which notice shall
specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section
2.15.  Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Bank thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.  Partial prepayments of Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof.  Optional prepayments of the Loans made in
accordance with this Section 2.5 shall be applied to reduce the then remaining
installments of the Loans pursuant to Section 2.4 as directed by the Borrower.

 

2.6                                 Mandatory Prepayments.

 

2.6.1                        If any Capital Stock shall be issued by the Borrower or any of its
Subsidiaries (other than any Capital Stock issued to the Seller or to
management of the Borrower), an amount equal to the Applicable Percentage of
the Net Cash Proceeds thereof shall be applied on the date of such issuance, first,
toward the prepayment of the Vought Bridge Loans, if any, and, second,
toward the prepayment of the Loans as set forth in Section 2.6.5.

 

2.6.2                        If any Indebtedness shall be incurred by the Borrower or any of its
Subsidiaries (excluding any Indebtedness incurred in accordance with Section
5.2.1), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such incurrence, first, (solely in the case of
any Net Cash Proceeds of any senior unsecured Indebtedness) toward the
prepayment of the Vought Bridge Loans, if any, and, second, toward the
prepayment of the Loans as set forth in Section 2.6.5.

 

2.6.3                        If the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event then, such Net Cash Proceeds,
less (if a Reinvestment Notice shall have been delivered in respect thereof)
any applicable Reinvestment Amount shall be applied not later than the fifth
Business Day following receipt thereof toward the prepayment of the Loans as
set forth in Section 2.6.5; provided, that, notwithstanding the
foregoing, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Loans as set forth in Section
2.6.5.

 

2.6.4                        If, for any fiscal year of the Borrower commencing with the fiscal year
ending March 31, 2012, there shall be Excess Cash Flow, the Borrower shall, on
the relevant Excess Cash Flow Application Date, apply the ECF Percentage of
such Excess Cash Flow toward the prepayment of the Loans as set forth in
Section 2.6.5; provided, that any optional prepayments of the Loans made
in accordance with Section 2.5 during such fiscal year shall reduce the
prepayment obligations under this Section 2.6.4 for such fiscal year on a
dollar-for-dollar basis.  Each such
prepayment shall be made on a date (an “Excess Cash Flow Application Date”)
no later than five days after the earlier of (i) the date on which the
financial statements of the Borrower referred to in Section 5.3.2, for the
fiscal year with respect to which such prepayment is made, are required to be
delivered to the Banks and (ii) the date such financial statements are actually
delivered.

 

2.6.5                        Any prepayment made pursuant to this Section 2.6 shall be applied, first,
to reduce the scheduled installments on the Loans pursuant to Section 2.4 occurring
in the 12 months following such prepayment in direct order of maturity and,
second, ratably to the remaining installments of the Loans.  Each prepayment of the Loans under Section
2.6 shall be accompanied by accrued interest to the date of such prepayment on
the amount prepaid.

 

30

 

2.7                                 Conversion and Continuation Options.

 

2.7.1                        The Borrower may elect from time to time to convert Eurodollar Loans to
ABR Loans by giving the Administrative Agent prior irrevocable notice of such
election no later than 11:00 A.M., New York City time, on the Business Day
preceding the proposed conversion date, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto.  The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans
by giving the Administrative Agent prior irrevocable notice of such election no
later than 11:00 A.M., New York City time, on the third Business Day preceding
the proposed conversion date (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Banks have determined
in its or their sole discretion not to permit such conversions.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Bank thereof.

 

2.7.2                        Any Eurodollar Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing and the Administrative Agent or the Required Banks
have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if
such continuation is not permitted pursuant to the preceding proviso such Loans
shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.  Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Bank thereof.

 

2.8                                 Limitations on Tranches.  Notwithstanding anything to the contrary in
this Agreement, (a) all borrowings, conversions and continuations of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (x) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof (unless all Loans are Eurodollar Loans) and (y) no more than
five Eurodollar Tranches shall be outstanding at any one time and (b) all
borrowings, conversions and continuations of ABR Loans shall be in such amounts
and be made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of each ABR Loan shall be equal to $1,000,000 or
a whole multiple thereof (or if the then remaining ABR Loans are less than
$1,000,000, such lesser amount).

 

2.9                                 Interest Rates and Payment Dates.

 

2.9.1                        Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Base Rate determined for such Interest Period plus the Applicable
Margin.

 

2.9.2                        Each ABR Loan shall bear interest at a rate per annum equal to the ABR
plus the Applicable Margin.

 

2.9.3                        (i) If all or a portion of the principal amount of any Loan shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
all outstanding Loans (whether or not overdue) shall bear interest at a rate
per annum equal to the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% and (ii) if all or a
portion of any interest payable on any Loan or any other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans plus 2%, in
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).

 

2.9.4                        Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to Section 2.9.3 shall be payable from time to
time on demand.

 

31

 

2.10               Computation of Interest and Fees.

 

2.10.1                  Interest and fees payable pursuant hereto shall be calculated on the
basis of a 360-day year for the actual days elapsed, except that, with respect
to ABR Loans the rate of interest on which is calculated on the basis of the
Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed.  The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Banks of each determination of
a Eurodollar Base Rate.  Any change in
the interest rate on a Loan resulting from a change in the ABR shall become effective
as of the opening of business on the day on which such change becomes
effective.  The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Banks of the
effective date and the amount of each such change in interest rate.

 

2.10.2                  Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Banks in the absence of manifest error.  The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 2.9.1.

 

2.11                           Inability to Determine Interest Rate.  If prior to the first day of any Interest
Period:

 

(a)          the Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Base
Rate for such Interest Period, or

 

(b)         the Administrative Agent
shall have received notice from the Required Banks that the Eurodollar Base
Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Banks (as conclusively certified
by such Banks) of making or maintaining their affected Loans during such
Interest Period,

 

the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Banks as soon as practicable thereafter.  If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as ABR Loans, (y) any Loans that were to have been converted on the
first day of such Interest Period to Eurodollar Loans shall be continued as ABR
Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last
day of the then-current Interest Period, to ABR Loans.  Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.

 

2.12                           Pro Rata Treatment and Payments.

 

2.12.1                  Each borrowing by the Borrower from the Banks hereunder and any reduction
of the Commitments of the Banks shall be made pro  rata according
to the respective Aggregate Exposure Percentages of the relevant Banks.

 

2.12.2                  Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans shall be made pro  rata according
to the respective outstanding principal amounts of the Loans then held by the
Banks.  Amounts prepaid on account of the
Loans may not be reborrowed.

 

2.12.3                  All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the Banks, at the Funding Office, in Dollars and in immediately
available funds.  The Administrative
Agent shall distribute such payments to each relevant Bank promptly upon
receipt in like funds as received, net of any amounts owing by such Bank pursuant
to Section 7.7.  If any payment hereunder
(other than payments on the Eurodollar Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next
succeeding Business Day.  If any payment
on a Eurodollar Loan becomes 

 

32

 

due
and payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business
Day.  In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.

 

2.12.4                  Unless the Administrative Agent shall have been notified in writing by
any Bank prior to a borrowing that such Bank will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Bank is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made available
to the Administrative Agent by the required time on the Borrowing Date
therefor, such Bank shall pay to the Administrative Agent, on demand, such
amount with interest thereon, at a rate equal to the greater of (i) the Federal
Funds Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the
period until such Bank makes such amount immediately available to the
Administrative Agent.  A certificate of
the Administrative Agent submitted to any Bank with respect to any amounts
owing under this paragraph shall be conclusive in the absence of manifest
error.  If such Bank’s share of such
borrowing is not made available to the Administrative Agent by such Bank within
three Business Days after such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the rate per
annum applicable to ABR Loans, on demand, from the Borrower.

 

2.12.5                  Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Banks their respective pro
rata shares of a corresponding amount. 
If such payment is not made to the Administrative Agent by the Borrower
within three Business Days after such due date, the Administrative Agent shall
be entitled to recover, on demand, from each Bank to which any amount which was
made available pursuant to the preceding sentence, such amount with interest thereon
at the rate per annum equal to the daily average Federal Funds Effective
Rate.  Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Bank against the Borrower.

 

2.12.6                  If any Bank shall fail to make any payment required to be made by it
pursuant to Section 2.12.4, 2.12.5 or 7.7, then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision of this Agreement),
apply any amounts thereafter received by the Administrative Agent, for the account
of such Bank to satisfy such Bank’s obligations under such Sections until all
such unsatisfied obligations are fully paid.

 

2.13               Requirements of Law.

 

2.13.1                  If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Official Body made subsequent to the date hereof:

 

(a)  shall subject any Bank to any tax of any kind
whatsoever on its capital reserves (or similar) with respect to this Agreement
or any Loan or Commitment made by such Bank (except for Non-Excluded Taxes or
Other Taxes covered by Section 2.14, changes in the rate of tax on the overall
net income of such Bank, taxes that are explicitly excluded from the definition
of Non-Excluded Taxes pursuant to Section 2.14.4, Non-Excluded Taxes that are
attributable to such Bank’s failure to comply with the requirements of Section
2.14.4 or 2.14.5 or Non-Excluded Taxes that are United States withholding taxes
imposed on amounts payable to such Bank at the time such Bank becomes a party
to this Agreement, except to the extent that such Bank’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.14.4);

 

33

 

(b)  shall impose,
modify or hold applicable any reserve, special deposit, compulsory loan or
similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Bank that is not otherwise
included in the determination of the Eurodollar Base Rate; or

 

(c)  shall impose on
such Bank any other condition;

 

and the result of any of the foregoing is to
increase the cost to such Bank, by an amount that such Bank deems to be
material, of making, converting into, continuing or maintaining Eurodollar
Loans, or to reduce any amount receivable hereunder in respect thereof, then,
in any such case, the Borrower shall promptly pay such Bank, upon its demand,
any additional amounts necessary to compensate such Bank for such increased
cost or reduced amount receivable.  If
any Bank becomes entitled to claim any additional amounts pursuant to this paragraph,
it shall promptly notify the Borrower (with a copy to the Administrative Agent)
of the event by reason of which it has become so entitled.

 

2.13.2                  If any Bank shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Official Body made subsequent to the date
hereof shall have the effect of reducing the rate of return on such Bank’s or
such corporation’s capital as a consequence of its obligations hereunder to a
level below that which such Bank or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Bank’s
or such corporation’s policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, after submission by
such Bank to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such corporation for such
reduction.

 

2.13.3                  A certificate as to any additional amounts payable pursuant to this Section submitted
by any Bank to the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. 
Notwithstanding anything to the contrary in this Section, the Borrower
shall not be required to compensate a Bank pursuant to this Section for
any amounts incurred more than nine months prior to the date that such Bank
notifies the Borrower of such Bank’s intention to claim compensation therefor; provided
that, if the circumstances giving rise to such claim have a retroactive effect,
then such nine-month period shall be extended to include the period of such
retroactive effect.  The obligations of
the Borrower pursuant to this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

 

2.14                           Taxes.

 

2.14.1                  All payments made by or on behalf of any Loan Party under this Agreement
or any other Loan Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Official Body, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Bank as
a result of a present or former connection between the Administrative Agent or
such Bank and the jurisdiction of the Official Body imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Bank
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to the Administrative Agent or any Bank as determined in good faith by the
applicable withholding agent, (i) such amount shall be paid to the
relevant Official Body in accordance with applicable law, and (ii) the
amounts so payable by the applicable Loan Party to the Administrative Agent or
such Bank shall be increased to the extent necessary to yield to the
Administrative Agent or such Bank (after payment of all Non-Excluded Taxes and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement as if such withholding or
deduction had not been made, provided, 

 

34

 

however, that the Borrower shall not be required to increase any such amounts
payable to any Bank with respect to any Non-Excluded Taxes (i) that are
attributable to such Bank’s failure to comply with the requirements of Section 2.14.4
or 2.14.5 or (ii) that are United States withholding taxes imposed on
amounts payable to such Bank at the time such Bank becomes a party to this
Agreement, except to the extent that such Bank’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

 

2.14.2                  In addition, the Borrower shall pay any Other Taxes to the relevant
Official Body in accordance with applicable law.

 

2.14.3                  Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Bank, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof.  If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Banks for such amounts and any incremental taxes, interest or penalties
that may become payable by the Administrative Agent or any Bank as a result of
any such failure.

 

2.14.4                  Each Bank (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Internal Revenue Code (a “Non-U.S. Bank”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Bank from which the related participation shall have been purchased) two copies
of U.S. Internal Revenue Service (“IRS”) Form W-8BEN, Form W-8ECI
or Form W-8IMY (together with any applicable underlying IRS forms), or, in
the case of a Non-U.S. Bank claiming exemption from U.S. federal withholding
tax under Section 871(h) or 881(c) of the Internal Revenue Code
with respect to payments of “portfolio interest”, a statement substantially in
the form of Exhibit 1.1(E) and the applicable IRS Form W-8,
or any subsequent versions thereof or successors thereto, properly completed
and duly executed by such Non-U.S. Bank claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents.  Such forms shall be delivered by each
Non-U.S. Bank on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant
purchases the related participation) and from time to time thereafter upon the
request of the Borrower or the Administrative Agent.  In addition, each Non-U.S. Bank shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Bank.  Each
Non-U.S. Bank shall promptly notify the Borrower and the Administrative Agent
at any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Bank shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Bank is not legally able to deliver; provided,
however to the extent that such Non-U.S. Bank’s inability to deliver any such
form is not attributable to (i) a Change in Law occurring after the date that
the Non-U.S. Bank becomes a party to this Agreement, (ii) an event caused
by or under the control of the Borrower, or (iii) any action taken by the
Bank pursuant to Section 2.16, and such inability to deliver such form
results in the imposition of United States withholding tax upon such Non-U.S.
Bank, such Non-U.S. Bank shall not be entitled to any additional amounts
pursuant to Section 2.14.1 with respect to such United States withholding
taxes imposed solely as a result of the inability to deliver such form.

 

2.14.5                  A Bank that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Bank
is legally entitled to complete, execute and deliver such documentation and in
such Bank’s judgment such completion, execution or submission would not
materially prejudice the legal position of such Bank.

 

2.14.6                  If the Administrative Agent or any Bank determines, in its reasonable
discretion, that 

 

35

 

it has received a refund of any Non-Excluded Taxes
or Other Taxes as to which it has been indemnified by a Loan Party or with
respect to which a Loan Party has paid additional amounts pursuant to this Section 2.14,
it shall pay over such refund to such Loan Party (but only to the extent of
indemnity payments made, or additional amounts paid, by such Loan Party under
this Section 2.14 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Bank and without interest (other than any interest
paid by the relevant Official Body with respect to such refund); provided,
that such Loan Party, upon the request of the Administrative Agent or such Bank, agrees to repay the amount paid over to such
Loan Party (plus any penalties, interest or other charges imposed by the
relevant Official Body) to the Administrative Agent or such Bank in the event the Administrative Agent or such Bank is required to repay such refund to such
Official Body. This paragraph shall not be construed to require the
Administrative Agent or any Bank to
make available its tax returns (or any other information relating to its taxes
which it deems confidential) to any Loan Party or any other Person.

 

2.14.7                  The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.15                           Indemnity.  The
Borrower agrees to indemnify each Bank for, and to hold each Bank harmless
from, any loss or expense that such Bank may sustain or incur as a consequence
of (a) default by the Borrower in making a borrowing of, conversion into
or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b) default
by the Borrower in making any prepayment of or conversion from Eurodollar Loans
after the Borrower has given a notice thereof in accordance with the provisions
of this Agreement, (c) the making of a prepayment of Eurodollar Loans on a
day that is not the last day of an Interest Period with respect thereto or (d) the
assignment of a Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.17.  Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Bank) that would have accrued to such Bank on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market.  A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Bank shall be
conclusive in the absence of manifest error. 
This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

2.16                           Change of Lending Office.  Each Bank agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.13 or 2.14.1 with
respect to such Bank, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation
is made on terms that, in the sole judgment of such Bank, cause such Bank and
its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall
affect or postpone any of the obligations of the Borrower or the rights of any
Bank pursuant to Section 2.13 or 2.14.1.

 

2.17                           Replacement of Banks.  The Borrower shall be permitted to replace
any Bank that (a) requests reimbursement for amounts owing pursuant to Section 2.13
or 2.14.1, (b) defaults in its obligation to make Loans hereunder, or (c) does
not consent to any proposed amendment, supplement, modification, consent or
waiver of any provision of this Agreement or any other Loan Document that
requires the consent of each of the Banks or each of the Banks affected thereby
(so long as the consent of the Required Banks (with the percentage in such
definition being deemed to be 662/3% for this purpose) has been
obtained), with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Bank shall have
taken no action under Section 2.16 so as to eliminate the continued need
for payment of amounts owing pursuant to Section 2.13 or 2.14.1, (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Bank on or prior to the date of replacement, (v) the
Borrower shall be liable to such replaced Bank under Section 2.15  if any Eurodollar Loan owing to such replaced
Bank shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution shall be
reasonably 

 

36

 

satisfactory
to the Administrative Agent, (vii) the replaced Bank shall be obligated to
make such replacement in accordance with the provisions of Section 8.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section 2.13 or 2.14.1, as the case may be,
and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Bank shall have
against the replaced Bank.

 

2.18                           Incremental Credit Extensions.  The Borrower may at any time or from time to
time after the Closing Date, by notice to the Administrative Agent (whereupon
the Administrative Agent shall promptly deliver a copy to each of the Banks),
request one or more additional tranches of term loans (the “Incremental Term
Loans”); provided that both at the time of any such request and upon
the effectiveness of any Incremental Amendment referred to below, no Potential
Default or Event of Default shall exist and at the time that any such Incremental
Term Loan is made (and after giving effect thereto) no Potential Default or
Event of Default shall exist.  Each
tranche of Incremental Term Loans shall be in an aggregate principal amount
that is not less than $25,000,000 (provided that such amount may be less
than $25,000,000 if such amount represents all remaining availability under the
limit set forth in the next sentence). 
Notwithstanding anything to the contrary herein, the aggregate amount of
the Incremental Term Loans shall not exceed $100,000,000 (the “Incremental
Availability”); provided, that on a pro forma basis after giving
effect to the incurrence of such Incremental Term Loans (i) the Loan
Parties shall be in pro forma compliance with (x) the Total Leverage Ratio
and Senior Leverage Ratio set forth in Sections 5.2.16 and 5.2.17 hereof
assuming, in each case, that the maximum permitted ratio is  0.25
to 1.00 lower than otherwise permitted pursuant to such Section and (y) the
Interest Coverage Ratio set forth in Section 5.2.15.

 

The
Incremental Term Loans (a) shall rank pari passu in right of payment and
of security with the Loans, (b) shall not mature earlier than the
Termination Date and (c) shall be treated substantially the same as the
Loans (in each case, including with respect to mandatory and voluntary
prepayments), provided that (i) the terms and conditions applicable
to Incremental Term Loans may be materially different from those of the Loans
to the extent such differences are reasonably acceptable to the Administrative
Agent and (ii) the interest rates and amortization schedule applicable to
the Incremental Term Loans shall be determined by the Borrower and the lenders
thereof; provided, further, that, (a) in the event that the
applicable interest margins in respect of the Incremental Term Loans are more
than 0.25% per annum greater than the applicable interest margins in respect of
the Loans, then the applicable interest margins in respect of the Loans shall
be increased to the extent necessary so that the interest margins in respect of
the Loans are equal to the interest rate margins for such Incremental Term
Loans minus 0.25% per annum, (b) solely for purposes of the foregoing
clause (a), (x) the interest rate margins applicable to any Loans or
Incremental Term Loans shall be deemed to include all original issue discount
or upfront or similar fees (which shall be deemed to constitute like amounts of
original issue discount) paid or payable by the Borrower generally to the Banks
providing such Loans or such Incremental Term Loans in the initial primary
syndication thereof (with any original issue discount equated to interest based
on an assumed four-year life to maturity) and (y) if the Eurodollar Base
Rate or ABR includes a “floor” greater than 1.5% or 2.5%, respectively, such
increased amount shall be equated to interest margin; provided  further
that as of the date of the incurrence of the Incremental Term Loans, the
Weighted Average Life to Maturity of the Incremental Term Loans shall not be
shorter than that of the Loans.  Each notice
from the Borrower pursuant to this Section shall set forth the requested
amount and proposed terms of the relevant Incremental Term Loans.

 

Incremental
Term Loans may be made by any existing Bank (and each existing Bank will have
the right, but not an obligation, to make a portion of any Incremental Term
Loan on terms permitted in this Section 2.18) or by any other bank or
other financial institution (any such other bank or other financial institution
being called an “Additional Bank”). Commitments in respect of
Incremental Term Loans shall become Commitments under this Agreement pursuant
to an amendment (an “Incremental Amendment”) to this Agreement and, as
appropriate, the other Loan Documents, executed by the Borrower, each Bank
agreeing to provide such Commitment, if any, each Additional Bank, if any, and
the Administrative Agent. The Incremental Amendment may, without the consent of
any other Banks, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Borrower, to effect the provisions of this
Section. The effectiveness of (and the borrowing under) any Incremental
Amendment shall be subject to the satisfaction on the date thereof (each, an “Incremental
Facility Closing Date”) of each of the conditions set forth in
Section 4.1.1 (it being understood that all references to “the Closing
Date” or similar language in such Section 4.1.1 shall be deemed to refer
to the effective date of such Incremental Amendment) and such other conditions
as the 

 

37

 

parties
thereto shall agree.  The Borrower will
use the proceeds of the Incremental Term Loans for any purpose not prohibited
by this Agreement.  No Bank shall be
obligated to provide any Incremental Term Loans unless it so agrees.

 

This
Section 2.18 shall supersede any provisions in Section 8.1 or 8.7 to
the contrary.

 

ARTICLE 3.

 

REPRESENTATIONS
AND WARRANTIES

 

3.1                                 Representations and Warranties.

 

The Borrower represents and warrants
to the Administrative Agent and each of the Banks as follows:

 

3.1.1                        Organization and Qualification.

 

The Borrower and each Subsidiary of
the Borrower: (i) is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (ii) has the lawful power to own or
lease its properties and to engage in the business it presently conducts or
proposes to conduct, and (iii) is duly licensed or qualified and in good
standing in each jurisdiction where the property owned or leased by it or the
nature of the business transacted by it or both makes such licensing or
qualification necessary, except with respect to each of (i) and (iii) above,
for exceptions which would not reasonably be expected to result in a Material
Adverse Change.

 

3.1.2                        Capitalization and Ownership.

 

Schedule
3.1.2 states, as of the Closing
Date, the authorized capital stock of the Borrower, the issued and outstanding
shares (referred to herein as the “Shares”) of such stock, and the names
of any parties beneficially owning, individually or through affiliates, more
than 5% thereof.  All of the Shares have been validly issued and are fully
paid and nonassessable.  As of the Closing Date, there are no options,
warrants or other rights outstanding to purchase any such Shares except as
disclosed in Schedule 3.1.2.

 

3.1.3                        Subsidiaries.

 

Schedule 3.1.3 states, as of the Closing Date, the name of each of the
Borrower’s Subsidiaries, its jurisdiction of incorporation or organization, its
authorized capital stock, the issued and outstanding shares (referred to herein
as the “Subsidiary Shares”) and the owners thereof if it is a
corporation, its outstanding partnership interests (the “Partnership
Interests”) if it is a partnership and its outstanding limited liability
company interests, interests assigned to managers thereof and the voting rights
associated therewith (the “LLC Interests”) if it is a limited liability
company.  The Borrower and each Subsidiary of the Borrower has good and
marketable title to all of the Subsidiary Shares, Partnership Interests and LLC
Interests it purports to own, free and clear in each case of any Lien other
than the Vought Financing Liens and Permitted Refinancing Liens related
thereto, non-consensual Liens arising by operation of Law which are identified
under the definition of Permitted Liens herein and Liens in favor of the
Administrative Agent for the benefit of the Banks hereunder.  All Subsidiary
Shares, Partnership Interests and LLC Interests have been validly issued, and
all Subsidiary Shares are fully paid and nonassessable.  All capital
contributions and other consideration required to be made or paid in connection
with the issuance of the Partnership Interests and LLC Interests have been made
or paid, as the case may be.  There are no options,  warrants or other rights outstanding to
purchase any such Subsidiary Shares, Partnership Interests or LLC Interests
outstanding as of the Closing Date except as indicated on Schedule 3.1.3.

 

3.1.4                        Power and Authority.

 

The Borrower and each other Loan
Party has full power to enter into, execute, deliver and carry out this
Agreement and the other Loan Documents to which it is a party, to incur the
Indebtedness contemplated by 

 

38

 

the Loan Documents and to perform
its Obligations under the Loan Documents to which it is a party, and all such
actions have been duly authorized by all necessary proceedings on its part.

 

3.1.5                        Validity and Binding Effect.

 

This Agreement has been duly and
validly executed and delivered by the Borrower and each other Loan Party party
hereto, and each other Loan Document which the Borrower or any other Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by the Borrower and each other Loan Party on the
required date of delivery of such Loan Document.  This Agreement and each
other Loan Document to which the Borrower or any other Loan Party is a party
constitutes, or will constitute, legal, valid and binding obligations of each
such party, enforceable against each such party, in accordance with its terms,
except to the extent that enforceability of any of such Loan Document may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors’ rights generally or limiting
the right of specific performance.

 

3.1.6                        No Conflict.

 

Neither the execution and delivery
of this Agreement or the other Loan Documents by the Borrower or any other Loan
Party nor the consummation of the transactions herein or therein contemplated
or compliance with the terms and provisions hereof or thereof by them will
conflict with, constitute a default under or result in any breach of
(i) the terms and conditions of the certificate of incorporation, bylaws
or other organizational documents of the Borrower or any Subsidiary or
(ii) any Law or of any material agreement, instrument, order, writ, judgment,
injunction or decree to which the Borrower or any Subsidiary is a party or by
which it is bound or to which it is subject, or result in the creation or
enforcement of any Lien, charge or encumbrance whatsoever upon any property
(now or hereafter acquired) of the Borrower or any Subsidiary other than the
Liens granted to the Administrative Agent, for the benefit of the Banks,
pursuant to the Loan Documents.

 

3.1.7                        Litigation.

 

Except as set forth on Schedule
3.1.7, there are no actions, suits, proceedings or investigations pending
or, to the knowledge of the Borrower, threatened against the Borrower or any
Subsidiary of the Borrower at law or equity before any Official Body which
would, individually or in the aggregate, be reasonably likely to result in any
Material Adverse Change.  Neither the Borrower nor any Subsidiary of the
Borrower is in violation of any order, writ, injunction or any decree of any
Official Body which would reasonably be expected to result in any Material
Adverse Change.

 

3.1.8                        Title to Properties.

 

The real property owned or leased
(other than residential leases for use by employees) by the Borrower and each
Subsidiary of the Borrower as of the Closing Date is described on Schedule
3.1.8.  The Borrower and each of its
Subsidiaries has good and marketable title to or valid leasehold interests in
all properties, assets and other rights which it purports to own or lease or
which are reflected as owned or leased on its books and records, free and clear
of all Liens and encumbrances except Permitted Liens, and subject to the terms
and conditions of the applicable leases.  All leases of property are in
full force and effect without the necessity for any consent which has not
previously been obtained in respect of the transactions contemplated hereby.

 

3.1.9                        Financial Statements.

 

(i)             Historical Statements. 
The Borrower has delivered to the Administrative Agent copies of (a) its
audited consolidated and unaudited consolidating year-end financial statements
for and as of the end of the fiscal year ended March 31, 2010 and (b) Vought’s
audited consolidated and unaudited consolidating year-end financial statements
for and as of the end of the fiscal year ended December 31, 2009
(collectively, the “Historical Statements”).  The Historical Statements
were compiled from the books and records maintained by the Borrower’s or Vought’s
management, as the case may be, are correct and complete and present fairly in
all material respects the financial condition of the Borrower and its 

 

39

 

Subsidiaries
or Vought and its Subsidiaries, as the case may be, as of their dates and the
results of operations for the fiscal periods then ended and have been prepared
in accordance with GAAP consistently applied.

 

(ii)          Accuracy of Financial Statements. 
Neither the Borrower nor Vought had, as of the date of the most recent
Historical Statements for the Borrower and Vought respectively, any
liabilities, contingent or otherwise, that could reasonably be expected to result
in a Material Adverse Change and which were not disclosed in the Historical
Statements or in the notes thereto.  Since March 31, 2010, no
Material Adverse Change has occurred.

 

3.1.10                  Margin Stock.

 

Neither the Borrower nor any of its
Subsidiaries engages or intends to engage principally, or as one of its
important activities, in the business of extending credit for the purpose,  immediately, incidentally or ultimately, of
purchasing or carrying margin stock (within the meaning of Regulation U). 
No part of the proceeds of any Loan has been or will be used, immediately,
incidentally or ultimately, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
to refund Indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions of
Regulation U.  Neither the Borrower nor any of its Subsidiaries holds or
intends to hold margin stock in such amounts that more than 25% of the
reasonable value of the assets of the Borrower or any of its Subsidiaries are
or will be represented by margin stock. 
If requested by the Administrative Agent, the Borrower will furnish to
the Administrative Agent a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U-1, as applicable,
referred to in Regulation U.

 

3.1.11                  Full Disclosure.

 

Neither the Confidential Information
Memorandum, this Agreement nor any other Loan Document, nor any certificate,
statement, agreement or other documents furnished to the Administrative Agent
or any Bank in connection herewith or therewith, contains any untrue statement
of a material fact or, considered in the aggregate, omits to state a material
fact necessary in order to make the statements contained herein and therein, in
light of the circumstances under which they were made, not misleading.  On
the Closing Date, there is no fact known to the Borrower which materially
adversely affects the business, property, assets, financial condition or
results of operations of the Borrower or any Subsidiary of the Borrower which
has not been set forth in the Confidential Information Memorandum, this
Agreement or in the certificates, statements, agreements or other documents furnished
in writing to the Administrative Agent and the Banks prior to or at the date
hereof in connection with the transactions contemplated hereby or previously
been publicly disclosed in the Borrower’s or Vought’s, as applicable, most
recently filed Form 10-K or any Form 10-Q or Form 8-K filed
subsequently with the Securities and Exchange Commission prior to the Closing
Date.

 

3.1.12                  Taxes.

 

All federal, state, material local,
material foreign and material other tax returns required to have been filed with
respect to the Borrower and each Subsidiary of the Borrower have been filed
(subject to the timely filing of any extensions therefor), and payment or
adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become due
pursuant to said returns or to assessments received, except to the extent that
such taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made.  Other than extensions of tax return filing
deadlines for which the Borrower has applied in the ordinary course of
business, there are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of the Borrower or any
of its Subsidiaries for any period in which the underlying potential liability
could reasonably be expected to result in a Material Adverse Change.

 

40

 

3.1.13                  Consents and Approvals.

 

No consent, approval, exemption,
order or authorization of, or a registration or filing with, any Official Body
or any other Person is required by any Law or any agreement in connection with
the execution, delivery and carrying out of this Agreement and the other Loan
Documents by the Borrower, except as shall have been obtained or made on or
prior to the Closing Date.

 

3.1.14                  No Event of Default; Compliance with Instruments.

 

No event has occurred and is
continuing and no condition exists or will exist after giving effect to the
borrowings to be made on the Closing Date under the Loan Documents which
constitutes an Event of Default or Potential Default.  Neither the
Borrower nor any of its Subsidiaries is in violation of (i) any term of
its certificate of incorporation, bylaws, or other organizational documents or
(ii) any material agreement or instrument to which it is a party or by which
it or any of its properties may be subject or bound where such violation would
constitute a Material Adverse Change.

 

3.1.15                  Patents, Trademarks, Copyrights, Licenses, Etc.

 

The Borrower and each Subsidiary of
the Borrower owns or possesses all the material patents, trademarks, service
marks, trade names, copyrights, licenses, registrations, franchises, permits,
intellectual property and rights necessary to own and operate its properties
and to carry on its business as presently conducted and planned to be conducted
by the Borrower and its Subsidiaries, without known conflict with the rights of
others that could reasonably be expected to result in a Material Adverse
Change.

 

3.1.16                  Insurance.

 

All insurance policies and other
bonds to which the Borrower and each of its Subsidiaries is a party are valid
and in full force and effect to the extent necessary to comply with Section 5.1.3
[Maintenance of Insurance].  No notice has been given or claim made and no
grounds exist to cancel or avoid any of such policies or bonds or to reduce the
coverage provided thereby, except as would not impair the accuracy of the
following sentence or could reasonably be expected to result in a breach of Section 5.1.3
[Maintenance of Insurance].  Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of the Borrower and each Subsidiary of the Borrower
in accordance with prudent business practice in the industries of the Borrower
and its Subsidiaries.

 

3.1.17                  Compliance with Laws.

 

The Borrower and its Subsidiaries
are in compliance in all material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in subsection 3.1.22)
in all jurisdictions in which the Borrower and its Subsidiaries do business
except where the failure to so comply would not constitute a Material Adverse
Change.

 

3.1.18                  Material Contracts.

 

Except as otherwise publicly
disclosed in the Borrower’s or Vought’s, as applicable, most recent Form 10-K
or any Form 10-Q or Form 8-K subsequently filed with the Securities
and Exchange Commission, all material contracts publicly filed or required to
be publicly filed by the Borrower or Vought pursuant to applicable securities
law are valid, binding and enforceable in all material respects upon the
Borrower or Vought, as applicable, and any Subsidiary party thereto, and each
of the other parties thereto in accordance with their respective terms, and
there is no default thereunder by the Borrower, Vought or any such Subsidiary
or, to the Borrower’s knowledge, with respect to parties other than the
Borrower, Vought or any such Subsidiary, which would result in a Material
Adverse Change.

 

3.1.19                  Investment Companies.

 

Neither the Borrower nor any of its
Subsidiaries is an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an “investment

 

41

 

company” as such terms are defined
in the Investment Company Act of 1940 and shall not become such an “investment
company” or under such “control.”

 

3.1.20                  Plans and Benefit Arrangements.

 

Except as set forth on Schedule
3.1.20:

 

(i)             The Borrower and each member of its ERISA Group are in compliance with any
applicable provisions of ERISA with respect to all Benefit Arrangements and
Plans, except where the failure to do so could not reasonably be expected to
result in a Material Adverse Change.  There has been no Prohibited
Transaction with respect to any Benefit Arrangement or any Plan which could
result in a Material Adverse Change.  The Borrower and, to the knowledge
of the Borrower, all members of its ERISA Group have made when due any and all
material payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining
thereto.  Except where the failure to do so could not result in a Material
Adverse Change, with respect to each Plan and Multiemployer Plan, the Borrower
and each member of each of its ERISA Group (a) have fulfilled their
obligations under the minimum funding standards of ERISA, (b) have not
incurred any liability to the PBGC other than required premiums under Sections
4006 and 4007 of ERISA, and (c) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.

 

(ii)          To the Borrower’s knowledge, no condition exists that would
be reasonably expected to prevent a Plan from paying benefits when
due in accordance with Plan’s terms and applicable law (excluding for
purposes of this representation benefits that may become due to be
paid upon the given Plan being terminated).

 

(iii)       Neither
the Borrower nor any other member of any of its ERISA Group has instituted
proceedings or taken formal action to terminate any Plan.

 

(iv)      No
Plan has an actual or deemed Adjusted Funding Target Attainment Percentage that
would subject the Plan to the benefit limitations imposed under
Section 436(b), (d)(1) or (e) of the Internal Revenue Code.

 

(v)         Neither the Borrower nor any other member of its ERISA Group has
incurred or reasonably expects to incur any material Withdrawal Liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither the
Borrower nor any other member of its ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or
Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the knowledge of the Borrower, no Multiemployer Plan or Multiple
Employer Plan is reasonably expected to be reorganized or terminated, within
the meaning of Title IV of ERISA in a manner that can reasonably be expected to
result in a  Material Adverse Change.

 

(vi)      (a) To
the extent that any Benefit Arrangement is insured, the Borrower and all
members of each of its ERISA Group have paid when due all material premiums
required to be paid for all periods through the Closing Date and (b) to
the extent that any Benefit Arrangement is funded other than with insurance,
the Borrower and all members of its ERISA Group have made when due all material
contributions required to be paid for all periods through the Closing Date.

 

(vii)   All
Plans and Benefit Arrangements have been administered in accordance with their
terms and the applicable provisions of ERISA except where the failure to do so
could not reasonably be expected to result in a Material Adverse Change.

 

3.1.21                  Employment Matters.

 

Except as set forth on Schedule
3.1.21, the Borrower and each of its Subsidiaries are in compliance with
the Labor Contracts and all applicable federal, state and local labor and
employment Laws

 

42

 

including those related to equal
employment opportunity and affirmative action, labor relations, minimum wage,
overtime, child labor, medical insurance continuation, worker adjustment and
relocation notices, immigration controls and worker and unemployment
compensation where the failure to comply would, individually or in the
aggregate, likely constitute a Material Adverse Change.  To the best of
the Borrower’s knowledge, there are no outstanding grievances, arbitration
awards or appeals therefrom arising out of the Labor Contracts or current or
threatened strikes, picketing, handbilling or other work stoppages or
slowdowns at facilities of the Borrower or any of its Subsidiaries which in any
case would constitute a Material Adverse Change.

 

3.1.22                  Environmental Matters.

 

Except as disclosed on Schedule
3.1.22:

 

(i)             Neither the Borrower nor any Subsidiary of the Borrower has received
any material Environmental Complaint from any Official Body alleging that the
Borrower or such Subsidiary or, with respect to the Property, any prior or
subsequent owner of the Property is a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601, et  seq., and the Borrower has no reason to believe
that such an Environmental Complaint is likely to be received.  Except as
would not reasonably be expected to result in a Material Adverse Change,
neither the Borrower nor any Subsidiary of the Borrower has received any
Environmental Complaint described in the immediately preceding sentence, from a
private Person (as opposed to receipt thereof from an Official Body).  There are no pending or, to the Borrower’s
knowledge, threatened Environmental Complaints relating to the Borrower or any
Subsidiary of the Borrower or, to the Borrower’s knowledge with respect to the
Property, any prior or subsequent owner of the Property pertaining to, or
arising out of, any Environmental Conditions, in any case that would reasonably
be expected to result in a Material Adverse Change.

 

(ii)          There are no circumstances at, on or under the Property that constitute
a material breach of or non-compliance with any of the Environmental Laws.  There are no Environmental Conditions at, on
or under the Property or, to the knowledge of the Borrower, at, on or under
adjacent property, that prevent compliance with the Environmental Laws at the
Property in a manner that would reasonably be expected to result in a Material
Adverse Change.

 

(iii)       Neither
the Property nor any structures, improvements, equipment, fixtures, activities
or facilities thereon or thereunder contain or use Regulated Substances except
in material compliance with Environmental Laws.  There are no processes,
facilities, operations, equipment or any other activities at, on or under the
Property, or, to the knowledge of the Borrower, at, on or under adjacent
property, that currently result in the release or threatened release of
Regulated Substances onto the Property, except to the extent that such releases
or threatened releases are not a breach of or otherwise not a violation of the
Environmental Laws or would not result in a Material Adverse Change.

 

(iv)      The
Borrower and each Subsidiary of the Borrower has all material permits,
licenses, authorizations, plans and approvals required under the Environmental
Laws for the conduct of the business of the Borrower and its Subsidiaries as
presently conducted. The Borrower and each Subsidiary of the Borrower has
submitted all material notices, reports and other filings required by the
Environmental Laws to be submitted to an Official Body which pertain to past
and current operations on the Property.

 

(v)         All past and present on-site generation, storage, processing,
treatment, recycling, reclamation, disposal or other use or management of
Regulated Substances at, on, or under the Property and all off-site
transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances has been performed
by the Borrower and its Subsidiaries in material accordance with the
Environmental Laws.

 

43

 

3.1.23                  Senior Debt Status.

 

The Obligations of each Loan Party
under this Agreement, the Guarantee and Collateral Agreement and each of the
other Loan Documents to which it is a party do rank and will rank at least pari
passu in priority of payment with all other senior secured Indebtedness
(including, without limitation, Indebtedness under the Revolving Credit
Agreement, as in effect from time to time) of the Loan Parties.  The
obligations of any Loan Party under the Convertible Note Indenture and the
Convertible Notes are and shall remain at all times unsecured and subordinated
in right of payment to the Obligations hereunder and under the other Loan Documents. 
Without limiting the foregoing, each Loan Party shall take all steps necessary
to provide that (i) its Obligations under this Agreement, the Guarantee
and Collateral Agreement and the other Loan Documents shall be senior to, or pari
passu with, any outstanding Indebtedness, and  (ii) any Indebtedness of any Loan Party, now
existing or hereafter incurred that is in any manner subordinated in right of
payment or security to any other Indebtedness is subordinated to the
Obligations on the same terms and conditions.

 

3.1.24                  Anti-Terrorism Laws.

 

3.1.24.1.                              General.

 

None of the Loan Parties nor or any
Subsidiary of a Loan Party, nor, to the knowledge of any Loan Party, any other
Affiliate of any Loan Party, is in violation of any Anti-Terrorism Law or
engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.

 

3.1.24.2.                              Executive Order No. 13224.

 

None of the Loan Parties, nor any
Subsidiary of a Loan Party, nor, to the knowledge of any Loan Party, any other
Affiliate of any Loan Party,  or their  respective  agents 
acting  or benefiting  in any capacity in connection with the Loans
or other transactions hereunder, is any of the following (each a “Blocked
Person”):

 

(i)             a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;

 

(ii)          a Person owned or  controlled  by, or acting for or on
behalf  of,  any  Person  that is listed in the annex to,
or is otherwise subject to the provisions of, the Executive Order
No. 13224;

 

(iii)       a
Person or entity  with  which any  Bank is 
prohibited  from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

 

(iv)      a
Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;

 

(v)         a  Person or entity that is named as a “specially designated
national” on the most current list published by the U.S. Treasury Department
Office of Foreign Asset Control at its official website or any
replacement website or other  replacement 
official publication of such list, or

 

(vi)      a
person or entity who is affiliated or associated with a person or entity listed
above.

 

No Loan Party or to the knowledge of
any Loan Party, any of its agents acting in any capacity in connection with the
Loans or other transactions hereunder (i) conducts any business or engages
in making or receiving any contribution of funds, goods or services to or for
the benefit of any Blocked Person, or (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224.

 

3.1.25                  Security Interests; Mortgage Liens.

 

(i)                                                             From and after the Closing Date, the Guarantee and Collateral Agreement
will be effective to create in favor of the Administrative Agent, for the
benefit of the Banks, a legal, valid and 

 

44

 

enforceable
security interest in the Collateral described therein and proceeds
thereof.  In the case of the Pledged
Notes described in the Guarantee and Collateral Agreement, when the original of
such instruments are delivered to the Administrative Agent, and in the case of
the Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Collateral are delivered to the
Administrative Agent (together, in each case, with a properly completed and signed
stock power or endorsement), and in the case of the other Collateral described
in the Guarantee and Collateral Agreement, when financing statements and other
filings specified on Schedule 3.1.25(a), in appropriate form are filed
in the offices specified on Schedule 3.1.25(a), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and Prior
Security Interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations.  Notwithstanding the requirement for delivery
of possession of the Pledged Collateral to the Administrative Agent required
pursuant to the Loan Documents, so long as the Intercreditor Agreement is in
force and effect, possession of such Pledged Collateral by the collateral agent
or the administrative agent, as applicable, for the lenders under the Revolving
Credit Agreement shall be deemed to be possession by the Administrative Agent
thereof for purposes of perfection of the Administrative Agent’s Lien thereon.

 

(ii)                                                          Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Banks, a legal, valid and
enforceable Lien on the Real Property Collateral described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule 3.1.25(b) (with
respect to the Real Property Collateral owned as of the Closing Date), or in
the appropriate filing offices (with respect to Real Property Collateral
acquired after the Closing Date), each such Mortgage shall constitute a fully
perfected Lien on, and Prior Security Interest in, all right, title and
interest of the Loan Parties in the Real Property Collateral and the proceeds
thereof, as security for the Obligations. 
Schedule 1.1(M) lists, as of the Closing Date, each parcel
of owned real property and each leasehold interest in real property located in
the United States and held by the Borrower or any of its Subsidiaries that has
a value, in the reasonable opinion of the Borrower, in excess of $10,000,000.

 

3.1.26                  Status of the Pledged Collateral.

 

All the shares of capital stock,
Partnership Interests or LLC Interests included in the Pledged Collateral to be
pledged pursuant to the Guarantee and Collateral Agreement are or will be upon
issuance validly issued and nonassessable and owned beneficially and of record
by the applicable pledgor free and clear of any Lien or restriction on
transfer, except (i) as otherwise permitted by the Guarantee and
Collateral Agreement or this Agreement, (ii) as the right of the Banks to
dispose of the Subsidiary Shares, Partnership Interests or LLC Interests may be
limited by the Securities Act of 1933, as amended, and the regulations
promulgated by the Securities and Exchange Commission thereunder and by
applicable state securities laws and (iii) restrictions on asset sales and
like contractual provisions that would not impair the ability of the
Administrative Agent to realize on its Lien in accordance with the Guarantee
and Collateral Agreement (subject to the Intercreditor Agreement).  There
are no shareholder, partnership, limited liability company or other agreements
or understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledged Collateral except for the
partnership agreements, limited liability company agreements and other
agreements described on Schedule 3.1.26. 
The Loan Parties have delivered true and correct copies of such
partnership agreements and limited liability company agreements to the
Administrative Agent not later than the Closing Date.

 

ARTICLE 4.

 

CONDITIONS
OF LOANS

 

4.1                                 Conditions of Loans.

 

The obligation of each Bank to make
Loans hereunder is subject to the performance by the Borrower of its
Obligations to be performed hereunder at or prior to the making of any such
Loans and to the satisfaction of the following further conditions:

 

45

 

4.1.1                        Closing Representations.

 

The representations and warranties
of the Borrower contained in Article 5 shall be true and accurate on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and no Event of Default or
Potential Default under this Agreement shall have occurred and be continuing.

 

4.1.2                        Secretary’s Certificate.

 

There shall be delivered to the
Administrative Agent for the benefit of each Bank a certificate dated the
Closing Date and signed by the Secretary or an Assistant Secretary of each Loan
Party, certifying as appropriate as to:

 

(i)                                                             all requisite corporate, limited liability company or partnership, as
the case may be, action taken by such Loan Party in connection with this
Agreement and the other Loan Documents;

 

(ii)                                                          the names of the officer or officers authorized to sign this Agreement
and the other Loan Documents and the true signatures of such officer or
officers and specifying the Authorized Officers permitted to act on behalf of
the Borrower and the other Loan Parties for purposes of this Agreement and the
true signatures of such officers, on which the Administrative Agent and each
Bank may conclusively rely; and

 

(iii)                                                       with respect to each Loan Party, (a) copies of the organizational
documents, including certificates of incorporation and bylaws (or comparable
documents, if applicable) as in effect on the Closing Date, of such Loan Party,
(b) certificates of incorporation (or comparable documents), certified by
the appropriate state official where such documents are filed in a state office
(to the extent such state office provides certified copies of such documents)
and (c) certificates, as of a reasonably recent date, from the appropriate
state officials as to the continued existence and good standing of such Loan
Party in each state where organized (to the extent state officials in such state
provide such certificates).

 

4.1.3                        Delivery of Loan Documents.

 

This  Agreement, the Guarantee and Collateral Agreement, the
Intercompany Subordination Agreement, the Mortgages, the Indiana Mortgage
Amendment, the Pennsylvania Mortgage Amendment, the Collateral Agency Agreement
and the Intercreditor Agreement each shall have been duly executed by the
parties thereto and such documents shall have been delivered to the
Administrative Agent for the benefit of the Banks.

 

4.1.4                        Amendments to Convertible Debt Documents.

 

The Borrower shall have delivered to
the Administrative Agent true and correct copies of the waivers, consents or
amendments to the Convertible Debt Documents and the 2009 Bonds, if any, made
in connection with this Agreement and such amendments shall be acceptable to
the Administrative Agent.

 

4.1.5                        Opinion of Counsel.

 

There shall be delivered to the
Administrative Agent for the benefit of each Bank customary written opinions of
counsel to each Loan Party and opinions of local real estate counsel in each of
the jurisdictions in which Real Property Collateral is located to the extent a
Mortgage is being delivered in respect of such Real Property Collateral on the
Closing Date, in each case, addressing such matters as reasonably requested by
the Administrative Agent, all in form and substance satisfactory to the
Administrative Agent.

 

4.1.6                        Legal Details.

 

All material legal details and
proceedings in connection with the transactions contemplated by the Agreement
and the other Loan Documents shall be in form and substance satisfactory to the
Administrative Agent, and the Administrative Agent shall have received all such
other counterpart originals or certified or other copies of 

 

46

 

such documents and proceedings in
connection with such transactions, in form and substance satisfactory to the
Administrative Agent, as the Administrative Agent or said counsel may
reasonably request.

 

4.1.7                        Payment of Fees.

 

The Borrower shall pay or cause to
be paid to the Administrative Agent for itself and for the account of the Banks
all fees identified herein or set forth in the Administrative Agent’s Fee
Letter or any other commitment letters with any of the Banks required to be
paid prior to or upon the Closing Date and all invoiced costs and expenses for
which the Administrative Agent and the Banks are entitled to be reimbursed, and
such other fees and invoiced expenses as are due and payable on or before the
Closing Date.

 

4.1.8                        Consents.

 

All material consents and approvals
(including those of an Official Body) required to effectuate the transactions
contemplated hereby shall have been obtained on terms reasonably satisfactory
to the Administrative Agent.

 

4.1.9                        Officer’s Certificate Regarding MACs.

 

Since March 31, 2010, no
Company Material Adverse Change in respect of either the Borrower or Vought
shall have occurred; prior to the Closing Date, there shall be delivered to the
Administrative Agent for the benefit of each Bank a certificate dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower to such effect.

 

4.1.10                  No Violation of Laws.

 

The making of the Loans shall not
contravene any Law applicable to the Borrower or any of the Banks.

 

4.1.11                  No Actions or Proceedings.

 

No action, proceeding,
investigation, regulation or legislation shall be pending before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of this Agreement or the consummation of the
transactions contemplated hereby.

 

4.1.12                  Lien Searches; Filing Receipts; Pledged Shares.

 

The Administrative Agent shall have
received (1) Lien searches with respect to each Loan Party, including
title searches with respect to the Real Property to be subject to a Mortgage
that do not show Liens other than Permitted Liens and Liens with respect to
liabilities that have been demonstrated to the reasonable satisfaction of the
Administrative Agent to have been discharged, or that will be discharged
contemporaneously with the Closing Date, (2) such UCC financing statements
as are necessary or appropriate, in the Administrative Agent’s reasonable
discretion, to perfect the security interests in the UCC Collateral to the
extent any such security interest can be perfected by filing a UCC financing
statement, (3) original instruments evidencing the Pledged Notes required
to be delivered under the Guarantee and Collateral Agreement and accompanying
endorsements thereof and (4) stock certificates or limited liability
company certificates evidencing the Pledged Collateral (to the extent that such
shares are certificated) and accompanying stock powers.  Notwithstanding the requirement for delivery
of possession or control of the Pledged Collateral to the Administrative Agent
required pursuant to the Loan Documents, so long as the Intercreditor Agreement
is in force and effect, possession or control of such Pledged Collateral by the
collateral agent or administrative agent, as applicable, for the lenders under
the Revolving Credit Agreement shall be deemed to be possession or control,
respectively, by the Administrative Agent thereof for purposes of this
condition precedent and perfection of the Administrative Agent’s Lien thereon.

 

47

 

4.1.13                  Refinancing of Existing Debt.

 

(a)                                  The Loan Parties shall have repaid all loans and other amounts
outstanding under the 2009 Credit Agreement, subject to the obligations under Section 4.5.2
[Indemnity] of the 2009 Credit Agreement on the Closing Date and terminated the
commitments thereunder and satisfactory evidence thereof shall be delivered to
the Administrative Agent.

 

(b)                                 The Indebtedness outstanding under the Existing Vought Credit Agreement
shall have been repaid (or, with respect to any outstanding letters of credit
thereunder, cash collateralized or backstopped on terms acceptable to the
administrative agent and issuing banks thereunder) in full and the Existing
Vought Indenture shall have been discharged or the Indebtedness thereunder
shall have been repaid in full and, in each case, satisfactory evidence thereof
shall be delivered to the Administrative Agent.

 

4.1.14                  Vought Acquisition.

 

The Acquisition shall be consummated simultaneously
with the funding of the initial Loans hereunder, which shall occur on or before
September 23, 2010, on the terms and conditions set forth in the
Acquisition Agreement, which must meet the Vought Purchase Parameters, without
any amendment, modification, waiver or material consents by the Borrower
thereto, that are materially adverse to the interests of the Banks and that are
not consented to by the Administrative Agent in its reasonable discretion, and
in accordance with applicable Law.

 

4.1.15                  Vought Financing.

 

The Vought Financing shall have been
consummated in accordance with the terms and conditions of the Vought Financing
Parameters.

 

4.1.16                  [Reserved].

 

4.1.17                  Insurance Policies, Certificates of Insurance; Endorsements.

 

The Loan Parties shall
have delivered evidence acceptable to the Administrative Agent that adequate
insurance in compliance with Section 5.1.3 [Maintenance of Insurance] is
in full force and effect and that all premiums then due thereon have been paid.

 

4.1.18                  Title Insurance.

 

(a)                                  The
Administrative Agent shall have received 
a fully paid mortgagee title insurance policy (each a “Mortgage
Policy”) to be delivered with respect to each Mortgage on all of the Real
Property Collateral of the Loan Parties in standard ALTA form, issued by a
title insurance company satisfactory to the Administrative Agent, each in an
amount equal to not less than the fair market value of the Real Property
subject to such Mortgage, insuring such Mortgage to create a valid lien on such
Real Property, with no exceptions other than Permitted Liens of the type
described in clause (v) of the definition thereof and such exceptions as
the Administrative Agent shall have approved in writing in its reasonable
discretion.

 

(b)                                 To the extent
reasonably requested by the Administrative Agent and required by the respective
title company to remove all standard exceptions from the respective Mortgage
Policy relating to a particular Real Property Collateral and issue any
endorsements to such Mortgage Policy as may be reasonably required by the
Administrative Agent, the Administrative Agent shall have received any existing
survey of such Real Property Collateral (and all improvements thereon).

 

(c)                                  The
Administrative Agent shall have received a completed “Life-of Loan” Federal
Emergency Management Agency Standard Flood Hazard Determination with respect to
each parcel of Real Property Collateral (together with a notice about special
flood hazard area status and flood disaster assistance duly executed by the
applicable Loan Party relating thereto).

 

48

 

4.1.19                  Pro Forma Balance Sheet; Financial Statements. The Banks shall have received an unaudited pro  forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at March 31, 2010 (including the notes thereto) and a pro forma statement
of operations for the Test Period then ended (collectively, the “Pro Forma
Balance Sheet”), which was prepared in accordance with Regulation S-X and
giving effect (as if such events had occurred on such date or the first day of
such Test Period, as applicable) to (i) the consummation of the
Acquisition, (ii) the Loans and Revolving Loans to be made and the 2010
Bonds to be issued on the Closing Date and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing.

 

4.1.20                  Closing Date Compliance.  The Administrative Agent shall have received
reasonably satisfactory documentation evidencing that on the Closing Date,
after giving effect to the transactions contemplated on the Closing Date
including the Vought Financing and the Acquisition, the ratio of Consolidated
Total Indebtedness as of such date to Consolidated Adjusted EBITDA for the Test
Period in effect at such time is not greater than 3.45 to 1.00.

 

4.1.21                  Solvency.  The Administrative Agent shall have received
a solvency certificate from the president or chief financial officer of the
Borrower as to the solvency of the Borrower and its Subsidiaries on a
consolidated basis.

 

ARTICLE 5.

 

COVENANTS

 

5.1                                 Affirmative Covenants.

 

The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon and satisfaction
of all of the Borrower’s other Obligations under the Loan Documents, the
Borrower shall comply at all times with the following affirmative covenants:

 

5.1.1                        Preservation of Existence, Etc.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, maintain its corporate existence (except that with
30 calendar days prior written notice to the Administrative Agent and taking
all steps requested by the Administrative Agent to continue the Prior Security
Interest in the Collateral, the Borrower or its Subsidiaries may change its
form of organization as provided in Section 5.2.14) and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary except (a) as expressly permitted by
Section 5.2.6 and (b) for exceptions (other than exceptions with respect
to corporate existence) which are not materially adverse to the business of the
Loan Parties and their Subsidiaries in the aggregate.

 

5.1.2                        Payment of Liabilities, Including Taxes, Etc.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, duly pay and discharge all liabilities to which it
is subject or which are asserted against it, promptly as and when the same
shall become due and payable, including all taxes (subject to the timely filing
of an extension therefor),  assessments
and governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are
being contested in good-faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made.  The Borrower and its Subsidiaries will pay
all such liabilities forthwith upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor, except to the
extent that the Borrower or its relevant Subsidiary is contesting such
liabilities in good faith and has posted an appropriate bond therefor or taken
such other actions as are necessary to suspend such foreclosure proceedings.

 

49

 

5.1.3                        Maintenance of Insurance.

 

Each Loan Party shall, and shall
cause each of its Subsidiaries to, insure its properties and assets against
loss or damage by fire and such other insurable hazards as such assets are
commonly insured (including fire, extended coverage, property damage, workers’
compensation, public liability and business interruption insurance) and against
other risks in such amounts as similar properties and assets are insured by
prudent companies in similar circumstances carrying on similar businesses, and
with reputable and financially sound insurers, including self-insurance to the
extent customary, all as reasonably determined by the Administrative
Agent.  The Borrower shall deliver (x) on the Closing Date and
annually thereafter original certificates of insurance describing and
certifying as to the existence of the insurance required to be maintained by this
Agreement and the other Loan Documents, together with a copy of the endorsement
described in the next sentence attached to such certificate and (y) at the
request of the Administrative Agent, from time to time a summary schedule
indicating all insurance then in force with respect to the Borrower and its
Subsidiaries.  From and after the Closing Date, such policies of insurance
shall contain special endorsements, in form and substance acceptable to the
Administrative Agent, which shall (i) specify the Administrative Agent as
an additional insured, mortgagee and lender loss payee as its interests may
appear, with the understanding that any obligation imposed upon the insured
(including the liability to pay premiums) shall be the sole obligation of the
Borrower or relevant Subsidiary and not that of the Administrative Agent,
(ii) include effective waivers by the insurer of all claims for insurance
premiums against the Administrative Agent, (iii) provide that no
cancellation of such policies for any reason (including non-payment of premium)
shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice of such cancellation (except that the
prior notice period to the Administrative Agent may be 10 days prior to
cancellation resulting from non-payment of premium), (iv) be primary
without right of contribution of any other insurance carried by or on behalf of
any additional insureds, (v) provide that inasmuch as the policy covers
more than one insured, all terms, conditions, insuring agreements and
endorsements (except limits of liability) shall operate as if there were a
separate policy covering each insured, (vi) provide that the interest of
the Banks shall be insured regardless of any breach or violation by the
applicable Loan Parties of any warranties, declarations or conditions contained
in such policies or any action or inaction of the applicable Loan Parties or
others insured under such policies and (vii) provide a waiver of any right
to set-off or counterclaim or any other deduction and provide that any rights
of subrogation which the insurers may have or acquire shall be adjusted in
accordance with the “mortgagee” and “lender loss payee” clauses of each such
policy, which in each case shall be reasonably satisfactory to the
Administrative Agent. The Borrower shall notify the Administrative Agent
promptly of any occurrence causing a material loss or decline in value of
insured assets and the estimated (or actual, if available) amount of such loss
or decline.

 

If any Real Property Collateral is
at any time from and after the Closing Date located in an area identified by
the Federal Emergency Management Agency (or any successor agency as a “Special
Flood Hazard Area” with respect to which flood insurance has been made
available under the National Flood Insurance Act of 1968 (as no or hereafter in
effect or successor act thereto), the Borrower shall, or shall cause the
applicable Loan Party to (i) maintain, or cause to be maintained, with a
financially sound and reputable insurer, flood insurance in an amount and
otherwise sufficient to comply with all applicable rules and regulations
promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the
Administrative Agent evidence of such compliance in form and substance reasonably
acceptable to the Administrative Agent.

 

5.1.4                        Maintenance of Properties and Leases.

 

The Borrower shall, and shall cause
each other Loan Party and their Subsidiaries to, maintain in good repair,
working order and condition (ordinary wear and tear excepted) in accordance
with the general practice of other businesses of similar character and size,
all of those properties useful or necessary to its business, and from time to
time, the Borrower will make or cause to be made all appropriate repairs, renewals
or replacements thereof except, in each case, where the failure to do so,
individually or in the aggregate, would not constitute a Material Adverse
Change.

 

5.1.5                        Maintenance of Patents, Trademarks, Etc.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, maintain in full force and effect all patents,
trademarks, trade names, copyrights, licenses, franchises, permits,
intellectual property and other authorizations necessary for the ownership and
operation of its properties and business if the failure so to maintain the same
would constitute a Material Adverse Change.

 

50

 

5.1.6                        Visitation Rights.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, permit any of the officers or authorized employees
or representatives of the Administrative Agent or any of the Banks to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances, properties, operations and
accounts with its officers, all in such detail and at such times during normal
business hours and as often as any of the Banks may reasonably request, provided
that, except during the existence of an Event of Default, each Bank
shall provide the Borrower and the Administrative Agent with reasonable notice
prior to any visit or inspection and such visitation and inspection shall not
unreasonably interfere with the conduct of the business of the Borrower or such
Subsidiary.  In the event any Bank desires to conduct an audit of the
Borrower, such Bank shall make a reasonable effort to conduct such audit
contemporaneously with any audit to be performed by the Administrative
Agent.  The Borrower shall not be obligated to reimburse the
Administrative Agent and the Banks for more than one audit per year in the
absence of a continuing Event of Default.

 

5.1.7                        Keeping of Records and Books of Account.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, maintain and keep proper books of record and account
which enable the Borrower and its Subsidiaries to issue financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made in all
material respects of all its dealings and business and financial affairs.

 

5.1.8                        Plans and Benefit Arrangements.

 

The Borrower shall, and shall cause
each member of its ERISA Group to, comply with the provisions of ERISA and the
Internal Revenue Code applicable to each Plan and Benefit Arrangement except
where such failure, alone or in conjunction with any other failure, would not
result in a Material Adverse Change.

 

5.1.9                        Compliance with Laws.

 

The Borrower shall, and shall cause
each of its Subsidiaries to, comply with (i) its organizational documents
(including certificates of incorporation, bylaws and comparable documents) and (ii) all
applicable Laws, including all Environmental Laws, in all respects, provided
that it shall not be deemed to be a violation of this
Section 5.1.9  if any failure to
comply with any Law would not result in fines, penalties, remediation costs,
other similar liabilities or injunctive relief which in the aggregate would
constitute a Material Adverse Change.

 

5.1.10                  Use of Proceeds.

 

The proceeds of the Loans shall be
used to finance a portion of the Acquisition and to pay related fees and
expenses.

 

5.1.11                  Subsidiary Dividends.

 

To the extent permitted by
applicable Law, the Borrower shall cause one or more of its Subsidiaries to pay
cash dividends to the Borrower (directly or through one or more Subsidiaries)
from time to time, in aggregate amounts as necessary to permit the Borrower to
pay and satisfy the Obligations when due and payable (by acceleration or
otherwise).

 

5.1.12                  Subordination of Intercompany Loans.

 

The Borrower and each Guarantor
shall cause any inter-company Indebtedness, loans or advances owed by any of
them to one another or to any other of their Subsidiaries to be subordinated
pursuant to the terms of the Intercompany Subordination Agreement.

 

51

 

5.1.13                  Anti-Terrorism Laws.

 

The Loan Parties and their
respective Affiliates and agents shall not (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224; or (iii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism
Law.  The Borrower shall deliver to Banks any certification or other
evidence requested from time to time by any Bank in its sole discretion,
confirming the Borrower’s compliance with this Section 5.1.13.

 

5.1.14                  Further Assurances.

 

Each Loan Party shall, from time to
time, at its expense, faithfully preserve and protect the Administrative Agent’s
Lien on and Prior Security Interest in the Collateral as a continuing Lien and
Prior Security Interest, and shall do such other acts and things as the
Administrative Agent in its reasonable discretion may deem necessary or
advisable from time to time in order to preserve, perfect and protect the Liens
granted under the Loan Documents and to exercise and enforce its rights and
remedies thereunder with respect to the Collateral.

 

5.1.15                  Collateral and Additional Collateral; Execution and Delivery of
Additional Collateral Documents.

 

(a)                                  The Borrower
shall, and shall cause each of its Subsidiaries to, with respect to any
property intended to be Collateral acquired after the Closing Date by any Loan
Party (other than any property described in paragraph (b), (c) or (d) below
), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Banks, a security interest in such
property intended to be Collateral and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the Banks, a
Prior Security Interest in such property intended to be Collateral, including
the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
by law or as may be reasonably requested by the Administrative Agent.

 

(b)                                 The Borrower
shall, and shall cause each of its Subsidiaries to, with respect to any fee
interest in any Real Property having a value (together with improvements
thereof) of at least $10,000,000 acquired after the Closing Date by any Loan
Party, promptly (i) execute and deliver a Mortgage constituting a Prior
Security Interest, in favor of the Administrative Agent, for the benefit of the
Banks, covering such Real Property, (ii) if requested by the
Administrative Agent, provide the Banks with all Ancillary Security Documents
as the Administrative Agent shall request (provided that the Administrative
Agent in its sole discretion may agree in writing not to take or to defer
taking of a Mortgage with respect to any Real Property otherwise required to be
subject to a Mortgage hereunder).

 

(c)                                  The Borrower
shall, and shall cause each of its Subsidiaries to, with respect to any new
Subsidiary that is a Domestic Subsidiary created or acquired after the Closing
Date by any Loan Party (which, for the purposes of this paragraph (c), shall
include any existing Subsidiary that ceases to be a Foreign Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Banks, a  Prior
Security Interest in the Capital Stock of such new Subsidiary that is owned by
any Loan Party, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Loan Party,
(iii) if such Subsidiary is a Material Subsidiary, cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Banks a Prior Security Interest in
the Collateral described in the Guarantee and Collateral Agreement with respect
to such new Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in a form reasonably acceptable
to the Administrative Agent, certifying as to organizational documents and
resolutions of such Loan Party and containing an incumbency certificate of such
Loan Party, with

 

52

 

appropriate insertions and attachments, and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

 

(d)                                 The Borrower
shall, and shall cause each of its Subsidiaries to, with respect to any new
Foreign Subsidiary created or acquired after the Closing Date by any Loan
Party, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Banks, a Prior Security Interest in the Capital Stock of
such new Subsidiary that is owned by any such Loan Party (provided that any
pledge of stock or other equity interest in a Foreign Subsidiary shall be
limited to 65% of the voting stock or equity interest in such Foreign
Subsidiary and that any pledge of any stock or equity interest in any
U.S.-Owned DRE shall be limited to 65% of the stock or equity interest in such
U.S.-Owned DRE), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Loan Party,
and take such other action as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable to perfect the Administrative Agent’s
security interest therein, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.

 

Notwithstanding
the requirement for delivery of possession or control of the Pledged Collateral
to the Administrative Agent required pursuant to the Loan Documents, so long as
the Intercreditor Agreement is in force and effect, possession or control of
such Pledged Collateral by the collateral agent or the administrative agent, as
applicable for the lenders under the Revolving Credit Agreement shall be deemed
to be possession or control, respectively, by the Administrative Agent thereof
for purposes of this covenant and perfection of the Administrative Agent’s Lien
thereon.

 

5.1.16                  Maintenance of Credit Rating.  The Borrower shall use commercially
reasonable efforts to acquire as promptly as practicable and to maintain, from
and after the Closing Date, both a Long-Term Issue Credit Rating and a Debt
Rating from each of Moody’s and Standard & Poor’s.

 

5.1.17                  Intercreditor Issues.  In the event of a breach or default (i) under
the Intercreditor Agreement or the Collateral Agency Agreement by any party
thereto (other than the Administrative Agent), or (ii) by any holder of
any Indebtedness which is subordinated to the Obligations, of such
subordination provisions, in each case, which circumstance is capable of being
cured or mitigated by action or inaction by any of the Loan Parties, the Loan
Parties shall take any practicable action or refrain from taking action
available to it to cure or mitigate such breach or default.  By way of example only, and without limiting
the generality of the foregoing, if, the collateral agent for the lenders of
the Revolving Loans receives a Lien on the assets which is not also provided to
the Administrative Agent (other than any such Lien on the assets of any Foreign
Subsidiary which secures the obligations of any Foreign Subsidiary thereunder),
the Loan Parties shall grant a Lien to the Administrative Agent thereon.

 

5.1.18                  Post-Closing Items.  On or prior to December 31, 2010 (or
such later date as may be agreed to by the Administrative Agent in its sole discretion),
the Borrower will take, or will cause to be taken, the actions specified in Section 5.1.15(b) with
respect to the Chatsworth Property (irrespective of the value thereof and
notwithstanding the fact that such property was not acquired after the Closing
Date) unless the Chatsworth Property shall have been transferred or otherwise
disposed of, in each case to a third party, prior to such date in a transaction
otherwise permitted pursuant to this Agreement.

 

5.2                                 Negative Covenants.

 

The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon and satisfaction
of all of the Borrower’s other Obligations hereunder, the Borrower shall
comply, and shall cause each of its Subsidiaries to comply, with the following
negative covenants:

 

5.2.1                        Indebtedness.  Other than (a) the Indebtedness under
the Loan Documents and (b) Indebtedness of the SP Sub (but only the SP
Sub) incurred in connection with the Receivables Facility up to a 

 

53

 

maximum
principal amount of $175,000,000.00 (or such greater amount that may be
approved in writing by the Required Banks), the Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time create, incur, assume or
suffer to exist

 

(i)                                     any secured Indebtedness, except:

 

(a)                                  the Vought
Financing;

 

(b)                                 the Vought
Excluded LCs (to the extent secured by the Vought Excluded LC Liens) and the
Triumph Excluded LCs (to the extent secured by the Triumph Excluded LC Liens);
provided that, in each case, the amount thereof is not hereafter increased and
no additional assets become subject to any Lien thereon;

 

(c)                                  the B&R
Promissory Note;

 

(d)                                 [Reserved];

 

(e)                                  the IDBs
existing on the date hereof so long as the principal amount thereof is not
hereafter increased and no additional assets (other than, in the case of the
Specified IDB Obligations, assets that constitute Collateral) become subject to
Liens associated therewith;

 

(f)                                    Capital Lease
Obligations and other Indebtedness set forth on Schedule 5.2.1 as of the
date hereof; provided that the amount thereof is not hereafter increased and no
additional assets become subject to any Liens thereon;

 

(g)                                 Indebtedness
secured by Purchase Money Security Interests and Capital Lease Obligations incurred
after the date hereof in an aggregate amount outstanding at any time (including
additional IDBs) not to exceed $50,000,000;

 

(h)                                 any
Bank-Provided Hedge or Revolving Bank Provided Hedge;

 

(i)                                     Indebtedness
under any Other Bank Provided Financial Services Product or Other Revolving
Credit Lender Provided Financial Service Product;

 

(j)                                     Permitted
Refinancing Debt refinancing any Refinanced Debt (and any Guaranties thereof by
Persons who were guarantors of the Refinanced Debt related thereto) permitted
pursuant to this Section 5.2.1(i) to the extent secured only by
Permitted Refinancing Liens;

 

(k)                                  Indebtedness in
an aggregate principal amount outstanding at any time, when combined with the
Indebtedness outstanding under clause (ii)(e) below, not exceeding $25,000,000;
provided that such Indebtedness is secured solely by Liens permitted pursuant
to clause (xvii) of the definition of Permitted Liens;

 

(l)                                     Guaranties by
any Loan Party of secured Indebtedness of any other Loan Party otherwise
permitted to be incurred under this Section 5.2.1(i) (other than (i) Sections
(b), (f), (g), (j), (k) and (m) of this Section 5.2.1(i) and
(ii) Section (e) of this Section 5.2.1(i), other than
pursuant to the IDB Guaranty and the Revolving Credit Collateral Documents);

 

(m)                               any
Indebtedness of a non-Loan Party (and any Guarantee by a non-Loan Party of such
Indebtedness) that, together with amounts incurred by non-Loan Parties pursuant
to Section 5.2.1(ii)(c) below, does not exceed $25,000,000; provided,
that such Indebtedness, if not secured, could have been incurred pursuant to Section 5.2.1(ii)(c) below
at the time it is incurred; or

 

(ii)                                  any unsecured Indebtedness, except for

 

54

 

(a)                                  Indebtedness of
the Borrower in respect of (x) the 2009 Bonds in an aggregate principal
amount not to exceed $175,000,000, (y) the Convertible Notes and (z) the
Vought Acquisition Debt, provided, that such Vought Acquisition Debt meets the
Vought Financing Parameters;

 

(b)                                 notes issued in
favor of the seller as consideration for an acquisition permitted under Section 5.2.6(ii) hereof;
provided that: (A) the Indebtedness evidenced by such notes is
included in the consideration for such acquisition and (B) such notes are
subordinated to the Obligations in a manner reasonably satisfactory to the
Administrative Agent; provided, further, that such notes may be
repaid in accordance with their terms at or before the Termination Date so long
as no Event of Default or Potential Default then exists or will result from
such payment, and

 

(c)                                  other unsecured
Indebtedness; provided that (A) the Obligations under this
Agreement and each of the other Loan Documents rank at least pari  passu
in priority of payment with such unsecured Indebtedness, (B) no Event of Default
or Potential Default then exists nor will result from incurring such unsecured
Indebtedness, (C) such indebtedness shall mature no earlier than ninety
(90) days after the Termination Date and (D) not more than $25,000,000
principal amount of Indebtedness may be incurred pursuant to this clause and
clause 5.2.1(i)(m), in the aggregate, by Subsidiaries that are not Loan
Parties, and (E) after giving effect thereto, the Loan Parties shall be in
compliance with the Total Leverage Ratio and the Senior Leverage Ratio,
assuming that the maximum permitted Total Leverage Ratio is 0.50 to 1.00 less
than the maximum permitted ratio set forth in Section 5.2.16 and the
maximum permitted Senior Leverage Ratio is 0.25 to 1.00 less than the maximum
permitted ratio set forth in Section 5.2.17;

 

(d)                                 Indebtedness of
a Loan Party to another Loan Party which is subordinated pursuant to the
Intercompany Subordination Agreement;

 

(e)                                  Indebtedness in
an aggregate principal amount outstanding at any time, when combined with Indebtedness
outstanding under clause (i)(k) above, does not exceed $25,000,000;

 

(f)                                    Guaranties by
any Loan Party of Indebtedness of any other Loan Party otherwise permitted to
be incurred pursuant to this Section 5.2.1, and Guaranties of any
Subsidiary of the Borrower that is not a Loan Party of Indebtedness of any
other Subsidiary that is not a Loan Party otherwise permitted to be incurred
pursuant to this Section 5.2.1; provided that, in each case, such
Guaranties must meet all restrictions to which the Indebtedness that is being
Guarantied is subject, including, without limitation, with respect to whom the
obligors are on such Indebtedness or on any applicable subordination provisions
or conditions to incurrence;

 

(g)                                 Permitted
Refinancing Debt;

 

(h)                                 Indebtedness of
a non-Loan Party Subsidiary to the Borrower or any Subsidiary of the Borrower
to the extent permitted pursuant to Sections 5.2.4(v), 5.2.4(viii), 5.2.4(x) and
5.2.4(xii); and

 

(i)                                     Indebtedness
set forth on Schedule 5.2.1.

 

5.2.2                        Liens.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time create, incur, assume or
suffer to exist any Lien on any of its property or assets, tangible or
intangible, now owned or hereafter acquired, or agree or become liable to do
so,  except Permitted Liens.

 

5.2.3                        Guaranties.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time, directly or indirectly,
become or be liable in respect of any Guaranty, except:

 

(i)             Guaranties expressly permitted under Section 5.2.1 [Indebtedness];

 

55

 

(ii)          endorsements of negotiable or other instruments for deposit or
collection in the ordinary course of business;

 

(iii)       any
Guaranty of an obligation of the Borrower or any of its Subsidiaries to
indemnify or hold harmless any seller or buyer, as applicable, incurred in
connection with an acquisition or divestiture of Capital Stock or assets
permitted under this Agreement;

 

(iv)      any
Guaranty by a Loan Party or its Subsidiaries (including through the issuance of
a letter of credit on behalf of such Person) of the obligations of any of the
Borrower or its direct or indirect Subsidiaries not constituting Indebtedness
and which is incurred in the ordinary course of business such as trade credit
and obligations under real estate leases (it being understood that any such
Guaranty by a Loan Party of obligations of a non-Loan Party shall not be
subject to the limitations in Section 5.2.4 unless and until payments are
made under any such Guaranty);

 

(v)         any Guaranty pursuant to the Guarantee and Collateral Agreement
executed in connection herewith and the guarantee and collateral agreement
executed with respect to the Revolving Credit Obligations, to the extent such
Revolving Credit Obligations are permitted hereby;

 

(vi)      the
Receivables Performance Guaranty and other Standard Securitization Undertakings
in connection with the Receivables Facility; and

 

(vii)   Guaranties
permitted under Section 5.2.4 (other than Section 5.2.4(xi));

 

provided, with respect to each of clauses (i) through
(vii) above, no Guaranties will be made for the benefit of any Loan Party
or Subsidiary thereof which is intended to be dissolved, liquidated or wound
up.

 

5.2.4                        Loans and Investments.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) in, or any other investment or interest in,  or make any capital contribution to, any other Person, or
agree, become or remain liable to do any of the foregoing, except:

 

(i)             (a) trade credit extended on usual and customary terms in the
ordinary course of business and (b) extensions of credit extended beyond
usual and customary terms and investments received in satisfaction or partial
satisfaction of accounts receivable owing by financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit a loss;
provided that the aggregate amount thereof outstanding under this clause (b) at
any time does not exceed $10,000,000;

 

(ii)          advances to employees to meet expenses incurred by such employees in
the ordinary course of business;

 

(iii)       Permitted
Investments;

 

(iv)      subject
to Section 5.2.1, loans, advances, investments and capital contributions
in and to other Loan Parties (except for Loan Parties that are intended to be
dissolved, liquidated or wound up);

 

(v)         Investments in (a) the SP Sub, and (b) Joint Ventures and
Subsidiaries which are not Loan Parties, (other than SP Sub), provided  that
the aggregate amount of Investments in Joint Ventures and Subsidiaries that are
not Loan Parties made after the date hereof pursuant to this clause (b) shall
not exceed $50,000,000; except additional Investments that would make the
aggregate amount of all such Investments exceed $50,000,000 may be made if the
Borrower demonstrates that after giving effect to such Investments, the Senior
Secured First Lien Leverage Ratio would not exceed 1.50 to 1.00; provided
further that such Investments are calculated without duplication and are
determined net of cash payments of principal, 

 

56

 

dividends
or redemptions to the extent such cash is received by a Loan Party (but without
netting out any write-downs or write-offs);

 

(vi)      the
consideration paid in connection with acquisitions permitted under
Section 5.2.6(ii);

 

(vii)   investments
existing on the date hereof and set forth on Schedule 5.2.4;

 

(viii)                        other investments not identified above so long as the aggregate amount
of such investments made and outstanding after the date hereof shall not at any
time exceed $15,000,000;

 

(ix)        investments in Triumph Group Charitable Foundation not to exceed
$5,000,000;

 

(x)           any other investment to the extent that the aggregate amount of such
investment would not exceed the then available Cumulative Credit at the time
such investment is made;

 

(xi)        investments constituting Guaranties permitted under Section 5.2.3
(other than Section 5.2.3(vii)); and

 

(xii)     investments
of non-Loan Party Subsidiaries in other non-Loan Party Subsidiaries.

 

5.2.5                        Dividends and Related Distributions.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, make or pay, or agree to become or
remain liable to make or pay, any dividend or other distribution of any nature
(whether in cash, property, securities or otherwise) on account of or in
respect of its shares of capital stock or partnership interest or on account of
the purchase, redemption, retirement or acquisition of its shares of capital
stock (or warrants, options or rights therefor) or partnership interests,
except

 

(i)             dividends or other distributions payable (a) to the Borrower or
any other Loan Party by its Subsidiaries, or (b) to a non-Loan Party
Subsidiary by another non-Loan Party Subsidiary;

 

(ii)          repurchases by the Borrower of its common stock and dividends payable
by the Borrower to the holders of its common stock, provided  that
the amount of any such repurchase made or dividends paid does not exceed the
then available Cumulative Credit, and provided  further that no
Event of Default or Potential Default exists at the time of any such payment or
will result from such payment;

 

(iii)       regularly
scheduled quarterly dividends on the common stock of the Borrower, consistent
with past practice, not to exceed $0.04 per share per quarter, subject to
adjustments for stock splits, reverse stock splits, stock dividends and similar
transactions;

 

(iv)      redemptions
of any employee’s Capital Stock in the Borrower upon termination of employment
provided that no Event of Default then exists or will result from such
redemption;

 

(v)         repurchases or redemptions of Capital Stock of the Borrower deemed to
occur upon the cashless exercise of stock options or warrants or upon the
vesting of restricted stock units if such Capital Stock represents the exercise
price of such options or warrants or represents withholding taxes due upon such
exercise or vesting; and

 

(vi)      dividends
or other distributions payable in stock, including stock splits; and

 

(vii)   distributions
from, or payments by, a Subsidiary to the extent necessary to pay any liability
for taxes imposed on any shareholder or equity holder of such Subsidiary or any
consolidated, combined, or similar group of which such Subsidiary is a member
as a result of income earned by such 

 

57

 

Subsidiary
being taxable to such shareholder or equity holder or such group
notwithstanding the absence of any distribution or payment by the Subsidiary.

 

5.2.6                        Liquidations, Mergers, Consolidations, Acquisitions.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, dissolve, liquidate or wind-up its
affairs, or become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the assets or capital
stock of any other Person (other than the Acquisition in accordance with the
terms of Section 4.1.14), except that

 

(i)             any Subsidiary may consolidate, merge or liquidate into the Borrower or
another Subsidiary, provided  that no Domestic Subsidiary shall
merge, consolidate or liquidate into a Foreign Subsidiary and no Subsidiary
that is a Loan Party shall merge, consolidate or liquidate into any Subsidiary
that is not a Loan Party;

 

(ii)          the Borrower or any of its Subsidiaries may acquire assets or Capital
Stock of other Persons engaged in the business permitted under
Section 5.2.10 or may merge with or into any such Person in connection
with an acquisition thereof (each such transaction, a “Permitted Acquisition”),
provided  that:

 

(a)                                  no Event of
Default exists or will result from such acquisition;

 

(b)                                 with respect to
any Permitted Acquisition for which the aggregate Consideration to be paid
therefor equals or exceeds $30,000,000, the Borrower notifies the
Administrative Agent in writing of the acquisition at least 15 days before it
is scheduled to close, and includes with such notice, to the satisfaction of
the Administrative Agent, the following:

 

(1)                                  a certification by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower confirming the matters addressed in clauses
(a) and (b) of this Section 5.2.6(ii) and including a pro
forma computation of clauses (c) and (d) below, and

 

(2)                                  if the Borrower wishes to include any of the pre-acquisition EBITDA of
the acquired business in the Borrower’s Consolidated Adjusted EBITDA, copies of
the financial statements, due diligence reports, and computations described in,
and to the extent required under, clause (1) of the definition of
Consolidated Adjusted EBITDA.

 

(c)                                  on a pro forma
basis using historical Consolidated EBITDA of the assets and business being
acquired in such acquisition, the Borrower is in compliance with all financial
covenants set forth in Sections 5.2.15, 5.2.16, and 5.2.17 for the immediately
preceding fiscal quarter for the twelve months then ended and the full
immediately preceding fiscal year, as though such acquisition had occurred on
the first day of each of such respective periods, and

 

(d)                                 on a pro forma
basis after giving effect to such acquisition, the Loan Parties shall be in
compliance with the Total Leverage Ratio and the Senior Leverage Ratio assuming
that the maximum permitted ratios in each case shall be 0.25 to 1.00 below the
otherwise applicable ratio under Sections 5.2.16 and 5.2.17, respectively, and

 

(e)                                  if any merger
is effected in connection with any such acquisition and any Loan Party is a
party to such merger, then the surviving entity of such merger will be a Loan
Party, and

 

(iii)       the
Borrower shall be permitted to dissolve, liquidate or wind up (A) Triumph
Interiors, Ltd, organized under the laws of the Republic of Ireland,
(B) Saygrove Acquisition & Motion Control Limited, organized
under the laws of the United Kingdom, (C) Airframe Spares &
Logistics GmbH, organized under the laws of Germany, and (D) any other
non-Loan Party Subsidiary to the extent not a Material Subsidiary.

 

58

 

5.2.7                        Dispositions of Assets or Subsidiaries.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or
otherwise transfer or dispose of, voluntarily or involuntarily, any of its
properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general intangibles with or without recourse or of capital stock,
shares of beneficial interest or partnership interests of a Subsidiary of the
Borrower), except:

 

(i)             transactions involving the sale of inventory in the ordinary course of
business;

 

(ii)          any sale, transfer or lease of assets in the ordinary course of
business which are no longer necessary or required in the conduct of the
Borrower’s or such Subsidiary’s business;

 

(iii)       any
sale, transfer or lease of assets by (a) any Subsidiary of the Borrower to
the Borrower or another Loan Party or (b) any non-Loan Party Subsidiary to
another non-Loan Party Subsidiary;

 

(iv)      any
sale, transfer or lease of assets in the ordinary course of business which are
replaced by substitute assets acquired or leased; provided such substitute
assets are subject to the Banks’ Prior Security Interest to the extent such
substitute assets are required to become Collateral hereunder or under any of
the Loan Documents;

 

(v)         any sale, transfer, or lease of assets the after-tax proceeds of which,
when added to the after-tax proceeds of other sales, transfers and leases of
assets in the same fiscal year, do not exceed, in the aggregate for the
Borrower and its Subsidiaries, 5% of the Borrower’s consolidated total assets
at the start of such fiscal year;

 

(vi)      the
Payment Discount Arrangements;

 

(vii)   any
sale, transfer or lease of assets, other than those specifically excepted
pursuant to clauses (i) through (vi) above, which is approved by the
Required Banks;

 

(viii)                        to the extent done as part of the Receivables Facility, the sale,
contribution, transfer, conveyance or assignment of Receivables and Related
Rights by the Borrower and its Subsidiaries to the SP Sub and the sale by the
SP Sub of individual variable percentage interests in the Purchased Interests
to the Purchaser; and

 

(ix)        to the extent pursuant to a dissolution, liquidation or winding-up
permitted by 5.2.6(iii) above.

 

5.2.8                        Affiliate Transactions.

 

Except for the Borrower and its
Subsidiaries entering into, and performing their obligations under, the
Receivables Purchase Agreement and the other Transaction Documents, the
Borrower shall not, and shall not permit any of its Subsidiaries to, enter into
or carry out any transaction with any Affiliate (including purchasing property
or services from or selling property or services to any Affiliate of the Borrower
or other Person, but excluding transactions exclusively among Loan Parties)
unless such transaction is not otherwise prohibited by the Agreement, is upon
fair and reasonable arm’s-length terms and conditions and is in accordance with
all applicable Law; provided neither (a) the payment of customary
directors’ fees, nor (b) ordinary course transactions with non-Loan Party
Subsidiaries, including the provision of cash management and other general and
administrative services, shall be considered a prohibited Affiliate
transaction.

 

59

 

5.2.9                        Subsidiaries, Partnerships and Joint Ventures.

 

Each of the Loan Parties shall not,
and shall not permit any of its Subsidiaries to, own or create directly or
indirectly any Subsidiaries unless it shall comply with the requirements of Section 5.1.15(c),
to the extent applicable.

 

5.2.10                  Continuation of Present Business.

 

The Borrower shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than those
businesses engaged in as of the Closing Date by a Loan Party or a Subsidiary of
a Loan Party (provided  that only the SP Sub shall be permitted to
engage in the business in which the SP Sub is engaged in as of the Closing
Date) and any business reasonably related, ancillary or complementary thereto
and any reasonable extension thereof.

 

5.2.11                  Plans and Benefit Arrangements.

 

Except as would not result in a
Material Adverse Change, the Borrower shall not, and shall not permit any of
its Subsidiaries to:

 

(i)             fail to satisfy the minimum funding requirements of ERISA and the
Internal Revenue Code with respect to any Plan;

 

(ii)          request a minimum funding waiver from the Internal Revenue Service with
respect to any Plan;

 

(iii)       engage
in a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer
Plan which, alone or in conjunction with any other circumstances or set of
circumstances resulting in liability under ERISA;

 

(iv)      permit
the Adjusted Funding Target Attainment Percentage of any Plan to be less than
sixty percent (60%), unless the Adjusted Funding Target Attainment Percentage
is deemed to be less than sixty percent (60%) under
Section 436(h)(2) of the Internal Revenue Code at no fault of the
Borrower, any Subsidiary or any other member of one of their ERISA Groups;

 

(v)         fail to make when due any contribution to any Multiemployer Plan that
the Borrower or any member of its ERISA Group may be required to make under any
agreement relating to such Multiemployer Plan, or any Law pertaining thereto
where such failure is likely to result in a liability of the Borrower or any
member of the ERISA Group;

 

(vi)      withdraw
(completely or partially) from any Multiemployer Plan or withdraw (or be deemed
under Section 4062(e) of ERISA to withdraw) from any Multiple
Employer Plan, where any such withdrawal is likely to result in a Withdrawal
Liability or other liability of the Borrower or any member of the ERISA Group;

 

(vii)   terminate,
or institute proceedings to terminate, any Plan, where such termination is
likely to result in a liability to the Borrower or any member of the ERISA
Group; or

 

(viii)                        fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code.

 

5.2.12                  Fiscal Year.

 

The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, change its fiscal year from the
twelve-month period beginning April 1 and ending March 31, other than
upon thirty (30) days’ prior written notice to the Administrative Agent and
provided that such new fiscal year shall end on the last day of a calendar
quarter.

 

60

 

5.2.13                  Issuance of Stock.

 

No Loan Party, other than the
Borrower, shall, and no Loan Party (including the Borrower) shall permit any of
its Subsidiaries to, issue any additional shares of its Capital Stock or any
options, warrants or other rights in respect thereof, other than the issuance
of Capital Stock by (i) any Loan Party or other Subsidiary to a Loan
Party; provided the same is subject to the Administrative Agent’s Prior
Security Interest and the receiving Loan Party takes such actions to perfect
the Administrative Agent’s Lien thereon as is reasonably satisfactory to the
Administrative Agent, all to the extent such Capital Stock is required to be
pledged to the Administrative Agent for the benefit of the Banks under the Loan
Documents, (ii) any non-Loan Party Subsidiary to another non-Loan Party
Subsidiary and (iii) in connection with the formation of Joint Ventures
not otherwise prohibited under this Agreement.

 

5.2.14                  Changes in Organizational Documents.

 

The Borrower shall not, and shall
not permit any Loan Party to, amend any provisions of its certificate of
incorporation relating to capital stock, form of organization, jurisdiction of
organization or name without, in each case, providing at least ten (10) Business
Days’ prior written notice to the Administrative Agent and the Banks, taking
all steps required by the Administrative Agent to continue its Prior Security
Interest in the Collateral and, in the event such change would be adverse to
the Banks as determined by the Administrative Agent in its reasonable
discretion, obtaining the prior written consent of the Required Banks.

 

5.2.15                  Minimum Interest Coverage Ratio.

 

The Borrower shall not permit the
Interest Coverage Ratio, calculated as of the end of each fiscal quarter for
the four fiscal quarters then ended, to be less than 3.50 to 1.00.

 

5.2.16                  Total Leverage Ratio.

 

The Borrower shall not at any time
permit the Total Leverage Ratio, calculated as of the end of each fiscal
quarter, to exceed 4.50 to 1.00.

 

5.2.17                  Senior Leverage Ratio.

 

The Borrower shall not at any time
permit the Senior Leverage Ratio, calculated as of the end of each fiscal quarter,
to exceed 3.00 to 1.00.

 

5.2.18                  Negative Pledges; Restrictions on Dividend Payments.

 

The Borrower shall not and shall not
permit any of its Subsidiaries to, agree with any Person (i) to limit its
ability to provide collateral security to the Banks to secure the Obligations
or (ii) to limit the ability of the Borrower’s Subsidiaries to pay
dividends or make other distributions to the Borrower, except any such
limitations set forth in (a) in the case of clause (ii) above, this
Agreement, the other Loan Documents and the documents governing the Revolving
Credit Loans, the 2010 Bonds, the Convertible Notes, the 2009 Bonds or any
Permitted Refinancing Debt in respect of any of the foregoing so long as the
limitations in such Permitted Refinancing Debt are no more restrictive than
those contained in the applicable Refinanced Debt, (b) in the case of
clause (i) above, agreements relating to secured Indebtedness permitted by
this Agreement if such prohibition or limitation applies only to the property
and assets securing such Indebtedness and such property or assets do not
constitute Collateral, (c) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the disposition of assets of such Subsidiary otherwise permitted hereby so long
as such restrictions apply only to such assets and do not conflict with any
obligation to provide Collateral pursuant to the Loan Documents, or (d) customary
restrictions or conditions on any non-Loan Party imposed by any agreement or
document governing or evidencing indebtedness of any such non-Loan Party that
is otherwise permitted hereunder or (e) customary anti-assignment
provisions with respect to contractual obligations, permits or licenses.

 

61

 

5.2.19                  Minimum Availability.

 

The Borrower shall not permit
Availability to be less than 125% of the amount of outstanding Indebtedness
under the Convertible Notes at any time during the period commencing 180 days
prior to each Repurchase Date (as defined in the Convertible Note Indenture).

 

5.2.20                  Repayment of Convertible Notes; Repayment of other Subordinated
Indebtedness.

 

Notwithstanding anything to the
contrary in the Convertible Debt Documents, but subject to the subordination
provisions contained in the Convertible Note Indenture, no Loan Party shall
make, or permit any of their Subsidiaries to make, any principal payment of the
Convertible Notes prior to October 1, 2011, or, as permitted in the
Convertible Note Indenture based on a “fundamental change” of the Borrower (as
such term is defined in the Convertible Note Indenture), without prior written
consent of the Required Banks; provided  however, the Borrower
may, so long as no Event of Default or Potential Default exists immediately
prior to or would exist after giving effect to such payment (a) pay the
settlement amount with respect to each $1,000 aggregate principal amount of
Convertible Notes converted into shares of the Borrower’s common stock
(i) in cash, which shall not exceed the lesser of (x) $1,000 and
(y) the conversion value of such Convertible Notes pursuant to the terms
and conditions of the Convertible Note Indenture and (ii) if the
conversion value of such Convertible Notes exceeds $1,000, in the number of
shares of the Borrower’s common stock as calculated pursuant to the terms and
conditions of the Convertible Note Indenture, (b) with respect to the
conversion of the Convertible Notes into shares of the Borrower’s common stock,
the Borrower may pay the cash value of fractional shares of the Borrower’s
common stock pursuant to the terms and conditions of the Convertible Note
Indenture and additional amounts to the extent the Borrower is required to pay
such amounts under the Convertible Note Indenture, and (c) pay for
purchases or voluntary repurchases of Convertible Notes by the Borrower
(including by way of a tender offer for all of the outstanding Convertible
Notes by the Borrower) prior to October 1, 2011; provided  that
after giving effect to each such purchase or repurchase by the Borrower,
Availability equals or exceeds $50,000,000.

 

No Loan Party shall or shall permit
any Subsidiary to repay the 2009 Bonds, the 2010 Bonds, the Vought Bridge Loans
(or any Permitted Refinancing Debt with respect to any of the foregoing) or any
subordinated indebtedness (other than the Convertible Notes as addressed in the
immediately preceding paragraph and except to the extent permitted by Section 5.2.1(ii)(b)),
without the written consent of the Required Banks except, in each case, (w) with
Permitted Refinancing Debt thereof, (x) upon scheduled maturity or as
otherwise required by the terms thereof, (y) any such payment, if after
giving pro forma effect to such payment, the Senior Secured First Lien Leverage
Ratio would be no greater than 1.00 to 1.00 or (z) any such payments to
the extent that, at the time such payments are made, such payments would not
exceed the then available Cumulative Credit; provided that no such
repayment of subordinated indebtedness may be made if an Event of Default shall
have occurred and be continuing or would result from such repayment.

 

5.2.21                  Modification of Other Debt Documents.

 

The Borrower and the other Loan
Parties shall not, without the prior written consent of the Required Banks, agree
to, or make, or permit to be made any amendment, modification, or supplement to
the Convertible Note Indenture or the other Convertible Debt Documents, the
2009 Bonds, the 2010 Bonds or the Vought Bridge Loans, as the case may be, each
as in effect on the Closing Date, the effect of which is to (i) increase
the rate of interest or fees payable in respect of the Convertible Notes or
2009 Bonds, as applicable, (ii) require any principal payments of the
Convertible Notes or 2009 Bonds prior to the dates of required principal
payments under the Convertible Note Indenture or 2009 Bonds, as applicable, or
change the definition of “fundamental change” under the Convertible Note
Indenture, (iii) shorten the final maturity date of the Convertible Notes,
the 2009 Bonds, the 2010 Bonds or the Vought Bridge Loans or permit the holders
of the Convertible Notes, the 2009 Bonds or the 2010 Bonds to put such
Convertible Notes, 2009 Bonds or 2010 Bonds to the Borrower prior to the times
provided therefore under the Convertible Note Indenture, the 2009 Bonds or the
2010 Bonds, as applicable, (iv) secure or obtain any agreement to secure
the Convertible Notes or the 2009 Bonds with the grant of any security
interests, mortgage liens or other collateral assignments on the property of
any of the Loan Parties, (v) modify the subordination provisions contained
in the Convertible Note Indenture or the 2009 Bonds or, if applicable, the 2010
Bonds, (vi) make the covenants and events of default contained in the
Convertible Note Indenture, the 2009 Bonds or the 2010 Bonds more restrictive,
(vii) modify or amend the terms under which the Convertible Notes are
convertible into shares of the Borrower’s common stock or cash if the effect of
such amendment or modification is to make the terms of such conversion less
favorable either to the Borrower or to the Banks than the terms of such

 

62

 

conversion as in effect as of the
Closing Date or (viii) with respect to the Convertible Debt Documents, the
2009 Bonds, the 2010 Bonds or the Vought Bridge Loans, materially adversely
affect the Borrower’s or the Banks’ rights and interests.

 

The Borrower and the other Loan
Parties shall not agree to, or make, or permit to be made any amendment,
modification, or supplement to any such documents evidencing the Vought
Financing, the effect of which results in the Vought Financing not being in
compliance with the Vought Financing Parameters, including without limitation
in each case, such documents shall not be guaranteed by or be in favor a
borrower or other obligor thereunder (other than any Foreign Subsidiary) unless
such Person is also a Borrower or a Guarantor of the Obligations.

 

5.3                                 Reporting Requirements.

 

The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon and satisfaction
of all of the Borrower’s other Obligations hereunder and under the other Loan
Documents, the Borrower will furnish or cause to be furnished to the
Administrative Agent and each of the Banks:

 

5.3.1                        Quarterly Financial Statements.

 

As soon as available and in any
event within forty-five (45) calendar days after the end of each of the first
three fiscal quarters in each fiscal year, the Borrower’s financial statements,
consisting of consolidated balance sheets as of the end of such fiscal quarter
and related consolidated statements of income, stockholders’ equity and cash
flows for the fiscal quarter then ended and the fiscal year through that date,
all in reasonable detail and certified (subject to normal year-end audit
adjustments and the absence of footnotes) by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower as having been prepared in
accordance with GAAP, consistently applied, and setting forth in comparative
form the respective financial statements for the corresponding date and period
in the previous fiscal year. The Borrower will be deemed to have complied with
the delivery requirements of this Section 5.3.1 if within forty -five (45)
days after the end of its fiscal quarter, the Borrower delivers to the
Administrative Agent and files with the Securities and Exchange Commission a
copy of its Form 10-Q as filed with the Securities and Exchange Commission
(together with a notice stating that such document is being delivered pursuant
to this Section 5.3.1) and the financial statements contained therein meet
the requirements of this Section.

 

5.3.2                        Annual Financial Statement.

 

As soon as available and in any
event within ninety (90) days after the end of each fiscal year, consolidated
financial statements of the Borrower and its Subsidiaries consisting of
consolidated balance sheets as of the end of such fiscal year, and related
consolidated statements of income, stockholders’ equity and cash flows for the
fiscal year then ended, all in reasonable detail and setting forth in
comparative form the financial statements as of the end of and for the
preceding fiscal year, with the consolidated statements being certified by
independent certified public accountants of nationally recognized standing
reasonably satisfactory to the Administrative Agent. The certificate or report
of accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not
indicate the occurrence or existence of any event, condition or contingency which
would materially impair the prospect of payment or performance of any covenant,
agreement or duty of the Borrower under any of the Loan Documents, together
with a letter of such accountants (to the extent allowable under the policies
of such accountants) substantially to the effect that, based upon their
ordinary and customary examination of the affairs of the Borrower and its
Subsidiaries, performed in connection with the preparation of such consolidated
financial statements, and in accordance with generally accepted auditing
standards, they are not aware of the existence of any condition or event which
constitutes an Event of Default or Potential Default or, if they are aware of
such condition or event, stating the nature thereof and confirming the Borrower’s
calculations with respect to the certificate to be delivered pursuant to
Section 5.3.3 with respect to such financial statements. The Borrower will
be deemed to have complied with the delivery requirements of this
Section 5.3.2 if within ninety (90) days after the end of its fiscal year,
the Borrower delivers to the Administrative Agent and files with the Securities
and Exchange Commission a copy of the Borrower’s annual report and
Form 10-K as filed with the Securities and Exchange Commission 

 

63

 

(together with a notice stating that
such document is being delivered pursuant to this Section 5.3.2) and the
financial statements and certification of public accountants contained therein
meets the requirements described in this Section.

 

5.3.3                        Compliance Certificate.

 

Concurrently with the financial
statements of the Borrower and its Subsidiaries furnished to the Administrative
Agent and to the Banks pursuant to Sections 5.3.1 and 5.3.2, a certificate of
the Borrower signed by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower, in the form of Exhibit 5.3.3, to
the effect that, except as described pursuant to Section 5.3.4, (i) no
Event of Default or Potential Default exists and is continuing on the date of
such certificate, (ii) containing calculations in sufficient detail to
demonstrate compliance as of the date of the financial statements with all
financial covenants contained in Section 5.2, and (iii) certifying
that (a) the Subsidiaries of the Borrower then comprising the Loan Parties
directly contributed in the aggregate not less than eighty (80%) of the
Consolidated EBITDA of the Borrower and its Subsidiaries and (b) the
Domestic Subsidiaries then comprising the Loan Parties directly contributed in
the aggregate not less than ninety five (95%) of the Consolidated EBITDA of the
Borrower and its Domestic Subsidiaries, in each case, for the last four
consecutive fiscal quarters then ended.  If an acquisition permitted under
Section 5.2.6(ii) occurred during the reporting period covered by the
compliance certificate and if the Borrower has complied with the requirements
set forth in the definition of Consolidated Adjusted EBITDA for purpose of
making adjustments to Consolidated EBITDA reflecting the historical financial
performance of the acquired assets or Person, the Borrower may also calculate
the Section 5.2 financial covenants on a pro forma basis to include the
financial performance and condition of the acquired business during the period.

 

5.3.4                        Notice of Default.

 

Promptly after any officer of the
Borrower has learned of the occurrence of an Event of Default or Potential
Default, a certificate signed by the Chief Executive Officer, President or
Chief Financial Officer of the Borrower setting forth the details of such Event
of Default or Potential Default and, if applicable, the action which the
Borrower proposes to take with respect thereto.

 

5.3.5                        Notice of Litigation.

 

Promptly after the commencement
thereof, notice of all actions, suits, proceedings or investigations before or
by any Official Body or any other Person against the Borrower or any Subsidiary
of the Borrower which relate to the Collateral or in the good faith estimation
of counsel for the Borrower could reasonably be expected to constitute a
Material Adverse Change.

 

5.3.6                        Certain Events; Events Under the Convertible Notes or Vought Financing.

 

Written notice together with a
detailed description to the Administrative Agent of any of the following
events:

 

(i)             Transfer of Assets. 
At least ten (10) Business Days prior thereto, with respect to any
proposed sale or transfer of assets pursuant to Section 5.2.7(v); provided
that such notice shall be provided at least fifteen (15) Business Days prior to
any individual sale or transfer of assets pursuant to such provision the
after-tax proceeds of which exceed 2% of the Borrower’s consolidated total
assets at the start of the fiscal year in which such sale or transfer occurs.

 

(ii)          Charter Amendments. 
Within the time limits set forth in Section 5.2.14, the amendment to the
charter affecting the capital structure of the Borrower or any of its
Subsidiaries;

 

(iii)       Event of Default; Waiver or Amendment. 
And to each of the Banks (A) promptly after any officer of the Borrower
has learned of the occurrence of (i) an event of default under or (B) at
least ten (10) Business Days prior to a waiver, amendment or consent
under, in each case of clause (A) and (B), the Convertible Debt Documents,
the 2009 Bonds, the Revolving Credit Agreement, the 2010 Bonds, 

 

64

 

the
Vought Bridge Loans or the Acquisition Agreement; together with a copy of such
proposed waiver, amendment or consent and a description of such event of
default, as the case may be.

 

(iv)      Schedules.  Notice of and a
detailed description, promptly after any change or addition to the information
contained or required to be contained on Schedules: 1.1(M) [Real Property
Collateral], 3.1.2 [Capitalization], 3.1.3 [Subsidiaries], assuming in each
case that each such Schedule is being delivered as of the date of notice of
such change or addition thereto (rather than as of the Closing Date or prior
thereto).

 

5.3.7                        Budgets, Forecasts, Other Reports and Information.

 

At the request of the Administrative
Agent, any of the following items, promptly upon their becoming available to
the Borrower:

 

(i)             the annual budget of the Borrower and its Subsidiaries, to be certified
by a responsible officer of the Borrower and supplied at the request of the
Administrative Agent prior to commencement of the fiscal year to which any of
the foregoing may be applicable,

 

(ii)          any reports including management letters submitted to the Borrower by
independent accountants in connection with any annual, interim or special
audit,

 

(iii)       any
reports, notices or proxy statements generally distributed by the Borrower to
its stockholders on a date no later than the date supplied to the stockholders,

 

(iv)      regular
or periodic reports (other than the Forms 10-K or 10-Q which are addressed in
Sections 5.3.1 and 5.3.2 above), including 8-K, registration statements and
prospectuses, filed by the Borrower with the Securities and Exchange Commission
within 5 days after such filing,

 

(v)         a copy of any order, issued by any Official Body in any proceeding to
which the Borrower or any of its Subsidiaries is a party, and in which the
amount in controversy exceeds $2,500,000 or where injunctive or similar relief
is sought,

 

(vi)      such
other reports and information as the Banks may from time to time reasonably
request.  The Borrower shall also notify the Banks promptly of the
enactment or adoption of any Law which may result in a Material Adverse Change,
and

 

(vii)   within
60 days of closing on any acquisition permitted under Section 5.2.6 in
which the total consideration paid by the Borrower or its Subsidiary exceeded
$5,000,000, such financial information as the Administrative Agent may
reasonably request concerning the acquisition and its effect on the financial
condition and performance of any Loan Party.

 

5.3.8                        Notices Regarding Plans and Benefit Arrangements.

 

5.3.8.1.                                    Certain Events.

 

Promptly upon becoming aware of the
occurrence thereof, notice (including the nature of the event and, when known,
any action taken or threatened by the Internal Revenue Service or the PBGC with
respect thereto) of:

 

(i)             any Reportable Event with respect to the Borrower or any member of its
ERISA Group for which reporting to the PBGC has not been waived involving an
event which could subject the Borrower or any member of its ERISA Group to any
material liability,

 

65

 

(ii)          any Prohibited Transaction which could subject the Borrower or any
member of its ERISA Group to any material tax or liability in connection with
any Plan, Benefit Arrangement or any trust created thereunder,

 

(iii)       any
assertion of material Withdrawal Liability with respect to any Multiemployer
Plan,

 

(iv)      any
partial or complete withdrawal from a Multiemployer Plan by the Borrower or any
member of its ERISA Group, where such withdrawal is likely to result in
material Withdrawal Liability,

 

(v)         withdrawal by the Borrower or any member of its ERISA Group from a
Multiple Employer Plan, which is likely to result in a material liability, or

 

(vi)      any
change in the actuarial assumptions or funding methods used for any Plan (other
than interest rate changes required by Financial Standards Board Opinion
No. 87 or ERISA or the Internal Revenue Code), where the effect of such
change is to materially increase or materially reduce the unfunded benefit
liability or obligation to make periodic contributions to such Plan.

 

5.3.8.2.                                    Notices of Involuntary Termination and Annual
Reports.

 

Promptly after receipt thereof,
copies of (a) all notices received by the Borrower or any member of its
ERISA Group of the PBGC’s intent to terminate any Plan administered or
maintained by the Borrower or member of its ERISA Group, or to have a trustee
appointed to administer any such Plan; and (b) at the request of the
Administrative Agent or any Bank each annual report (IRS Form 5500 series)
and all accompanying schedules, the most recent actuarial reports, the most
recent financial information concerning the financial status of each Plan
administered or maintained by the Borrower or any member of its ERISA Group,
and schedules showing the amounts contributed to each such Plan by or on behalf
of the Borrower or any member of the ERISA Group in which any of their
personnel participate or from which such personnel may derive a benefit, and
each Schedule SB (Actuarial Information) to the annual report filed by the
Borrower or any member of its ERISA Group with the Internal Revenue Service
with respect to each such Plan.

 

5.3.8.3.                                    Notice of Voluntary Termination.

 

Promptly upon the filing thereof,
copies of any Form 5310 or Form 500, or any successor or equivalent
form to such forms, filed with the Internal Revenue Service or PBGC in
connection with the termination of any Plan which causes the Borrower or any
member of its ERISA Group to have a material liability.

 

5.3.8.4.                                    Notice of Change in Debt Rating.

 

Within
three (3) Business Days after Standard & Poor’s or Moody’s
announces a change in the Borrower’s Debt Rating or Long-Term Issuer Credit
Rating, notice of such change.  The
Borrower, on behalf of the Loan Parties, will deliver, together with such
notice, a copy of any written notification which the Borrower received from the
applicable rating agency regarding such change of Debt Rating or Long Term
Issuer Credit Rating, as the case may be.

 

ARTICLE 6.

DEFAULT

 

6.1                                 Events of Default.

 

An Event of Default shall mean the
occurrence or existence of any one or more of the following events or
conditions (whatever the reason therefor and whether voluntary, involuntary or effected
by operation of Law):

 

66

 

6.1.1                        Payments Under Loan Documents.

 

The Borrower shall fail to pay when
due any principal of any Loan (including scheduled installments, mandatory
prepayments or the payment due at maturity) or shall fail to pay, for more than
two Business Days after the due date thereof, any interest on any Loan or any
fees or any other amount owing hereunder or under the other Loan Documents;

 

6.1.2                        Breach of Warranty.

 

Any representation or warranty made
at any time by the Borrower or any other Loan Party herein or in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;

 

6.1.3                        Refusal to Permit Inspections; Breach of Negative Covenants.

 

The Borrower shall default in the
observance or performance of any covenant contained in Sections 5.1.1 (with
respect to the Borrower), 5.1.6, or 5.2 or Sections 5.5 or 5.7(b) of the
Guarantee and Collateral Agreement;

 

6.1.4                        Breach of Other Covenants.

 

The Borrower or any other Loan Party
shall default in the observance or performance of any other covenant, condition
or provision hereof or of any other Loan Document and such default shall
continue unremedied for a period of ten (10) Business Days after any
officer of the Borrower becomes aware of the occurrence thereof;

 

6.1.5                        Defaults in Other Agreements or Indebtedness.

 

(a)                                  A default or
event of default shall occur at any time under the terms of any other agreement
involving borrowed money or the extension of credit or any other Indebtedness
under which the Borrower or Subsidiary of the Borrower may be obligated as a
borrower or guarantor in excess of $25,000,000 in the aggregate, and such
breach, default or event of default consists of the failure to pay (beyond any
period of grace permitted with respect thereto, whether waived or not) any
Indebtedness when due (whether at stated maturity, by acceleration or
otherwise) or if such breach or default permits or causes the acceleration of
any Indebtedness (and such right shall not have been waived) or the termination
of any commitment to lend thereunder, or (b) without limiting the
foregoing, there occurs and is continuing any event of default giving rise to a
right of acceleration or termination under (i) the Convertible Debt
Documents, (ii) the Revolving Credit Agreement, (iii) the 2009 Bonds,
(iv) the 2010 Bonds, (v) the Specified IDB Obligations, or (vi) the
Vought Bridge Loans or (c) without limiting the foregoing, the Receivables
Facility is terminated prior to maturity as a result of a breach, default,
event of default, or Termination Event (as defined in the Receivables Purchase
Agreement);

 

6.1.6                        Final Judgments or Orders.

 

Any final judgments or orders for
the payment of money in excess of $25,000,000 (to the extent not covered by
insurance) in the aggregate shall be entered against the Borrower or any
Subsidiary of the Borrower by a court having jurisdiction in the premises,
which judgment is not discharged, vacated, bonded or stayed pending appeal
within a period of forty-five (45) days from the date of entry;

 

6.1.7                        Loan Document Unenforceable.

 

Any of the Loan Documents shall
cease to be legal, valid and binding agreements enforceable against the party
executing the same or such party’s successors and assigns (as permitted under
the Loan Documents) in accordance with the respective terms thereof or shall in
any way be terminated (except in accordance with its terms) or become or be
declared ineffective or inoperative or shall in any way be challenged or
contested by any Loan Party or cease to give or provide the respective Liens,
security interests, rights, titles, interests, remedies, 

 

67

 

powers or privileges intended to be
created thereby with the priority purported to be created thereby.  In addition to and without limiting the
generality of the foregoing, (i) any Collateral Document ceases to be
valid or effective, other than in accordance with the terms hereof or of such
Collateral Document, (ii) any Loan Party asserts that any Collateral
Document is not a legal, valid and binding obligation of such Person enforceable
in accordance with its terms, (iii) the security interest or Lien
purporting to be created by any of the Collateral Documents ceases to be or is
asserted by any Loan Party not to be a valid, perfected Lien subject to no
Liens (other than Permitted Liens), other than in accordance with the terms
hereof or of such Collateral Document, or is declared by a court or other
Official Body of competent jurisdiction to be void, voidable or unenforceable
against such Person; or (iv) any Collateral Document is amended,
subordinated, terminated or discharged, or any Person is released from any of
its covenants or obligations except to the extent expressly provided herein or
therein;

 

6.1.8                        Uninsured Losses; Proceedings Against Assets.

 

There shall occur any material
uninsured damage to or loss, theft or destruction of (i) the assets of any
Loan Party in excess of $50,000,000 in fair market value and the same is
reasonably expected to result in a Material Adverse Change or (ii) the
assets of any Loan Party are attached, seized, levied upon or subjected to a
writ or distress warrant and the fair market value of such assets exceeds
$50,000,000 and the same is not cured within sixty (60) days thereafter; or
such assets come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors and the same is not cured within sixty
(60) days thereafter;

 

6.1.9                        Notice of Lien or Assessment.

 

A notice of Lien or assessment in
excess of $25,000,000.00 which is not a Permitted Lien is filed of record with
respect to all or any part of the assets of the Borrower or any of its
Subsidiaries by the United States, or any department, agency or instrumentality
thereof, or by any state, county, municipal or other governmental agency,
including the Pension Benefit Guaranty Corporation, or if any taxes or debts
owing at any time or times hereafter to any one of these becomes payable and
the same is not paid within thirty (30) days after the same becomes payable
(unless the Borrower or such Subsidiary is contesting the obligation as
provided in Section 5.1.2);

 

6.1.10                  Insolvency.

 

Any Loan Party or any Material
Subsidiary of the Borrower ceases to be solvent or admits in writing its
inability to pay its debts as they mature;

 

6.1.11                  Events Relating to Plans and Benefit Arrangements.

 

Any of the following occurs:
(i) any Reportable Event, which the Administrative Agent determines in
good-faith constitutes grounds for the termination of any Plan by the PBGC or
the appointment of a trustee to administer or liquidate any Plan, shall have
occurred and be continuing; (ii) proceedings shall have been instituted or
other formal action taken to terminate any Plan, or a termination notice shall
have been filed with respect to any Plan; (iii) a trustee shall be appointed
to administer or liquidate any Plan; (iv) the PBGC shall give notice of
its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; (v) the Borrower or
any member of the ERISA Group shall withdraw completely or partially from a
Multiemployer Plan; (vi) the Borrower or any member of its ERISA Group
shall withdraw (or shall be deemed under Section 4062(e) of ERISA to
withdraw) from a Multiple Employer Plan; and, with respect to any of the events
specified in (i) through (vi) above, such occurrence is reasonably
likely to result in a Material Adverse Change;

 

6.1.12                  Cessation of Business.

 

Except as otherwise permitted
herein, the Borrower or any Subsidiary of the Borrower ceases to conduct its business
as contemplated or the Borrower is enjoined, restrained or in any way prevented
by court order from conducting all or any material part of its business and
such injunction, restraint or other preventive order is not dismissed within
thirty (30) days after the entry thereof;

 

68

 

6.1.13                  Change of Control.

 

There occurs an event or series of
events by which (i) any “person” or “group” (as such terms are defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder), is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
such Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all shares that any such Person has the right to acquire without
condition, other than passage of time, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the total voting power of the then outstanding voting stock of the
Borrower, or (ii) (A) the Borrower consolidates with or merges into
another corporation or conveys, transfers or leases all or substantially all of
its properties and assets (determined on a consolidated basis for the Borrower
and its Subsidiaries taken as a whole) to any Person, or (B) any
corporation consolidates with or merges into the Borrower or a Subsidiary of
the Borrower in a transaction in which the outstanding voting stock of the
Borrower is changed into or exchanged for cash, securities or other property,
other than a transaction solely between the Borrower and a Subsidiary of the
Borrower;

 

6.1.14                  Involuntary Proceedings.

 

A proceeding shall have been
instituted in a court having jurisdiction in the premises seeking a decree or
order for relief in respect of any Loan Party or any Material Subsidiary of any
Loan Party in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of the Borrower or any of its
Subsidiaries for any substantial part of its property, or for the winding-up or
liquidation of its affairs, and such proceeding shall remain undismissed or
unstayed and in effect for a period of sixty (60) consecutive days or such
court shall enter a decree or order granting any of the relief sought in such
proceeding; or

 

6.1.15                  Voluntary Proceedings.

 

Any Loan Party or any Material
Subsidiary of any Loan Party shall commence a voluntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.

 

6.2                                 Consequences of Event of Default.

 

6.2.1                        Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.

 

If an Event of Default specified
under subsections 6.1.1 through 6.1.13 of Section 6.1 shall occur and be
continuing, the Banks and the Administrative Agent shall be under no further
obligation to make Loans, and the Administrative Agent may, and upon the
request of the Required Banks, shall by written notice to the Borrower, declare
the unpaid principal amount of the Notes then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to
the Banks hereunder and thereunder to be forthwith due and payable, and the
same shall thereupon become and be immediately due and payable to the
Administrative Agent for the benefit of each Bank without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived.

 

6.2.2                        Bankruptcy, Insolvency or Reorganization Proceedings.

 

If an Event of Default specified
under subsections 6.1.14 or 6.1.15 shall occur, the Banks shall be under no
further obligations to make Loans hereunder and the unpaid principal amount of
the Loans then outstanding and all interest accrued thereon, any unpaid fees
and all other Indebtedness of the Borrower to the Banks 

 

69

 

hereunder and thereunder shall be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived; and

 

6.2.3                        Set-off.

 

If an Event of Default shall occur
and be continuing, any Bank to whom any Obligation is owed by the Borrower
hereunder or under any other Loan Document or any participant of such Bank
which has agreed in writing to be bound by the provisions of Section 2.12
and 8.7 and any branch, Subsidiary or Affiliate of such Bank or participant
anywhere in the world shall have the right, in addition to all other rights and
remedies available to it, without notice to the Borrower, to set-off against
and apply to the then unpaid balance of all the Loans and all other Obligations
of the Borrower hereunder or under any other Loan Document any debt owing to,
and any other funds held in any manner for the account of, the Borrower by such
Bank or participant or by such branch, Subsidiary or Affiliate, including all
funds in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by the Borrower for its own account (but not including funds held in
custodian or trust accounts) with such Bank or participant or such branch,
Subsidiary or Affiliate.  Such right shall exist whether or not any Bank
or the Administrative Agent shall have made any demand under this Agreement or
any other Loan Document, whether or not such debt owing to or funds held for
the account of the Borrower is or are matured or unmatured and regardless of
the existence or adequacy of any Guaranty or any other security, right or
remedy available to any Bank or the Administrative Agent; and

 

6.2.4                        Suits, Actions, Proceedings.

 

If an Event of Default shall occur
and be continuing, and whether or not the Administrative Agent shall have
accelerated the maturity of Loans to the Borrower pursuant to any of the
foregoing provisions of this Section 6.2, the Administrative Agent or any
Bank, if owed any amount hereunder or under any other Loan Document, may
proceed to protect and enforce its rights by suit in equity, action at law
and/or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or any other Loan
Document, including as permitted by applicable Law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of the Administrative Agent or such Bank; and

 

6.2.5                        Application of Proceeds; Collateral Sharing.

 

6.2.5.1.                                    Application of Proceeds.

 

From and after the date on which the
Administrative Agent has taken any action pursuant to this Section 6.2 and
until all Obligations of the Borrower have been paid in full, any and all
proceeds received by the Administrative Agent from any sale or other
disposition of the Collateral, or any part thereof, or on account of the exercise
of other remedies by the Administrative Agent, shall, subject to the
Intercreditor Agreement and the Collateral Agency Agreement, be applied as
described in Section 6.5 of the Guarantee and Collateral Agreement.

 

6.2.5.2.                                    Collateral Sharing.

 

All Liens granted under any
Collateral Document or any other Loan Document shall secure ratably and on a pari
passu basis (i) the Obligations in favor of the Administrative
Agent and the Banks hereunder, (ii) the Obligations incurred by any of the
Loan Parties in favor of any Bank which provides a Bank-Provided Hedge or an
Other Bank Provided Financial Service Product (the “IRH Provider”), and (iii) the
obligations arising under the B&R Promissory Note.  The Administrative
Agent under the Collateral Documents shall be deemed to serve as the collateral
agent (the “Collateral Agent”) for B&R, the IRH Providers and the
Banks hereunder, provided  that the Collateral Agent shall comply
with the instructions and directions of the Administrative Agent (or the Banks
under this Agreement to the extent that this Agreement or any other Loan
Document empowers the Banks to direct the Administrative Agent), as to all
matters relating to the Collateral, including the maintenance and disposition
thereof.  Neither B&R nor any IRH Provider (except in its capacity as
a Bank hereunder) shall be entitled or have the power to direct or instruct the
Collateral Agent on any such matters or to control or direct in any manner the
maintenance or disposition of the Collateral.

 

70

 

6.2.5.3.                                    Notice of Sale.

 

Any notice required to be given by
the Administrative Agent of a sale, lease, or other disposition of the
Collateral or any other intended action by the Administrative Agent, if given
ten (10) days prior to such proposed action, shall constitute commercially
reasonable and fair notice thereof to the applicable Loan Parties.

 

ARTICLE 7.

THE AGENT

 

7.1                                 Appointment.

 

Each Bank hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Bank
under this Agreement and the other Loan Documents, and each such Bank
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto.   Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

 

7.2                                 Delegation of Duties.

 

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

 

7.3                                 Exculpatory Provisions.

 

Neither any Agent nor any of their
respective officers, directors, employees, agents, advisors, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks
for any recitals, statements, representations or warranties made by any Loan
Party or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any Bank to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

 

7.4                                 Reliance by Administrative Agent.

 

The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy
or email message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. 
The Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent.  

 

71

 

The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Banks (or, if so specified by this Agreement, all
Banks) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Banks (or, if so specified by this Agreement, all Banks), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks and all future holders of the Loans.

 

7.5                                 Notice of Default.

 

The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Potential
Default or Event of Default unless the Administrative Agent has received notice
from a Bank or the Borrower referring to this Agreement, describing such
Potential Default or Event of Default and stating that such notice is a “notice
of default”.  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Banks.  The
Administrative Agent shall take such action with respect to such Potential
Default or Event of Default as shall be reasonably directed by the Required
Banks (or, if so specified by this Agreement, all Banks); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Potential Default or
Event of Default as it shall deem advisable in the best interests of the Banks.

 

7.6                                 Non-Reliance on Agents and Other Banks.

 

Each Bank expressly acknowledges
that neither the Agents nor any of their respective officers, directors,
employees, agents, advisors, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of
a Loan Party, shall be deemed to constitute any representation or warranty by
any Agent to any Bank.  Each Bank
represents to the Agents that it has, independently and without reliance upon
any Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement.  Each Bank also represents that it will,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to
make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates.  Except for notices, reports and other documents
expressly required to be furnished to the Banks by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, advisors, attorneys-in-fact or affiliates.

 

7.7                                 Indemnification.

 

The Banks agree to indemnify each
Agent and its officers, directors, employees, affiliates, agents, advisors and
controlling persons (each, an “Agent Indemnitee”)  (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in
any way relating to or arising out of, the Commitments, this Agreement, any of
the other Loan Documents or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by such Agent

 

72

 

 

Indemnitee under or in connection
with any of the foregoing; provided that no Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements that are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent Indemnitee’s gross negligence or
willful misconduct.  The agreements in
this Section shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

7.8                                 Agent in its Individual Capacity.

 

Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent.  With respect to its Loans made or renewed by
it, each Agent shall have the same rights and powers under this Agreement and
the other Loan Documents as any Bank and may exercise the same as though it
were not an Agent, and the terms “Bank” and “Banks” shall include each Agent in
its individual capacity.

 

7.9                                 Successor Administrative Agent.

 

The Administrative Agent may resign
as Administrative Agent upon 20 days’ notice to the Banks and the
Borrower.  If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, which successor agent shall (unless an Event of
Default under Section 6.1.14 or 6.1.15 with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans.  If no successor
agent has accepted appointment as Administrative Agent by the date that is 20
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Banks shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor agent as provided for above.  After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 7 and
of Section 8.5 shall continue to inure to its benefit.

 

7.10                           Documentation Agents and Syndication Agent.

 

Neither the Syndication Agent nor
either Documentation Agent shall have any duties or responsibilities hereunder
in its capacity as such.

 

ARTICLE 8.

MISCELLANEOUS

 

8.1                                 Amendments and Waivers.

 

Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 8.1 and
as provided in Section 2.18.  The
Required Banks and each Loan Party party to the relevant Loan Document may, or,
with the written consent of the Required Banks, the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a) enter
into written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the Banks or
of the Loan Parties hereunder or thereunder or (b) waive, on such terms
and conditions as the Required Banks or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Potential Default or 

 

73

 

Event of Default and its
consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal
amount or extend the final scheduled date of maturity of any Loan, extend the
scheduled date of any amortization payment in respect of any Loan or reduce the
stated rate of any interest or fee payable hereunder (except in connection with
the waiver of applicability of any post-default increase in interest rates
(which waiver shall be effective with the consent of the Required Banks)), in
each case without the written consent of each Bank directly affected thereby; (ii) eliminate
or reduce the voting rights of any Bank under this Section 8.1 without the
written consent of such Bank; (iii) reduce any percentage specified in the
definition of Required Banks, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Guarantors from their obligations under
the Guarantee and Collateral Agreement, in each case without the written
consent of all Banks; or (iv) amend, modify or waive any provision of Section 7
or any other provision of any Loan Document that affects the Administrative
Agent without the written consent of the Administrative Agent.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Banks and shall
be binding upon the Loan Parties, the Banks, the Administrative Agent and all
future holders of the Loans.  In the case
of any waiver, the Loan Parties, the Banks and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Potential Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Potential Default or Event of Default, or impair any right
consequent thereon.  Notwithstanding
anything to the contrary herein, no Carlyle Affiliated Bank nor any Defaulting
Bank shall have any right to approve or disapprove any amendment, waiver or
consent hereunder, except any amendment, waiver or consent that (x) requires
the vote of each Bank or (y) affects such Carlyle Affiliated Bank or such
Defaulting Bank, as applicable, differently from other Banks; provided
that the Commitment of such Carlyle Affiliated Bank or such Defaulting Bank may
not be increased or extended without the consent of such Carlyle Affiliated
Bank or such Defaulting Bank, as applicable (it being understood that, other
than in the case of any amendment, waiver or consent referred to in clauses (x) or
(y) above, any Commitments or Loans held or deemed held by any Defaulting
Bank or any Carlyle Affiliated Bank shall be excluded for a vote of the Banks
hereunder requiring any consent of the Banks).

 

Notwithstanding the foregoing, this
Agreement may be amended (or amended and restated) with the written consent of
the Required Banks, the Administrative Agent and the Borrower (a) to add
one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof to share ratably in the benefits of this
Agreement and the other Loan Documents with the Loans and the accrued interest
and fees in respect thereof and (b) to include appropriately the Banks
holding such credit facilities in any determination of the Required Banks.

 

In addition, notwithstanding the
foregoing, this Agreement may be amended with the written consent of the
Administrative Agent, the Borrower and the Banks providing the relevant
Replacement Term Loans (as defined below) to permit the refinancing,
replacement or modification of all outstanding Loans (“Replaced Term Loans”)
with a replacement term loan tranche hereunder (“Replacement Term Loans”),
provided that (a) the aggregate principal amount of such
Replacement Term Loans shall not exceed the aggregate principal amount of such
Replaced Term Loans, (b) the Applicable Margin for such Replacement Term
Loans shall not be higher than the Applicable Margin for such Replaced Term
Loans and (c) the weighted average life to maturity of such Replacement
Term Loans shall not be shorter than the weighted average life to maturity of
such Replaced Term Loans at the time of such refinancing.

 

8.2                                 Notices.  All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as
follows in the case of the Borrower and the Administrative Agent, and as set
forth in an administrative questionnaire delivered to the Administrative Agent
in the case of the Banks, or to such other address as may be hereafter notified
by the respective parties hereto:

 

	
  Borrower:

  	
  Triumph
  Group, Inc.

  1550
  Liberty Ridge Drive

  Suite 100

  Wayne,
  PA 19087

  
	
   

  	
  Attention:  M. David Kornblatt

  

 

74

 

	
   

  	
  Telecopy:  (610) 251-1555

  
	
   

  	
  Telephone:
  (610) 251-1000

  
	
   

  	
   

  
	
  Administrative Agent:

  	
  Royal
  Bank of Canada

  P.O. Box
  50, 200 Bay Street

  Royal
  Bank Plaza

  12th
  Floor, South Tower

  Toronto,
  Ontario

  M5J
  2W7

  
	
   

  	
  Attention:
  Manager, Agency Services Group

  
	
   

  	
  Facsimile:
  416-842-4023

  

 

provided that any notice, request or demand to or upon the
Administrative Agent or the Banks shall not be effective until received.

 

Notices and other communications to
the Banks hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Administrative Agent and the applicable Bank.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications.

 

8.3                                 No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Bank, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

8.4                                 Survival of Representations and Warranties.  All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loans and other extensions
of credit hereunder.

 

8.5                                 Payment of Expenses.  The
Borrower agrees (a) to pay or reimburse the Administrative Agent for all
its reasonable out-of-pocket expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with
statements with respect to the foregoing to be submitted to the Borrower prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Bank and the Administrative Agent for all its out-of-pocket
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement or any other Loan Document, including the fees and
disbursements of counsel to each Bank and of counsel to the Administrative
Agent, and (c) to pay, indemnify, and hold each Bank and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents, advisors and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement and the financing
contemplated hereby and the use of proceeds thereof (including the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (c), collectively, the “Indemnified
Liabilities”), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee or material breach by the
Indemnitee under the Loan Documents in connection with 

 

75

 

a claim brought by the Borrower against such
Indemnitee.  Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives
and agrees to cause its Subsidiaries to waive, all rights for contribution or
any other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee. 
All amounts due under this Section 8.5 shall be payable not later
than 10 days after written demand therefor. 
Statements payable by the Borrower pursuant to this Section 8.5
shall be submitted to the Borrower at the address of the Borrower set forth in Section 8.2,
or to such other Person or address as may be hereafter designated by the
Borrower in a written notice to the Administrative Agent.  The agreements in this Section 8.5 shall
survive the termination of this Agreement and the repayment of the Loans and
all other amounts payable hereunder.

 

8.6                                 Successors and Assigns; Participations and Assignments.

 

(a)                                  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 (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Bank
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Bank may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Section.

 

(b)                                 (i) Subject
to the conditions set forth in paragraph (b)(ii) below, any Bank may
assign to one or more assignees (other than the Borrower or any Affiliate
thereof (other than any Carlyle Affiliated Institutional Lender or, in
accordance with clause (vi) below, any Carlyle Affiliated Bank)) (each, an
“Assignee”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans at the
time owing to it) with the prior written consent of:

 

(A) the
Borrower (such consent not to be unreasonably withheld or delayed), provided
that no consent of the Borrower shall be required for an assignment to a Bank,
an affiliate of a Bank, an Approved Fund (as defined below) or, if an Event of
Default has occurred and is continuing, any other Person; provided  further
that the Borrower shall be deemed to have consented to any such assignment
unless it shall object thereto by written notice to the Administrative Agent
within five Business Days after having received notice thereof; and

 

(B) the
Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Loan  to a Bank, an affiliate of a Bank or an
Approved Fund.

 

(ii) Assignments shall be
subject to the following additional conditions:

 

(A) except
in the case of an assignment to a Bank, an affiliate of a Bank or an Approved
Fund or an assignment of the entire remaining amount of the assigning Bank’s
Commitments or Loans, the amount of the Commitments or Loans of the assigning
Bank 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) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that (1) no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Bank and its affiliates or Approved Funds, if any;

 

(B) (1) 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 (except that no processing and recordation fee shall be payable in the
case of an Assignee which is already a Bank, an Affiliate of a Bank or an
Approved Fund, and provided that only one such fee shall be payable in respect
of contemporaneous assignments to or by two or more Approved Funds) and (2) the
assigning Bank shall have paid in full any amounts owing by it to the
Administrative Agent; and

 

(C) the
Assignee, if it shall not be a Bank, shall deliver to the Administrative Agent
an administrative questionnaire in which the Assignee designates one or more
credit contacts to whom all 

 

76

 

syndicate-level information
(which may contain material non-public information about the Borrower and its
Affiliates and their related parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

 

For the purposes of this Section 8.6,
“Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Bank, (b) an affiliate of a Bank or (c) an
entity or an affiliate of an entity that administers or manages a Bank.

 

(iii) Subject to
acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Bank under this Agreement, and the assigning Bank 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 Bank’s
rights and obligations under this Agreement, such Bank shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.13, 2.14, 2.15 and 8.5). 
Any assignment or transfer by a Bank of rights or obligations under this
Agreement that does not comply with this Section 8.6 shall be treated for
purposes of this Agreement as a sale by such Bank of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.

 

(iv)  The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Banks, and the
Commitments of, and principal amount of the Loans owing to, each Bank pursuant
to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Banks may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Bank hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.  The Register shall be
available for inspection by the Borrower or any Bank at any reasonable time and
from time to time at the office of the Administrative Agent upon reasonable
prior notice.

 

(v)  Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Bank and an Assignee, the
Assignee’s completed administrative questionnaire (unless the Assignee shall
already be a Bank hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register.  No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

 

(vi)  (A) A Carlyle
Affiliated Bank may from time to time purchase, in accordance with this Section 8.6(b),
Loans from one or more Banks pursuant to open market purchases, including,
without limitation, pursuant to a Dutch auction (open to all Banks), on terms
to be agreed between such Carlyle Affiliated Bank and the Banks participating
in such open market purchases, so long as immediately after giving effect to
such purchase, the aggregate principal amount of Loans to be purchased by any
such Carlyle Affiliated Banks on such date when added to the principal amount
of Loans assigned to Carlyle Affiliated Banks previously as of the date of such
assignments shall not exceed 15.0% of the aggregate principal amount of all
Loans outstanding at such time.  (B) By
its purchase or other acquisition of a Loan, such Carlyle Affiliated Bank shall
be deemed to have acknowledged and agreed that it has no right whatsoever (in
its capacity as a Bank) to require the Administrative Agent or any other Bank
to undertake any action (or refrain from taking any action) with respect to
this Agreement or any other Loan Document, to attend any meeting (live or by
any electronic means) in its capacity as a Bank with the Administrative Agent or
any other Bank or receive any information from the Administrative Agent or any
other Bank or to make or bring any claim, in its capacity as a Bank, against
the Administrative Agent or any Bank with respect to the duties and obligations
of such Person under this Agreement and the other Loan Documents.  (C) Notwithstanding anything to the
contrary contained herein, any Carlyle Affiliated Bank may contribute any Loans
purchased pursuant to Section 8.6(b), to the Borrower.  Upon such contribution, all principal and
accrued and unpaid interest on the Loans contributed shall be deemed to have
been paid for all purposes and shall be cancelled and no longer outstanding for

 

77

 

all purposes of this Agreement and
all other Loan Documents (and in connection with any such contribution, the
Administrative Agent is authorized to make appropriate entries in the Register
to reflect such cancellation).

 

(c)                                  (i)  Any
Bank may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (other than the Borrower
or any Affiliate thereof (other than any Carlyle Affiliated Institutional
Lender) (a “Participant”) in all or a portion of such Bank’s rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Bank’s
obligations under this Agreement shall remain unchanged, (B) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (C) the Borrower, the Administrative Agent and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement.  Any agreement pursuant to which a Bank sells
such a participation shall provide that such Bank 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 may
provide that such Bank will not, without the consent of the Participant, agree
to any amendment, modification or waiver that (1) requires the consent of
each Bank directly affected thereby pursuant to the proviso to the second
sentence of Section 8.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Bank and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of
Section 8.7(b) as though it were a Bank, provided such Participant
shall be subject to Section 8.7(a) as though it were a Bank.

 

(ii)  A Participant shall not be entitled to
receive any greater payment under Section 2.13 or 2.14 than the applicable
Bank would have been entitled to receive with respect to the participation sold
to such Participant.  Any Participant
that is a Non-U.S. Bank shall not be entitled to the benefits of
Section 2.14 unless such Participant complies with Section 2.14.4.

 

(d)                                 Each Bank that
sells a participation shall maintain at one of its offices a register for the
recordation of the names and addresses of each Participant and the principal
amount of each Participant’s interest in the Commitments and Loans held by it
(the “Participant Register”).  The
entries in the Participant Register shall be conclusive, and such Bank, each Loan
Party and the Administrative Agent shall treat each Person whose name is
recorded in the Participant Register pursuant to the terms hereof as the owner
of such participation for all purposes of this Agreement, notwithstanding
notice to the contrary.  Any such
Participant Register shall be available for inspection by the Administrative
Agent at any reasonable time and from time to time upon reasonable prior
notice.

 

(e)                                  Any Bank 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 Bank, including any
pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Bank
from any of its obligations hereunder or substitute any such pledgee or
Assignee for such Bank as a party hereto.

 

(f)                                    The Borrower,
upon receipt of written notice from the relevant Bank, agrees to issue Notes to
any Bank requiring Notes to facilitate transactions of the type described in
paragraph (d) above.

 

(g)                                 Notwithstanding
the foregoing, any Conduit Bank may assign any or all of the Loans it may have
funded hereunder to its designating Bank without the consent of the Borrower or
the Administrative Agent and without regard to the limitations set forth in Section 8.6(b).  Each of the Borrower, each Bank and the
Administrative Agent hereby confirms that it will not institute against a
Conduit Bank or join any other Person in instituting against a Conduit Bank any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any state bankruptcy or similar law, for one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Conduit Bank; provided, however, that each Bank designating any Conduit
Bank hereby agrees to indemnify, save and hold harmless each other party hereto
for any loss, cost, damage or expense arising out of its inability to institute
such a proceeding against such Conduit Bank during such period of forbearance.

 

78

 

8.7                                 Adjustments; Set-Off.

 

(a)                                  Except to the
extent that this Agreement or a court order expressly provides for payments to
be allocated to a particular Bank, if any Bank (a “Benefitted Bank”)
shall receive any payment of all or part of the Obligations owing to it (other
than in connection with an assignment made pursuant to Section 8.6), or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 6.1.15, or otherwise), in a greater proportion than
any such payment to or collateral received by any other Bank, if any, in
respect of the Obligations owing to such other Bank, such Benefitted Bank shall
purchase for cash from the other Banks a participating interest in such portion
of the Obligations owing to each such other Bank, or shall provide such other
Banks with the benefits of any such collateral, as shall be necessary to cause
such Benefitted Bank to share the excess payment or benefits of such collateral
ratably with each of the Banks; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Bank, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.

 

(b)                                 In addition to
any rights and remedies of the Banks provided by law, each Bank shall have the
right, without notice to the Borrower, any such notice being expressly waived
by the Borrower to the extent permitted by applicable law, upon any Obligations
becoming due and payable by the Borrower (whether at the stated maturity, by
acceleration or otherwise), to apply to the payment of such Obligations, by
setoff or otherwise, any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Bank, any
affiliate thereof or any of their respective branches or agencies to or for the
credit or the account of the Borrower. 
Each Bank agrees promptly to notify the Borrower and the Administrative
Agent after any such application made by such Bank, provided that the
failure to give such notice shall not affect the validity of such application.

 

8.8                                 Counterparts.  This
Agreement may be executed by one or more of the parties to this Agreement on
any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by email or facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

8.9                                 Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

8.10                           Integration.  This
Agreement and the other Loan Documents represent the entire agreement of the
Borrower, the Administrative Agent and the Banks with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Bank relative
to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.

 

8.11                           GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.12                           Submission to Jurisdiction; Waivers.  The Borrower hereby irrevocably and
unconditionally:

 

(a)                                  submits for
itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and
appellate courts from any thereof;

 

79

 

(b)                                 consents that
any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that
service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Borrower at its address set forth in Section 8.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

(d)                                 agrees that
nothing herein shall affect the right to effect service of process in any other
manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

(e)                                  waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.

 

8.13                           Acknowledgements.  The
Borrower hereby acknowledges that:

 

(a)                                  it has been
advised by counsel in the negotiation, execution and delivery of this Agreement
and the other Loan Documents;

 

(b)                                 neither the
Administrative Agent nor any Bank has any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between Administrative Agent and
Banks, on one hand, and the Borrower, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint
venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Banks or among the
Borrower and the Banks.

 

8.14                           Release of Guaranties and Liens.

 

(a)                                  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Bank (without
requirement of notice to or consent of any Bank except as expressly required by
Section 8.1) to take any action requested by the Borrower having the
effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by
any Loan Document or that has been consented to in accordance with Section 8.1
or (ii) under the circumstances described in paragraph (b) below.

 

(b)                                 At such time as
the Loans and the other obligations under the Loan Documents (other than
obligations under or in respect of Bank Provided Hedges of Other Bank Provided
Financial Service Products) shall have been paid in full and the Commitments
have been terminated, the Collateral shall be released from the Liens created
by the Collateral Documents, and the Collateral Documents and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Loan Party under the Collateral Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person.

 

8.15                           Confidentiality.  Each
of the Administrative Agent and each Bank agrees to keep confidential all
non-public information provided to it by any Loan Party, the Administrative
Agent or any Bank pursuant to or in connection with this Agreement that is
designated by the provider thereof as confidential; provided that
nothing herein shall prevent the Administrative Agent or any Bank from
disclosing any such information (a) to the Administrative Agent, any other
Bank or any affiliate thereof, (b) subject to an agreement to comply with
the provisions of this Section, to any actual or prospective Transferee or any
direct or indirect counterparty to any Bank Provided Hedge or Other Bank
Provided Financial Service Product (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates, (d) in
response to any order of any court or other Official Body, upon the demand of
any Official Body, or as may otherwise be required pursuant to any Requirement
of Law, (f) if required to do so in 

 

80

 

connection with any litigation or similar
proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Bank’s investment portfolio in connection with ratings issued with respect to
such Bank, or (i) in connection with the exercise of any remedy hereunder
or under any other Loan Document, or (j) if agreed by the Borrower in its
sole discretion, to any other Person.

 

Each
Bank acknowledges that information furnished to it pursuant to this Agreement
or the other Loan Documents may include material non-public information
concerning the Borrower and its Affiliates and their related parties or their
respective securities, and confirms that it has developed compliance procedures
regarding the use of material non-public information and that it will handle
such material non-public information in accordance with those procedures and
applicable law, including Federal and state securities laws.

 

All
information, including requests for waivers and amendments, furnished by the
Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their
respective securities.  Accordingly, each
Bank represents to the Borrower and the Administrative Agent that it has
identified in its administrative questionnaire a credit contact who may receive
information that may contain material non-public information in accordance with
its compliance procedures and applicable law, including Federal and state
securities laws.

 

8.16                           WAIVERS OF JURY TRIAL.  THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.17                           USA Patriot Act.  Each
Bank hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Bank to
identify the Borrower in accordance with the Patriot Act.

 

8.18                           Intercreditor Agreement and Collateral Agency Agreement.  The Administrative Agent is authorized and
directed to enter into the Intercreditor Agreement and the Collateral Agency
Agreement on behalf of the Banks and each of the Banks hereby approves and
agrees to be bound by the terms of the Intercreditor Agreement and the
Collateral Agency Agreement.

 

81

 

 

 

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

 

	
  BORROWER:

  
	
   

  
	
  TRIUMPH GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. David Kornblatt

  
	
   

  	
  Name: M. David Kornblatt

  
	
   

  	
  Title: Executive Vice President,
  Chief Financial Officer and Treasurer

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  ROYAL BANK OF CANADA,  

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ann Hurley

  
	
   

  	
   

  	
  Name: Ann Hurley

  
	
   

  	
   

  	
  Title: Manager, Agency

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  ROYAL BANK OF CANADA,  

  as a Bank 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Umbs

  
	
   

  	
   

  	
  Name: Scott Umbs

  
	
   

  	
   

  	
  Title: Authorized Signatory

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION,  

  as Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian T. Vesey

  
	
   

  	
   

  	
  Name: Brian T. Vesey

  
	
   

  	
   

  	
  Title: Vice President

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  CITIZENS BANK OF PENNSYLVANIA,  

  as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol Castle

  
	
   

  	
   

  	
  Name: Carol Castle

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  U.S. BANK, NATIONAL ASSOCATION,  

  as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward L. Hocter

  
	
   

  	
   

  	
  Name: Edward L. Hocter

  
	
   

  	
   

  	
  Title: Managing Director

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  ACCEPTED AND
  AGREED BY GUARANTORS AS FOLLOWS:

  
	
   

  	
   

  
	
   

  	
  NU-TECH BRANDS, INC.

  
	
   

  	
  TRIUMPH BRANDS, INC.

  
	
   

  	
  TRIUMPH GROUP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. David Kornblatt

  
	
   

  	
  Name: M. David Kornblatt

  
	
   

  	
  Title: President and
  Treasurer of each of the above named companies

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KILROY STEEL, INC.

  
	
   

  	
  KILROY STRUCTURAL STEEL CO.

  
	
   

  	
  TRIUMPH METALS COMPANY

  
	
   

  	
  TRIUMPH STRUCTURES - EAST
  TEXAS, INC.

  
	
   

  	
  TRIUMPH PRECISION, INC.

  
	
   

  	
  TRIUMPH INSULATION SYSTEMS,
  LLC

  
	
   

  	
  THE MEXMIL HOLDING COMPANY
  LLC

  
	
   

  	
  TRIUMPH STRUCTURES - LONG
  ISLAND, LLC

  
	
   

  	
  TRIUMPH INVESTMENT HOLDINGS, INC.

  
	
   

  	
  TRIUMPH INSTRUMENTS -
  BURBANK, INC.

  
	
   

  	
  AIRFRAME SPARES AND
  LOGISTICS, LLC

  
	
   

  	
  MEXMIL CHINA, LLC

  
	
   

  	
  TRIUMPH GROUP HOLDINGS -
  MEXICO, LLC

  
	
   

  	
  TRIUMPH GROUP INVESTMENT -
  MEXICO, LLC

  
	
   

  	
  TRIUMPH AEROSPACE SYSTEMS -
  NEWPORT NEWS, INC.

  
	
   

  	
  TRIUMPH ACCESSORY SERVICES
  - GRAND PRAIRIE, INC.

  
	
   

  	
  TRIUMPH FABRICATIONS - FORT
  WORTH, INC.

  
	
   

  	
  CBA ACQUISITION, LLC

  
	
   

  	
  TRIUMPH FABRICATIONS - HOT
  SPRINGS, INC.

  
	
   

  	
  TRIUMPH PROCESSING, INC.

  
	
   

  	
  TRIUMPH ACTUATION SYSTEMS -
  VALENCIA, INC.

  
	
   

  	
  TRIUMPH ACTUATION SYSTEMS,
  LLC

  
	
   

  	
  TRIUMPH ACTUATION SYSTEMS -
  CONNECTICUT, LLC

  
	
   

  	
  HT PARTS, L.L.C.

  
	
   

  	
  LAMAR ELECTRO-AIR
  CORPORATION

  
	
   

  	
  TRIUMPH AEROSPACE SYSTEMS -
  WICHITA, INC.

  
	
   

  	
  TRIUMPH STRUCTURES - KANSAS
  CITY, INC.

  
	
   

  	
  THE TRIUMPH GROUP
  OPERATIONS, INC.

  
	
   

  	
  TRIUMPH AEROSPACE SYSTEMS
  GROUP, INC.

  
	
   

  	
  TRIUMPH AFTERMARKET
  SERVICES GROUP, INC.

  
	
   

  	
  TRIUMPH AIRBORNE STRUCTURES, INC.

  
	
   

  	
  TRIUMPH AVIATIONS INC.

  
	
   

  	
  TRIUMPH FABRICATIONS - SAN
  DIEGO, INC.

  
	
   

  	
  TRIUMPH COMPOSITE SYSTEMS, INC.

  
	
   

  	
  TRIUMPH CONTROLS, LLC

  
	
   

  	
  TRIUMPH ENGINEERED
  SOLUTIONS, INC.

  
	
   

  	
  TRIUMPH ENGINEERING
  SERVICES, INC.

  
	
   

  	
  TRIUMPH GEAR SYSTEMS, INC.

  
	
   

  	
  TRIUMPH GEAR SYSTEMS -
  MACOMB, INC.

  
	
   

  	
  TRIUMPH GROUP ACQUISITION
  HOLDINGS, INC.

  
	
   

  	
  TRIUMPH INSTRUMENTS, INC.

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

 

 

	
   

  	
  TRIUMPH PRECISION CASTINGS
  CO.

  
	
   

  	
  TRIUMPH STRUCTURES - LOS ANGELES, INC.

  
	
   

  	
  TRIUMPH THERMAL SYSTEMS, INC.

  
	
   

  	
  TRIUMPH TURBINE SERVICES, INC.

  
	
   

  	
  TRIUMPH STRUCTURES - WICHITA, INC.

  
	
   

  	
  TRIUMPH INTERIORS, LLC

  
	
   

  	
  TRIUMPH FABRICATIONS — ORANGEBURG, INC.

  
	
   

  	
  TRIUMPH FABRICATIONS — ST. LOUIS, INC.

  
	
   

  	
  TRIUMPH REAL ESTATE — MEXICO, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. David Kornblatt

  
	
   

  	
  Name: M. David Kornblatt

  
	
   

  	
  Title: Vice
  President and Treasurer of each of the above named companies

   

  
	
   

  	
   

  
	
   

  	
  TRIUMPH AEROSTRUCTURES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Ill

  
	
   

  	
  Name: Richard C. Ill

  
	
   

  	
  Title:  Chairman

  
	
   

  	
   

  
	
   

  	
  VAC INDUSTRIES, INC.

  
	
   

  	
  VOUGHT COMMERCIAL AIRCRAFT COMPANY

  
	
   

  	
  CONTOUR AEROSPACE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. David Kornblatt

  
	
   

  	
  Name: M. David Kornblatt

  
	
   

  	
  Title:  Vice President and Treasurer

  

 

Triumph Group, Inc.
Credit Agreement Signature Page

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