Document:

Exhibit 10.9

 

REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

dated as of February 16, 2006

 

among

 

STANLEY, INC.

as Borrower

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

 

and

 

SUNTRUST BANK

as Administrative Agent

 

 

SUNTRUST CAPITAL MARKETS, INC.,

as Arranger and Book Manager

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1   DEFINITIONS; CONSTRUCTION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Classifications of Loans and Borrowings

  	
   

  	
  23

  
	
  Section 1.3.

  	
   

  	
  Accounting Terms and Determination

  	
   

  	
  23

  
	
  Section 1.4.

  	
   

  	
  Terms Generally

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2   AMOUNT AND TERMS OF THE COMMITMENTS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  General Description of Facilities

  	
   

  	
  24

  
	
  Section 2.2.

  	
   

  	
  Revolving Loans

  	
   

  	
  24

  
	
  Section 2.3.

  	
   

  	
  Procedure for Revolving Borrowings

  	
   

  	
  24

  
	
  Section 2.4.

  	
   

  	
  Swingline Commitment

  	
   

  	
  25

  
	
  Section 2.5.

  	
   

  	
  Reserved

  	
   

  	
  27

  
	
  Section 2.6.

  	
   

  	
  Term Loan Commitments

  	
   

  	
  27

  
	
  Section 2.7.

  	
   

  	
  Funding of Borrowings

  	
   

  	
  27

  
	
  Section 2.8.

  	
   

  	
  Interest Elections

  	
   

  	
  28

  
	
  Section 2.9.

  	
   

  	
  Optional Reduction and Termination of Commitments

  	
   

  	
  29

  
	
  Section 2.10.

  	
   

  	
  Repayment of Loans

  	
   

  	
  29

  
	
  Section 2.11.

  	
   

  	
  Evidence of Indebtedness

  	
   

  	
  30

  
	
  Section 2.12.

  	
   

  	
  Optional Prepayments

  	
   

  	
  30

  
	
  Section 2.13.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  31

  
	
  Section 2.14.

  	
   

  	
  Interest on Loans

  	
   

  	
  32

  
	
  Section 2.15.

  	
   

  	
  Fees

  	
   

  	
  33

  
	
  Section 2.16.

  	
   

  	
  Computation of Interest and Fees

  	
   

  	
  34

  
	
  Section 2.17.

  	
   

  	
  Inability to Determine Interest Rates

  	
   

  	
  34

  
	
  Section 2.18.

  	
   

  	
  Illegality

  	
   

  	
  35

  
	
  Section 2.19.

  	
   

  	
  Increased Costs

  	
   

  	
  35

  
	
  Section 2.20.

  	
   

  	
  Funding Indemnity

  	
   

  	
  36

  
	
  Section 2.21.

  	
   

  	
  Taxes

  	
   

  	
  37

  
	
  Section 2.22.

  	
   

  	
  Payments Generally; Pro Rata Treatment; Sharing of Set-offs

  	
   

  	
  39

  
	
  Section 2.23.

  	
   

  	
  Letters of Credit

  	
   

  	
  41

  
	
  Section 2.24.

  	
   

  	
  Increase of Commitments; Additional Lenders

  	
   

  	
  46

  
	
  Section 2.25.

  	
   

  	
  Mitigation of Obligations

  	
   

  	
  48

  
	
  Section 2.26.

  	
   

  	
  Replacement of Lenders

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3   CONDITIONS PRECEDENT TO LOANS AND LETTERS
  OF CREDIT

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Conditions To Effectiveness

  	
   

  	
  48

  
	
  Section 3.2.

  	
   

  	
  Each Credit Event

  	
   

  	
  51

  
	
  Section 3.3.

  	
   

  	
  Delivery of Documents

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4   REPRESENTATIONS AND WARRANTIES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Existence; Power

  	
   

  	
  52

  

 

 

	
  Section 4.2.

  	
   

  	
  Organizational Power; Authorization

  	
   

  	
  52

  
	
  Section 4.3.

  	
   

  	
  Governmental Approvals; No Conflicts

  	
   

  	
  52

  
	
  Section 4.4.

  	
   

  	
  Financial Statements

  	
   

  	
  53

  
	
  Section 4.5.

  	
   

  	
  Litigation and Environmental Matters

  	
   

  	
  53

  
	
  Section 4.6.

  	
   

  	
  Compliance with Laws and Agreements

  	
   

  	
  54

  
	
  Section 4.7.

  	
   

  	
  Investment Company Act, Etc.

  	
   

  	
  54

  
	
  Section 4.8.

  	
   

  	
  Taxes

  	
   

  	
  54

  
	
  Section 4.9.

  	
   

  	
  Margin Regulations

  	
   

  	
  54

  
	
  Section 4.10.

  	
   

  	
  ERISA

  	
   

  	
  54

  
	
  Section 4.11.

  	
   

  	
  Ownership of Property

  	
   

  	
  55

  
	
  Section 4.12.

  	
   

  	
  Disclosure

  	
   

  	
  55

  
	
  Section 4.13.

  	
   

  	
  Labor Relations

  	
   

  	
  56

  
	
  Section 4.14.

  	
   

  	
  Subsidiaries

  	
   

  	
  56

  
	
  Section 4.15.

  	
   

  	
  Insolvency

  	
   

  	
  56

  
	
  Section 4.16.

  	
   

  	
  Reserved

  	
   

  	
  56

  
	
  Section 4.17.

  	
   

  	
  OFAC

  	
   

  	
  56

  
	
  Section 4.18.

  	
   

  	
  Patriot Act

  	
   

  	
  56

  
	
  Section 4.19.

  	
   

  	
  Debarment and Suspension

  	
   

  	
  57

  
	
  Section 4.20.

  	
   

  	
  Security Documents

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5   AFFIRMATIVE COVENANTS

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Financial Statements and Other Information

  	
   

  	
  57

  
	
  Section 5.2.

  	
   

  	
  Notices of Material Events

  	
   

  	
  59

  
	
  Section 5.3.

  	
   

  	
  Existence; Conduct of Business

  	
   

  	
  59

  
	
  Section 5.4.

  	
   

  	
  Compliance with Laws, Etc.

  	
   

  	
  60

  
	
  Section 5.5.

  	
   

  	
  Payment of Obligations

  	
   

  	
  60

  
	
  Section 5.6.

  	
   

  	
  Books and Records

  	
   

  	
  60

  
	
  Section 5.7.

  	
   

  	
  Visitation, Inspection, Etc.

  	
   

  	
  60

  
	
  Section 5.8.

  	
   

  	
  Maintenance of Properties; Insurance

  	
   

  	
  60

  
	
  Section 5.9.

  	
   

  	
  Use of Proceeds and Letters of Credit

  	
   

  	
  61

  
	
  Section 5.10.

  	
   

  	
  Interest Rate Protection

  	
   

  	
  61

  
	
  Section 5.11.

  	
   

  	
  Additional Subsidiaries

  	
   

  	
  61

  
	
  Section 5.12.

  	
   

  	
  Further Assurances

  	
   

  	
  61

  
	
  Section 5.13.

  	
   

  	
  Primary Operating Account

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6   FINANCIAL
  COVENANTS

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Leverage Ratio

  	
   

  	
  62

  
	
  Section 6.2.

  	
   

  	
  Fixed Charge Coverage Ratio

  	
   

  	
  63

  
	
  Section 6.3.

  	
   

  	
  Consolidated Net Worth

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7   NEGATIVE COVENANTS

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Indebtedness and Disqualified Stock

  	
   

  	
  63

  
	
  Section 7.2.

  	
   

  	
  Negative Pledge

  	
   

  	
  64

  
	
  Section 7.3.

  	
   

  	
  Fundamental Changes

  	
   

  	
  65

  

 

ii

 

	
  Section 7.4.

  	
   

  	
  Investments, Loans, Etc.

  	
   

  	
  65

  
	
  Section 7.5.

  	
   

  	
  Restricted Payments

  	
   

  	
  66

  
	
  Section 7.6.

  	
   

  	
  Sale of Assets

  	
   

  	
  67

  
	
  Section 7.7.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  67

  
	
  Section 7.8.

  	
   

  	
  Restrictive Agreements

  	
   

  	
  67

  
	
  Section 7.9.

  	
   

  	
  Sale and Leaseback Transactions

  	
   

  	
  68

  
	
  Section 7.10.

  	
   

  	
  Hedging Transactions

  	
   

  	
  68

  
	
  Section 7.11.

  	
   

  	
  Amendment to Material Documents

  	
   

  	
  68

  
	
  Section 7.12.

  	
   

  	
  Permitted Subordinated Indebtedness

  	
   

  	
  69

  
	
  Section 7.13.

  	
   

  	
  Accounting Changes

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8   EVENTS OF DEFAULT

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Events of Default

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9   THE ADMINISTRATIVE AGENT

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Appointment of Administrative Agent

  	
   

  	
  72

  
	
  Section 9.2.

  	
   

  	
  Nature of Duties of Administrative Agent

  	
   

  	
  73

  
	
  Section 9.3.

  	
   

  	
  Lack of Reliance on the Administrative Agent

  	
   

  	
  74

  
	
  Section 9.4.

  	
   

  	
  Certain Rights of the Administrative Agent

  	
   

  	
  74

  
	
  Section 9.5.

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  74

  
	
  Section 9.6.

  	
   

  	
  The Administrative Agent in its Individual Capacity

  	
   

  	
  74

  
	
  Section 9.7.

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  75

  
	
  Section 9.8.

  	
   

  	
  Authorization to Execute other Loan Documents; Collateral

  	
   

  	
  75

  
	
  Section 9.9.

  	
   

  	
  Benefits of Article 9

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10   MISCELLANEOUS

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Notices

  	
   

  	
  76

  
	
  Section 10.2.

  	
   

  	
  Waiver; Amendments

  	
   

  	
  78

  
	
  Section 10.3.

  	
   

  	
  Expenses; Indemnification

  	
   

  	
  79

  
	
  Section 10.4.

  	
   

  	
  Successors and Assigns

  	
   

  	
  81

  
	
  Section 10.5.

  	
   

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
   

  	
  84

  
	
  Section 10.6.

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  85

  
	
  Section 10.7.

  	
   

  	
  Right of Setoff

  	
   

  	
  85

  
	
  Section 10.8.

  	
   

  	
  Counterparts; Integration

  	
   

  	
  85

  
	
  Section 10.9.

  	
   

  	
  Survival

  	
   

  	
  86

  
	
  Section 10.10.

  	
   

  	
  Severability

  	
   

  	
  86

  
	
  Section 10.11.

  	
   

  	
  Confidentiality

  	
   

  	
  86

  
	
  Section 10.12.

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  87

  
	
  Section 10.13.

  	
   

  	
  Waiver of Effect of Corporate Seal

  	
   

  	
  87

  
	
  Section 10.14.

  	
   

  	
  Patriot Act

  	
   

  	
  87

  

 

iii

 

	
  Schedules

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule I

  	
   

  	
  -

  	
  Applicable
  Margin and Applicable Percentage

  	
   

  	
   

  
	
  Schedule II

  	
   

  	
   

  	
  Commitment
  Amounts

  	
   

  	
   

  
	
  Schedule 2.23 

  	
   

  	
  -

  	
  Existing Letters of Credit

  	
   

  	
   

  
	
  Schedule 4.5

  	
   

  	
  -

  	
  Environmental
  Matters

  	
   

  	
   

  
	
  Schedule 4.14

  	
   

  	
  -

  	
  Subsidiaries

  	
   

  	
   

  
	
  Schedule 7.1

  	
   

  	
  -

  	
  Outstanding
  Indebtedness

  	
   

  	
   

  
	
  Schedule 7.2

  	
   

  	
  -

  	
  Existing
  Liens

  	
   

  	
   

  
	
  Schedule 7.4

  	
   

  	
  -

  	
  Existing
  Investments

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  -

  	
  Form of
  Revolving Credit Note

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  -

  	
  Form of Term
  Note

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  -

  	
  Reserved

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  -

  	
  Form of
  Swingline Note

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  -

  	
  Form of
  Assignment and Assumption

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  -

  	
  Form of
  Subsidiary Guaranty Agreement

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
   

  	
  Form of
  Security Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 2.3

  	
   

  	
  -

  	
  Form of
  Notice of Revolving Borrowing

  	
   

  	
   

  
	
  Exhibit 2.4

  	
   

  	
  -

  	
  Form of
  Notice of Swingline Borrowing

  	
   

  	
   

  
	
  Exhibit 2.8

  	
   

  	
  -

  	
  Form of
  Notice of Continuation/Conversion

  	
   

  	
   

  
	
  Exhibit 2.22

  	
   

  	
   

  	
  Form of
  Prepayment Notice

  	
   

  	
   

  
	
  Exhibit 5.1(c)

  	
   

  	
  -

  	
  Form of
  Compliance Certificate

  	
   

  	
   

  

 

iv

 

REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

THIS
REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Agreement”) is made and entered into as of February 16, 2006, by and among STANLEY,
INC., a Delaware corporation (the “Borrower”), the several
banks and other financial institutions and lenders from time to time party
hereto (the “Lenders”), and SUNTRUST BANK, in its capacity as
administrative agent for the Lenders (the “Administrative Agent”), as
issuing bank (the “Issuing Bank”) and as swingline lender (the “Swingline
Lender”).

 

W I T N E
S S E T H:

 

WHEREAS,
the Borrower has requested that (a) the Revolving Loan Lenders establish a $50,000,000 revolving
credit facility in favor of, and (b) the Term Loan Lenders make term loans in
an aggregate principal amount equal to $100,000,000 to, the Borrower;

 

WHEREAS,
subject to the terms and conditions of this Agreement, the Revolving Loan
Lenders the Term Loan Lenders, the Issuing Bank and the Swingline Lender to the
extent of their respective Commitments as defined herein, are willing severally
to establish the requested revolving credit facility, letter of credit
subfacility and the swingline subfacility in favor of and severally to make the
term loans to the Borrower.

 

NOW,
THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Borrower, the Lenders, the
Administrative Agent, the Issuing Bank and the Swingline Lender agree as
follows:

 

ARTICLE 1

DEFINITIONS; CONSTRUCTION

 

Section 1.1.                                   Definitions. In addition to the other terms
defined herein, the following terms used herein shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of
the terms defined):

 

“Additional
Lender” shall have the meaning given to such term in Section 2.24.

 

“Adjusted
LIBO Rate” shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage.

 

“Administrative
Questionnaire” shall mean, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent duly completed by such Lender.

 

“Affiliate”
shall mean, as to any Person, any other Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such Person. For the purposes of this definition,
“Control” shall mean the power, directly or indirectly, either to (i) vote 10%
or more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause

 

 

the direction of the management
and policies of a Person, whether through the ability to exercise voting power,
by control or otherwise. The terms “Controlling”, “Controlled by”, and “under
common Control with” have the meanings correlative thereto.

 

“Aggregate
Revolving Commitment Amount” shall mean the aggregate principal amount of
the Aggregate Revolving Commitments from time to time. On the Closing Date, the
Aggregate Revolving Commitment Amount equals $50,000,000.

 

“Aggregate
Revolving Commitments” shall mean, collectively, all Revolving Commitments
of all Lenders at any time outstanding.

 

“Applicable
Lending Office” shall mean, for each Lender and for each Type of Loan, the
“Lending Office” of such Lender (or an Affiliate of such Lender) designated for
such Type of Loan in the Administrative Questionnaire submitted by such Lender
or such other office of such Lender (or an Affiliate of such Lender) as such
Lender may from time to time specify to the Administrative Agent and the
Borrower as the office by which its Loans of such Type are to be made and
maintained.

 

“Applicable
Margin” shall mean, as of any date, 
with respect to interest on all Loans outstanding on any date, or the
letter of credit fee, as the case may be, a percentage per annum determined by
reference to the applicable Leverage Ratio from time to time in effect as set
forth on Schedule I; provided, that a change in the Applicable
Margin resulting from a change in the Leverage Ratio shall be effective on the
second Business Day after which the Borrower delivers the financial statements
required by Section 5.1(a) or (b) and the Compliance Certificate
required by Section 5.1(c); provided further, that if at any time
the Borrower shall have failed to deliver such financial statements and such
Compliance Certificate when so required, the Applicable Margin shall be at
Level VI as set forth on Schedule I until such time as such financial
statements and Compliance Certificate are delivered, at which time the
Applicable Margin shall be determined as provided above. Notwithstanding the
foregoing, the Applicable Margin from the Closing Date until the financial
statements and Compliance Certificate for the Fiscal Quarter ending March 31,
2006, are required to be delivered shall be
at Level V as set forth on Schedule
I.

 

“Applicable
Percentage” shall mean, as of any date, with respect to the commitment fee
as of any date, the percentage per annum determined by reference to the
applicable Leverage Ratio in effect on such date as set forth on Schedule I;
provided, that a change in the Applicable Percentage resulting from a
change in the Leverage Ratio shall be effective on the second Business Day
after which the Borrower delivers the financial statements required by Section
5.1(a) or (b) and the Compliance Certificate required by Section
5.1(c); provided  further, that if at any time the Borrower
shall have failed to deliver such financial statements and such Compliance
Certificate, the Applicable Percentage shall be at Level V as set forth on Schedule
I until such time as such financial statements and Compliance Certificate
are delivered, at which time the Applicable Percentage shall be determined as
provided above. Notwithstanding the foregoing, the Applicable Percentage for
the commitment fee from the Closing Date until the financial statements and
Compliance Certificate for the Fiscal Quarter ending March 31, 2006, are
required to be delivered shall be at Level V as set forth on Schedule I.

 

2

 

“Approved
Fund” shall mean any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by (i) a Lender, (ii) an Affiliate of a
Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.

 

“Assignment
and Assumption” shall mean an Assignment and Assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit E
attached hereto or any other form approved by the Administrative Agent.

 

“Availability
Period” shall mean the period from the Closing
Date to the Revolving Commitment Termination Date.

 

“Base Rate”
shall mean the higher of (i) the per annum rate which the Administrative
Agent publicly announces from time to time to be its prime lending rate, as in
effect from time to time, and (ii) the Federal Funds Rate, as in effect
from time to time, plus one-half
of one percent (0.50%). The Administrative Agent’s prime lending rate is a
reference rate and does not necessarily represent the lowest or best rate
charged to customers. The Administrative Agent may make commercial loans or
other loans at rates of interest at, above or below the Administrative Agent’s
prime lending rate. Each change in the Administrative Agent’s prime lending
rate shall be effective from and including the date such change is publicly
announced as being effective.

 

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

 

“Borrowing
Availability” means, at any time, the amount by which the Aggregate
Revolving Commitment Amount exceeds the sum of the outstanding Revolving Loans,
Swingline Loans and LC Exposure.

 

“Business
Day” shall mean (i) any day other than a Saturday, Sunday or other day on
which commercial banks in Atlanta, Georgia and New York, New York are
authorized or required by law to close and (ii) if such day relates to a
Borrowing of, a payment or prepayment of principal or interest on, a conversion
of or into, or an Interest Period for, an Index Rate Loan or Eurodollar Loan or
a notice with respect to any of the foregoing, any day on which dealings in
Dollars are carried on in the London interbank market.

 

“Capital
Expenditures” shall mean for any period, without duplication, (i) the
additions to property, plant and equipment and other capital expenditures of
the Borrower and its Subsidiaries that are (or would be) set forth on a
consolidated statement of cash flows of the Borrower for such period prepared
in accordance with GAAP and (ii) Capital Lease Obligations required to be paid
by the Borrower and its Subsidiaries during such period, but excluding (1)
Permitted Acquisitions, (2) reinvestment of proceeds described in Section
2.13(a) which are not subject to mandatory prepayment under such section and
(d) Capitalized Interest Expense.

 

3

 

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

 

“Capital
Stock” shall mean any non-redeemable capital stock (or in the case of a
partnership or limited liability company, the partners’ or members’ equivalent
equity interest) of the Borrower or any of its Subsidiaries (to the extent
issued to a Person other than the Borrower), whether common or preferred.

 

“Cash
Management Swingline Loans” shall have the meaning assigned to such term in
Section 2.4(b).

 

“Change in
Control” shall mean the occurrence of one or more of the following events:
(i) any sale, lease, exchange or other transfer (in a single transaction or a
series of related transactions) of all or substantially all of the assets of
the Borrower to any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder in effect on the date hereof), (ii) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or “group”
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof) of 30% or more of the outstanding shares of the voting
stock of the Borrower, except in connection with an IPO, or (iii) occupation of
a majority of the seats (other than vacant seats) on the board of directors of
the Borrower by Persons who were neither (a) nominated by the current board of
directors nor (b) appointed by directors so nominated.

 

“Change in
Law” shall mean (i) the adoption of any applicable law, rule or regulation
after the date of this Agreement, (ii) any change in any applicable law, rule
or regulation, or any change in the interpretation or application thereof, by
any Governmental Authority after the date of this Agreement, or (iii)
compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank
(or for purposes of Section 2.19(b), by such Lender’s or the Issuing
Bank’s parent corporation, if applicable) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

 

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

 

“Closing
Date” shall mean the date on which the conditions precedent set forth in Section
3.1 and Section 3.2 have been satisfied or waived in accordance with
Section 10.2.

 

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

 

4

 

“Collateral”
shall mean all property and assets of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.

 

“Commitment”
shall mean a Revolving Commitment, a Swingline Commitment, a Term Loan
Commitment or an Incremental Term Loan Commitment, or any combination thereof
(as the context shall permit or require).

 

“Compliance
Certificate” shall mean a certificate from the principal executive officer
and the principal financial officer of the Borrower in the form of, and
containing the certifications set forth in, the certificate attached hereto as Exhibit
5.1(c).

 

“Consolidated
EBITDA” shall mean, for the Borrower and its Subsidiaries for any period,
an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated
Net Income for such period, (A) Consolidated Interest Expense, (B) income tax
expense determined on a consolidated basis in accordance with GAAP, (C)
depreciation and amortization determined on a consolidated basis in accordance
with GAAP, (D) a noncash charge pursuant to FAS 144 in respect of the
Subsidiaries to be dissolved as referenced in Section 7.3 , a noncash
charge for the cumulative effect of the Borrower’s adoption of FASB Statement
123, including the effect of such adoption in the context of an IPO, and all
other non-cash charges acceptable to the Administrative Agent in its reasonable
discretion, (E) the Morgan Add-Backs, and (F) expenses incurred in connection
with an IPO, determined on a consolidated basis in accordance with GAAP, in
each case for such period. Consolidated EBITDA
shall include the pro forma Consolidated EBITDA of any Person or business
acquired for the applicable period preceding such acquisition so long as the
calculation thereof is done in a manner reasonably calculated to comply with
GAAP and such calculation is detailed in the supporting calculations to each
applicable Compliance Certificate as detailed and measured to the
Administrative Agent’s reasonable satisfaction.

 

“Consolidated
Fixed Charges” shall mean, for the Borrower and its Subsidiaries for any
period (including Morgan Research), the sum (without duplication) of (i)
Consolidated Interest Expense for such period, (ii) scheduled principal
payments required to be made on Consolidated Total Debt during such period, and
(iii) Restricted Payments paid during such period, other than intercompany dividends
and distributions by and among the Borrower and the Subsidiaries and
repurchases of Capital Stock permitted by this Agreement. Consolidated Fixed Charges
shall include include the pro forma Consolidated Fixed Charges of any Person or
business acquired, annualized from the date of acquisition for a period not to
exceed four fiscal quarters so long as the calculation thereof is done in a
manner reasonably calculated to comply with GAAP and such calculation is
detailed in the supporting calculations to each applicable Compliance
Certificate as detailed and measured to the Administrative Agent’s reasonable
satisfaction.

 

“Consolidated
Interest Expense” shall mean, for the Borrower and its Subsidiaries for any
period determined on a consolidated basis in accordance with GAAP, the sum of
(i) total interest expense, including without limitation the interest component
of any payments in respect of Capital Lease Obligations capitalized or expensed
during such period (whether or
not actually paid during such period) plus (ii) the net amount payable (or minus
the net amount receivable) under Hedging Transactions during such period
(whether or not actually paid or received during such period).

 

5

 

“Consolidated
Net Income” shall mean, for the Borrower and its Subsidiaries for any
period, the net income (or loss) of the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, but
excluding therefrom (to the extent otherwise included therein) (i) any
extraordinary gains or losses, (ii) any gains attributable to write-ups of
assets or any losses attributable to the write-down of assets, (iii) any
equity interest of the Borrower or any Subsidiary of the Borrower in the unremitted
earnings of any Person that is not a Subsidiary and (iv) any income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary or is merged
into or consolidated with the Borrower or any Subsidiary on the date that such
Person’s assets are acquired by the Borrower or any Subsidiary.

 

“Consolidated
Net Worth” shall mean, as of any date, (i) the total assets of the Borrower
and its Subsidiaries that would be reflected on the Borrower’s consolidated
balance sheet as of such date prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in
the stock and capital surplus of Subsidiaries, minus
(ii) the sum of (x) the total liabilities of the Borrower and its Subsidiaries
that would be reflected on the Borrower’s consolidated balance sheet as of such
date prepared in accordance with GAAP and (y) the amount of any write-up in the
book value of any assets resulting from a revaluation thereof or any write-up
in excess of the cost of such assets acquired reflected on the consolidated
balance sheet of the Borrower as of such date prepared in accordance with GAAP.

 

“Consolidated
Total Debt” shall mean, as of any date, all Indebtedness of the Borrower
and its Subsidiaries measured on a consolidated basis as of such date, but
excluding Indebtedness of the type described in subsection (xi) of the
definition thereto.

 

“Contractual
Obligation” of any Person shall mean any provision of any security issued
by such Person or of any agreement, instrument or undertaking under which such
Person is obligated or by which it or any of the property in which it has an
interest is bound.

 

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

 

“Default
Interest” shall have the meaning set forth in Section 2.14(d).

 

“Disqualified
Stock” shall mean any Capital Stock which, by its terms (or by the terms of
any security or instrument into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Maturity Date or the Incremental Term Loan Maturity
Date, or (b) is convertible into or exchangeable (unless at the sole option of
the issuer thereof) for (i) Indebtedness or (ii) any Capital Stock referred to
in clause (a) above, in each case at any time prior to the first anniversary of
the Maturity Date or the Incremental Term Loan Maturity Date.

 

“Dollar(s)”
and the sign “$” shall mean lawful money of the United States of America.

 

“Environmental
Laws” shall mean all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered

 

6

 

into by or with any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material or to health and safety matters.

 

“Environmental
Liability” shall mean any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation,
costs of administrative oversight, fines, natural resource damages, penalties
or indemnities), of the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (i) any violation of any Environmental Law, (ii)
the generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (iii) any exposure to any Hazardous Materials, (iv)
the Release or threatened Release of any Hazardous Materials or (v) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any successor statute.

 

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

 

“ERISA Event” shall mean (i) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (ii)
the existence with respect to any Plan of an “accumulated funding deficiency”
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (iii) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (iv) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (v) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (vi) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

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

 

“Eurodollar
Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next 1/100th of 1%) in effect on any day to which the
Administrative Agent is subject with respect to the Adjusted LIBO Rate

 

7

 

pursuant to regulations issued
by the Board of Governors of the Federal Reserve System (or any Governmental
Authority succeeding to any of its principal functions) with respect to
eurocurrency funding (currently referred to as “eurocurrency liabilities” under
Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Event of
Default” shall have the meaning provided in Article 8

 

“Excess
Cash Flow” shall
mean, for any Fiscal Year, (a) Consolidated EBITDA  minus (b) the sum of (i) Interest
Expense paid in cash, (ii) required principal payments on Total Debt (including voluntary and
mandatory prepayments of Total Debt),
(iii) federal, state and local income taxes paid in cash,
(iv) Capital Expenditures paid in cash to the extent permitted by the
terms of this Agreement, (v) cash payments made pursuant to acquisition
agreements reflecting Permitted Acquisitions and transactional expenses
incurred in connection with Permitted Acquisitions, (vi) losses from write
downs of assets, and (vi) any net increase in working capital, plus,
(c) as applicable, (i) extraordinary gains and (ii) any net
decreases in working capital, in each case, measured for such fiscal year on a
consolidated basis for the Borrower and its Subsidiaries in accordance with
GAAP.

 

“Excess Cash Flow Period”
means the Fiscal Year commencing on April 1, 2006, and each succeeding
Fiscal Year.

 

“Excluded
Taxes” shall mean with respect to
the Administrative Agent, any Lender, the Issuing Bank or any other recipient
of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any
Lender is located and (c) in the case of a Foreign Lender, any withholding tax
that (i) is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement, (ii) is imposed on amounts
payable to such Foreign Lender at any time that such Foreign Lender designates
a new lending office, other than taxes that have accrued prior to the designation
of such lending office that are otherwise not Excluded Taxes, and (iii) is
attributable to such Foreign Lender’s failure to comply with Section 2.21(e).

 

“Existing Letters of Credit” means the letters of credit issued
and outstanding under the Existing Credit Agreement as set forth on Schedule
2.23.

 

“Federal
Funds Rate” shall mean, for any day, the rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published
by the Federal Reserve Bank of New York on the next succeeding Business Day or
if such rate is not so published for any Business Day, the Federal

 

8

 

Funds Rate for such day shall
be the average rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent.

 

“Fee Letter”
shall mean that certain fee letter, dated as of December 12, 2005, executed by
SunTrust Capital Markets, Inc. and SunTrust Bank and accepted by Borrower.

 

“Fiscal
Quarter” shall mean any fiscal quarter of the Borrower.

 

“Fiscal
Year” shall mean any fiscal year of the Borrower.

 

“Fixed
Charge Coverage Ratio” shall mean, as of any date, the ratio of (a)
Consolidated EBITDA less the actual amount paid by the Borrower and its Subsidiaries
(including Morgan Research) in cash on account of Capital Expenditures and the
actual amount of federal, state and local income taxes paid by the Borrower and
its Subsidiaries (including Morgan Research) to (b) Consolidated Fixed Charges,
in each case measured for the four consecutive Fiscal Quarters ending on or
immediately prior to such date.

 

“Foreign
Lender” shall mean any Lender that
is not a United States person under Section 7701(a)(3) of the Code.

 

“Foreign
Subsidiary” shall mean any Subsidiary that is organized under the laws of a
jurisdiction other than one of the fifty states of the United States or the
District of Columbia.

 

“GAAP”
shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

 

“Government”
shall mean the United States of America or any agency or instrumentality
thereof.

 

“Government
Contract” means any contract with the Government under which the Borrower
or any Subsidiary is a prime contractor or a subcontractor.

 

“Governmental
Authority” shall mean the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee”
of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly
and including any obligation, direct or indirect, of the guarantor (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment thereof, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof,
(iii) to maintain working capital, equity capital or any other financial
statement condition

 

9

 

or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (iv) as an account party in respect of any letter of credit or
letter of guaranty issued in support of such Indebtedness or obligation; provided,
that the term “Guarantee” shall not include endorsements for collection or
deposits in the ordinary course of business. The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which Guarantee is made or, if not so stated
or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith. The term “Guarantee” used as a verb has a
corresponding meaning.

 

“Hazardous
Materials” shall mean all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Hedging Obligations”
of any Person shall mean any and all obligations of such Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired under (i) any and all Hedging Transactions, (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Hedging
Transactions and (iii) any and all renewals, extensions and modifications of
any Hedging Transactions and any and all substitutions for any Hedging
Transactions.

 

“Hedging
Transaction” of any Person shall mean any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by such
Person that is a rate swap, basis swap, forward rate transaction, commodity
swap, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these transactions)
or any combination thereof, whether linked to one or more interest rates,
foreign currencies, commodity prices, equity prices or other financial
measures.

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

“Indebtedness”
of any Person shall mean, without duplication (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of business), (iv)
all obligations of such Person under any conditional sale or other title
retention agreement(s) relating to property acquired by such Person,
(v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit, acceptances
or similar extensions of credit, (vii) all Guarantees of such Person of
the type of Indebtedness described in clauses (i) through (vi) above, (viii)
all Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (ix)
all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any common stock of such Person, (x)
Off-Balance Sheet Liabilities and (xi) all Hedging Obligations. The
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer,
except to the extent that the terms of such Indebtedness provide that such Person
is not liable therefor. “Indebtedness” shall not include the obligation of a
Person to make payments after the closing of an acquisition or merger which are
based on financial or performance metrics of the acquisition or merger target
or for consulting, noncompetition or nonsolicitation agreements unless required
to be reflected as a liability of such Person on such Person’s balance sheet in
accordance with GAAP.

 

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

 

“Index Rate”
means that rate per annum effective on any Index Rate Determination Date which
is equal to the quotient of:

 

(i) the rate
per annum equal to the offered rate for deposits in U.S. dollars for a one (1)
month period, which rate appears on that page of Bloomberg reporting service,
or such similar service as determined by the Administrative Agent, that
displays British Bankers’ Association interest settlement rates for deposits in
U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days
prior to the Index Rate Determination Date; provided, that if no such offered
rate appears on such page, the rate used for such period will be the per annum
rate of interest determined by the Administrative Agent to be the rate at which
U.S. dollar deposits for such period, are offered to the Administrative Agent
in the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the
day which is two (2) Business Days prior to the Index Rate Determination Date,
divided by

 

(ii) a
percentage equal to 1.00 minus the maximum reserve percentages (including any
emergency, supplemental, special or other marginal reserves) expressed as a
decimal (rounded upward to the next 1/100th of 1%) in effect on any day to
which the Administrative Agent is subject with respect to any Index Rate Loan
pursuant to regulations issued by the Board of Governors of the Federal Reserve
System with respect to eurocurrency

 

11

 

funding (currently referred to
as “eurocurrency liabilities” under Regulation D). This percentage will be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Index Rate
Borrowing” and “Index Rate Loan” when used in reference to any Loan
or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, bears interest at a rate determined by reference to the Index Rate.

 

“Index Rate
Determination Date” means the Closing Date and the first Business Day of
each calendar month thereafter.

 

“Information
Memorandum” shall mean the Confidential Information Memorandum dated January, 2006 relating
to the Borrower and the transactions contemplated by this Agreement and the
other Loan Documents.

 

“Interest
Period” shall mean, with respect to any Eurodollar Borrowing, a period of one,
two, three or six months; provided, that:

 

(i)                                     the
initial Interest Period for such Borrowing shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of another
Type), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

 

(ii)                                  if any Interest Period would otherwise end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless such Business Day falls in another
calendar month, in which case such Interest Period would end on the next
preceding Business Day;

 

(iii)                               any Interest Period which 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 such calendar month;

 

(iv)                              each
principal installment of the Term Loans shall have an Interest Period ending on
each installment payment date and the remaining principal balance (if any) of
the Term Loans shall have an Interest Period determined as set forth above; and

 

(v)                                 no Interest Period may extend beyond the
Revolving Commitment Termination Date, unless on the Revolving Commitment
Termination Date the aggregate outstanding principal amount of Term Loans is
equal to or greater than the aggregate principal amount of Eurodollar Loans
with Interest Periods expiring after such date, and no Interest Period may extend
beyond the Maturity Date.

 

“IPO”
means an initial public offering of the Capital Stock, and any secondary
offering by some or all of the underwriters purchasing such Capital Stock in
such initial public offering.

 

“Issuing
Bank” shall mean SunTrust Bank or any other Lender, each in its capacity as
an issuer of Letters of Credit pursuant to Section 2.23.

 

12

 

“LC
Commitment” shall mean that portion of the Aggregate Revolving Commitment
Amount that may be used by the Borrower for the issuance of Letters of Credit
in an aggregate face amount not to exceed $5,000,000.

 

“LC
Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.

 

“LC
Documents” shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.

 

“LC
Exposure” shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the aggregate amount of all LC Disbursements
that have not been reimbursed by or on behalf of the Borrower at such time. The
LC Exposure of any Lender shall be its Pro Rata Share of the total LC Exposure
at such time.

 

“Lenders”
shall have the meaning assigned to such term in the opening paragraph of this
Agreement and shall include, where appropriate, the Swingline Lender and each
Additional Lender that joins this Agreement pursuant to Section 2.24.

 

“Letter of
Credit” shall mean any stand-by letter of credit issued pursuant to Section
2.23 by the Issuing Bank for the account of the Borrower pursuant to the LC
Commitment and the Existing Letters of
Credit.

 

“Leverage
Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total Debt
as of such date to (ii) Consolidated
EBITDA for the four consecutive Fiscal Quarters ending on or immediately prior
to such date.

 

“LIBOR”
shall mean, for any applicable Interest Period with respect to any Eurodollar
Loan, the British Bankers’ Association Interest Settlement Rate per annum for
deposits in Dollars for a period equal to such Interest Period appearing on the
display designated as Page 3750 on the Dow Jones Markets Service (or such other
page on that service or such other service designated by the British Bankers’
Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the day that
is two Business Days prior to the first day of the Interest Period or if such
Page 3750 is unavailable for any reason at such time, the rate which appears on
the Reuters Screen ISDA Page as of such date and such time; provided,
that if the Administrative Agent determines that the relevant foregoing sources
are unavailable for the relevant Interest Period, LIBOR shall mean the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates per
annum at which deposits in Dollars are offered to the Administrative Agent two
(2) Business Days preceding the first day of such Interest Period by leading
banks in the London interbank market as of 10:00 a.m. New York time) for
delivery on the first day of such Interest Period, for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of the Administrative Agent.

 

“Lien”
shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of the foregoing
or any preference, priority or other security

 

13

 

agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having the same economic
effect as any of the foregoing).

 

“Loan
Documents” shall mean, collectively, this Agreement, the Notes (if any),
the LC Documents, the Subsidiary Guaranty Agreement, the Security Documents,
each Incremental Term Loan Assumption Agreement, all Notices of Borrowing, all
Notices of Conversion/Continuation, all Compliance Certificates and any and all
other instruments, agreements, documents and writings executed in connection
with any of the foregoing.

 

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

 

“Loans”
shall mean all Revolving Loans, Swingline Loans and Term Loans in the aggregate
or any of them, as the context shall require.

 

“Material
Adverse Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the
business, results of operations, financial condition, assets or liabilities of
the Borrower or of the Borrower and its Subsidiaries taken as a whole,
(ii) the ability of the Loan Parties to perform any of their respective
obligations under the Loan Documents, (iii) the rights and remedies of the
Administrative Agent, the Issuing Bank, Swingline Lender, and the Lenders under
any of the Loan Documents, or (iv) the legality, validity or enforceability of
any of the Loan Documents.

 

“Material
Contract” means any contract or other arrangement (other than the Loan
Documents), whether written or oral, to which a Borrower or any Subsidiary is a
party (a) requiring annual payments by any party thereto of more than 5 %
of the annual consolidated gross revenues of the Borrower and its Subsidiaries,
or (b) as to which the breach, nonperformance, cancellation or failure to
renew by any party thereto could reasonably be expected to have a Material
Adverse Effect.

 

“Material
Indebtedness” shall mean Indebtedness (other than the Loans and Letters of
Credit) and Hedging Obligations of the Borrower or any of its Subsidiaries,
individually or in an aggregate principal amount exceeding $1,000,000. For purposes of determining
the amount of attributed Indebtedness from Hedging Obligations, the “principal
amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market
Exposure of such Hedging Obligations.

 

“Maturity
Date” shall mean, with respect to the Term Loans, the earlier of (i)
January 31, 2012 or (ii) the date on which the principal amount of all
outstanding Term Loans have been declared or automatically have become due and
payable (whether by acceleration or otherwise).

 

“Moody’s”
shall mean Moody’s Investors Service, Inc.

 

“Morgan
Acquisition” shall mean the acquisition of the stock of Morgan Research by
the Borrower pursuant to the terms of the Morgan Merger Agreement.

 

14

 

“Morgan
Add-Backs” shall mean (a) salaries of certain officers of Morgan who will
not be employed after the closing of the Morgan Acquisition, provided that the
aggregate amount thereof shall not exceed $436,000, (b) non-capitalized
expenses of the Borrower with respect to the Morgan Acquisition, in an
aggregate amount not to exceed $500,000, (c) payments made to certain officers
and shareholders of Morgan to cancel stock options and to pay compensation due
upon the Change in Control of Morgan, in an aggregate amount not to exceed $9,288,173,
and (d) a charge for debt owed to the Borrower by certain of its officers
and forgiven by the Borrower during its Fiscal Quarter ended on March 31, 2005,
in an aggregate amount not to exceed $933,000.

 

“Morgan
Acquisition Documentation” shall mean collectively, the Merger Agreement
and all schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented or otherwise
modified from time to time.

 

“Morgan
Merger Agreement” shall mean the Agreement And Plan of Merger, dated as of
January 5, 2006, by and among the Borrower, MR Merger Corp., an Alabama
corporation and a wholly-owned subsidiary of the Borrower, Morgan Research,
Sharon Morgan and Timothy Morgan

 

“Morgan
Research” shall mean Morgan Research Corporation, an Alabama corporation.

 

“Multiemployer
Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

 

“Net
Mark-to-Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of
all unrealized losses over all unrealized profits of such Person arising from
such Hedging Obligation. “Unrealized losses” shall mean the fair market value
of the cost to such Person of replacing the Hedging Transaction giving rise to
such Hedging Obligation as of the date of determination (assuming the Hedging
Transaction were to be terminated as of that date), and “unrealized profits”
means the fair market value of the gain to such Person of replacing such
Hedging Transaction as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date).

 

“Notes”
shall mean, collectively, the Revolving Credit Notes, the Swingline Note and
the Term Notes.

 

“Notices of
Borrowing” shall mean, collectively, the Notices of Revolving Borrowing and
the Notices of Swingline Borrowing.

 

“Notice of
Conversion/Continuation” shall mean the
notice given by the Borrower to the Administrative Agent in respect of the
conversion or continuation of an outstanding Borrowing as provided in Section
2.8(b).

 

“Notice of
Revolving Borrowing” shall have the meaning as set forth in Section 2.3.

 

“Notice of
Swingline Borrowing” shall have
the meaning as set forth in Section 2.4.

 

15

 

“Obligations”
shall mean all amounts owing by the Borrower to the Administrative Agent, the
Issuing Bank or any Lender (including the Swingline Lender) pursuant to or in
connection with this Agreement or any other Loan Document, including without
limitation, all principal, interest (including any 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),
all reimbursement obligations, fees, expenses, indemnification and
reimbursement payments, costs and expenses (including all fees and expenses of
counsel to the Administrative Agent, the Issuing Bank and any Lender (including
the Swingline Lender) incurred pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising hereunder or thereunder, and
all Hedging Obligations owed to the Administrative Agent, any Lender or any of
their Affiliates incurred in order to limit interest rate or fee fluctuation
with respect to the Loans and Letters of Credit, and all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing,
together with all renewals, extensions, modifications or refinancings thereof.

 

“Off-Balance
Sheet Liabilities” of any Person shall mean (i) any repurchase obligation
or liability of such Person with respect to accounts or notes receivable sold
by such Person, (ii) any liability of such Person under any sale and leaseback
transactions that do not create a liability on the balance sheet of such
Person, (iii) any Synthetic Lease Obligation or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person.

 

“OSHA”
shall mean the Occupational Safety and Health Act of 1970, as amended from time
to time, and any successor statute.

 

“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.

 

“Other Term
Loans” shall have the meaning set forth in Section 2.24.

 

“Participant” shall have the
meaning set forth in Section 10.4(d).

 

“Payment
Office” shall mean the office of the Administrative Agent located at 303
Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA, and any successor entity performing similar
functions.

 

“Permitted
Acquisition” means any transaction consummated after July 31, 2006, in
which the Borrower or a Subsidiary acquires all or substantially all of the
assets or outstanding capital stock or equity interests of any Person or any
division or business line of any Person, or merges or consolidates with any
Person (with any such acquisition being referred to a an “Acquired Business”
and any such Person, division or line of business being the “Target”), provided
that (a) at the closing of such transaction, after giving effect thereto, no
Default or

 

16

 

Event of Default shall have
occurred and be continuing, (b) the Target has Consolidated EBITDA (assuming
that Consolidated EBITDA were to be determined for the Target and its
Subsidiaries rather than the Company and its Subsidiaries, and without regard
to the Morgan Add-Backs or adjustments for IPO expenses) for the twelve month
period ending as of the most recent fiscal quarter end prior to the acquisition
date in an amount greater than $0, (c) such acquisition is not a “hostile”
acquisition and has been approved by the Board of Directors and/or shareholders
of the Borrower, the applicable Subsidiary and the Target, (d) after giving
effect to such, acquisition, there shall be at least $10,000,000 of Borrowing
Availability, (e) at least 10 Business Days prior to the consummation of such
transaction, the Borrower shall give written notice of such transaction to the
Administrative Agent (the “Acquisition Notice”), which shall include either
(i) the final acquisition agreement or the then current draft of the
acquisition agreement or (ii) a reasonably detailed description of the
material terms of such Permitted Acquisition (including, without limitation,
the purchase price and method and structure of payment), (f) the Borrower or a
Subsidiary shall be the surviving entity of any merger, and the surviving
entity shall not be a Foreign Subsidiary, (g) the Acquired Business shall be in
substantially the same line of business as the Borrower and its Subsidiaries or
a line of business permitted by Section 5.3, (h) the aggregate value of
the sum of current and deferred cash and securities to be paid and issued, plus
Indebtedness paid or assumed, in connection with all transactions (the
“Aggregate Acquisition Consideration”) shall not exceed $ 20,000,000 in any
fiscal year of the Borrower, unless otherwise approved by the Administrative
Agent and the Required Lenders; (i) at the time it gives the Acquisition
Notice, the Borrower shall deliver to the Administrative Agent pro forma
financial statements for next succeeding two-year period giving effect to the
acquisition, which shall reflect to the Administrative Agent’s reasonable
satisfaction that the Borrower and its Subsidiaries will continue to be in
compliance with all of the financial covenants set forth in this Agreement and
the pro forma total Leverage Ratio will not exceed 2.75 to 1, (j) the
Administrative Agent shall receive and approve all documents relating to the
acquisition and such additional documentation regarding the acquisition as it
shall reasonably require, including, without limitation, audited financial
statements or a financial review of such Target, as applicable, for its two
most recent fiscal years prepared by independent certified public accountants
reasonably acceptable to the Administrative Agent and unaudited fiscal
year-to-date statements for the two most recent interim periods, and (k) at the
time it gives the Acquisition Notice, the Borrower shall deliver to the
Administrative Agent (which shall promptly deliver a copy to the Lenders) a
certificate, executed by a Responsible Officer of the Borrower, demonstrating
in sufficient detail compliance with the financial covenants contained in
Section 6 of the Agreement on a pro forma basis after giving effect to such
acquisition and, further, certifying that, after giving effect to the
consummation of such acquisition, the representations and warranties of the
Borrower contained herein will be true and correct in all material respects and
as of the date of such consummation, except to the extent such representations
or warranties expressly relate to an earlier date, and that the Borrower, as of
the date of such consummation, will be in compliance with all other terms and
conditions contained herein.

 

“Permitted
Encumbrances” shall mean:

 

(i)                                     Liens
imposed by law for taxes or other governmental charges not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;

 

17

 

(ii)                                  statutory
Liens of landlords, suppliers, carriers, warehousemen, mechanics, materialmen
and similar Liens arising by operation of law in the ordinary course of
business for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;

 

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

 

(iv)                              Liens
and deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

 

(v)                                 judgment
and attachment liens not giving rise to an Event of Default or Liens created by
or existing from any litigation or legal proceeding that are currently being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP; and

 

(vi)                              easements,
zoning restrictions, defects in title, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or materially interfere with the ordinary
conduct of business of the Borrower and its Subsidiaries taken as a whole;

 

provided, that the term “Permitted
Encumbrances” shall not include any Lien securing Indebtedness.

 

“Permitted
Investments” shall mean:

 

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

 

(ii)                                  commercial
paper having the highest rating, at the time of acquisition thereof, of S&P
or Moody’s and in either case maturing within one year from the date of
acquisition thereof;

 

(iii)                               certificates
of deposit, bankers’ acceptances and time deposits maturing within 180 days of
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any state
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;

 

(iv)                              fully
collateralized repurchase agreements with a term of not more than 60 days for
securities described in clause (i) above and entered into with a financial
institution satisfying the criteria described in clause (iii) above; and

 

18

 

(v)                                 mutual
funds investing solely in any one or more of the Permitted Investments
described in clauses (i) through (iv) above.

 

“Permitted
Subordinated Debt” shall mean any Indebtedness of the Borrower or any
Subsidiary (i) that is expressly subordinated to the Obligations on terms
satisfactory to the Administrative Agent and the Required Lenders in their sole
discretion, (ii) that matures by its terms no earlier than six months after the
later of the Revolving Commitment Termination Date, the Maturity Date or the
Incremental Term Loan Maturity Date then in effect with no required principal
payments permitted prior to such maturity, and (iii) that is evidenced by an
indenture or other similar agreement the material terms of which are reasonably
satisfactory to the Administrative Agent and the Required Lenders.

 

“Person”
shall mean any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental
Authority.

 

“Plan”
shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pro Rata
Share” shall mean (i) with respect to any Revolving Commitment of any
Revolving Loan Lender at any time, a percentage, the numerator of which shall
be such Revolving Loan Lender’s Revolving Commitment (or if such Revolving
Commitments have been terminated or expired or the Loans have been declared to
be due and payable, such Lender’s Revolving Credit Exposure), and the
denominator of which shall be the sum of such Revolving Commitments of all
Revolving Loan Lenders (or if such Revolving Commitments have been terminated
or expired or the Loans have been declared to be due and payable, all Revolving
Credit Exposure of all Revolving Loan Lenders), (ii) with respect to any Term
Loan Commitment of any Term Loan Lender at any time, a percentage, the
numerator of which shall be such Term Loan Lender’s Term Loan Commitment (or if
such Term Loan Commitments have been terminated or expired or the Loans have
been declared to be due and payable, such Term Loan Lender’s Term Loan), and
the denominator of which shall be the sum of such Term Loan Commitments of all
Term Loan Lenders (or if such Term Loan Commitments have been terminated or
expired or the Loans have been declared to be due and payable, all Term Loans
of all Term Loan Lenders), and (iii) with respect to all Commitments of any
Lender at any time, the numerator of which shall be the sum of such Lender’s
Revolving Commitment (or if such Revolving Commitments have been terminated or
expired or the Loans have been declared to be due and payable, such Lender’s
Revolving Credit Exposure) and Term Loan and the denominator of which shall be
the sum of all Lenders’ Revolving Commitments (or if such Revolving Commitments
have been terminated or expired or the Loans have been declared to be due and
payable, all Revolving Credit Exposure of all Lenders funded under such
Commitments) and Term Loans.

 

“Regulation D”
shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time, and any successor
regulations.

 

19

 

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

 

“Release”
shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

 

“Required
Lenders” shall mean, at any time, Lenders holding more than 50% of the
aggregate outstanding Revolving Commitments and Term Loans at such time or if
the Lenders have no Commitments outstanding, then Lenders holding more than 50%
of the Revolving Credit Exposure and Term Loans.

 

“Required
Revolving Lenders” shall mean, at any time, Revolving Loan Lenders holding
more than 50% of the aggregate outstanding Revolving Commitments at such time
or if the Revolving Loan Lenders have no Revolving Commitments outstanding,
then Revolving Lenders holding more than 50% of the Revolving Credit Exposure.

 

“Requirement
of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may
be, and other organizational and governing documents of such Person, and any
law, treaty, rule or regulation, or determination of a Governmental Authority,
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.

 

“Responsible
Officer” shall mean any of the president, the chief executive officer, the
chief operating officer, the chief financial officer, the treasurer or a vice
president of the Borrower or such other representative of the Borrower as may
be designated in writing by any one of the foregoing with the consent of the
Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer or the treasurer of the Borrower.

 

“Restricted
Payment” shall have the meaning set forth in Section 7.5.

 

“Revolving
Commitment” shall mean, with respect to each Lender, the obligation of such
Lender to make Revolving Loans to the Borrower and to participate in Letters of
Credit and Swingline Loans in an aggregate principal amount not exceeding the
amount set forth with respect to such Lender on Schedule II, as such
schedule may be amended pursuant to Section 2.24, or in the case of a
Person becoming a Lender after the Closing Date through an assignment of an
existing Revolving Commitment, the amount of the assigned “Revolving
Commitment” as provided in the Assignment and Assumption executed by such
Person as an assignee, as the same may be increased or deceased pursuant to
terms hereof.

 

“Revolving
Commitment Termination Date” shall mean the earliest of (i) January 31,
2011, (ii) the date on which the Revolving Commitments are terminated pursuant
to Section 2.9 and (iii) the date on which all amounts outstanding under
this Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise).

 

20

 

“Revolving
Credit Exposure” shall mean, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure.

 

“Revolving
Credit Note” shall mean a promissory note of the Borrower payable to the
order of a requesting Lender in the principal amount of such Lender’s Revolving
Commitment, in substantially the form of Exhibit A.

 

“Revolving
Loan” shall mean a loan made by a Lender (other than the Swingline Lender)
to the Borrower under its Revolving Commitment, which may either be a Base Rate
Loan or a Eurodollar Loan.

 

“Revolving
Loan Lender” shall mean each Lender that has a Revolving Commitment or is
the holder of Revolving Credit Exposure.

 

“Security
Agreement” shall mean the Security Agreement, dated as of the date hereof
and substantially in the form of Exhibit G, made by the Borrower and certain Subsidiaries of the
Borrower in favor of the Administrative Agent for the benefit of the Lenders.

 

“Security
Documents” shall mean the Security Agreement and each of the security
agreements, mortgages and other instruments and documents executed and
delivered pursuant thereto or pursuant to Section 5.12.

 

“S&P”
shall mean Standard & Poor’s, a Division of the McGraw-Hill Companies.

 

“Subordinated
Debt Documents” shall mean any indenture, agreement or similar instrument
governing any Permitted Subordinated Debt.

 

“Subsidiary”
shall mean, with respect to any Person (the “parent”), any corporation,
partnership, joint venture, limited liability company, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, partnership, joint venture, limited liability company, association
or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power, or in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held, or (ii)
that is, as of such date, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. Unless otherwise indicated, all references to “Subsidiary” hereunder
shall mean a Subsidiary of the Borrower.

 

“Subsidiary
Guaranty Agreement” shall mean the Subsidiary Guaranty Agreement, dated as
of the date hereof and substantially in the form of Exhibit F, made by certain Subsidiaries of
the Borrower in favor of the Administrative Agent for the benefit of the Lenders.

 

“Subsidiary
Guaranty Supplement” shall mean each supplement substantially in the form
of Schedule II to the Subsidiary Guaranty Agreement executed and
delivered by a Subsidiary of the Borrower pursuant to Section 5.11.

 

21

 

“Subsidiary
Loan Party” shall mean any Subsidiary that executes or becomes a party to
the Subsidiary Guaranty Agreement.

 

“Swingline
Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $5,000,000.

 

“Swingline
Exposure” shall mean, with respect to each Lender, the principal amount of
the Swingline Loans in which such Lender is legally obligated either to make a
Base Rate Loan or to purchase a participation in accordance with Section 2.4,
which shall equal such Lender’s Pro Rata Share of all outstanding Swingline
Loans.

 

“Swingline
Lender” shall mean SunTrust Bank, or any other Lender that may agree to
make Swingline Loans hereunder.

 

“Swingline
Loan” shall mean a loan made to the Borrower by the Swingline Lender under
the Swingline Commitment.

 

“Swingline
Note” shall mean the promissory note of the Borrower payable to the order
of the Swingline Lender in the principal amount of the Swingline Commitment,
substantially the form of Exhibit D.

 

“Swingline
Rate” shall mean the Base Rate plus the Applicable Margin.

 

“Synthetic
Lease” shall mean a lease transaction under which the parties intend that
(i) the lease will be treated as an “operating lease” by the lessee pursuant to
Statement of Financial Accounting Standards No. 13, as amended and (ii) the
lessee will be entitled to various tax and other benefits ordinarily available
to owners (as opposed to lessees) of like property.

 

“Synthetic
Lease Obligations” shall mean, with respect to any Person, the sum of (i)
all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the
lease property at the end of the lease term.

 

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

 

“Term Loan”
shall have the meaning set forth in Section 2.6. Unless the context
shall otherwise require, “Term Loans” shall include the Incremental Term Loans.

 

“Term Loan
Commitment” shall mean, with respect to each
Term Loan Lender, the obligation of such Term Loan Lender to make a Term Loan
hereunder on the Closing Date, in a principal amount not exceeding the amount
set forth with respect to such Lender on Schedule II. The aggregate
principal amount of all Term Loan Lenders’ Term Loan Commitments is
$100,000,000. Unless the context shall otherwise require, “Term Loan
Commitments” shall include the Incremental Term Loan Commitments.

 

22

 

“Term Loan
Lender” shall mean each Lender that has a Term Loan Commitment or is the
holder of a Term Loan. Unless the context otherwise requires, “Term Loan
Lenders” shall include the Incremental Term Loan Lenders.

 

“Term Note”
shall mean a promissory note of the Borrower payable to the order of a
requesting Term Loan Lender in the principal amount of such Lender’s Term Loan
Commitment, in substantially the form of Exhibit B.

 

“Type”,
when used in reference to a Loan or Borrowing, refers to whether the rate of interest
on such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the Adjusted LIBO Rate, the Index Rate or the Base Rate.

 

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

 

Section
1.2.                                   Classifications of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g. a “Revolving Loan” or a “Term Loan”) or by Type (e.g. a “Eurodollar
Loan,” “Index Rate Loan” or “Base Rate Loan”) or by Class and Type (e.g.
“Revolving Eurodollar Loan”). Borrowings also may be classified and referred to
by Class (e.g. “Revolving Borrowing”) or by Type (e.g. “Eurodollar Borrowing”)
or by Class and Type (e.g. “Revolving Eurodollar Borrowing”).

 

Section
1.3.                                   Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial statement
of the Borrower delivered pursuant to Section 5.1(a); provided,
that if the Borrower notifies the Administrative Agent that the Borrower wishes
to amend any covenant in Article 6 to eliminate the effect of any change
in GAAP on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article 6
for such purpose), then the Borrower’s compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Lenders.

 

Section
1.4.                                   Terms Generally. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including” and the word “to” means “to but excluding”. Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, restated,

 

23

 

supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or modifications
set forth herein), (ii) any reference herein to any Person shall be construed
to include such Person’s successors and permitted assigns, (iii) the words
“hereof”, “herein” and “hereunder” and words of similar import shall be
construed to refer to this Agreement as a whole and not to any particular
provision hereof, (iv) all references to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Administrative
Agent’s principal office, unless otherwise indicated.

 

ARTICLE 2

AMOUNT AND TERMS OF THE COMMITMENTS

 

Section
2.1.                                   General Description of Facilities. Subject
to and upon the terms and conditions herein set forth, (i) the Revolving
Loan Lenders hereby establish in favor of the Borrower a revolving credit
facility pursuant to which each Revolving Loan Lender severally agrees (to the
extent of such Lender’s Revolving Commitment) to make Revolving Loans to the
Borrower in accordance with Section 2.2, (ii) the Issuing Bank agrees to
issue Letters of Credit in accordance with Section 2.23, (iii) the Swingline Lender
agrees to make Swingline Loans in accordance with Section 2.4, (iv) each
Revolving Loan Lender agrees to purchase a participation interest in the
Letters of Credit and the Swingline Loans pursuant to the terms and conditions
hereof; provided, that in no event shall the aggregate principal amount
of all outstanding Revolving Loans, Swingline Loans and outstanding LC Exposure
exceed at any time the Aggregate Revolving Commitment Amount from time to time
in effect; and (v) each Term Loan Lender severally agrees to make a Term Loan
to the Borrower in a principal amount not exceeding such Term Loan Lender’s
Term Loan Commitment on the Closing Date.

 

Section 2.2.                                   Revolving Loans. Subject to the terms and
conditions set forth herein, each Revolving Loan Lender severally agrees to
make Revolving Loans, ratably in proportion to its Pro Rata Share, to the
Borrower, from time to time during the Availability
Period, in an aggregate principal amount outstanding at any time that will not
result in (a) such Revolving Loan Lender’s Revolving Credit Exposure exceeding
such Revolving Loan Lender’s Revolving Commitment or (b) the sum of the
aggregate Revolving Credit Exposures of all Revolving Loan Lenders exceeding
the Aggregate Revolving Commitment Amount. During the Availability Period, the
Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in
accordance with the terms and conditions of this Agreement; provided,
that the Borrower may not borrow or reborrow should there exist a Default or
Event of Default.

 

Section 2.3.                                   Procedure for Revolving Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Revolving Borrowing substantially in the form of Exhibit 2.3 (a “Notice of Revolving
Borrowing”) (x) prior to 11:00 a.m. New York time) one (1) Business Day
prior to the requested date of each Base Rate Borrowing or Index Rate Borrowing
and (y) prior to 11:00 a.m. New York time) three (3) Business Days prior to the
requested date of each Eurodollar Borrowing. Each Notice of Revolving Borrowing
shall be irrevocable and shall
specify: (i) the aggregate

 

24

 

principal amount of
such Borrowing, (ii) the date of such Borrowing (which shall be a Business
Day), (iii) the Type of such Revolving Loan comprising such Borrowing and (iv)
in the case of a Eurodollar Borrowing, the duration of the initial Interest
Period applicable thereto (subject to the provisions of the definition of
Interest Period). Each Revolving Borrowing shall consist entirely of Base Rate
Loans, Index Rate Loans or Eurodollar Loans, as the Borrower may request, provided,
that on the Closing Date all Revolving Loans shall be Index Rate Loans. The
aggregate principal amount of each Eurodollar Borrowing shall be not less than
$1,000,000 or a larger multiple of $500,000, and the aggregate principal amount
of each Base Rate Borrowing and Index Rate Borrowing shall not be less than
$500,000 or a larger multiple of $100,000; provided, that Base Rate
Loans made pursuant to Section 2.4 or Section 2.23(d) may be made
in lesser amounts as provided therein. At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed six. Promptly following the receipt
of a Notice of Revolving Borrowing in accordance herewith, the Administrative
Agent shall advise each Revolving Loan Lender of the details thereof and the
amount of such Revolving Loan Lender’s Revolving Loan to be made as part of the
requested Revolving Borrowing.

 

Section
2.4.                                   Swingline Commitment.

 

(a)                                  Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower, from time to time during the Availability Period, in an
aggregate principal amount outstanding at any time not to exceed the lesser of
(i) the Swingline Commitment then in effect and (ii) the difference between the
Aggregate Revolving Commitment Amount and the aggregate Revolving Credit
Exposures of all Lenders; provided, that the Swingline Lender shall not
be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. The Borrower shall be entitled to borrow, repay and reborrow Swingline
Loans in accordance with the terms and conditions of this Agreement.

 

(b)                                 The Swingline Lender agrees to
make Swingline Loans to the Borrower from time to time in accordance with the
treasury and cash management services and products provided to the Borrower by
the Swingline Lender (the “Cash Management Swingline Loans”). For other
Swingline Loans, The Borrower shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Borrowing substantially in the form of Exhibit 2.4 attached hereto (“Notice of
Swingline Borrowing”) prior to 10:00 a.m. New York time) on the requested
date of each Swingline Borrowing. Each Notice of Swingline Borrowing shall be
irrevocable and shall specify: (i) the principal amount of such Swingline Loan,
(ii) the date of such Swingline Loan (which shall be a Business Day) and (iii)
the account of the Borrower to which the proceeds of such Swingline Loan should
be credited. The Administrative Agent will promptly advise the Swingline Lender
of each Notice of Swingline Borrowing. Each Swingline Loan shall accrue
interest at the Swingline Rate and shall have an Interest Period (subject to
the definition thereof) as agreed between the Borrower and the Swingline
Lender. The aggregate principal amount of each Swingline Loan shall be not less
than $100,000 or a larger multiple
of $50,000, or such other minimum amounts agreed to by the Swingline Lender and
the Borrower. The Swingline Lender will make the proceeds of each Swingline
Loan available to the Borrower in Dollars in immediately available funds at the
account specified by the Borrower in the applicable Notice of Swingline
Borrowing not later than 1:00 p.m. New York time) on the requested date of such
Swingline Loan.

 

25

 

(c)                                  The
Swingline Lender, at any time and from time to time in its sole discretion,
may, on behalf of the Borrower (which hereby irrevocably authorizes and directs
the Swingline Lender to act on its behalf), give a Notice of Revolving
Borrowing to the Administrative Agent requesting the Revolving Loan Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal to
the unpaid principal amount of any Swingline Loan. Each Revolving Loan Lender
will make the proceeds of its Base Rate Loan included in such Borrowing
available to the Administrative Agent for the account of the Swingline Lender
in accordance with Section 2.7, which will be used solely for the
repayment of such Swingline Loan. The Swingline Lender agrees that it shall give such Notice
of Borrowing on the last Business Day of each calendar week if any Swingline
Loans are then outstanding.

 

(d)                                 If for
any reason a Base Rate Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the
foregoing provisions, then each Revolving Loan Lender (other than the Swingline
Lender) shall purchase an undivided participating interest in such Swingline
Loan in an amount equal to its Pro Rata Share thereof on the date that such
Base Rate Borrowing should have occurred. On the date of such required
purchase, each Revolving Loan Lender shall promptly transfer, in immediately
available funds, the amount of its participating interest to the Administrative
Agent for the account of the Swingline Lender. If such Swingline Loan bears
interest at a rate other than the Base Rate, such Swingline Loan shall
automatically become a Base Rate Loan on the effective date of any such
participation and interest shall become payable on demand.

 

(e)                                  Each
Revolving Loan Lender’s obligation to make a Base Rate Loan pursuant to Section
2.4(c) or to purchase the participating interests pursuant to Section
2.4(d) shall be absolute and unconditional and shall not be affected
by any circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Revolving Loan Lender or any other
Person may have or claim against the Swingline Lender, the Borrower or any
other Person for any reason whatsoever, (ii) the existence of a Default or an
Event of Default or the termination of any Revolving Loan Lender’s Revolving Commitment,
(iii) the existence (or alleged existence) of any event or condition which has
had or could reasonably be expected to have a Material Adverse Effect, (iv) any
breach of this Agreement or any other Loan Document by the Borrower, the
Administrative Agent or any Revolving Loan Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided, however, that the obligation of each
Revolving Loan Lender to make any such Base Rate Loan or purchase any such
participating interest is subject to the condition that the Swing Line Lender
believed in good faith that all conditions under Section 3.2 were
satisfied at the time the Swing Line Loan was made. If
such amount is not in fact made available to the Swingline Lender by any
Revolving Loan Lender, the Swingline Lender shall be entitled to recover such
amount on demand from such Revolving Loan Lender, together with accrued
interest thereon for each day from the date of demand thereof (i) at the Federal
Funds Rate until the second Business Day after such demand and (ii) at the Base
Rate at all times thereafter. Until such time as such Revolving Loan Lender
makes its required payment, the Swingline Lender shall be deemed to continue to
have outstanding Swingline Loans in the amount of the unpaid participation for
all purposes of the Loan Documents. In addition, such Revolving Loan Lender
shall be deemed to have assigned any and all payments made of principal and
interest on its Revolving Loans and any other amounts due to it hereunder, to
the Swingline Lender to fund the amount of such Revolving Loan Lender’s
participation interest in

 

26

 

such Swingline Loans that such
Revolving Loan Lender failed to fund pursuant to this Section 2.4, until
such amount has been purchased in full.

 

Section
2.5.                                   Reserved.

 

Section
2.6.                                   Term Loan Commitments. Subject to the terms and
conditions set forth herein, each Term Loan Lender severally agrees to make a
single loan (each, a “Term Loan”) to the Borrower on the Closing Date in
a principal amount not to exceed the Term Loan Commitment of such Term Loan
Lender; provided, that if for any reason the full amount of such Term
Loan Lender’s Term Loan Commitment is not fully drawn on the Closing Date, the
undrawn portion thereof shall automatically be cancelled. The Term Loans may
be, from time to time, Base Rate Loans or Eurodollar Loans or a combination
thereof; provided, that on the Closing Date all Term Loans shall be Base
Rate Loans. At no
time shall the total number of Eurodollar Loans outstanding at any time exceed six.
The
execution and delivery of this Agreement by the Borrower and the satisfaction
of all conditions precedent pursuant to Section 3.1 shall be deemed to
constitute the Borrower’s request to borrow the Term Loans on the Closing Date.

 

Section
2.7.                                   Funding of Borrowings.

 

(a)                                  Each
Lender will make available each Loan to be made by it hereunder on the proposed
date thereof by wire transfer in immediately available funds by 1:00 p.m. (New York time) to the
Administrative Agent at the Payment Office; provided, that the Swingline
Loans will be made as set forth in Section 2.4. The Administrative Agent
will make such Loans available to the Borrower by promptly crediting the
amounts that it receives, in like funds by the close of business on such
proposed date, to an account maintained by the Borrower with the Administrative
Agent or at the Borrower’s option, by effecting a wire transfer of such amounts
to an account designated by the Borrower to the Administrative Agent.

 

(b)                                 Unless
the Administrative Agent shall have been notified by any Lender prior to 5:00
p.m. (New York
time) one
(1) Business Day prior to the date of a Borrowing in which such Lender is to
participate that such Lender will not make available to the Administrative
Agent such Lender’s share of such Borrowing, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date, and the Administrative Agent, in reliance on such
assumption, may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at the Federal Funds Rate until
the second Business Day after such demand and thereafter at the Base Rate. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent together with interest at the rate specified
for such Borrowing. Nothing in this subsection shall be deemed to relieve any
Lender from its obligation to fund its Pro Rata Share of any Borrowing
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.

 

27

 

(c)                                  All
Revolving Borrowings shall be made by the Lenders on the basis of their
respective Pro Rata Shares. No Lender shall be responsible for any default by
any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.

 

Section
2.8.                                   Interest Elections.

 

(a)                                  On the Closing Date, each
Revolving Loan shall be an Index Rate Loan and each Term Loan and each
Swingline Loan shall be a Base Rate Loan. After the Closing Date, each
Borrowing initially shall be of the Type specified in the applicable Notice of
Borrowing, and in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Notice of Borrowing, provided that only
Revolving Loans may be borrowed as Index Rate Loans. Thereafter, the Borrower
may elect to convert such Borrowing into a different Type or to continue such
Borrowing, and in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.8. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding Loans comprising such Borrowing, and the Loans comprising each
such portion shall be considered a separate Borrowing. This Section shall not
apply to Swingline Borrowings, which may not be converted or continued.

 

(b)                                 To
make an election pursuant to this Section 2.8, the Borrower shall give
the Administrative Agent prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing substantially in the form of Exhibit
2.8 attached hereto (a “Notice
of Conversion/Continuation”) that is to be converted or continued, as the
case may be, (x) prior to 10:00 a.m. New York time) one (1) Business Day prior to the
requested date of a conversion into a Base Rate Borrowing and (y) prior to
11:00 a.m. New York
time) three
(3) Business Days prior to a continuation of or conversion into a Eurodollar
Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify (i) the Borrowing to which such Notice of Continuation/Conversion
applies and if different options are being elected with respect to different
portions thereof, the portions thereof that are to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii)
the effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (iii) whether the
resulting Borrowing is to be a Base Rate Borrowing, and Index Rate Borrowing or
a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to be a
Eurodollar Borrowing, the Interest Period applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition
of “Interest Period”. If any such Notice of Continuation/Conversion requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower
shall be deemed to have selected an Interest Period of one month. The principal
amount of any resulting Borrowing shall satisfy the minimum borrowing amount
for Eurodollar Borrowings, Index Rate Borrowings and Base Rate Borrowings set
forth in Section 2.3.

 

(c)                                  If, on
the expiration of any Interest Period in respect of any Eurodollar Borrowing,
the Borrower shall have failed to deliver a Notice of Conversion/ Continuation,
then,

 

28

 

unless such Borrowing is repaid as
provided herein, the Borrower shall be deemed to have elected to convert such
Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or
continued as, a Eurodollar Borrowing if a Default or an Event of Default
exists, unless the Administrative Agent and each of the Lenders shall have
otherwise consented in writing. No conversion of any Eurodollar Loans shall be
permitted except on the last day of the Interest Period in respect thereof.

 

(d)                                 Upon
receipt of any Notice of Conversion/Continuation, the Administrative Agent
shall promptly notify each Lender of the details thereof and of such Lender’s
portion of each resulting Borrowing.

 

(e)                                  If a Notice of Borrowing or a
Notice of Conversion/Continuation does not specify a Type, the Borrower shall
be deemed to have requested a Base Rate Borrowing with respect to the Term
Loans and an Index Rate Borrowing with respect to the Revolving Loans.

 

Section
2.9.                                   Optional Reduction and Termination of Commitments.

 

(a)                                  Unless
previously terminated, all Revolving Commitments, Swingline Commitments and LC
Commitments shall terminate on the Revolving Commitment Termination Date. The
Term Loan Commitments shall terminate on the Closing Date upon the making of
the Term Loans pursuant to Section 2.6.

 

(b)                                 Upon
at least three (3) Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent (which notice shall
be irrevocable), the Borrower may reduce the Aggregate Revolving Commitments in
part or terminate the Aggregate Revolving Commitments in whole; provided,
that (i) any partial reduction shall apply to reduce proportionately and
permanently the Revolving Commitment of each Lender, (ii) any partial reduction
pursuant to this Section 2.9 shall be in an amount of at least
$1,000,000 and any larger multiple of $500,000, and (iii) no such reduction
shall be permitted which would reduce the Aggregate Revolving Commitment Amount
to an amount less than the outstanding Revolving Credit Exposures of all
Lenders. Any such reduction in the Aggregate Revolving Commitment Amount below
the sum of the principal amount of the Swingline Commitment and the LC
Commitment shall result in a proportionate reduction (rounded to the next
lowest integral multiple of $100,000) in the Swingline Commitment and the LC
Commitment.

 

Section
2.10.                             Repayment of Loans.

 

(a)                                  The
outstanding principal amount of all Revolving Loans shall be due and payable
(together with accrued and unpaid interest thereon) on the Revolving Commitment
Termination Date.

 

(b)                                 The
principal amount of each Swingline Borrowing shall be due and payable (together
with accrued and unpaid interest thereon) the Revolving Commitment Termination
Date.

 

(c)                                  The Borrower unconditionally
promises to pay to the Administrative Agent for the account of each Term Loan
Lender the then unpaid principal amount of the Term

 

29

 

Loan of such Term Loan Lender in installments
payable on the last day of each March, June September and December, commencing
on June 30, 2006, with each such installment being in the aggregate principal
amount for all Term Loan Lenders equal to 0.25% of the original aggregate
principal amount of the Term Loans, provided, that, to the extent not
previously paid, the aggregate unpaid principal balance of the Term Loans shall
be due and payable on the Maturity Date.

 

Section
2.11.                             Evidence of Indebtedness.

 

(a)                                  Each Lender shall maintain in
accordance with its usual practice appropriate records evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable thereon and paid to such Lender from time to time under this Agreement.
The Administrative Agent shall maintain appropriate
records in which shall be recorded
(i) the Revolving Commitment and Term Loan Commitment of each Lender, (ii) the
amount of each Loan made hereunder by each Lender, the Class and Type thereof
and the Interest Period applicable thereto, (iii) the date of each continuation
thereof pursuant to Section 2.8, (iv) the date of each conversion of all
or a portion thereof to another Type pursuant to Section 2.8, (v) the
date and amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder in respect of such Loans
and (vi) both the date and amount of any sum received by the Administrative
Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro
Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded, absent manifest error; provided,
that the failure or delay of any Lender or the Administrative Agent in
maintaining or making entries into any such record or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans
(both principal and unpaid accrued interest) of such Lender in accordance with the
terms of this Agreement.

 

(b)                                 At the
request of any Lender (including the Swingline Lender) at any time, the
Borrower agrees that it will execute and deliver to such Lender, as applicable,
a Revolving Credit Note, a Term Loan Note and, in the case of the Swingline
Lender only, a Swingline Note, payable to the order of such Lender.

 

Section 2.12.                             Optional
Prepayments. The
Borrower shall have the right at any time and from time to time to prepay any
Borrowing, in whole or in part, without premium or penalty, by giving
irrevocable written notice (or telephonic notice promptly confirmed in writing)
to the Administrative Agent no later than (i) in the case of prepayment of any
Eurodollar Borrowing, 11:00 a.m. (New York time) not less than three (3)
Business Days prior to any such prepayment, (ii) in the case of any prepayment
of any Base Rate Borrowing or an Index Rate Borrowing, not less than one
Business Day prior to the date of such prepayment, and (iii) in the case of
Swingline Borrowings, prior to 11:00 a.m. New York time) on the date of such
prepayment, provided that no notice shall be required for the prepayment of any
Cash Management Swingline Loans. Each such notice shall be irrevocable and
shall specify the proposed date of such prepayment and the principal amount of
each Borrowing or portion thereof to be prepaid. Upon receipt of any such
notice, the Administrative Agent shall promptly notify each affected Lender of
the contents thereof and of such Lender’s Pro Rata Share of any such
prepayment. If such notice is given, the aggregate amount specified in such
notice shall be due and payable on the

 

30

 

date designated in
such notice, together with accrued interest to such date on the amount so
prepaid in accordance with Section 2.14(e); provided, that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.20. Each partial prepayment of any
Loan (other than a Swingline Loan) shall be in an a minimum amount of $100,000
and shall be an integral multiple of $50,000. Each prepayment of a Borrowing
shall be applied ratably to the Loans comprising such Borrowing, and in the
case of a prepayment of a Term Loan Borrowing, to principal installments in
inverse order of maturity.

 

Section
2.13.                             Mandatory Prepayments.

 

(a)                                  Within
three Business days of receipt by the Borrower or any of its Subsidiaries of
proceeds in excess of $25,000 of any sale or disposition by the Borrower or
such Subsidiary of any of its assets (excluding (i) sales of inventory in the
ordinary course of business, (ii)
sales of worn-out, surplus or obsolete equipment, (iii) sales of assets the proceeds of which are
invested or committed to be invested into the businesses of the Borrower and
its Subsidiaries within 180 days after such assets are sold, (iv) insurance
proceeds (less any costs of recovery) which are invested or committed to be
invested into the business of the Borrower and its Subsidiaries within 180 days
of receipt, (v) sales or liquidations of Permitted Investments,
(vi) sales of accounts receivable in connection with settlement or
collection and (vii) so long as no Event of Default has occurred and is continuing,
other sales of assets of the Borrower or any of its Subsidiaries with an
aggregate book value not to exceed $5,000,000 in any Fiscal Year) the
Borrower shall prepay the Loans in an amount equal to all such proceeds, net of
commissions and other reasonable, taxes, reserves for purchase price
adjustments and post-closing obligations, and customary transaction costs, fees
and expenses properly attributable to such transaction and payable by such
Borrower in connection therewith (in each case, paid to non-Affiliates). Any
such prepayment shall be applied in accordance with Section 2.13(d).

 

(b)                                 If the
Borrower or any of its Subsidiaries issues any debt or equity securities (other
than Indebtedness permitted under Section 7.1, equity securities issued
by a Subsidiary of the Borrower to the Borrower or another Subsidiary or equity
securities transferred or allocated to the Borrower’s ESOP or stock option
plans) then no later than three Business Days following the date of receipt of
the proceeds thereof, Borrower shall prepay the Loans in an amount equal to
50%, in the case of equity securities, and 100% in the case of debt securities,
of all such proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. Any such
prepayment shall be applied in accordance with Section 2.13(d).

 

(c)                                  If at
the end of any Excess Cash Flow period the Leverage Ratio is equal to or
greater than 2.50:1.00, the Borrower shall, within 90 days after the end of
such Excess Cash Flow Period, prepay the Loans in an amount equal to 50% of
Excess Cash Flow for such Excess Cash Flow Period. Any such prepayment shall be
applied in accordance with Section 2.13(d).

 

(d)                                 Amounts to be applied in
connection with prepayments made pursuant to Sections 2.13(a), (b)
or (c) shall be applied first, to Administrative Agent’s fees
and reimbursable expenses then due and payable pursuant to any of the Loan
Documents; second, to all other fees and reimbursable expenses of the
Lenders and the Issuing Bank then due and payable pursuant to

 

31

 

any of the Loan Documents; third,
to interest then due and payable on the Loans; fourth, to the principal
balance of the Term Loans, until the same shall have been paid in full; fifth,
to the principal balance of the Swingline Loans, until the same shall have been
paid in full, to the Swingline Lender; sixth, to the principal balance
of the Revolving Loans, until the same shall have been paid in full, and seventh,
to cash collateralize the Letters of Credit in accordance with Section
2.23(g) in an amount in cash equal to the LC Exposure as of such date plus
any accrued and unpaid fees thereon. The Revolving Commitments of the Lenders
shall not be permanently reduced by the amount of any prepayments made pursuant
this the Section 2.13(d).

 

(e)                                  If at
any time the Revolving Credit Exposure of all Lenders exceeds the Aggregate
Revolving Commitment Amount, as reduced pursuant to Section 2.9 or
otherwise, the Borrower shall immediately repay Swingline Loans and Revolving
Loans in an amount equal to such excess, together with all accrued and unpaid
interest on such excess amount and any amounts due under Section 2.20.
Each prepayment shall be applied first to the Swingline Loans to the full
extent thereof, second to the Base Rate Loans to the full extent thereof, and
finally to Eurodollar Loans to the full extent thereof. If after giving effect
to prepayment of all Swingline Loans and Revolving Loans, the Revolving Credit
Exposure of all Lenders exceeds the Aggregate Revolving Commitment Amount, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Issuing Bank and the
Lenders, an amount in cash equal to such excess plus any accrued and unpaid
fees thereon to be held as collateral for the LC Exposure. Such account shall
be administered in accordance with Section 2.23(g) hereof.

 

Section 2.14.                             Interest on
Loans.

 

(a)                                  The Borrower shall pay interest
on each Base Rate Loan at the Base Rate in effect from time to time and on each
Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in
effect for such Loan, plus, in each
case, the Applicable Margin in effect from time to time. The Borrower shall pay
interest on each Index Rate Loan at the Index Rate plus the Applicable Margin
in effect from time to time. The interest rate on Index Rate Loans shall be
established based on the Index Rate in effect on the first Index Rate Determination
Date, and shall be adjusted on each Index Rate Determination Date thereafter to
reflect the Index Rate then in effect.

 

(b)                                 The
Borrower shall pay interest on each Swingline Loan at the Swingline Rate in
effect from time to time.

 

(c)                                  While
an Event of Default exists or after acceleration, at the option of the Required
Lenders, the Borrower shall pay interest (“Default Interest”) with
respect to all Eurodollar Loans and at the rate otherwise applicable for the
then-current Interest Period plus an additional
2% per annum until the last day of such Interest Period, and thereafter, and
with respect to all Index Rate Loans and Base Rate Loans (including all
Swingline Loans) and all other
Obligations hereunder (other than Loans), at an all-in rate in effect for Base
Rate Loans, plus an additional 2% per annum.

 

(d)                                 Interest
on the principal amount of all Loans shall accrue from and including the date
such Loans are made to but excluding the date of any repayment thereof.

 

32

 

Interest on all outstanding Base Rate
Loans, Index Rate Loans and Swingline Loans shall be payable monthly in
arrears on the last day of each calendar
month and on the Revolving Commitment
Termination Date or the Maturity Date, as the case may be. Interest on all
outstanding Eurodollar Loans shall be payable on the last day of each Interest
Period applicable thereto, and, in the case of any Eurodollar Loans having an
Interest Period in excess of three months, on each day which occurs every three
months after the initial date of such Interest Period, and on the Revolving
Commitment Termination Date or the Maturity Date, as the case may be. Interest
on any Loan which is converted into a Loan of another Type or which is repaid
or prepaid shall be payable on the date of such conversion or on the date of
any such repayment or prepayment (on the amount repaid or prepaid) thereof. All
Default Interest shall be payable on demand.

 

(e)                                  The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder and shall promptly notify the Borrower and the Lenders of such rate
in writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.

 

Section
2.15.                             Fees.

 

(a)                                  The
Borrower shall pay to the Administrative Agent for its own account fees in the
amounts and at the times previously agreed upon in writing by the Borrower and
the Administrative Agent.

 

(b)                                 The
Borrower agrees to pay to the Administrative Agent for the account of each
Revolving Loan Lender a commitment fee, which shall accrue at the Applicable
Percentage per annum (determined daily in accordance with Schedule I) on
the daily amount of the unused Revolving Commitment of such Revolving Loan
Lender during the Availability Period. For purposes of computing commitment
fees with respect to the Revolving Commitments, the Revolving Commitment of
each Revolving Loan Lender shall be deemed used to the extent of the
outstanding Revolving Loans and LC Exposure, but not Swingline Exposure, of
such Lender.

 

(c)                                  The
Borrower agrees to pay (i) to the Administrative Agent, for the account of each
Revolving Loan Lender, a letter of credit fee with respect to its participation
in each Letter of Credit, which shall accrue at a rate per annum equal to the
Applicable Margin for Eurodollar Loans then in effect on the average daily
amount of such Revolving Loan Lender’s LC Exposure attributable to such Letter
of Credit during the period from and including the date of issuance of such
Letter of Credit to but excluding the date on which such Letter of Credit
expires or is drawn in full (including without limitation any LC Exposure that
remains outstanding after the Revolving Commitment Termination Date) and (ii)
to the Issuing Bank for its own account a fronting fee, which shall accrue at
the rate of 0.125% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the Availability
Period (or until the date that such Letter of Credit is irrevocably cancelled,
whichever is later), as well as the Issuing Bank’s standard fees with respect
to issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Notwithstanding the foregoing, if the Required Lenders elect
to increase the interest rate on the Loans to the Default Interest pursuant to Section
2.14(d),

 

33

 

the rate per annum used to calculate the
letter of credit fee pursuant to clause (i) above shall automatically be
increased by an additional 2% per annum.

 

(d)                                 The
Borrower shall pay to the Administrative Agent, for the ratable benefit of each
Lender, the upfront fee previously agreed upon by the Borrower and the
Administrative Agent, which shall be due and payable on the Closing Date.

 

(e)                                  Accrued
fees under paragraphs (b) and (c) above shall be payable quarterly in arrears
on the last day of each March, June, September and December, commencing on March 31, 2006 and on the Revolving Commitment
Termination Date (and if later, the date the Loans and LC Exposure shall be
repaid in their entirety); provided  further, that any such fees
accruing after the Revolving Commitment Termination Date shall be payable on
demand.

 

Section 2.16.                             Computation of Interest and Fees. All
computations of interest and fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable (to the extent computed on the basis of days elapsed). Each
determination by the Administrative Agent of an interest amount or fee
hereunder shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes.

 

Section
2.17.                             Inability to Determine Interest Rates. If
prior to the commencement of any Interest Period for any Eurodollar Borrowing or on the Index Rate
Determination Date for any Index Rate Borrowing,

 

(i)                                     the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant interbank
market, adequate means do not exist for ascertaining LIBOR for such Interest
Period or the Index Rate on such Index Rate Determination Date, or

 

(ii)                                  the Administrative Agent shall have received
notice from the Required Lenders that the Adjusted LIBO Rate or the Index Rate
does not adequately and fairly reflect the cost to such Lenders (or Lender, as
the case may be) of making, funding or maintaining their (or its, as the case
may be)  Eurodollar Loans for such
Interest Period or its Index Rate Loans, as applicable,

 

the
Administrative Agent shall give written notice (or telephonic notice, promptly
confirmed in writing) to the Borrower and to the Lenders as soon as practicable
thereafter. Until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i)
the obligations of the Lenders to make Eurodollar Revolving Loans or Index Rate
Loans or to continue or convert outstanding Loans as or into Eurodollar Loans
or Index Rate Loans shall be suspended and (ii) all such affected Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto and all Index Rate Loans shall automatically be
converted to Base Rate Loans, unless, in either case, the Borrower prepays such
Loans in accordance with this Agreement. Unless the Borrower notifies the
Administrative Agent at least one Business Day before the date of any
Eurodollar Revolving Borrowing for which a Notice of Revolving Borrowing has
previously 

 

34

 

been given that it elects not
to borrow on such date, then such Revolving Borrowing shall be made as a Base
Rate Borrowing.

 

Section
2.18.                             Illegality. If any
Change in Law shall make it unlawful or impossible for any Lender to make,
maintain or fund any Eurodollar Loan or Index Rate Loan and such Lender shall
so notify the Administrative Agent, the Administrative Agent shall promptly
give notice thereof to the Borrower and the other Lenders, whereupon until such
Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Revolving Loans or Index Rate Loans, or to
continue or convert outstanding Loans as or into Eurodollar Loans or Index Rate
Loans, shall be suspended. In the case of the making of a Eurodollar Revolving
Borrowing or an Index Rate Borrowing, such Lender’s Revolving Loan shall be
made as a Base Rate Loan as part of the same Revolving Borrowing for the same
Interest Period and if the affected Eurodollar Loan is then outstanding, such
Loan shall be converted to a Base Rate Loan either (i) on the last day of the
then current Interest Period applicable to such Eurodollar Loan if such Lender
may lawfully continue to maintain such Loan to such date or (ii) immediately if
such Lender shall determine that it may not lawfully continue to maintain such
Eurodollar Loan to such date, and immediately in the case of an Index Rate
Loan. Notwithstanding the foregoing, the affected Lender shall, prior to giving
such notice to the Administrative Agent, designate a different Applicable
Lending Office if such designation would avoid the need for giving such notice
and if such designation would not otherwise be commercially disadvantageous to
such Lender in the good faith exercise of its discretion.

 

Section
2.19.                             Increased Costs.

 

(a)                                  If any
Change in Law shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit or similar requirement that is not otherwise included
in the determination of the Adjusted LIBO Rate or the Index Rate hereunder
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate or the Index Rate) or the Issuing Bank; or

 

(ii)                                  impose on any Lender or on the Issuing Bank
or the eurodollar interbank market any other condition affecting this Agreement
or any Eurodollar Loans or Index Rate Loans made by such Lender or any Letter
of Credit or any participation therein;

 

and the result
of either of the foregoing is to increase the cost to such Lender of making,
converting into, continuing or maintaining a Eurodollar Loan or Index Rate Loan
or to increase the cost to such Lender or the Issuing Bank of participating in
or issuing any Letter of Credit or to reduce the amount received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
any other amount), then such Lender or Issuing Bank shall promptly notify the
Borrower and the Administrative Agent in writing of the facts underlying such
increase in cost and the Borrower shall promptly pay, upon written notice from
and demand by such Lender on the Borrower (with a copy of such notice and
demand to the Administrative Agent), to the Administrative Agent for the
account of such Lender, within five Business Days after the date of such notice
and demand, additional amount or amounts sufficient to compensate

 

35

 

such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 If any
Lender or the Issuing Bank shall have determined that on or after the date of
this Agreement any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the Issuing
Bank’s capital (or on the capital of such Lender’s or the Issuing Bank’s parent
corporation) as a consequence of its obligations hereunder or under or in
respect of any Letter of Credit to a level below that which such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s parent corporation could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies or the policies of such Lender’s or the
Issuing Bank’s parent corporation with respect to capital adequacy) then such Lender or Issuing Bank
shall promptly notify the Borrower and the Administrative Agent in writing of
the facts underlying such increase in cost and, from time to time, within five
(5) Business Days after receipt by the Borrower of written demand by such
Lender (with a copy thereof to the Administrative Agent), the Borrower shall
pay to such Lender such additional amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s parent corporation for any
such reduction suffered.

 

(c)                                  A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s parent corporation, as the case may be, specified in paragraph
(a) or (b) of this Section 2.19 shall be delivered to the Borrower (with
a copy to the Administrative Agent) and shall be conclusive, absent manifest
error. The Borrower shall pay any such Lender or the Issuing Bank, as the case
may be, such amount or amounts within 10 days after receipt thereof.

 

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

 

Section
2.20.                             Funding Indemnity. In the event of (a) the
payment of any principal of a Eurodollar Loan other than on the last day of the
Interest Period applicable thereto (including as a result of an Event of Default),
(b) the conversion or continuation of a Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure by the
Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date
specified in any applicable notice (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate
each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event. In the case
of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (A) the amount of
interest that would have accrued on the

 

36

 

principal amount of such
Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate
applicable to such Eurodollar Loan for the period from the date of such event
to the last day of the then current Interest Period therefor (or in the case of
a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Eurodollar Loan) over (B) the amount of interest
that would accrue on the principal amount of such Eurodollar Loan for the same
period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was
prepaid or converted or the date on which the Borrower failed to borrow,
convert or continue such Eurodollar Loan. Each Lender agrees to use
commercially reasonable efforts to mitigate the amount of each loss, cost or
expense referred to in this Section 2.20. A certificate as to any
additional amount payable under this Section 2.20 submitted to the
Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive,
absent manifest error.

 

Section
2.21.                             Taxes.

 

(a)                                  Any
and all payments by or on account of any obligation of the Borrower hereunder
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided, that if the Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then, subject
to the provisions of Section 2.21(e), (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.21)
the Administrative Agent, any Lender or the Issuing Bank (as the case may be)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

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

 

(c)                                  The
Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Bank, within five (5) Business Days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section 2.21) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Bank, shall be conclusive absent manifest error.

 

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

 

37

 

(e)                                  Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the Code or any treaty to which the United States is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), on or prior to the date on
which such Foreign Lender becomes a Lender or a Participant under this
Agreement, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate. Without limiting
the generality of the foregoing, each Foreign Lender agrees that it will
deliver to the Administrative Agent and the Borrower (or in the case of a
Participant, to the Lender from which the related participation shall have been
purchased), as appropriate, two (2) duly completed copies of (i) Internal
Revenue Service Form W-8 ECI, or any successor form thereto, certifying that
the payments received from the Borrower hereunder are effectively connected
with such Foreign Lender’s conduct of a trade or business in the United States;
or (ii) Internal Revenue Service Form W-8 BEN, or any successor form thereto,
certifying that such Foreign Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest; or (iii) Internal Revenue Service Form
W-8 BEN, or any successor form prescribed by the Internal Revenue Service,
together with a certificate (A) establishing that the payment to the Foreign
Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under
Code section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is
not a bank for purposes of Code section 881(c)(3)(A), or the obligation
of the Borrower hereunder is not, with respect to such Foreign Lender, a loan
agreement entered into in the ordinary course of its trade or business, within
the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of
the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and
(3) the Foreign Lender is not a controlled foreign corporation that is related
to the Borrower within the meaning of Code section 881(c)(3)(C); or (iv) such
other Internal Revenue Service forms as may be applicable to the Foreign
Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender shall
deliver to the Borrower and the Administrative Agent such forms on or before
the date that it becomes a party to this Agreement (or in the case of a
Participant, on or before the date such Participant purchases the related
participation). In addition, each such Foreign Lender shall deliver such forms
within 10 days after the obsolescence or invalidity of any form previously
delivered by such Foreign Lender. Each such Foreign Lender shall promptly
notify the Borrower and the Administrative Agent at any time that 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
Internal Revenue Service for such purpose). ). If a Foreign Lender is entitled
to an exemption from or reduction of withholding tax in respect of payments to
be made to such Lender under this Agreement and does not deliver the Internal
Revenue Service forms and certificates described in the preceding sentences
prior to becoming a party to this Agreement or within ten (10) days after the
obsolescence or invalidity of any previously delivered form, the Borrower shall
withhold taxes from payments to such Foreign Lender at the applicable statutory
rates and the Borrower shall not be required to pay any additional amount, as a
result of such withholding, provided that all such withholding shall cease upon
the delivery by the Foreign Lender to the Borrower and the Administrative Agent
of the Internal Revenue Service forms and certificates required to be delivered
pursuant to this Section 2.21(e).

 

38

 

Section
2.22.                             Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)                                  Each Borrowing hereunder, each
payment by the Borrower on account of any Commitment Fee or Letter of Credit
Fee (other than the fronting fee payable solely to the Issuing Bank) and any
reduction of the Revolving Commitments of the Revolving Loan Lenders shall be
made pro  rata according to the respective Pro Rata Shares of the
relevant Lenders. Each payment (other than prepayments) in respect of principal
or interest in respect of the Loans and each payment in respect of fees payable
hereunder shall be applied to the amounts of such obligations owing to the
Lenders pro  rata according to the respective amounts then due and
owing to the Lenders.

 

(b)                                 Each payment (including each
prepayment) of the Term Loans shall be allocated among the Term Loan Lenders
holding such Term Loans pro  rata based on the principal amount of
such Term Loans held by such Term Loan Lenders. Prepayments shall be applied to
the installments of such Term Loans in the inverse order of the scheduled
maturities of such installments. Amounts prepaid on account of the Term Loans
may not be reborrowed.

 

(c)                                  Each payment (including each
prepayment) by the Borrowers on account of principal of and interest on the
Revolving Credit Loans shall be made pro  rata according to the
respective outstanding principal amounts of the Revolving Credit Loans then
held by the Revolving Credit Lenders. Each payment in respect of LC
Disbursements in respect of any Letter of Credit shall be made to the Issuing
Bank that issued such Letters of Credit.

 

(d)                                 The
Borrower shall make each payment required to be made by it hereunder (whether
of principal, interest, fees or reimbursement of LC Disbursements, or of
amounts payable under Sections 2.19, 2.20 or 2.21, or
otherwise) prior to 12:00 noon New
York time) on the date when due, in immediately available funds, free
and clear of any defenses, rights of set-off, counterclaim, or withholding or
deduction of taxes. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at the Payment Office
(and, pending disbursement, shall be held in trust by the Administrative Agent
for the benefit of the Lenders), except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.19,
2.20 and 2.21 and 10.3 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If payments are required to be
made by the Administrative Agent to the Lenders hereunder, and are not in fact
made available within one (1) Business Day after the Administrative Agent’s
receipt thereof, then such Lender shall be entitled to recover such amount from
the Administrative Agent, together with accrued interest thereon for each day
from the date of receipt at the Federal Funds Rate. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be made payable for the period of
such extension. All payments hereunder shall be made in Dollars.

 

(e)                                  If at
any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,

 

39

 

interest and fees then due hereunder,
such funds shall be applied (i) first, towards payment of interest and fees
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of interest and fees then due to such parties, and (ii)
second, towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such
parties.

 

(f)                                    If any
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its
Revolving Loans or participations in LC Disbursements or Swingline Loans that
would result in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received
by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided, that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements or Swingline Loans to any assignee or participant, other
than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(g)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the
account of the Lenders or the Issuing Bank hereunder that the Borrower will not
make such payment, the Administrative Agent may assume that the Borrower will
make such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount or amounts due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

(h)                                 If any
Lender shall fail to make any payment required to be made by it pursuant to Section
2.4(b), 2.7(b), 2.22(d), 2.23(d) or (e) or 10.3(d),
then the Administrative

 

40

 

Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

 

(i)                                     Notwithstanding anything to the
contrary in Section 2.13 or this Section 2.22, each Term Loan
Lender may, at its option, decline any mandatory prepayment applicable to the
Term Loans of such Lender. Accordingly, with respect to the amount of any
mandatory prepayment described in Section 2.13 that is allocated to Term
Loans (such amounts, the “Term Loan Prepayment Amount”), the Borrower
will, in the case of any mandatory prepayment required to be made pursuant to Section
2.13, in lieu of applying such amount to the prepayment of the Term Loans,
as provided in paragraph Section 2.13(d), on the date specified in Section
2.13 for such mandatory prepayment, give the Administrative Agent
telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Term Loan Lender a notice
(each, a “Prepayment Option Notice”) as described below. As promptly as
practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Term Loan Lender a Prepayment Option Notice, which
shall be in the form of Exhibit 2.22, and shall include an offer by the
Borrower to prepay on the date (each a “Prepayment Date”) that is 10
Business Days after the date of the Prepayment Option Notice, the relevant Term
Loans of such Term Loan Lender by an amount equal to the portion of the Term
Loan Prepayment Amount indicated in such Term Loan Lender’s Prepayment Option
Notice as being applicable to such Term Loan Lender’s Term Loans. On the
Prepayment Date, (i) the Borrower shall pay to the Administrative Agent the
aggregate amount necessary to prepay that portion of the outstanding relevant
Term Loans in respect of which Term Loan Lenders have accepted prepayment as
described above (such Term Loan Lenders, the “Accepting Lenders”), and
such amount shall be applied to reduce the Term Loan Prepayment Amounts with
respect to each Accepting Lender, (ii) the Borrower shall pay to the
Administrative Agent an amount equal to Term Loan Prepayment Amount not
accepted by the Accepting Lenders, and such amount shall be applied to the
prepayment of the Revolving Loans until paid in full, and (iii) the remaining
portion of the Term Loan Prepayment Amount not accepted by the Accepting
Lenders shall be applied to the Term Loans pro rata according to the amounts
then due and owing to the Term Loan Lenders.

 

Section
2.23.                             Letters of Credit.

 

(a)                                  During
the Availability Period, the Issuing Bank, in reliance upon the agreements of
the other Lenders pursuant to Section 2.23(d), agrees to issue, at the
request of the Borrower, Letters of Credit for the account of the Borrower on
the terms and conditions hereinafter set forth; provided, that (i) each
Letter of Credit shall expire on the earlier of (A) the date one year after the
date of issuance of such Letter of Credit (or in the case of any renewal or
extension thereof, one year after such renewal or extension) and (B) the date
that is five (5) Business Days prior to the Revolving Commitment Termination
Date; (ii) each Letter of Credit shall be in a stated amount of at least $100,000; and (iii) the Borrower may not
request any Letter of Credit, if, after giving effect to such issuance (A) the
aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate
Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving
Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank without recourse a
participation in each Letter of Credit equal to such Lender’s Pro Rata Share of
the

 

41

 

aggregate amount available to be drawn
under such Letter of Credit (i) on the Closing Date with respect to all
Existing Letters of Credit and (ii) on the date of issuance with respect to all
other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to
utilize the Revolving Commitment of each Lender by an amount equal to the
amount of such participation.

 

(b)                                 To
request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall give the
Issuing Bank and the Administrative Agent irrevocable written notice at least
three (3) Business Days prior to the requested date of such issuance specifying
the date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, extended or renewed, as the case may be), the expiration date of
such Letter of Credit, the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. In addition
to the satisfaction of the conditions in Article 3 the issuance of such
Letter of Credit (or any amendment which increases the amount of such Letter of
Credit) will be subject to the further conditions that such Letter of Credit
shall be in such form and contain such terms as the Issuing Bank shall approve
and that the Borrower shall have executed and delivered any additional
applications, agreements and instruments relating to such Letter of Credit as
the Issuing Bank shall reasonably require; provided, that in the event
of any conflict between such applications, agreements or instruments and this
Agreement, the terms of this Agreement shall control.

 

(c)                                  At
least two Business Days prior to the issuance of any Letter of Credit, the
Issuing Bank will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received such notice and if not, the
Issuing Bank will provide the Administrative Agent with a copy thereof. Unless
the Issuing Bank has received notice from the Administrative Agent on or before
the Business Day immediately preceding the date the Issuing Bank is to issue
the requested Letter of Credit (1) directing the Issuing Bank not to issue the
Letter of Credit because such issuance is not then permitted hereunder because
of the limitations set forth in Section 2.23(a) or that one or more
conditions specified in Article 3 are not then satisfied, then, subject
to the terms and conditions hereof, the Issuing Bank shall, on the requested
date, issue such Letter of Credit in accordance with the Issuing Bank’s usual
and customary business practices.

 

(d)                                 The
Issuing Bank shall examine all documents purporting to represent a demand for
payment under a Letter of Credit promptly following its receipt thereof. The
Issuing Bank shall notify the Borrower and the Administrative Agent of such
demand for payment and whether the Issuing Bank has made or will make a LC
Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to such LC
Disbursement. The Borrower shall be irrevocably and unconditionally obligated
to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank
in respect of such drawing, without presentment, demand or other formalities of
any kind. Unless the Borrower shall have notified the Issuing Bank and the
Administrative Agent prior to 11:00 a.m. New York time) on the Business Day immediately prior
to the date on which such drawing is honored that the Borrower intends to
reimburse the Issuing Bank for the amount of such drawing in funds other than
from the proceeds of Revolving Loans, the Borrower shall be deemed to have
timely given a Notice of Revolving Borrowing to the Administrative Agent
requesting the Lenders to make a Base Rate

 

42

 

Borrowing on the date on which such drawing is honored in an exact
amount due to the Issuing Bank; provided, that for purposes solely of
such Borrowing, the conditions precedents set forth in Section 3.2
hereof shall not be applicable. The Administrative Agent shall notify the
Lenders of such Borrowing in accordance with Section 2.3, and each
Lender shall make the proceeds of its Base Rate Loan included in such Borrowing
available to the Administrative Agent for the account of the Issuing Bank in
accordance with Section 2.7. The proceeds of such Borrowing shall be
applied directly by the Administrative Agent to reimburse the Issuing Bank for
such LC Disbursement.

 

(e)                                  If for
any reason a Base Rate Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the
foregoing provisions, then each Lender (other than the Issuing Bank) shall be
obligated to fund the participation that such Lender purchased pursuant to
subsection (a) in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the
date which such Base Rate Borrowing should have occurred. Each Lender’s
obligation to fund its participation shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation (i) any
setoff, counterclaim, recoupment, defense or other right that such Lender or
any other Person may have against the Issuing Bank or any other Person for any
reason whatsoever, (ii) the existence of a Default or an Event of Default or
the termination of the Aggregate Revolving Commitments, (iii) any adverse
change in the condition (financial or otherwise) of the Borrower or any of its
Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other
Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing, provided, however, that the obligation of each
Revolving Loan Lender to fund such participation interest is subject to the
condition that the Issuing Bank believed in good faith that all conditions
under Section 3.2 were satisfied at the time the applicable Letter of
Credit was issued. On the date that such participation is required to be
funded, each Lender shall promptly transfer, in immediately available funds,
the amount of its participation to the Administrative Agent for the account of
the Issuing Bank. Whenever, at any time after the Issuing Bank has received
from any such Lender the funds for its participation in a LC Disbursement, the
Issuing Bank (or the Administrative Agent on its behalf) receives any payment on
account thereof, the Administrative Agent or the Issuing Bank, as the case may
be, will distribute to such Lender its Pro Rata Share of such payment; provided,
that if such payment is required to be returned for any reason to the Borrower
or to a trustee, receiver, liquidator, custodian or similar official in any
bankruptcy proceeding, such Lender will return to the Administrative Agent or
the Issuing Bank any portion thereof previously distributed by the
Administrative Agent or the Issuing Bank to it.

 

(f)                                    To the
extent that any Lender shall fail to pay any amount required to be paid
pursuant to paragraph (e) above on the due date therefor, such Lender shall pay
interest to the Issuing Bank (through the Administrative Agent) on such amount
from such due date to the date such payment is made at a rate per annum equal
to the Federal Funds Rate; provided, that if such Lender shall fail to
make such payment to the Issuing Bank within three (3) Business Days of such
due date, then, retroactively to the due date, such Lender shall be obligated
to pay interest on such amount at the rate set forth in Section 2.14(d).

 

(g)                                 If any
Event of Default shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Administrative Agent or the Required Lenders

 

43

 

demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Issuing Bank and the Lenders, an amount in cash equal to the
LC Exposure as of such date plus any accrued and unpaid fees thereon; provided,
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Section 8.1.
Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Borrower agrees
to execute any documents and/or certificates to effectuate the intent of this
paragraph. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest. Interest and profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall be applied by
the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it had not been reimbursed and to the extent so applied, shall be held
for the satisfaction of the reimbursement obligations of the Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been accelerated,
with the consent of the Required Lenders, be applied to satisfy other
obligations of the Borrower under this Agreement and the other Loan Documents.
If the Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount (to the
extent not so applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

 

(h)                                 Promptly
following the end of each calendar quarter, the Issuing Bank shall deliver
(through the Administrative Agent) to each Lender and the Borrower a report
describing the aggregate Letters of Credit outstanding at the end of such
Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing
Bank shall deliver to such Lender any other information reasonably requested by
such Lender with respect to each Letter of Credit then outstanding.

 

(i)                                     The
Borrower’s obligation to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:

 

(i)                                     Any lack of validity or enforceability of any
Letter of Credit or this Agreement;

 

(ii)                                  The existence of any claim, set-off, defense
or other right which the Borrower or any Subsidiary or Affiliate of the
Borrower may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any Persons or entities for whom any such beneficiary or
transferee may be acting), any Lender (including the Issuing Bank) or any other
Person, whether in connection with this Agreement or the Letter of Credit or
any document related hereto or thereto or any unrelated transaction;

 

44

 

(iii)                               Any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;

 

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

 

(v)                                 Any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section 2.23, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder; or

 

(vi)                              The existence of a Default or an Event of
Default.

 

Neither the
Administrative Agent, the Issuing Bank, the Lenders nor any Related Party of
any of the foregoing shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to above), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank; provided,
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any actual direct damages (as
opposed to special, indirect (including claims for lost profits or other
consequential damages), or punitive damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank’s failure to
exercise due care when determining whether drafts or other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree, that in the absence of gross negligence, bad faith or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised due
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented that appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(j)                                     Unless otherwise expressly
agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued
and subject to applicable laws, performance under Letters of Credit by the
Issuing Bank, its correspondents, and the beneficiaries thereof will be
governed by the rules of the “International Standby Practices 1998” (ISP98) (or
such later revision as may be published by the Institute of International
Banking Law & Practice on any date any Letter of Credit may be issued)and
to the extent not inconsistent therewith, the governing law of this Agreement
set forth in Section 10.5.

 

45

 

Section
2.24.                             Increase of Commitments; Additional Lenders.

 

(a)                                  Subject
to the terms and conditions of this Section 2.24 ̧ the Borrower may, by
written notice to the Administrative Agent from time to time, request an
increase in the Aggregate Revolving Commitments, or request Incremental Term
Loan Commitments, or both, by an amount not to exceed $75,000,000 in the
aggregate (the amount of any such increase, the “Additional Commitment
Amount”). Such
notice shall set forth (i) the amount of the Additional Commitment Amount being
requested (which shall be in minimum increments of $1,000,000 and a minimum
amount of $25,000,000), (ii) the allocation of the Additional Commitment Amount
to an increase in the Aggregate Revolving Commitments or Incremental Term Loan
Commitments, or both, (iii) the date on which the Additional Commitment Amount
is requested to become effective (which shall not be less than 15 Business Days
(or such shorter period as the Administrative Agent may agree) nor more than 60
days after the date of such notice), and (iii) whether any Incremental Term
Loan Commitments are commitments to make additional Term Loans or commitments
to make term loans with terms different from the Term Loans (“Other Term
Loans”).

 

(b)                                 For a period
of ten Business Days following receipt of such notice, each Revolving Lender
shall have the right  to elect by written
notice to the Borrower and the Administrative Agent to increase its Revolving
Commitment by a principal amount equal to its Pro Rata Share of the Additional
Commitment Amount allocated to the Aggregate Revolving Commitments, and each
Term Loan Lender shall have the right to elect to make an Incremental Term Loan
in a principal amount equal to its Pro Rate share of the Additional Commitment
Amount allocated to the Incremental Term Loan Commitments. No Lender (or any
successor thereto) shall have any obligation to increase its Revolving
Commitment or to make an Incremental Term Loan, and any decision by a Lender to
increase its Revolving Commitment or to make an Incremental Term Loan shall be
made in its sole discretion independently from any other Lender.

 

(c)                                  If any
Lender shall not elect to increase its Revolving Commitment or to make an
Incremental Term Loan pursuant to subsection (a) of this Section 2.24,
the Borrower may designate another bank or other financial institution (which
may be, but need not be, one or more of the existing Lenders) which at the time
agrees to, in the case of any such Person that is an existing Revolving Lender,
increase its Revolving Commitment and in the case of any other such Person (an
“Additional Lender”), become a party to this Agreement, if not already a
Lender, or if already a Lender, become a Revolving Loan Lender or a Term Loan
Lender, as applicable; provided, however, that any new bank or
financial institution must be reasonably acceptable to the Administrative
Agent, which acceptance will not be unreasonably withheld, conditioned or
delayed. The sum of the increases in the Revolving Commitments of the existing
Revolving Lenders pursuant to this subsection (b) plus the Revolving
Commitments of the Additional Lenders shall not in the aggregate exceed the
unsubscribed amount of the Additional Commitment Amount allocated to the
Aggregate Revolving Commitments.

 

(d)                                 The Borrower and each
Incremental Term Lender shall execute and deliver to the Administrative Agent
an Incremental Term Loan Assumption Agreement and such other documentation as
the Administrative Agent shall reasonably specify to evidence the Incremental
Term Loan Commitment of each Incremental Term Lender. Each Incremental Term

 

46

 

Loan Assumption Agreement shall be on the
same terms and conditions as the Term Loans, except that the Incremental Term
Loan Assumption Agreement may provide for a different maturity date and
amortization schedule,  provided that, (i) the final maturity date of any
Other Term Loans shall be no earlier than the Maturity Date, and (ii) the
dollar weighted average life to maturity of the Other Term Loans shall be no
shorter than the dollar weighted average life to maturity of the Term Loans.
The Administrative Agent shall promptly notify each Lender as to the
effectiveness of each Incremental Term Loan Assumption Agreement. Each of the
parties hereto hereby agrees that, upon the effectiveness of any Incremental
Term Loan Assumption Agreement, this Agreement shall be deemed amended to the
extent (but only to the extent) necessary to reflect the existence and terms of
the Incremental Term Loan Commitment and the Incremental Term Loans evidenced
thereby.

 

(e)                                  Notwithstanding the foregoing,
no Additional Commitment Amount shall become effective under this Section
2.24 unless (i) on the date of such effectiveness (A) the conditions set
forth in paragraphs (a), (b) and (c) of Section 3.2 shall be satisfied and (B)
after giving effect to the making of any Incremental Term Loans and the use of
the proceeds thereof, the Borrower would be in pro forma compliance with the
financial covenants set forth in Article 6 as of and for the most
recently ended period of four consecutive fiscal quarters for which financial
statements have been delivered pursuant to Section 5.1 (assuming for the
purposes of Section 6.2 that such transactions occurred at the end of
such period and for the purposes of Section 6.2 that such transactions
occurred at the beginning of such period), and the Administrative Agent shall
have received a certificate as to clauses (A) and (B) (with reasonably detailed
calculations in the case of clause (B) dated such date and executed by a
Responsible Officer of the Borrower, and (ii) except as otherwise specified in
the applicable Incremental Term Loan Assumption Agreement, the Administrative
Agent shall have received (with sufficient copies for each of the Incremental
Term Lenders) legal opinions, board resolutions and other closing certificates
reasonably requested by the Administrative Agent and consistent with those
delivered on the Closing Date under Section 3.1.

 

(f)                                    Upon
the acceptance of any such agreement by the Administrative Agent with respect
to an increase in the Revolving Commitments, the Aggregate Revolving Commitment
Amount shall automatically be increased by the amount of the Revolving
Commitments added through such agreement and Schedule II shall
automatically be deemed amended to reflect the Revolving Commitments of all
Revolving Lenders after giving effect to the addition of such Revolving
Commitments.

 

(g)                                 Upon
any increase in the aggregate amount of the Revolving Commitments pursuant to
this Section 2.24 that is not pro rata among all Revolving Lenders, (x)
within five Business Days, in the case of any Base Rate Loans then outstanding,
and at the end of the then current Interest Period with respect thereto, in the
case of any Eurodollar Loans then outstanding, the Borrower shall prepay such
Loans in their entirety and, to the extent the Borrower elects to do so and
subject to the conditions specified in Article 3, the Borrower shall
reborrow Loans from the Revolving Lenders in proportion to their respective
Revolving Commitments after giving effect to such increase, until such time as
all outstanding Loans are held by the Lenders in proportion to their respective
Commitments after giving effect to such increase and (y) effective upon such
increase, the amount of the participations held by each Lender in each Letter
of Credit then outstanding shall be adjusted automatically such that, after

 

47

 

giving effect to such adjustments, the
Lenders shall hold participations in each such Letter of Credit in proportion
to their respective Revolving Commitments.

 

Section
2.25.                             Mitigation of Obligations. If any Lender requests compensation
under Section 2.19, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.21, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under Section
2.19 or Section 2.21, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.

 

Section
2.26.                             Replacement of Lenders. If any Lender is unable to
fund any Eurodollar Loan or Index Rate Loan pursuant to Section 2.18 or
if any Lender requests compensation under Section 2.19, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority of the account of any Lender pursuant to Section 2.21,
or if any Lender defaults in its obligation to fund Loans hereunder or comply
with the provisions of Section 2.21(e) or if any Lender does not provide
its consent to any proposed Permitted Acquisition which must be consented to by
the Required Lenders, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions set forth in Section 10.4(b) all its interests, rights and
obligations under this Agreement to an assignee that shall assume such obligations
(which assignee may be another Lender); provided, that (i) the Borrower
shall have received the prior written consent of the Administrative Agent,
which consent shall not be unreasonably withheld or delayed, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal
amount of all Loans owed to it, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (in the case of such
outstanding principal and accrued interest) and from the Borrower (in the case
of all other amounts) and (iii) in the case of a claim for compensation under Section
2.19 or payments required to be made pursuant to Section 2.21, such
assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

ARTICLE 3

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

 

Section
3.1.                                   Conditions To Effectiveness. The
obligations of the Lenders (including the Swingline Lender) to make Loans and
the obligation of the Issuing Bank to issue any Letter of Credit hereunder shall
not become effective until the date on which each of the following conditions
is satisfied (or waived in accordance with Section 10.2).

 

48

 

(a)                                  The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Closing Date, including reimbursement or payment of
all out-of-pocket expenses (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent) required to be reimbursed
or paid by the Borrower hereunder, under any other Loan Document and under any
agreement with the Administrative Agent or SunTrust Capital Markets, Inc., as
Arranger.

 

(b)                                 The
Administrative Agent (or its counsel) shall have received the following:

 

(i)                                     a counterpart of this Agreement signed by or
on behalf of each party hereto or written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement;

 

(ii)                                  duly executed Notes payable to each Lender
requesting a note;

 

(iii)                               the Subsidiary Guaranty Agreement duly
executed by each Subsidiary Loan Party;

 

(iv)                              the Security Agreement duly executed by the
Borrower and each Subsidiary Loan Party;

 

(v)                                 a certificate of the Secretary or Assistant
Secretary of each Loan Party in form and substance acceptable to the
Administrative Agent, attaching and certifying copies of its bylaws and of the
resolutions of its boards of directors, or partnership agreement or limited
liability company agreement, or comparable organizational documents and
authorizations, authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and certifying the name, title and true signature
of each officer of such Loan Party executing the Loan Documents to which it is
a party;

 

(vi)                              certified copies of the articles or
certificate of incorporation, certificate of organization or limited
partnership, or other registered organizational documents of each Loan Party,
together with certificates of good standing or existence, as may be available
from the Secretary of State of the jurisdiction of organization of such Loan
Party and such other jurisdictions where such Loan Party qualified to do business
as a foreign corporation as may be required by the Administrative Agent;

 

(vii)                           evidence that the Borrower has received a
long term debt rating of not less than B from S&P or not less than B2 from
Moody’s, and that the rating assigned by S&P is not lower than B- and the
rating assigned by Moody’s is not lower than B3;

 

(viii)                        favorable written opinions of Dickstein
Shapiro Morin & Oshinsky LLP, counsel to the Loan Parties, and of Alabama
counsel to the Loan Parties, addressed to the Administrative Agent and each of
the Lenders, and covering such matters relating to the Loan Parties, the Loan
Documents and the transactions contemplated therein as the Administrative Agent
or the Required Lenders shall reasonably request;

 

49

 

(ix)                                a certificate, in form and substance
acceptable to the Administrative Agent, dated the Closing Date and signed by a
Responsible Officer, certifying that (x) no Default or Event of Default exists,
(y) all representations and warranties of each Loan Party set forth in the Loan
Documents are true and correct and (z) since the date of the financial
statements of the Borrower described in Section 4.4, there shall have
been no change which has had or could reasonably be expected to have a Material
Adverse Effect;

 

(x)                                   a duly executed Notice of Borrowing;

 

(xi)                                a duly executed funds disbursement agreement,
together with a report setting forth the sources and uses of the proceeds of
the Loans to be disbursed on the Closing Date;

 

(xii)                             certified copies of all consents, approvals,
authorizations, registrations and filings and orders required or advisable to
be made or obtained under any Requirement of Law, or by any Contractual
Obligation of each Loan Party, in connection with the execution, delivery,
performance, validity and enforceability of the Loan Documents, the Morgan
Merger Agreement or any of the transactions contemplated thereby, and such
consents, approvals, authorizations, registrations, filings and orders shall be
in full force and effect and all applicable waiting periods shall have expired,
and no investigation or inquiry by any governmental authority regarding the
Credit Facility or any transaction being financed with the proceeds thereof
shall be ongoing;

 

(xiii)                          a
reasonably satisfactory solvency analysis certified by the chief financial
officer of the Borrower which shall document the solvency of the Borrower and
its Subsidiaries considered as a whole after giving effect to the transactions
contemplated hereby.

 

(xiv)                         a
Perfection Certificate (as defined in the Security Agreement) with respect to
the Loan Parties dated the Closing Date and duly executed by a Responsible
Officer of the Borrower, and the results of a search of the Uniform Commercial
Code filings (or equivalent filings) made with respect to the Loan Parties in
the states (or other jurisdictions) of formation of such Persons, and in the
case of the Perfection Certificate, in which the chief executive office of each
such Person is located and in the other jurisdictions in which such Persons
maintain property, in each case as indicated on such Perfection Certificate,
together with copies of the financing statements (or similar documents)
disclosed by such search, and accompanied by evidence satisfactory to the
Administrative Agent that the Liens indicated in any such financing statement
(or similar document) would be permitted by Section 7.2 or have been or
will be contemporaneously released or terminated;

 

(xv)                            copies of (A) the internally prepared monthly financial statements of Borrower and its
Subsidiaries on a consolidated basis for the month ending
on November
30, 2005, and (B) the audited
consolidated financial statements for Borrower and its Subsidiaries for the
Fiscal Year ending March 31, 2005;

 

(xvi)                         a duly completed
and executed Compliance Certificate of the including pro forma calculations of
the financial covenants set forth in Article 6 hereof as of December 31,
2005;

 

50

 

(xvii)                      certified
copies of all agreements, indentures or notes governing the terms of any
Material Indebtedness and all other material agreements, documents and
instruments to which any Loan Party or any of its assets are bound; and

 

(xviii)                   a
copy of, or a certificate as to coverage under, the insurance policies required
by the applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a customary lender’s loss payable
endorsement and to name the Adminsitrative Agent as additional insured, in form
and substance satisfactory to the Administrative.

 

(c)                                  The Administrative Agent shall
have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Security
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note pledged to the
Administrative Agent pursuant to Security Agreement endorsed (without recourse)
in blank (or accompanied by an executed transfer form in blank satisfactory to
the Administrative Agent) by the pledgor thereof.

 

(d)                                 Each document (including,
without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.2), shall be in proper form for filing,
registration or recordation.

 

(e)                                  The Morgan Acquisition shall
have been consummated in accordance with the terms of the Morgan Merger
Agreement, with no amendment or waivers materially adverse to the Lenders
having been made without the consent of the Administrative Agent, such consent
not to be unreasonably withheld or delayed.

 

Section
3.2.                                   Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit is subject to the
satisfaction of the following conditions:

 

(a)                                  at the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default or Event of Default shall exist;

 

(b)                                 at the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, all
representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, extension or renewal of such Letter of Credit,
except to the extent such representations or warranties expressly relate to an
earlier date, in each case before and after giving effect thereto; and

 

(c)                                  the
Borrower shall have delivered the required Notice of Borrowing.

 

51

 

 

Each Borrowing
and each issuance, amendment, extension or renewal of any Letter of Credit
shall be deemed to constitute a representation and warranty by the Borrower on
the date thereof as to the matters specified in paragraphs (a), (b) and (c) of
this Section 3.2.

 

Section
3.3.                                   Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article 3, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall
be in form and substance satisfactory in all respects to the Administrative
Agent.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

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

 

Section
4.1.                                   Existence; Power. The Borrower and each of its
Subsidiaries (i) is duly organized, validly existing and in good standing as a
corporation, partnership or limited liability company under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
carry on its business as now conducted, and (iii) is duly qualified to do
business, and is in good standing, in each jurisdiction where such
qualification is required, except where a failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect.

 

Section
4.2.                                   Organizational Power; Authorization. The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party are within such Loan Party’s organizational powers and have
been duly authorized by all necessary organizational, and if required,
shareholder, partner or member, action. This Agreement has been duly executed
and delivered by the Borrower, and constitutes,
and each other Loan Document to which any Loan Party is a party, when executed
and delivered by such Loan Party, will constitute, valid and binding
obligations of the Borrower or such Loan Party (as the case may be),
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.

 

Section
4.3.                                   Governmental Approvals; No Conflicts. The
execution, delivery and performance by the Borrower of this Agreement, and by
each Loan Party of the other Loan Documents to which it is a party, and the
Morgan Acquisition (a) do not require any material consent or approval of,
registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect,
(b) will not violate in any material respect any Requirements of Law applicable
to the Borrower or any of its Subsidiaries or any judgment, order or ruling of
any Governmental Authority, (c) will not violate or result in a default in any
material respect under any indenture, material agreement or other material
instrument binding on the Borrower or any of its Subsidiaries or any of its
assets or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, except Liens created under the Loan Documents.

 

52

 

Section
4.4.                                   Financial Statements.

 

(a)                                  The Borrower has furnished to
each Lender (i) the audited consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 2005 and the related consolidated statements of income,
shareholders’ equity and cash flows for the Fiscal Year then ended prepared by
Deloitte & Touche LLP and (ii) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as of November 30, 2005, and the related unaudited
consolidated statements of income for the Fiscal Quarter and year-to-date
period then ending, certified by a Responsible Officer. Such financial
statements fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as of such dates and the
consolidated results of operations for such periods in conformity with GAAP
consistently applied, subject to year end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii). Since March
31, 2005, there
have been no changes with respect to the Borrower and its Subsidiaries which
have had or could reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect.

 

(b)                                 The Borrower has furnished to
each Lender (i) the audited consolidated balance sheet of Morgan Research as of
December 31, 2004 and the related consolidated statements of income,
shareholders’ equity and cash flows for the Fiscal Year then ended prepared by
Beason and Nalley, Inc. and (ii) the unaudited consolidated balance sheet
of Morgan Research as of November 30, 2005, and the related unaudited consolidated statements of
income for the Fiscal Quarter and year-to-date period then ending, certified by
a Responsible Officer of Morgan Research. Such financial statements fairly
present in all material respects the consolidated financial condition of Morgan
Research as of such dates and the consolidated results of operations for such
periods in conformity with GAAP consistently applied, subject to year end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii). Since November 30, 2005, there have been no changes
with respect to Morgan Research which have had or could reasonably be expected to have, singly or
in the aggregate, a Material Adverse Effect.

 

(c)                                  The unaudited pro  forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of December 31, 2005 (including the notes thereto) (the “Pro Forma Balance
Sheet”), copies of which have heretofore been furnished to each Lender, has
to the best of Borrower’s knowledge and belief been prepared giving effect (as
if such events had occurred on such date) to (i)
the consummation of the Morgan Acquisition, (ii)
the Loans to be made on the Closing Date and the use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrower as of the date of
delivery thereof, and represents management of the Borrower’s good faith
estimate on a pro  forma basis of the financial position of
Borrower and its consolidated Subsidiaries as of December 31, 2005, assuming
that the events specified in the preceding sentence had actually occurred at
such date.

 

Section
4.5.                                   Litigation and Environmental Matters.

 

(a)                                  No
litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable

 

53

 

possibility of an adverse determination
that could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect or (ii) which in any manner draws into
question the validity or enforceability of this Agreement or any other Loan
Document.

 

(b)                                 Except
for the matters set forth on Schedule 4.5, neither the Borrower nor any
of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability which either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

Section
4.6.                                   Compliance with Laws and Agreements. The
Borrower and each Subsidiary is in compliance with (a) all Requirements of Law
and all judgments, decrees and orders of any Governmental Authority and (b) all
indentures, agreements or other instruments binding upon it or its properties,
except where non-compliance, either singly or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 4.7.                                   Investment
Company Act, Etc. Neither
the Borrower nor any of its Subsidiaries is (a) an “investment company” or is “controlled”
by an “investment company”, as such terms are defined in, or is required to
register under, the Investment Company Act of 1940, as amended, (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended or (c) otherwise subject to any other
regulatory scheme limiting its ability to incur debt or requiring any approval
or consent from or registration or filing with, any Governmental Authority in
connection therewith.

 

Section
4.8.                                   Taxes. The
Borrower and its Subsidiaries have timely filed or caused to be filed all
Federal income tax returns and all other material tax returns that are required
to be filed by them, and have paid all taxes shown to be due and payable on
such returns or on any assessments made against it or its property and all
other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except where the same are currently
being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as the case may be, has set aside on its books
adequate reserves in accordance with GAAP. The charges, accruals and reserves
on the books of the Borrower and its Subsidiaries in respect of such taxes are
adequate.

 

Section
4.9.                                   Margin Regulations. None of the proceeds of any of
the Loans or Letters of Credit will be used, directly or indirectly, for “purchasing”
or “carrying” any “margin stock” with the respective meanings of each of such
terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect or for any purpose that
violates the provisions of the Regulation U. Neither the Borrower nor its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying “margin
stock.”

 

Section
4.10.                             ERISA. No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. The

 

54

 

present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans.

 

Section
4.11.                             Ownership of Property.

 

(a)                                  Each
of the Borrower and its Subsidiaries has good title to, or valid leasehold
interests in, all of its real and personal property material to the operation
of its business, including all such properties reflected in the most recent
audited consolidated balance sheet of the Borrower referred to in Section
4.4 or purported to have been acquired by the Borrower or any Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens other than Liens permitted
by this Agreement. All leases that individually or in the aggregate are
material to the business or operations of the Borrower and its Subsidiaries are
valid and subsisting and are in full force, except for such invalidities which
individually or in the aggregate are not reasonably likely to have a Material
Adverse Effect.

 

(b)                                 Each
of the Borrower and its Subsidiaries owns, or is licensed, or otherwise has the
right, to use, all patents, trademarks, service marks, trade names, copyrights
and other intellectual property material to its business, and to the best
knowledge and belief of the Borrower, the use thereof by the Borrower and its
Subsidiaries does not infringe in any material respect on the rights of any
other Person.

 

(c)                                  The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies which are not Affiliates of the
Borrower, in such amounts with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or any applicable
Subsidiary operates.

 

Section
4.12.                             Disclosure. Neither the Information
Memorandum nor any of the reports (including without limitation all reports
that the Borrower is required to file with the Securities and Exchange
Commission), financial statements, certificates or other information prepared
by the Borrower and furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation or
syndication of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by any other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in
light of the circumstances under which they were made, not misleading;
provided, that with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions that management of the Borrower believed to be reasonable at the
time such projected financial information was prepared. As of the date hereof, the representations
and warranties of Morgan Research contained in the Morgan Acquisition

 

55

 

Documentation are,
to the best of the Borrower’s knowledge and belief, true and correct in all
material respects.

 

Section
4.13.                             Labor Relations. There are no strikes, lockouts
or other material labor disputes or grievances against the Borrower or any of
its Subsidiaries, or, to the Borrower’s knowledge, threatened against or
affecting the Borrower or any of its Subsidiaries, and no significant unfair
labor practice, charges or grievances are pending against the Borrower or any
of its Subsidiaries, or to the Borrower’s knowledge, threatened against any of
them before any Governmental Authority which individually or in the aggregate
are reasonably likely to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries pursuant to the provisions of any
collective bargaining agreement have been paid or accrued as a liability on the
books of the Borrower or any such Subsidiary, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

Section
4.14.                             Subsidiaries. Schedule 4.14 sets
forth the name of, the ownership interest of the Borrower in, the jurisdiction
of incorporation or organization of, and the type of, each Subsidiary and
identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of
the Closing Date. Each of CCI Incorporated, Fuentez Systems Concepts, Inc. and
GSI Information Services, Inc. is an inactive Subsidiary, does not conduct
business and does not own any material assets.

 

Section
4.15.                             Insolvency. After giving effect to the
execution and delivery of the Loan Documents, the making of the Loans under
this Agreement, and the consummation of 
the Morgan Acquisition, neither the Borrower nor its Subsidiaries will
be “insolvent,” within the meaning of such term as defined in § 101 of Title 11
of the United States Code, as amended from time to time, or be unable to pay
its debts generally as such debts become due, or have an unreasonably small
capital to engage in any business or transaction, whether current or
contemplated.

 

Section
4.16.                             Reserved.

 

Section 4.17.                             OFAC. No Loan Party (i) is a person
whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2,
or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons
or subject to the limitations or prohibitions under any other U.S. Department
of Treasury’s Office of Foreign Assets Control regulation or executive order.

 

Section 4.18.                             Patriot Act. Each Loan Party is in
compliance, in all material respects, with (i) the Trading with the Enemy
Act, as amended, and each of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
and any other enabling legislation or executive order relating thereto, and
(ii) the Uniting And Strengthening America By Providing Appropriate Tools
Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part
of the proceeds of the Loans will be

 

56

 

used, directly or
indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

 

Section 4.19.                             Debarment and
Suspension. No
event has occurred and, to the knowledge of the Borrower, no condition exists
that is reasonably likely to result in the debarment or suspension of a Loan
Party from any contracting with the Government, and no Loan Party nor any
Affiliate of a Loan Party has been subject to any such debarment or suspension
prior to the date of this Agreement. There is no Government investigation or
inquiry pending, or to the knowledge of the Borrower, threatened, against any
Loan Party involving fraud, deception or willful misconduct in connection with
any Government Contract of a Loan Party or a Subsidiary or any activities of
any Loan Party or any Subsidiary

 

Section 4.20.                             Security Documents.

 

(a)                                  The Security Agreement, upon
execution and delivery thereof by the parties thereto, will create in favor of
the Administrative Agent, for the ratable benefit of the Lenders, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and the proceeds thereof, in which a security interest may
be perfected under the New York Uniform Commercial Code as in effect at the
relevant time by filing of financing statements or obtaining control or
possession, and the Lien created under the Security Agreement is (or will be,
upon the filing of appropriate financing statements and grants of security in
Intellectual Property, the execution of appropriate control agreements and
delivery of certificated securities and instruments to the Administrative
Agent) a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral), in each case prior and
superior in right to any other person, other than with respect to Liens
permitted by Section 7.2.

 

(b)                                 As of the Closing Date, neither
the Borrower nor any Subsidiary owns in fee any real property.

 

(c)                                  Schedule 4.20 lists completely and correctly
as of the Closing Date all real property leased by the Borrower and the
Subsidiaries and the addresses thereof. As of the Closing Date, the Borrower
and the Subsidiaries have valid leases in all the real property set forth on Schedule
4.20.

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

The Borrower
covenants and agrees that so long as any Lender has a Commitment hereunder or
any Obligation remains unpaid or outstanding:

 

Section
5.1.                                   Financial Statements and Other Information. The
Borrower will deliver to the Administrative Agent and each Lender:

 

57

 

(a)                                  as
soon as available and in any event within 90 days after the end of each Fiscal
Year of Borrower, a copy of the annual audited report for such Fiscal Year for
the Borrower and its Subsidiaries, containing a consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, stockholders’ equity and cash flows
(together with all footnotes thereto) of the Borrower and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year, all in reasonable detail and reported on by Deloitte & Touche LLP or
other independent public accountants of nationally recognized standing (without
a “going concern” or like qualification, exception or explanation and without
any qualification or exception as to scope of such audit, except for any
qualification to the effect that such accountants did not audit the financial
statements of Morgan or any Target of a Permitted Acquisition for any Fiscal
Year prior to acquisition of Morgan by the Borrower or the Target of a
Permitted Acquisition by the Borrower or any Subsidiary) to the effect that
such financial statements present fairly in all material respects the financial
condition and the results of operations of the Borrower and its Subsidiaries
for such Fiscal Year on a consolidated and consolidating basis in accordance
with GAAP and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards;

 

(b)                                 as soon as available and in any
event within 45 days after the end of each Fiscal Quarter of the Borrower, an
unaudited consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and the related unaudited
consolidated and consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed
portion of such Fiscal Year, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of Borrower’s
previous Fiscal Year, provided that the statement of cash flows shall not be
required for the Fiscal Quarter ended on March 31, 2006;

 

(c)                                  concurrently
with the delivery of the financial statements referred to in clauses (a) and
(b) above, a Compliance Certificate signed by the principal executive officer
and the principal financial officer of the Borrower;

 

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

 

(e)                                  not less than ten days prior to
such change, written notice of any change (i) in any Loan Party’s corporate
name, (ii) in the jurisdiction of organization or formation of any Loan Party,
(iii) in any Loan Party’s identity or form of organization or (iv) in any Loan
Party’s Federal Taxpayer Identification Number. The Borrower also agrees
promptly to notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed; and

 

(f)                                    promptly
following any request therefor by the Administrative Agent or any Lender and
subject to applicable law and regulations, such other information regarding the

 

58

 

results of operations, business affairs
and financial condition of the Borrower or any Subsidiary as the Administrative
Agent or any Lender may reasonably request.

 

Section
5.2.                                   Notices of Material Events.

 

(a)                                  The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following
after a Responsible Officer of the Borrower has knowledge:

 

(i)                                     the
occurrence of any Default or Event of Default;

 

(ii)                                  the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or, to the knowledge of the
Borrower, affecting the Borrower or any Subsidiary which, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect;

 

(iii)                               the
occurrence of any event or any other development by which the Borrower or any
of its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses, which individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;

 

(iv)                              the
occurrence of any ERISA Event that alone, or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$2,500,000;

 

(v)                                 the
occurrence of any material default or event of default, or the receipt by
Borrower or any of its Subsidiaries of any written notice of an alleged default
or event of default, respect of any Material Indebtedness of the Borrower or
any of its Subsidiaries;

 

(vi)                              promptly
after any Loan Party’s receipt thereof, notice of any final decision of a
contracting officer disallowing costs aggregating more than $1,000,000, which
disallowed costs arise out of any audit of Government Contracts of any Loan
Party; and

 

(vii)                           any
other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

 

(b)                                 Each
notice delivered under this Section 5.2 shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.

 

Section
5.3.                                   Existence; Conduct of Business. The
Borrower will, and will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and maintain in full force and
effect its legal existence and its respective rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business, except for failures which will not
individually or in the aggregate reasonably likely to

 

59

 

have a Material Adverse Effect,
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto; provided, that
nothing in this Section 5.3 shall prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.3.

 

Section
5.4.                                   Compliance with Laws, Etc. The
Borrower will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and requirements of any Governmental Authority
applicable to its business and properties, including without limitation, all
Environmental Laws, ERISA and OSHA, except where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

Section
5.5.                                   Payment of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, pay and discharge at or before maturity, all of its
obligations and liabilities (including without limitation all tax liabilities
and claims that could result in a statutory Lien) before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect or would result in a Permitted Encumbrance.

 

Section
5.6.                                   Books and Records. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries
in all material respects shall be made of all dealings and transactions in
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of Borrower in conformity with GAAP.

 

Section
5.7.                                   Visitation, Inspection, Etc. Subject
to applicable law and the provisions of Section 10.11, the Borrower
will, and will cause each of its Subsidiaries to, permit any representative of
the Administrative Agent or any Lender, to visit and inspect its properties, to
examine its books and records and to make copies and take extracts therefrom,
to discuss its affairs, finances and accounts with any of its officers and with
its independent certified public accountants, all at such reasonable times during normal business hours
and as often as the Administrative Agent or any Lender may reasonably request
after reasonable prior notice to the Borrower; provided,
however, if an Event of Default has occurred and is continuing, no
prior notice shall be required. The
Administrative Agent may discuss the status of Government Contracts of each
Loan Party with the applicable contracting officers. The Administrative Agent
agrees to give the Borrower not fewer than two days’ prior written notice of
taking any action described in the preceding sentence, and to obtain the
Borrower’s permission (which is not to be unreasonably withheld, conditioned or
delayed) prior to contacting the contracting officer under any Government
Contract, provided that if a Default or Event of Default has occurred and is
continuing, the Administrative shall not be required to give such prior notice
or obtain such permission.

 

Section
5.8.                                   Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain

 

60

 

with financially sound and
reputable insurance companies, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by companies in the same or
similar businesses operating in the same or similar locations.

 

Section
5.9.                                   Use of Proceeds and Letters of Credit. The
Borrower will use the proceeds of all Loans to finance working capital needs,
the Morgan Acquisition, Permitted Acquisitions, payment of transactional
expenses, repurchases of shares of Capital Stock permitted by this Agreement,
Capital Expenditures and for other general corporate purposes of the Borrower
and its Subsidiaries. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that would violate any rule or
regulation of the Board of Governors of the Federal Reserve System, including
Regulations T, U or X. All Letters of Credit will be used for general corporate
purposes.

 

Section
5.10.                             Interest Rate Protection. As
promptly as practicable, and in any event within 120 days after the Closing
Date, the Borrower will enter into, and thereafter maintain in effect, one or
more Hedging Transactions on such terms and with such parties as shall be
reasonably satisfactory to the Administrative Agent, the effect of which shall
be to fix or limit the interest cost to the Borrower with respect to at least
50% of all floating rate Indebtedness of the Borrower and the Subsidiaries for
a period of not less than three years from the Closing Date.

 

Section
5.11.                             Additional Subsidiaries. If any Subsidiary is acquired or formed after the Closing Date, the
Borrower will promptly notify the Administrative Agent and the Lenders thereof
and, within ten (10) Business Days after any such Subsidiary is acquired or
formed, will cause such Subsidiary to become a Subsidiary Loan Party. A Subsidiary shall become an additional Subsidiary
Loan Party by executing and delivering to the Administrative Agent a Subsidiary
Guaranty Supplement, a Security Agreement and such other Security Documents as
are required by Section 5.12, accompanied by (i) all other Loan Documents
related thereto, (ii) certified copies of certificates or articles of
incorporation or organization, by-laws, membership operating agreements, and
other organizational documents, appropriate authorizing resolutions of the
board of directors of such Subsidiaries, and opinions of counsel comparable to
those delivered pursuant to Section 3.1, and (iii) such other documents as the
Administrative Agent may reasonably request. No Subsidiary that becomes a
Subsidiary Loan Party shall thereafter cease to be a Subsidiary Loan Party or
be entitled to be released or discharged from its obligations under the
Subsidiary Guaranty Agreement.

 

Section
5.12.                             Further Assurances. The
Borrower will, and will cause each of its Subsidiaries to, execute any and all
further documents, financing statements, agreements and instruments, and take
all further action (including filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust and preparing all documentation
relating to filings under the Assignment of Claims Act) that may be required
under applicable law, or that the Required Lenders or the Administrative Agent
may reasonably request, in order to effectuate the transactions contemplated by
the Loan Documents and in order to grant, preserve, protect and perfect the
validity and first priority of the security interests created or intended to be
created by the Security Documents; provided, however, that notwithstanding
anything else to the contrary in the Loan Documents, none of the Loan Parties
shall be required to make filings under the Assignment of Claims Act for the
assignment of Government Contracts to the Administrative

 

61

 

Agent
unless (a) such Government Contract constitutes a Material Contract and (b) the
Administrative Agent shall have requested, in its reasonable discretion, that a
filing under the Assignment of Claims Act be made with respect to such
Government Contract. The Borrower will cause any subsequently acquired or
organized Subsidiary to become a Loan Party by executing the Security Agreement
and each applicable Security Document in favor of the Administrative Agent. In
addition, from time to time, the Borrower will, at its cost and expense, promptly
secure the Obligations by pledging or creating, or causing to be pledged or
created, perfected security interests with respect to such of its assets and
properties as the Administrative Agent or the Required Lenders shall designate
(it being understood that it is the intent of the parties that the Obligations
shall be secured by substantially all the assets of the Borrower and its
Subsidiaries (including real and other properties acquired subsequent to the
Closing Date)). Such security interests and Liens will be created under the
Security Documents and other security agreements, mortgages, deeds of trust and
other instruments and documents in form and substance reasonably satisfactory
to the Administrative Agent, and the Borrower shall deliver or cause to be
delivered to the Lenders all such instruments and documents (including legal
opinions, title insurance policies and lien searches) as the Administrative
Agent shall reasonably request to evidence compliance with this Section 5.12. The
Borrower agrees to provide such evidence as the Administrative Agent shall
reasonably request as to the perfection and priority status of each such
security interest and Lien. In furtherance of the foregoing, the Borrower will
give prompt notice to the Administrative Agent of the acquisition by the
Borrower or any of the Subsidiaries of any real property (or any fee interest
in real property) having a value in excess of $500,000.

 

Section
5.13.                             Primary Operating Account. The Borrower will, and will cause each Loan Party
to, maintain its primary operating deposit accounts with the Administrative
Agent.

 

ARTICLE 6

FINANCIAL COVENANTS

 

The Borrower
covenants and agrees that so long as any Lender has a Commitment hereunder or
any Obligation remains unpaid or outstanding:

 

Section
6.1.                                   Leverage Ratio. The Borrower will maintain at
all times a Leverage Ratio of not
greater than:

 

	
  Fiscal Quarter

  	
   

  	
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each Fiscal
  Quarter ending on or

  	
   

  	
  4.25:1.0

  	
   

  
	
  prior to
  December 31, 2006

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each Fiscal
  Quarter ending after

  	
   

  	
  3.50:1.0

  	
   

  
	
  December 31, 2006 and on or prior to

  	
   

  	
   

  	
   

  
	
  December 31,
  2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each Fiscal
  Quarter ending after

  	
   

  	
  3.00:1.0

  	
   

  
	
  December 31,
  2007

  	
   

  	
   

  	
   

  

 

62

 

Section
6.2.                                   Fixed Charge Coverage Ratio. The
Borrower will maintain, as of the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending March 31,
2006, a Fixed Charge Coverage Ratio of not less than 1.50 to 1.

 

Section 6.3.                                   Consolidated Net Worth. The Borrower will not permit its Consolidated
Net Worth at any time to be less than an amount equal to the sum of (i) 85% of
the Consolidated Net Worth as at December
31, 2005, plus (ii)
50% of Consolidated Net Income on a cumulative basis for all preceding Fiscal
Quarters, commencing with the Fiscal Quarter ending March 31, 2006; provided,
that if Consolidated Net Income is negative in any Fiscal Quarter the amount
added for such Fiscal Quarter shall be zero and such negative Consolidated Net
Income shall not reduce the amount of Consolidated Net Income added from any
previous Fiscal Quarter; plus (iii) 100% of the amount by
which the Borrower’s “total stockholders’ equity” is increased as a result of
any public or private offering of common stock of the Borrower after the
Closing Date. Promptly after the consummation of such offering, the Borrower
shall notify the Administrative Agent in writing of the amount of such increase
in “total stockholders’ equity”.

 

ARTICLE 7

NEGATIVE COVENANTS

 

The Borrower
covenants and agrees that so long as any Lender has a Commitment hereunder or
any Obligation remains outstanding:

 

Section
7.1.                                   Indebtedness and Disqualified Stock. The
Borrower will not, and will not permit any of its Subsidiaries to issue any
Disqualified Stock or to, create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)                                  Indebtedness
created pursuant to the Loan Documents;

 

(b)                                 Indebtedness
of the Borrower and its Subsidiaries existing on the date hereof and set forth
on Schedule 7.1 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
plus any applicable premium or penalty, accrued interest and related fees and
expenses or shorten the maturity or the weighted average life thereof;

 

(c)                                  Indebtedness
of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations, and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof; provided, that such Indebtedness is incurred prior to
or within 180 days after such acquisition or the completion of such
construction or improvements or extensions, renewals, and replacements of any
such Indebtedness; provided further, that the aggregate principal amount of
such Indebtedness does not exceed $5,000,000 at
any time outstanding;

 

(d)                                 Indebtedness
of the Borrower owing to any Subsidiary and of any Subsidiary owing to the
Borrower or any other Subsidiary; provided, that any such Indebtedness
that is owed to a Subsidiary that is not a Subsidiary Loan Party shall be
subject to Section 7.4;

 

63

 

(e)                                  Guarantees
by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of the Borrower or any other Subsidiary; provided, that
Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not a
Subsidiary Loan Party shall be subject to Section 7.4;

 

(f)                                    Permitted
Subordinated Debt;

 

(g)                                 Indebtedness
in respect of Hedging Obligations permitted by Section 7.10;

 

(h)                                 Indebtedness
in respect of a bid, performance, surety appeal or similar bonds issued for the
account of the Borrower or any Subsidiary in the ordinary course of business;
and

 

(i)                                     other
unsecured Indebtedness of the Borrower or its Subsidiaries in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding;.

 

Section
7.2.                                   Negative Pledge. The
Borrower will not, and will not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien on any of its assets or property now
owned or hereafter acquired or, except:

 

(a)                                  Liens
securing the Obligations, provided, however, that no Liens may
secure Hedging Obligations without securing all other Obligations on a basis at
least pari passu with such Hedging Obligations and subject to the priority of
payments set forth in Section 2.22 of this Agreement;

 

(b)                                 Permitted
Encumbrances;

 

(c)                                  any
Liens on any property or asset of the Borrower or any Subsidiary existing on
the Closing Date set forth on Schedule 7.2; provided, that such
Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary;

 

(d)                                 purchase
money Liens upon or in any fixed or capital assets to secure the purchase price
or the cost of construction or improvement of such fixed or capital assets or
to secure Indebtedness incurred solely for the purpose of financing the
acquisition, construction or improvement of such fixed or capital assets
(including Liens securing any
Capital Lease Obligations); provided, that (i) such Lien secures
Indebtedness permitted by Section 7.1(c), (ii) such Lien attaches to
such asset concurrently or within 180 days after the acquisition, improvement
or completion of the construction thereof; (iii) such Lien does not extend to
any other asset of the Borrower or any Subsidiary; and (iv) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets;

 

(e)                                  extensions,
renewals, or replacements of any Lien referred to in paragraphs (a) through (d)
of this Section 7.2; provided, that the principal amount of the
Indebtedness secured thereby plus any applicable premium or penalty, accrued
interest and related fees and expenses is not increased and that any such
extension, renewal or replacement is limited to the assets originally
encumbered thereby;

 

64

 

(f)                                    Liens
arising out of a conditional sale, title retention, consignment or similar
arrangement for the sale of goods or operating leases;

 

(g)                                 Bankers
liens, rights of set-off and similar rights of any depository institution or
escrow agent in possession of funds of the Borrower or the Subsidiaries; and

 

(h)                                 Operating
leases and licenses, including those related to intellectual property;

 

Section
7.3.                                   Fundamental Changes.

 

(a)                                  The
Borrower will not, and will not permit any Subsidiary to, merge into or
consolidate into any other Person, or permit any other Person to merge into or
consolidate with it, or sell, lease, transfer or otherwise dispose of (in a
single transaction or a series of transactions) all or substantially all of its
assets (in each case, whether now owned or hereafter acquired) or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired) or liquidate
or dissolve; provided, that if at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary; provided, that if any
party to such merger is a Subsidiary Loan Party, the Subsidiary Loan Party
shall be the surviving Person, (iii) any Subsidiary may sell, transfer, lease
or otherwise dispose of all or substantially all of its assets to the Borrower
or to a Subsidiary Loan Party and (iv) any Subsidiary (other than a Subsidiary
Loan Party) may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not reasonably likely individually or in the aggregate to have a
Material Adverse Effect; provided, that any such merger involving a
Person that is not a wholly-owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 7.4 , and
provided further that each of CCI Incorporated, Fuentez Systems Concepts, Inc.
and GCI Information Services, Inc. may be liquidated and dissolved, and the
Borrower agrees that such liquidation and dissolution shall be competed on or
before March 31, 2006, or such later date as may be approved by the
Administrative Agent.

 

(b)                                 The
Borrower will not, and will not permit any of its Subsidiaries to, engage to
any material extent in any business other than businesses of the type conducted
by the Borrower and its Subsidiaries on the date hereof and businesses
reasonably related thereto.

 

Section
7.4.                                   Investments, Loans, Etc. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not
a wholly-owned Subsidiary prior to such merger), any common stock, evidence of
indebtedness or other securities (including any option, warrant, or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person (all of the foregoing
being collectively called “Investments”), or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person that constitute a business unit, or create or form any Subsidiary,
except:

 

65

 

(a)                                  Investments
(other than Permitted Investments) existing on the date hereof and set forth on
Schedule 7.4 (including Investments in Subsidiaries);

 

(b)                                 Permitted
Investments;

 

(c)                                  Guarantees
constituting Indebtedness permitted by Section 7.1;

 

(d)                                 Investments
made by the Borrower in or to any Loan Party and by any Subsidiary to the
Borrower or in or to another Loan Party;

 

(e)                                  Loans
or advances to employees, officers or directors of the Borrower or any
Subsidiary in the ordinary course of business for travel, relocation and
related expenses; provided, however, that the
aggregate amount of all such loans and advances does not exceed $1,000,000 at any time;

 

(f)                                    Repurchases
of shares of Capital Stock and options to purchase shares of Capital Stock in
an aggregate amount not to exceed $3,000,000 from the Closing Date through the
Fiscal Year ending on March 31, 2007, or $3,000,000 per Fiscal Year for any
Fiscal Year thereafter without the prior consent of the Required Lenders;

 

(g)                                 Lease,
utility and similar deposits in the ordinary course of business;

 

(h)                                 Permitted
Acquisitions:

 

(i)                                     Deposits
permitted by Sections 7.1 or 7.2; 

 

(j)                                     Joint
ventures and teaming arrangements entered into by the Borrower or any
Subsidiary in the ordinary course of business, provided that neither the Borrower or any
Subsidiary assumes any obligations of any other Person in connection therewith;

 

(k)                                  Hedging
Transactions permitted by Section 7.10; and

 

(l)                                     Other
Investments which in the aggregate do not exceed $1,000,000 in any Fiscal Year.

 

Section 7.5.                                   Restricted Payments. The Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend on any class of its stock, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any
shares of common stock or Indebtedness subordinated to the Obligations of the
Borrower or any Guarantee thereof or any options, warrants, or other rights to
purchase such common stock or such Indebtedness, whether now or hereafter
outstanding (each, a “Restricted Payment”), except for (i) dividends
payable by the Borrower solely in shares of any class of its common stock,
(ii) Restricted Payments made by any Subsidiary to the Borrower or to
another Subsidiary, on at least a pro rata basis with any other shareholders if
such Subsidiary is not wholly owned by the Borrower and other wholly owned
Subsidiaries, (iii) cash dividends and distributions paid on the common stock
of the Borrower; provided, for the purpose of this clause (iii) that (x) no Default or Event of Default has
occurred and is continuing at the time such

 

66

 

dividend or distribution is paid
or redemption is made, and (y) the
aggregate amount of all such Restricted Payments made by the Borrower in any
Fiscal Year does not exceed (1) 20% of Net Income (if greater than $0) earned
during the immediately preceding Fiscal Year , plus (2) Capital Stock
repurchases permitted by this Agreement, plus (3) Restricted Payments arising
out of the purchase by the Company of its Capital Stock from beneficiaries of
the Company’s employee stock ownership plan, to the extent that such Restricted
Payments are simultaneously deducted as an operating expense of the Company
under GAAP, and (4) Restricted Payments required to be made to the Borrower’s
employee stock ownership plan under ERISA.

 

Section
7.6.                                   Sale of Assets. The Borrower will not, and
will not permit any of its Subsidiaries to, convey, sell, lease, assign,
transfer or otherwise dispose of, any of its assets, business or property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary’s common stock to any Person other
than the Borrower or a Subsidiary Loan Party (or
to qualify directors if required by applicable law), except:

 

(a)                                  the
sale or other disposition for fair market value of obsolete, nonfunctional,
worn out or surplus property or other property not necessary for operations
disposed of in the ordinary course of business other than leases and licenses
of real property in the ordinary course of business;

 

(b)                                 the
sale of inventory and Permitted Investments in the ordinary course of business;

 

(c)                                  the
sale or other disposition of such assets in an aggregate amount not to exceed $1,000,000 in any Fiscal Year;

 

(d)                                 abandonment or other disposition of intellectual
property that in the reasonable judgment of the Borrower is no longer useful;
and

 

(e)                                  transfers or other dispositions resulting from a
condemnation or taking or from damage or destruction of assets.

 

Section
7.7.                                   Transactions with Affiliates. The
Borrower will not, and will not permit any of its Subsidiaries to, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, (b) transactions between or among the Borrower
and any Subsidiary Loan Party not involving any other Affiliates, (c) any
Restricted Payment permitted by Section 7.5, (d) investments
permitted by Section 7.4, (e) reasonable and customary director,
officer and employee compensation and indemnification arrangements, and
(f) sales of Capital Stock of the Borrower and grants of options to
purchase shares of Capital Stock pursuant to the ESOP or stock option plans of
the Borrower.

 

Section
7.8.                                   Restrictive Agreements. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement (other than Subordinated Debt Documents
evidencing Permitted Subordinated Debt) and that prohibits,

 

67

 

restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit any Lien upon any of its assets or properties, whether now
owned or hereafter acquired, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to its common stock, to make or
repay loans or advances to the Borrower or any other Subsidiary, to Guarantee
Indebtedness of the Borrower or any other Subsidiary or to transfer any of its
property or assets to the Borrower or any Subsidiary of the Borrower; provided,
that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement or any other Loan Document, (ii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is sold and
such sale is permitted hereunder, (iii) clause (a) shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness or Liens permitted by this Agreement if such restrictions and
conditions apply only to the property or assets securing such Indebtedness and
(iv) clause (a) shall not apply to customary provisions in leases or other
agreements entered into in the ordinary course of business restricting the
assignment thereof.

 

Section
7.9.                                   Sale and Leaseback Transactions. The
Borrower will not, and will not permit any of the Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.

 

Section
7.10.                             Hedging Transactions. The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any Hedging Transaction,
other than (a) Hedging Transactions required by Section
5.10 and (b) Hedging Transactions entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities. Solely
for the avoidance of doubt, the Borrower acknowledges that a Hedging
Transaction entered into for speculative purposes or of a speculative nature
(which shall be deemed to include any Hedging Transaction under which the
Borrower or any of the Subsidiaries is or may become obliged to make any
payment (i) in connection with the purchase by any third party of any common
stock or any Indebtedness or (ii) as a result of changes in the market value of
any common stock or any Indebtedness) is not a Hedging Transaction entered into
in the ordinary course of business to hedge or mitigate risks.

 

Section
7.11.                             Amendment to Material Documents.

 

(a)                                  The Borrower will not, and will
not permit any of its Subsidiaries to, amend, modify or waive any of its rights
under its certificate of incorporation, bylaws or other organizational
documents or the documents governing its
employee stock ownership plan if such amendment, modfication or waiver could
reasonably be expected to have a Material Adverse Effect.

 

(b)                                 The Borrower will not amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms
and conditions of the indemnities and licenses furnished to the Borrower or any
of its Subsidiaries pursuant to the Morgan Acquisition Documentation if such
amendment, supplement or modification would be materially adverse to the
interests of the Loan Parties or the Lenders with respect thereto, or otherwise
amend, supplement or otherwise 

 

68

 

modify the terms and conditions of the Morgan
Acquisition Documentation except to the extent that any such amendment,
supplement or modification could not reasonably be expected to have a Material
Adverse Effect.

 

Section
7.12.                             Permitted Subordinated Indebtedness.

 

(a)                                  The Borrower will not, and will not permit
any of its Subsidiaries to (i) prepay, redeem, repurchase or otherwise acquire
for value any Permitted Subordinated Debt, or (ii) make any principal, interest
or other payments on any Permitted Subordinated Debt that is not expressly
permitted by the subordination provisions of the Subordinated Debt Documents.

 

(b)                                 The
Borrower will not, and will not permit any of its Subsidiaries to, agree to or
permit any amendment, modification or waiver of any provision of any
Subordinated Debt Document if the effect of such amendment, modification or
waiver is to (i) increase the interest rate on such Permitted Subordinated Debt
above market rates or change (to earlier dates) the dates upon which principal
and interest are due thereon; (ii) alter the redemption, prepayment or
subordination provisions thereof in a manner taken as a whole which is adverse
to the Administrative Agent or the Lenders; (iii) alter the covenants and
events of default in a manner that would make such provisions more onerous or
restrictive to the Borrower or any such Subsidiary; or (iv) otherwise increase
the obligations of the Borrower or any Subsidiary in respect of such Permitted
Subordinated Debt or confer additional rights upon the holders thereof which
individually or in the aggregate would be adverse to the Borrower or any of its
Subsidiaries or to the Agent or the Lenders.

 

Section
7.13.                             Accounting Changes. The Borrower will not, and
will not permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP or as
approved by the Administrative Agent, or change the Fiscal Year of the Borrower
or of any of its Subsidiaries, except to change the fiscal year of a Subsidiary
to conform its Fiscal Year to that of the Borrower.

 

ARTICLE 8

EVENTS OF DEFAULT

 

Section
8.1.                                   Events of Default. If any
of the following events (each an “Event of Default”) shall occur:

 

(a)                                  the
Borrower shall fail to pay any principal of any Loan or of any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment or otherwise; or

 

(b)                                 the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount payable under clause (a) of this Section 8.1)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days; or

 

69

 

(c)                                  any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Subsidiary in or in connection with this Agreement or any other Loan
Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent or
the Lenders by any Loan Party or any representative of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document shall prove
to be incorrect when made or
deemed made or submitted; or

 

(d)                                 the
Borrower shall fail to observe or perform any covenant or agreement contained
in Sections 5.1, 5.2, or 5.3 (with respect to the
Borrower’s existence) or Articles 6 or 7; or

 

(e)                                  any
Loan Party shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those referred to in clauses (a), (b) and (d)
above) or any other Loan Document, and such failure shall remain unremedied for
30 days after the earlier of (i) any Responsible Officer of the
Borrower becomes aware of such failure, or (ii) notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender; or

 

(f)                                    all or
any part of any Permitted Subordinated Debt is accelerated, is declared to be
due and payable is required to be prepaid or redeemed (other than prepayments
or redemptions of Permitted Subordinated Debt to the extend necessary to avoid
such debt from being characterized as an Alternative High Yield Debt Obligation
under Section 163(i) of the Code), in each case prior to the stated maturity
thereof; or

 

(g)                                 the
Borrower or any Subsidiary (whether as primary obligor or as guarantor or other
surety) shall fail to pay any principal of, or premium or interest on, any
Material Indebtedness that is outstanding, when and as the same shall become
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
evidencing or governing such Indebtedness; or any other event shall occur or
condition shall exist under any agreement or instrument relating to such
Indebtedness and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or any offer to
prepay, redeem, purchase or defease such Indebtedness shall be required to be
made, in each case prior to the stated maturity thereof; or

 

(h)                                 the
Borrower or any Subsidiary shall (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or petition
described in clause (i) of this Section 8.1, (iii) apply for or consent
to the appointment of a custodian, trustee, receiver, liquidator or other
similar official for the Borrower or any such Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any

 

70

 

such proceeding, (v) make a general
assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or

 

(i)                                     an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Subsidiary or its debts, or any substantial part of its assets,
under any federal, state or foreign bankruptcy, insolvency or other similar law
now or hereafter in effect or (ii) the appointment of a custodian, trustee,
receiver, liquidator or other similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, and in any such case, such
proceeding or petition shall remain undismissed for a period of 60 days or an
order or decree approving or ordering any of the foregoing shall be entered; or

 

(j)                                     the
Borrower or any Subsidiary shall become unable to pay, shall admit in writing
its inability to pay, or shall fail to pay, its debts as they become due; or

 

(k)                                  an
ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Borrower and the
Subsidiaries in an aggregate amount exceeding $1,000,000; or

 

(l)                                     any judgment or order for the payment of money
in excess of $1,000,000 in the
aggregate shall be rendered against the Borrower or any Subsidiary, and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be a period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

 

(m)                               any non-monetary judgment or order shall be rendered against the Borrower or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, and there shall be a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

(n)                                 a
Change in Control shall occur or exist;

 

(o)                                 any
provision of any Subsidiary Guaranty Agreement shall for any reason be declared
by a court of competent jurisdiction to be null or void or a proceeding is
commenced by a Loan Party seeking to establish the invalidity or
unenforceability thereof (exclusive of interpretation), or any Subsidiary Loan
Party shall seek to terminate its Subsidiary Guaranty Agreement;

 

(p)                                 any
security interest purported to be created by any Security Document shall cease
to be, or shall be asserted by the Borrower or any other Loan Party not to be,
a valid, perfected, first priority (except as otherwise expressly provided in
this Agreement or such Security Document) security interest in the securities,
assets or properties covered thereby, except to the extent that any such loss
of perfection or priority relates to Collateral with an aggregate fair market
value of less than $1,000,000 or results from the failure of the Administrative
Agent to maintain possession of certificates representing securities pledged
under the Security Agreement;

 

71

 

(q)                                 If the Borrower or any
Subsidiary shall be debarred or suspended from any contracting with the
Government, or if a final decision of debarment or a final decision of
suspension shall have been issued to the Borrower or any Subsidiary; or the
actual termination for default of any Material Contract, or any Government
Contract with annual revenues in excess of $5,000,000, shall have been issued
to or received by the Borrower or any Subsidiary and in each case, such
debarment or suspension, final notice of disbarment or suspension or
termination for default shall not have been revoked, rescinded, withdrawn,
stayed or reversed within thirty (30) days of entry or issuance;

 

then, and in
every such event (other than an event with respect to the Borrower described in
clause (h) or (i) of this Section 8.1) and at any time thereafter during
the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender
shall terminate immediately, (ii) declare the principal of and any accrued
interest on the Loans, and all other Obligations owing hereunder, to be,
whereupon the same shall become, due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, (iii) exercise all remedies contained in any
other Loan Document, and (iv) exercise any other remedies available at law or
in equity; and that, if an Event of Default specified in either clause (h) or
(i) shall occur, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest
thereon, and all fees, and all other Obligations shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.

 

ARTICLE 9

THE ADMINISTRATIVE AGENT

 

Section
9.1.                                   Appointment of Administrative Agent.

 

(a)                                  Each
Lender irrevocably appoints SunTrust Bank as the Administrative Agent and
authorizes it to take such actions on its behalf and to exercise such powers as
are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions set forth in this
Article shall apply to any such sub-agent or attorney-in-fact and the Related
Parties of the Administrative Agent, any such sub-agent and any such
attorney-in-fact and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

 

(b)                                 The
Issuing Bank shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith until such time and
except

 

72

 

for so long as the Administrative Agent
may agree at the request of the Required Lenders to act for the Issuing Bank
with respect thereto; provided, that the Issuing Bank shall have all the
benefits and immunities (i) provided to the Administrative Agent in this
Article with respect to any acts taken or omissions suffered by the Issuing
Bank in connection with Letters of Credit issued by it or proposed to be issued
by it and the application and agreements for letters of credit pertaining to
the Letters of Credit as fully as if the term “Administrative Agent” as used in
this Article included the Issuing Bank with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to the Issuing
Bank.

 

Section 9.2.                                   Nature of Duties of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether
a Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, except those discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.2), and (c) except as expressly
set forth in the Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for
any action taken or not taken by it, its sub-agents or attorneys-in-fact with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2) or in the absence of its own gross negligence
or willful misconduct or a breach by the Administrative Agent of its
specific and express obligations to the Lenders under this Agreement as
determined by a final non-appealable judgment by a court of competent
jurisdiction.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any sub-agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall not be deemed to have knowledge
of any Default or Event of Default unless and until written notice thereof
(which notice shall include an express reference to such event being a “Default”
or “Event of Default” hereunder) is given to the Administrative Agent by the
Borrower or any Lender, and the Administrative Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty
or representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements, or other terms and conditions set forth in
any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article 3
or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent. The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower) concerning all matters pertaining to such duties. The
Administrative Agent agrees to exercise such care in performing its duties
hereunder as it would for loans for its sole benefit.

 

73

 

Section
9.3.                                   Lack of Reliance on the Administrative Agent. Each
of the Lenders, the Swingline Lender and the Issuing Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each of the Lenders, the Swingline Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, continue to make its own decisions in
taking or not taking of any action under or based on this Agreement, any
related agreement or any document furnished hereunder or thereunder.

 

Section
9.4.                                   Certain Rights of the Administrative Agent. If
the Administrative Agent shall request instructions from the Required Lenders
with respect to any action or actions (including the failure to act) in
connection with this Agreement, the Administrative Agent shall be entitled to
refrain from such act or taking such act, unless and until it shall have
received instructions from such Lenders, and the Administrative Agent shall not
incur liability to any Person by reason of so refraining in the absence
of the Administrative Agent’s own gross negligence or willful misconduct as
determined by a final non-appealable judgment by a court of competent
jurisdiction. . Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent acting
or refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement in the
absence of the Administrative Agent’s own gross negligence or willful
misconduct as determined by a final non-appealable judgment by a court of
competent jurisdiction.

 

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

 

Section
9.6.                                   The Administrative Agent in its Individual Capacity. The
bank serving as the Administrative Agent shall have the same rights and powers
under this Agreement and any other Loan Document in its capacity as a Lender as
any other Lender and may exercise or refrain from exercising the same as though
it were not the Administrative Agent; and the terms “Lenders”, “Required
Lenders”, “holders of Notes”, or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.

 

74

 

Section
9.7.                                   Successor Administrative Agent.

 

(a)                                  The
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent, subject to the
approval by the Borrower provided that no Default or Event of Default shall
exist at such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent, which shall be a commercial
bank organized under the laws of the United States of America or any state
thereof or a bank which maintains an office in the United States, having a
combined capital and surplus of at least $500,000,000.

 

(b)                                 Upon
the acceptance of its appointment as the Administrative Agent hereunder by a
successor, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. If within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section 9.7 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative
Agent’s resignation shall become effective, (ii) the retiring Administrative
Agent shall thereupon be discharged from its duties and obligations under the
Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Administrative Agent under the Loan Documents until such
time as the Required Lenders appoint a successor Administrative Agent as
provided above. After any retiring Administrative Agent’s resignation
hereunder, the provisions of this Article shall continue in effect for the
benefit of such retiring Administrative Agent and its representatives and
agents in respect of any actions taken or not taken by any of them while it was
serving as the Administrative Agent.

 

Section
9.8.                                   Authorization to Execute other Loan Documents; Collateral.

 

(a)                                  Each Lender authorizes the
Administrative Agent to enter into each of the Loan Documents to which it is a
party and to take all action contemplated by such Loan Documents. Each Lender
agrees that no Lender, other than the Administrative Agent acting on behalf of
all Lenders, shall have the right individually to seek to realize upon the
security granted by any Loan Document, it being understood and agreed that such
rights and remedies may be exercised solely by the Administrative Agent for the
benefit of the Lenders, upon the terms of the Loan Documents.

 

(b)                                 In the event that any Collateral
is pledged by any Person as collateral security for the Obligations, the
Administrative Agent is hereby authorized to execute and deliver on behalf of
the Lenders any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Administrative Agent on behalf of the
Lenders.

 

(c)                                  The Lenders hereby authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (i) upon
termination of the Commitments and payment and satisfaction of all of the
Obligations or the transactions contemplated hereby; (ii) as permitted by, but
only in accordance

 

75

 

with, the terms of the applicable Loan
Document; (iii) if approved, authorized or ratified in writing by the Required
Lenders, unless such release is required to be approved by all of the Lenders
hereunder; (iv) the release of a Subsidiary Loan Guaranty made or Lien
granted by a Subsidiary in the case of the sale of the Subsidiary permitted by
the terms of this Agreement; or (v) the release of any Lien on any assets
which are transferred or disposed of in accordance with the terms of this
Agreement. Upon request by the Administrative Agent at any time, the Lenders
will confirm in writing the Administrative Agent’s authority to release
particular types or items of Collateral pursuant to this Section 9.08(c).

 

(d)                                 Upon any sale or transfer of
assets constituting Collateral which is expressly permitted pursuant to the
terms of any Loan Documents, or consented to in writing by the Required
Lenders, and upon at least ten (10) Business Days’ prior written request by the
Borrower, the Administrative Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Administrative Agent for the benefit of the
Lenders, upon the Collateral that was sold or transferred; provided, however, that (i) the Administrative Agent shall
not be required to execute any such document on terms which, in the
Administrative Agent’s opinion, would expose the Administrative Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of the Borrower or any Guarantor) in respect of) all interests
retained by the Borrower or any Guarantor, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.

 

Section 9.9.                                   Benefits of Article 9. None of the provisions of this
Article 9 shall inure to the benefit of the Borrower or of any Person
other than Administrative Agent and each of the Lenders and their respective
successors and permitted assigns. Accordingly, neither the Borrower nor any
Person other than Administrative Agent and the Lenders (and their respective
successors and permitted assigns) shall be entitled to rely upon, or to raise
as a defense, the failure of the Administrative Agent or any Lenders to comply
with the provisions of this Article 9.

 

ARTICLE 10

MISCELLANEOUS

 

Section
10.1.                             Notices.

 

(a)                                  Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications to any party herein to be
effective shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

	
  To the Borrower:

  	
   

  	
  Stanley, Inc.

  
	
   

  	
   

  	
  3101 Wilson Boulevard

  
	
   

  	
   

  	
  Suite 700

  
	
   

  	
   

  	
  Arlington, Va. 22201

  
	
   

  	
   

  	
  Attention: Michael A. Zaramba

  
	
   

  	
   

  	
  Telecopy Number: 703-682-1547

  

 

76

 

	
  To the Administrative Agent

  	
   

  	
   

  
	
  or Swingline Lender:

  	
   

  	
  SunTrust Bank

  
	
   

  	
   

  	
  8330 Boone Blvd.

  
	
   

  	
   

  	
  Suite 700

  
	
   

  	
   

  	
  Vienna VA 22182-2624

  
	
   

  	
   

  	
  Attention: Peter Mandanis,
  Senior Vice President

  
	
   

  	
   

  	
  Telecopy Number: 703-442-1613

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  SunTrust Bank

  
	
   

  	
   

  	
  Agency Services

  
	
   

  	
   

  	
  303 Peachtree Street, N. E./ 25th Floor

  
	
   

  	
   

  	
  Atlanta, Georgia 30308

  
	
   

  	
   

  	
  Attention: Ms. Doris Folsom

  
	
   

  	
   

  	
  Telecopy Number: (404) 658-4906

  
	
   

  	
   

  	
   

  
	
  To the Issuing Bank:

  	
   

  	
  SunTrust Bank

  
	
   

  	
   

  	
  25 Park Place, N. E./Mail Code 3706

  
	
   

  	
   

  	
  Atlanta, Georgia 30303

  
	
   

  	
   

  	
  Attention: Sharon Anderson

  
	
   

  	
   

  	
  Telecopy Number: (404) 588-8129

  
	
   

  	
   

  	
   

  
	
  To the Swingline Lender:

  	
   

  	
  SunTrust Bank

  
	
   

  	
   

  	
  Agency Services

  
	
   

  	
   

  	
  303 Peachtree Street, N.E./25th Floor

  
	
   

  	
   

  	
  Atlanta, Georgia 30308

  
	
   

  	
   

  	
  Attention: Ms. Doris Folsom

  
	
   

  	
   

  	
  Telecopy Number: (404) 658-4906

  
	
   

  	
   

  	
   

  
	
  To any other Lender:

  	
   

  	
  the address set forth in the Administrative Questionnaire or the
  Assignment and Assumption Agreement executed by such Lender

  

 

(b)                                 Any party hereto may change its
address or telecopy number for notices and other communications hereunder by
notice to the other parties hereto. All such notices and other communications
shall, when transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the mail or if delivered, upon delivery;
provided, that notices delivered to the Administrative Agent, the Issuing Bank
or the Swingline Bank shall not be effective until actually received by such
Person at its address specified in this Section 10.1.

 

(c)                                  Any
agreement of the Administrative Agent and the Lenders herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrower. The Administrative Agent and the Lenders shall be
entitled to rely on the

 

77

 

authority of any Person purporting to
be a Person authorized by the Borrower to give such notice and the
Administrative Agent and Lenders shall not have any liability to the Borrower
or other Person on account of any action taken or not taken by the Administrative
Agent or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans and all other Obligations
hereunder shall not be affected in any way or to any extent by any failure of
the Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent and
the Lenders of a confirmation which is at variance with the terms understood by
the Administrative Agent and the Lenders to be contained in any such telephonic
or facsimile notice.

 

Section
10.2.                             Waiver; Amendments.

 

(a)                                  No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or any other Loan Document, and no course of dealing between
the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power hereunder or thereunder. The rights and remedies of the Administrative
Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies provided by law.
No waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section
10.2, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or the issuance of a Letter
of Credit shall not be construed as a waiver of any Default or Event of
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default or Event of
Default at the time.

 

(b)                                 No amendment or waiver of any
provision of this Agreement or the other Loan Documents, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Borrower and the Required Lenders or
the Borrower and the Administrative Agent with the consent of the Required
Lenders and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no
amendment or waiver shall: (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the date fixed for any payment of any principal
of, or interest on, any Loan or LC Disbursement or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.22(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby , without the written consent of each Lender, (v)
change any of the provisions of this Section 10.2 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Lender; (vi)

 

78

 

release any guarantor or limit the liability
of any such guarantor under any guaranty agreement, without the written consent
of each Lender, except as otherwise provided in Section 9.8(c), (vii)
release all or substantially all collateral (if any) securing any of the
Obligations, without the written consent of each Lender, (viii) amend, modify or waive any condition
precedent to any extension of credit under the Revolving Commitments set forth
in this Agreement (including, without limitation, the waiver of an existing
Default or Event of Default required to be waived in order for such extension
of credit to be made) without the consent of any Required Revolving Lenders, or
(ix) increase the aggregate of all Commitments (other than pursuant to Section
2.24) without the consent of all of the Lenders; provided further, that
no such agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Administrative Agent, the Swingline Bank or the Issuing Bank
without the prior written consent of such Person. Notwithstanding anything
contained herein to the contrary, this Agreement may be amended and restated
without the consent of any Lender (but with the consent of the Borrower and the
Administrative Agent) if, upon giving effect to such amendment and restatement,
such Lender shall no longer be a party to this Agreement (as so amended and
restated), the Commitments of such Lender shall have terminated (but such
Lender shall continue to be entitled to the benefits of Sections 2.19, 2.20,
2.21 and 10.3), such Lender shall no other commitment or other
obligation hereunder and shall have been paid in full all principal, interest
and other amounts owing to it or accrued for its account under this Agreement.

 

Section
10.3.                             Expenses; Indemnification.

 

(a)                                  The Borrower shall pay (i) all
reasonable, out-of-pocket costs and expenses of the Administrative Agent and
its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by
the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket costs and expenses (including, without limitation, the
reasonable fees, charges and disbursements of outside counsel and the allocated
cost of inside counsel) incurred by the Administrative Agent, the Issuing Bank
or any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section 10.3,
or in connection with the Loans made or any Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Bank, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan

 

79

 

Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
Release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any actual or alleged Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Borrower or any other Loan
Party, and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower or such
Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

 

(c)                                  The
Borrower shall pay, and hold the Administrative Agent and each of the Lenders
harmless from and against, any and all present and future stamp, documentary,
and other similar taxes with respect to this Agreement and any other Loan
Documents, any collateral described therein, or any payments due thereunder,
and save the Administrative Agent and each Lender harmless from and against any
and all liabilities with respect to or resulting from any delay or omission to
pay such taxes.

 

(d)                                 To the
extent that the Borrower fails to pay any amount required to be paid to the
Administrative Agent, the Issuing Bank or the Swingline Lender under clauses
(a), (b) or (c) hereof, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender’s Pro Rata Share (determined as of the time that the
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided,
that the unreimbursed expense or indemnified payment, claim, damage, liability
or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such.

 

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

 

(f)                                    All
amounts due under this Section 10.3 shall be payable promptly after
written demand therefor.

 

80

 

Section
10.4.                             Successors and Assigns.

 

(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 the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender,
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of paragraph
(b) of this Section, (ii) by way of participation in accordance with the
provisions of paragraph (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

(b)                                 Any Lender may at any time
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided that any such assignment shall
be subject to the following conditions:

 

(i)                                     Minimum
Amounts.

 

(A) in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B) in any case not described in paragraph
(b)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans and Revolving Credit Exposure outstanding
thereunder) or, if the applicable Commitment is not then in effect, the
principal outstanding balance of the Loans and Revolving Credit Exposure of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $1,000,000, unless each
of the Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed).

 

(ii)                                  Proportionate
Amounts. Each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans, Revolving Credit Exposure or the
Commitment assigned, except that this
clause (ii) shall not prohibit any Lender from assigning all or a portion of
its rights and obligations among separate Commitments on a non-pro rata basis.

 

81

 

(iii)                               Required
Consents. No consent shall be required for any assignment except to the
extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A) the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required for all assignments of all or a portion of its
rights under this Agreement unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund;

 

(B) the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments to a Person that is not
a Lender with a Commitment or an Affiliate of a Lender; and

 

(C) the
consent of the Issuing Bank (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding), and the consent of the Swingline Lender
(such consent not to be unreasonably withheld or delayed) shall be required for
any assignment in respect of the Revolving Credit Commitments.

 

(iv)                              Assignment
and Assumption. The parties to each assignment shall deliver to the
Administrative Agent (A) a duly executed Assignment and Assumption, (B) a processing
and recordation fee of $3,500, (C)
an Administrative Questionnaire unless the assignee is already a Lender and (D)
the documents required under Section 2.21(e) if such assignee is a
Foreign Lender.

 

(v)                                 No
Assignment to Borrower. No such assignment shall be made to the Borrower or
any of the Borrower’s Affiliates or Subsidiaries.

 

(vi)                              No
Assignment to Natural Persons. No such assignment shall be made to a
natural person.

 

Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
paragraph (c) of this Section 10.4, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 2.19, 2.20,
2.21 and 10.3 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with paragraph (d) of this Section 10.4.

 

82

 

(c)                                  The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at one of
its offices in Atlanta, Georgia a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amount of the Loans and
Revolving Credit Exposure owing to, each Lender 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 Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

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

 

(e)                                  Any agreement or instrument pursuant
to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any 
provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver with respect to the
following to the extent affecting such Participant:  (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the date fixed for any payment of any principal of, or
interest on, any Loan or LC Disbursement or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.22(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section 10.4 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Lender; (vi) release any guarantor or limit the liability of
any such guarantor under any guaranty agreement without the written consent of
each Lender except to the extent such release is expressly provided under the
terms of the Guaranty Agreement; or (vii) release all or substantially all
collateral (if any) securing any of the Obligations. Subject to paragraph (e)
of this Section 10.4, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.19, 2.20, and 2.21
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 10.4. To the extent
permitted by law, each Participant also shall be entitled to the

 

83

 

benefits of Section 10.7  as though it were a Lender, provided such
Participant agrees to be subject to Section 2.19 as though it were a
Lender.

 

(f)                                    A Participant
shall not be entitled to receive any greater payment under Section 2.19
and Section 2.21 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.21 unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.21(e) as though it were a Lender.

 

(g)                                 Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

Section
10.5.                             Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)                                  This
Agreement and the other Loan Documents shall be construed in accordance with
and be governed by the law (without giving effect to the conflict of law
principles thereof) of the State of New
York. EACH
LOAN DOCUMENT (OTHER THAN AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT)
WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

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

 

(c)                                  The
Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action
or proceeding described in paragraph (b) of this Section 10.5 and
brought in any court referred to in paragraph (b) of this Section 10.5.
Each of the parties hereto irrevocably waives, to the fullest extent

 

84

 

permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)                                 Each
party to this Agreement irrevocably consents to the service of process in the
manner provided for notices in Section 10.1. Nothing in this Agreement
or in any other Loan Document will affect the right of any party hereto to
serve process in any other manner permitted by law.

 

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

 

Section
10.7.                             Right of Setoff. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, each Lender and the Issuing Bank shall have the right, at any time
or from time to time upon the occurrence and during the continuance of an Event
of Default, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law, to
set off and apply against all deposits (general or special, time or demand,
provisional or final) of the Borrower at any time held or other obligations at
any time owing by such Lender and the Issuing Bank to or for the credit or the
account of the Borrower against any and all Obligations held by such Lender or
the Issuing Bank, as the case may be, irrespective of whether such Lender or
the Issuing Bank shall have made demand hereunder and although such Obligations
may be unmatured. Each Lender and the Issuing Bank agree promptly to notify the
Administrative Agent and the Borrower after any such set-off and any
application made by such Lender and the Issuing Bank, as the case may be; provided,
that the failure to give such notice shall not affect the validity of such
set-off and application.

 

Section
10.8.                             Counterparts; Integration. This
Agreement may be executed by one or more of the parties to this Agreement on
any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Agreement, the Fee Letter, the other Loan Documents, and any
separate letter agreement(s) relating to any fees payable to the Administrative
Agent constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior
agreements and understandings, oral or written, regarding such subject matters.

 

85

 

Section
10.9.                             Survival. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the making of any Loans and issuance of any Letters of Credit, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections
2.19, 2.20, 2.21, and 10.3 and Article 9 shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and the making of the
Loans and the issuance of the Letters of Credit.

 

Section
10.10.                       Severability. Any provision of this
Agreement or any other Loan Document held to be illegal, invalid or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

Section
10.11.                       Confidentiality. Each of the Administrative
Agent, the Issuing Bank and each Lender agrees to take normal and reasonable
precautions to maintain the confidentiality of any confidential or proprietary
information in accordance with the same standards that each such party uses for
its own confidential or proprietary information and provided to it by the
Borrower or any Subsidiary, except that such information may be disclosed (i)
to any Related Party of the Administrative Agent, the Issuing Bank or any such
Lender, including without limitation accountants, legal counsel and other
advisors, (ii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process and , unless prohibited by the terms of
such subpoena or similar legal process, after providing the Borrower with
prompt written notice of such requirement so that the Borrower may obtain an
appropriate protective order or agreement to hold its confidential and
proprietary information confidential, (iii) to the extent requested by any
regulatory agency or authority, (iv) to the extent that such information
becomes publicly available other than as a result of a breach of this Section
10.11, or which becomes available to the Administrative Agent, the Issuing
Bank, any Lender or any Related Party of any of the foregoing on a
non-confidential basis from a source other than the Borrower which did not
breach any confidentiality or other obligation owed to the Borrower or any
Subsidiary, (v) in connection with the exercise of any remedy hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, and (vi) subject to its agreement to provisions substantially
similar to this Section 10.11, to any actual or prospective assignee or
Participant, or (vii) with the prior written consent of the Borrower signed by
a Responsible Officer. Any Person required to maintain the confidentiality of
any information as provided for

 

86

 

in this Section 10.11
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such information as such Person would accord its own confidential information.

 

Section
10.12.                       Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which may be treated as interest on such Loan under applicable law
(collectively, the “Charges”), shall exceed the maximum lawful rate of
interest (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by a Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result of
the operation of this Section 10.12 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or periods shall
be increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Rate to the date of
repayment, shall have been received by such Lender.

 

Section
10.13.                       Waiver of Effect of Corporate Seal. The
Borrower represents and warrants that neither it nor any other Loan Party is
required to affix its corporate seal to this Agreement or any other Loan
Document pursuant to any requirement of law or regulation, agrees that this
Agreement is delivered by Borrower under seal and waives any shortening of the
statute of limitations that may result from not affixing the corporate seal to
this Agreement or such other Loan Documents.

 

Section
10.14.                       Patriot Act. The Administrative Agent and
each Lender hereby notifies the Loan Parties 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 each Loan Party, which information includes the
name and address of such Loan Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify such Loan Party
in accordance with the Patriot Act. Each Loan Party shall, and shall cause each
of its Subsidiaries to, provide to the extent commercially reasonable, such
information and take such other actions as are reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent
and the Lenders in maintaining compliance with
the Patriot Act.

 

(remainder of page left intentionally blank)

 

87

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STANLEY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Philip O. Nolan

  	
   

  
	
   

  	
   

  	
  Name:  Philip O. Nolan

  
	
   

  	
   

  	
  Title:    President & Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  [SEAL]

  

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

 

	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  SUNTRUST BANK
as
  Administrative Agent, as Issuing Bank and as

  Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter J. Mandanis

  	
   

  
	
   

  	
   

  	
  Name:  Peter J. Mandanis

  
	
   

  	
   

  	
  Title:    Senior Vice President

  

 

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

 

	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  SUNTRUST BANK
as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter J. Mandanis

  	
   

  
	
   

  	
   

  	
  Name:  Peter J. Mandanis

  
	
   

  	
   

  	
  Title:   Senior Vice President

  

 

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

 

	
   

  	
  M&T BANK
as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kevin J. McCormack

  	
   

  
	
   

  	
   

  	
  Name:  Kevin J. McCormack

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

 

[SIGNATURE PAGE TO

REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
   

  	
  PNC BANK, N.A.
as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Michael J. Elehwany

  	
   

  
	
   

  	
   

  	
  Name:  Michael J. Elehwany

  
	
   

  	
   

  	
  Title:   Vice President

  

 

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

 

[SIGNATURE PAGE TO

REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION
as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert M. Kadlick

  	
   

  
	
   

  	
   

  	
  Name:  Robert M. Kadlick

  
	
   

  	
   

  	
  Title:   Duly Authorized Signatory

  

 

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

 

[SIGNATURE PAGE TO

REVOLVING CREDIT AND TERM LOAN AGREEMENT]Exhibit 10.10

 

SECURITY
AGREEMENT

 

THIS SECURITY AGREEMENT
(this “Agreement”), dated as of February 16, 2006, among STANLEY, INC., a Delaware corporation (the “Borrower”),
the Subsidiaries of the Borrower signatory hereto and each other subsidiary of
the Borrower hereafter a party hereto (Borrower, each Subsidiary of the
Borrower a party hereto and each other Subsidiary hereafter becoming a party
hereto shall be collectively known as the “Grantors”, and individually
as a “Grantor”), in favor of SUNTRUST
BANK, a Georgia banking corporation, as the Administrative Agent
(the “Administrative Agent”), on its behalf and on behalf of the other
banks and lending institutions (the “Lenders”) from time to time party
to the Revolving Credit and Term Loan Agreement, dated as of the date hereof,
by and among the Borrower, the Lenders, the Administrative Agent, and SunTrust
Bank, as Issuing Bank and as Swingline Lender (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, pursuant to
the Credit Agreement, the Lenders have agreed to establish a revolving credit
facility and to extend term loans to the Borrower; and

 

WHEREAS, it is a
condition precedent to the obligations of the Administrative Agent, the Issuing
Bank, the Swingline Lender, and the Lenders under the Credit Agreement that the
Grantors enter into this Agreement to secure all obligations of the Borrower
under the Credit Agreement, and to secure the obligations of each Subsidiary of
the Borrower under the Subsidiary Guaranty Agreement and all other Loan
Documents to which each Grantor is a party, and the Grantors desire to satisfy
such condition precedent.

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

Section 1.01         Definitions.  Capitalized terms defined in the Credit
Agreement and not otherwise defined herein, when used in this Agreement shall
have the respective meanings provided for in the Credit Agreement.  The following additional terms, when used in
this Agreement, shall have the following meanings:

 

“Account Debtor” shall mean any person or entity that is
obligated under an Account.

 

“Accounts” shall mean all “accounts” (as defined in the UCC) now
owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights, and, in any event, shall mean and include, without limitation,
(a) all accounts receivable, contract rights, book debts, notes, drafts
and other obligations or indebtedness owing to any Grantor arising from the
sale or lease of goods or other property by any Grantor or the performance of
services by any Grantor (including, without limitation, any such obligation
which might be characterized as an account, contract right or general
intangible under the UCC in effect in any jurisdiction), (b) all of each
Grantor’s rights in, to and under all purchase and sales orders for goods,
services or other

 

 

property, and
all of each Grantor’s rights to any goods, services or other property
represented by any of the foregoing (including returned or repossessed goods
and unpaid sellers’ rights of rescission, replevin, reclamation and rights to
stoppage in transit), (c) all monies due to or to become due to any
Grantor under all contracts for the sale, lease or exchange of goods or other
property or the performance of services by any Grantor (whether or not yet
earned by performance on the part of such Grantor), and (d) all collateral
security and guarantees of any kind given to any Grantor with respect to any of
the foregoing.

 

“Chattel Paper” shall mean all “chattel paper” (as defined in
the UCC) owned or acquired by any Grantor or in which any Grantor has or
acquires any rights.

 

“Collateral” shall mean, collectively, all of the following:

 

(i)            all
Accounts;

 

(ii)           all
Chattel Paper;

 

(iii)          all
Deposit Accounts;

 

(iv)          all
Documents;

 

(v)           all
Equipment;

 

(vi)          all
Fixtures;

 

(vii)         all
General Intangibles;

 

(viii)        all
Instruments;

 

(ix)           all
Inventory;

 

(x)            all
Investment Property;

 

(xi)           all
Software;

 

(xii)          all
money, cash or cash equivalents;

 

(xiii)                          all
other goods and personal property, whether tangible or intangible;

 

(xiv)                         all Supporting
Obligations and Letter-of-Credit Rights of any Grantor;

 

(xv)                            all
books and records pertaining to any of the Collateral (including, without
limitation, credit files, Software, computer programs, printouts and other
computer materials and records but excluding customer lists); and

 

2

 

(xvi)                         All
products and Proceeds of all or any of the Collateral described in clauses (i) through
(xv) hereof.

 

“Copyright License” shall mean any and all rights of any Grantor
under any written agreement granting any right to use any Copyright or
Copyright registration.

 

“Copyrights” shall mean all of the following now owned or
hereafter acquired by any Grantor or in which any Grantor now has or hereafter
acquires any rights: (a) all copyrights and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright
Office or in any similar office or agency of the United States, any state or
territory thereof, or any other country or any political subdivision thereof,
and (b) all reissues, extensions or renewals thereof.

 

“Deposit Accounts” shall mean all “deposit accounts” (as defined
in the UCC) now owned or hereafter acquired by any Grantor or in which any
Grantor has or acquires any rights, or other receipts, of any Grantor covering,
evidencing or representing rights or interest in such deposit accounts.

 

“Documents” shall mean all “documents” (as defined in the UCC)
now owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights, or other receipts, of any Grantor covering, evidencing or
representing goods.

 

“Equipment” shall mean all “equipment” (as defined in the UCC)
now owned or hereafter acquired by any Grantor and wherever located, and, in
any event, shall include without limitation all machinery, furniture,
furnishings, processing equipment, conveyors, machine tools, engineering
processing equipment, manufacturing equipment, materials handling equipment,
trade fixtures, trucks, trailers, forklifts, vehicles, computers and other
electronic data processing and other office equipment of any Grantor, and any
and all additions, substitutions and replacements of any of the foregoing,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto, all fuel therefore and all manuals,
drawings, instructions, warranties and rights with respect thereto.

 

“Event of Default” shall have the meaning set forth for such
term in Section 7 hereof.

 

“General Intangibles” shall mean all “general intangibles” (as
defined in the UCC) now owned or hereafter acquired by any Grantor or in which
any Grantor has or acquires any rights and, in any event, shall include all
right, title and interest in or under all contracts, all customer lists,
Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life,

 

3

 

key man and
business interruption insurance, and all unearned premiums), uncertificated
securities, choses in action, deposit, checking and other bank accounts, rights
to receive tax refunds and other payments, rights of indemnification, all books
and records, correspondence, credit files, invoices, tapes, cards, computer
runs, domain names, prospect lists, customer lists and other papers and
documents.

 

“Instruments” shall mean all “instruments” (as defined in the
UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has
or acquires any rights and, in any event, shall include all promissory notes,
all certificates of deposit and all letters of credit evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts or other obligations owed to any
Grantor.

 

“Intellectual Property” shall mean all of the following now
owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights: (a) all Patents, patent rights and patent
applications, Copyrights and copyright applications, Trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights,
applications for registration of trademarks, trade names and service marks,
fictitious names registrations and trademark, trade name and service mark
registrations, and all derivations thereof; and (b) Patent Licenses,
Trademark Licenses, Copyright Licenses and other licenses to use any of the
items described in the preceding clause (a), and any other items necessary to
conduct or operate the business of each Grantor.

 

“Inventory” shall mean all “inventory” (as defined in the UCC)
now owned or hereafter acquired by any Grantor or in which any Grantor has or
acquires any rights and, in any event, shall include all goods owned or held
for sale or lease to any other Persons.

 

“Investment Property” shall mean all “investment property” (as
defined in the UCC) now owned or hereafter acquired by any Grantor or in which
any Grantor has or acquires any rights and, in any event, shall include all “certificated
securities”, “uncertificated securities”, “security entitlements”, “securities
accounts”, “commodity contracts” and “commodity accounts” (as all such terms
are defined in the UCC) of each Grantor.

 

“Letter-of-Credit Rights” shall mean “letter-of-credit rights”
(as defined in the UCC), now owned or hereafter acquired by any Grantor,
including rights to payment or performance under a letter of credit, whether or
not any Grantor, as beneficiary, has demanded or is entitled to demand payment
or performance.

 

“License” shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests of each Grantor in
Intellectual Property.

 

“Patent License” shall mean any written agreement now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
rights granting any right with respect to any property, process or other
invention on which a Patent is in existence.

 

“Patents” shall mean all of the following now owned or hereafter
acquired by any Grantor or in which any Grantor has or acquires any rights: (a) all
letters patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or any other country, including registrations, recordings and

 

4

 

applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State or Territory thereof, or any other
country; and (b) all reissues, continuations, continuations-in-part and
extensions thereof.

 

“Proceeds” shall mean all “proceeds” (as defined in the UCC) of,
and all other profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, the Collateral, and, in any event, shall mean and
include all claims against third parties for loss of, damage to or destruction
of, or for proceeds payable under, or unearned premiums with respect to,
policies of insurance in respect of any Collateral, and any condemnation or
requisition payments with respect to any Collateral and the following types of
property acquired with cash proceeds: 
Accounts, Inventory, General Intangibles, Documents, Instruments and
Equipment.

 

“Secured Obligations” shall mean (i) all Obligations of the
Borrower, (ii) all obligations of each other Grantor under the Subsidiary
Guaranty Agreement and all other Loan Documents to which such other Grantor is
a party to (whether for principal, interest, fees, expenses, indemnity or
reimbursement payments, or otherwise), (iii) all renewals, extensions,
refinancings and modifications thereof, and (iv) all reasonable costs and
expenses incurred by the Administrative Agent in connection with the exercise
of its rights and remedies hereunder (including reasonable attorneys’ fees).

 

“Security Interests” shall mean the security interests granted
to the Administrative Agent on its behalf and on behalf of the Lenders pursuant
to Section 3, as well as all other security interests created or assigned
as additional security for the Secured Obligations pursuant to the provisions
of this Agreement.

 

“Software” shall mean all “software” (as defined in the UCC),
now owned or hereafter acquired by any Grantor, including all computer programs
and all supporting information provided in connection with a transaction related
to any program.

 

“Supporting Obligations” means all “supporting obligations” (as
defined in the UCC), including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.

 

“Trademark License” shall mean any written agreement now owned
or hereafter acquired by any Grantor or in which any Grantor has or acquires
any such rights granting to any Grantor any right to use any Trademark.

 

“Trademarks” shall mean all of the following now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
such rights: (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos, other source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any

 

5

 

other country
or any political subdivision thereof, (ii) all reissues, extensions or
renewals thereof and (iii) all goodwill associated with or symbolized by
any of the foregoing.

 

“UCC” shall mean the Uniform Commercial Code as in effect, from
time to time, in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the Security Interests in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.

 

“United States” or “U.S.” shall mean the United States of
America, any of the fifty states thereof, and the District of Columbia.

 

SECTION 2.  Representations
and Warranties.  Each
Grantor represents and warrants to the Administrative Agent, for the benefit of
Lenders, as follows:

 

(a)           Such Grantor has rights in and the power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder and has
good and marketable title to all of its Collateral, free and clear of any Liens
other than Liens expressly permitted under Section 7.2 of the Credit
Agreement and restrictions on assignment and granting sublicenses contained in
Licenses.

 

(b)           Other than financing statements, security agreements, or
other similar or equivalent documents or instruments with respect to Liens
expressly permitted under Section 7.2 of the Credit Agreement, no
financing statement, mortgage, security agreement or similar or equivalent
document or instrument evidencing a Lien on all or any part of the Collateral
is on file or of record in any jurisdiction. 
None of the Collateral is in the possession of a Person (other than any
Grantor) asserting any claim thereto or security interest therein, except that
the Administrative Agent or its designee may have possession of Collateral as
contemplated hereby.

 

(c)           When the UCC financing statements in appropriate form are
filed in the offices specified on Schedule I attached hereto, the
Security Interests shall constitute valid and perfected security interests in
the Collateral, prior to all other Liens and rights of others therein except
for the Liens expressly permitted under Section 7.2 of the Credit
Agreement, to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, assuming the proper filing and indexing thereof.

 

(d)           All Inventory and Equipment is insured in accordance with
the requirements of the Credit Agreement.

 

(e)           None of the Collateral constitutes, or is the Proceeds of, “farm
products” (as defined in the UCC).

 

(f)            Schedule II correctly sets forth each
Grantor’s state of incorporation, taxpayer identification number,
organizational identification number and correct legal name indicated on the
public record of such Grantor’s jurisdiction of organization which shows such
Grantor to be organized.

 

6

 

(g)           The Perfection Certificate, which is attached hereto as Schedule III,  correctly sets forth (i) all names and
tradenames that each Grantor has used within the last five years and the names
of all Persons that have merged into or been acquired by each Grantor, (ii) the
chief executive offices of each Grantor over the last five years, (iii) all
other locations in which tangible assets of each Grantor have been located in
the last five years, (iv) the name of each bank at which each Grantor
maintains Deposit Accounts, the state or other jurisdiction of location of each
such bank, and the account numbers for each Deposit Account, (v) all
letters of credit under which each Grantor is a beneficiary, (vi) all
third parties with possession of any Inventory or Equipment of each Grantor and
(vii) each Grantor’s mailing address.

 

(h)           With respect to the Accounts of the Grantors:  (i) to the extent an Account arises out
of goods sold and/or services furnished, (A) the goods sold and/or
services furnished giving rise to each Account, to the extent applicable, are
not subject to any security interest or Lien except the security interest
granted to the Administrative Agent herein and Liens expressly permitted by Section 7.2
of the Credit Agreement, (B) such Account arises out of a bona fide
transaction for goods sold and delivered (or in the process of being delivered)
by a Grantor or for services actually rendered by a Grantor; (ii) each
Account and the papers and documents of the applicable Grantor relating thereto
are genuine and in all material respects what they purport to be; (iii) the
amount of each Account as shown on the applicable Grantor’s books and records,
and on all invoices and statements which may be delivered to the Administrative
Agent with respect thereto, is due and payable to the applicable Grantor and is
not in any way contingent (except for contingent Accounts relating to the sale,
lease or other disposition of all or substantially all of the assets of a line
of business or division of a Grantor); (iv) no Account is subject to
set-offs, counterclaims or disputes existing or asserted with respect to any
Account that in the aggregate could reasonably be expected to have a Material
Adverse Effect, and no Grantor has made any agreement with any Account Debtor
for any deduction from any Account except for deductions made in the ordinary
course of its business; (v) there has been no development or event in
respect of the validity or enforcement of any Account or Accounts or the amount
payable thereunder as shown on the applicable Grantor’s books and records and
all invoices and statements delivered to the Administrative Agent with respect
thereto, which individually or in the aggregate has had or could be reasonably
expected to have a Material Adverse Effect; and (vi) the right to receive
payment under each Account is assignable except where the Account Debtor with
respect to such Account is the United States government or any State government
or any agency, department or instrumentality thereof, to the extent the
assignment of any such right to payment is prohibited or limited by applicable
law, regulations, administrative guidelines or contract.

 

(i)            With respect to any Inventory, (i) such
Inventory is located at one of the Grantor’s locations set forth on the
Perfection Certificate (other than Inventory in transit between such
locations), (ii) no Inventory is now, or shall at any time or times
hereafter be stored at any other location without the Administrative Agent’s
prior consent, and if the Administrative Agent gives such consent, such Grantor
will concurrently therewith use commercially reasonable efforts to obtain, to
the extent required by the Credit Agreement, bailee, landlord and mortgagee
agreements, (iii) such Grantor has good title to such Inventory and such
Inventory is not subject to any Lien or security interest or document
whatsoever except for the Lien granted to the Administrative Agent and except
for Permitted Encumbrances, (iv) such Inventory is not subject to any
material licensing, patent, royalty, trademark, trade name or copyright
agreements with

 

7

 

any third parties which
would require any consent of any third party upon sale or disposition of that
Inventory or the payment of any monies to any third party upon such sale or
other disposition, and (v) the completion of manufacture, sale or other
disposition of such Inventory by the Administrative Agent following an Event of
Default shall not require the consent of any Person and shall not constitute a
breach or default under any contract or agreement to which such Grantor is a
party or to which such property is subject.

 

(j)            Such Grantor does not have any
interest in, or title to, any Patent, Trademark or Copyright except as set
forth in the Perfection Certificate. 
This Security Agreement is effective to create a valid and continuing Lien
on and, upon filing of the Copyright Security Agreements (as hereinafter
defined) with the United States Copyright Office and filing of the Patent
Security Agreements (as hereinafter defined) and the Trademark Security
Agreements (as hereinafter defined) with the United State Patent and Trademark
Office, perfected security interests in favor of the Administrative Agent in
such Grantor’s Patents, Trademarks and Copyrights and such perfected security
interests are enforceable as such as against any and all creditors of and
purchasers from such Grantor.  Upon
filing of the Copyright Security Agreements with the United States Copyright
Office and filing of the Patent Security Agreements and the Trademark Security
Agreements with the United States Patent and Trademark Office and the filing of
appropriate financing statements listed on Schedule I hereto, all action
necessary or desirable to perfect the Administrative Agent’s Lien on such
Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.  Notwithstanding anything to the contrary
contained in this Agreement, the Administrative Agent shall only require
perfection of its security interests in, or other registration with respect to,
any Patent, Trademark or Copyright registered, or eligible to be registered,
with a country other than the United States or any political subdivision
thereof, to the extent that Administrative Agent determines, in its sole
discretion, that such Patent, Trademark or Copyright, and the registration
thereof in such other country or political subdivision thereof, is material to
the applicable Grantor’s business.

 

SECTION 3.  The
Security Interests.  In
order to secure the full and punctual payment and performance of the Secured
Obligations in accordance with the terms thereof, each Grantor hereby pledges,
assigns, hypothecates, sets over and conveys to the Administrative Agent on its
behalf and on behalf of the Lenders and grants to the Administrative Agent on
its behalf and on behalf of the Lenders a continuing security interest in and
to, all of its rights in and to all Collateral now or hereafter owned or
acquired by such Grantor or in which such Grantor now has or hereafter has or
acquires any rights, and wherever located. 
The Security Interests are granted as security only and shall not
subject the Administrative Agent or any Lender to, or transfer to the
Administrative Agent or any Lender, or in any way affect or modify, any
obligation or liability of the Grantor with respect to any Collateral or any
transaction in connection therewith.

 

SECTION 4.  Further
Assurances; Covenants.

 

(a)           General.

 

(i)            No
Grantor shall change the location of its chief executive office or principal
place of business unless it shall have given the Administrative Agent ten (10) days’
prior notice thereof, as well as executed and delivered to the Administrative
Agent all financing statements and financing statement

 

8

 

amendments which the
Administrative Agent may request in connection therewith.  No Grantor shall change the locations, or
establish new locations, where it keeps or holds any of the Collateral or any
records relating thereto from the applicable locations described in the
Perfection Certificate attached hereto as Schedule III unless such Grantor
shall have given the Administrative Agent ten (10) days prior notice of
such change of location. The foregoing covenant shall not apply to any
Collateral (including trucks) perfected by recordation of the Administrative
Agent’s Lien on the appropriate certificate of title.

 

(ii)           No
Grantor shall change its name, organizational identification number, identity
or jurisdiction or form of organization in any manner unless it shall have
given the Administrative Agent ten (10) days’ prior written notice
thereof, and executed and delivered to the Administrative Agent all financing
statements and financing statement amendments which the Administrative Agent
may reasonably request in connection therewith. 
No Grantor shall merge or consolidate into, or transfer any of the
Collateral to, any other Person other than another Grantor, other than as
permitted by this Agreement and the Credit Agreement.

 

(iii)          Each
Grantor hereby authorizes the Administrative Agent, its counsel or its
representative, at any time and from time to time, to file financing statements
and amendments that describe the collateral covered by such financing
statements as “all assets of the Grantor”, “all personal property of the
Grantor” or words of similar effect, in such jurisdictions as are necessary or
desirable in order to perfect the security interests granted by such Grantor
under this Agreement.  Each Grantor will,
from time to time, at its expense, execute, deliver, file and record any
statement, assignment, instrument, document, agreement or other paper and take
any other action (including, without limitation, any filings with the United
States Patent and Trademark Office, Copyright or Patent filings and any filings
of financing or continuation statements under the UCC) that from time to time
may be reasonably necessary, or that the Administrative Agent may reasonably
request, in order to create, preserve, upgrade in rank (to the extent required
hereby), perfect, confirm or validate the Security Interests or to enable the
Administrative Agent to obtain the full benefits of this Agreement, or to
enable the Administrative Agent to exercise and enforce any of its rights,
powers and remedies hereunder with respect to any of its Collateral.  Each Grantor hereby authorizes the Administrative
Agent to execute and file financing statements, financing statement amendments
or continuation statements on behalf of such Grantor.  Each Grantor agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.  Grantors shall pay the actual and reasonable
costs of, or incidental to, any recording or filing of any financing
statements, financing statement amendments or continuation statements necessary
in the sole discretion of the Administrative Agent, to perfect the
Administrative Agent and Lenders’ security interest in the Collateral.

 

9

 

(iv)          Except
as set forth in the Perfection Certificate attached hereto as Schedule III,
no Grantor shall permit any of its tangible assets, including without
limitation, its Inventory and Equipment, to be in the possession of any other
Person (other than pursuant to the terms of a joint venture or teaming
arrangement permitted by the Credit Agreement) unless pursuant to an agreement
in form and substance satisfactory to the Administrative Agent (A) such
Person has acknowledged that (1) it holds possession of such Inventory,
Equipment and other tangible assets, as the case may be, for the Administrative
Agent’s benefit, subject to the Administrative Agent’s instructions, and (2) such
Person does not have a Lien in such Inventory, Equipment or other tangible
assets, (B) such Person agrees not to hold such Inventory, Equipment or
other tangible assets on behalf of any other Person and (C) such Person
agrees that, after the occurrence and during the continuance of an Event of
Default and upon request by the Administrative Agent to issue and deliver to
the Administrative Agent warehouse receipts, bills of lading or any similar
documents relating to such Collateral in the Administrative Agent’s name and in
form and substance acceptable to the Administrative Agent.

 

(v)           No
Grantor shall (A) sell, transfer, lease, exchange, assign or otherwise
dispose of, or grant any option, warrant or other right with respect to, any of
its Collateral other than sales of assets permitted under Section 7.6 of the Credit Agreement; or (B) create, incur or
suffer to exist any Lien with respect to any Collateral, except for the Liens
expressly permitted under Section 7.2 of the Credit Agreement.

 

(vi)          Each
Grantor will, promptly upon written request given on no more than two occasions
in each Fiscal Year prior to the occurrence of an Event of Default and without
limit during the continuance of any Event of Default, provide to the
Administrative Agent all information and evidence it may reasonably request
concerning the Collateral, to enable the Administrative Agent to enforce the
provisions of this Agreement.

 

(vii)         Each
Grantor shall take all actions necessary or reasonably requested by the
Administrative Agent in order to maintain the perfected status of the Security
Interests.

 

(viii)        No
Grantor shall file any amendment to or termination of a financing statement
naming any Grantor as debtor and the Administrative Agent as secured party, or
any correction statement with respect thereto, in any jurisdiction until such
time as the Secured Obligations have been satisfied and the Administrative
Agent and the Lenders have released their security interests granted hereunder.

 

(ix)           Each
Grantor shall take all steps necessary to grant the Administrative Agent
control of all electronic chattel paper in accordance with the UCC and all “transferable
records” as defined in each of the Uniform Electronic

 

10

 

Transactions Act and the
Electronic Signatures in Global and National Commerce Act.

 

(b)           Accounts, Etc.

 

(i)            Intentionally
Deleted.

 

(ii)           Upon
the occurrence and during the continuance of any Event of Default, each Grantor shall, at the request and
option of the Administrative Agent, notify Account Debtors and other Persons
obligated on the Accounts or any of the Collateral of the security interest of
Administrative Agent in any Account or other Collateral and that payment
thereof is to be made directly to the 
Administrative Agent, and may itself, if an Event of Default shall have occurred and be continuing, without
notice to or demand upon any Grantor, so notify Account Debtors and other
Persons obligated on Collateral.  After
the making of such a request or the giving of any such notification, and during
the continuance of an Event of Default, each Grantor shall hold any proceeds of
collection of the Accounts and such other Collateral received by such Grantor
as trustee for the  Administrative Agent
without commingling the same with other funds of such Debtor and shall turn the
same over to the  Administrative Agent in
the identical form received, together with any necessary endorsements or
assignments.  The  Administrative Agent shall apply the proceeds
of collection of the Accounts and other Collateral received by the
Administrative Agent to the Obligations in accordance with the provisions of
the Credit Agreement, such proceeds to be immediately credited after final
payment in cash or other immediately available funds of the items giving rise
to them..

 

(iii)          Each
Grantor will perform and comply in all material respects with all of its
obligations in respect of Accounts, Instruments and General Intangibles.

 

(iv)          Anything
herein to the contrary notwithstanding, each of the Grantors shall remain
liable under each of its Accounts, contracts and agreements to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Account or the terms of such contract or agreement.  Neither the Administrative Agent nor any
Lender shall have any obligation or liability under any Account (or any
agreement giving rise thereto), contract or agreement by reason of or arising
out of this Security Agreement or the receipt by the Administrative Agent or
any Lender of any payment relating to such Account, contract or agreement
pursuant hereto, nor shall the Administrative Agent or any Lender be obligated
in any manner to perform any of the obligations of any Grantor under or
pursuant to any Account (or any agreement giving rise thereto), contract or
agreement, to make any payment, to make any inquiry as to the nature or the sufficiency
of any payment received by it or as to the sufficiency of any performance by
any party under any Account (or any agreement giving rise thereto), contract or
agreement, to present or file any claim, to take any action to

 

11

 

enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

 

(v)           At
any time and from time to time,  the
Administrative Agent shall have the right, but not the obligation, to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the Grantors shall furnish all such
assistance and information as the Administrative Agent may reasonably require
in connection with such test verifications, provided that without the prior
written consent of the Grantors, the Administrative Agent may not contact the
Account Debtors unless an Event of Default shall have occurred and be
continuing.  Upon the Administrative
Agent’s request and at the expense of the Grantors, the Grantors shall cause
their independent public accountants or others reasonably satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Accounts.  After the occurrence and during the
continuance of an Event of Default, the Administrative Agent in its own name or
in the name of others may communicate with Account Debtors on the Accounts to
verify with them to the Administrative Agent’s reasonable satisfaction the
existence, amount and terms of any Accounts.

 

(c)           Equipment, Etc.  Each Grantor shall, (i) within ten (10) days
after a written request by the Administrative Agent, in the case of Equipment
now owned, and (ii) following a request by the Administrative Agent
pursuant to subclause (i) above, within ten (10) days after acquiring
any other Equipment, deliver to the Administrative Agent, any and all
certificates of title, and applications therefor, if any, of such Equipment and
shall cause the Administrative Agent to be named as lienholder on any such
certificate of title and applications. 
No Grantor shall permit any such items to become a fixture to real
estate or an accession to other personal property unless such real estate or
personal property is the subject of a fixture filing (as defined in the UCC)
creating a first priority perfected Lien in favor of the Administrative Agent.

 

(d)           Patents, Trademarks, Etc.  Each Grantor shall notify the Administrative
Agent immediately upon the occurrence of each of the following (i) such
Grantor’s  acquisition after the date of
this Agreement of any material Intellectual Property and (ii) a
Responsible Officer of such Grantor obtaining knowledge, or reason to know,
that any application or registration relating to any Intellectual Property
owned by or licensed to such Grantor is reasonably likely to become abandoned
or dedicated, or of any material adverse determination or development
(including, without limitation, the institution of, or any such determination
or development in, any proceeding in the United States Copyright Office, the
United States Patent and Trademark Office or any court) regarding such Grantor’s
ownership of any material Intellectual Property, its right to register the
same, or to keep and maintain the same, provided however, a Grantor shall have
no obligation to notify the Administrative Agent of any determination made in
the ordinary course of business to abandon or not prosecute any Intellectual
Property unless the same could be reasonably expected to have a Material
Adverse Effect.  Each Grantor will,
contemporaneously herewith, execute and deliver to the Administrative Agent the
Patent Security Agreement, Trademark Security Agreement and Copyright Security
Agreement in the forms of Exhibit A, Exhibit B and Exhibit C
hereto, as

 

12

 

necessary, and shall
execute and deliver to the Administrative Agent any other document required to
acknowledge or register or perfect the Administrative Agent’s interest in any
part of the Intellectual Property. 
Notwithstanding anything to the contrary contained in this Agreement,
the Administrative Agent shall only require perfection of its security
interests in, or other registration with respect to, any Patent, Trademark or
Copyright registered, or eligible to be registered, with a country other than
the United States or any political subdivision thereof, to the extent that Administrative
Agent determines, in its sole discretion, that such Patent, Trademark or
Copyright, and the registration thereof in such other country or political
subdivision thereof, is material to the applicable Grantor’s business.

 

(e)           Deposit Accounts, Chattel Paper,
Investment Property and Letters of Credit.

 

(i)            No
Grantor shall open or maintain any Deposit Accounts with deposits at any time
in excess of $100,000 other than those listed on the Perfection Certificate
attached hereto as Schedule III and such other Deposit Accounts as
such Grantor shall open and maintain with the consent of the Administrative
Agent subject to control agreements, in form and substance reasonably
satisfactory to the Administrative Agent in its sole discretion, executed by such
Grantor, the bank at which the deposit account is located and the
Administrative Agent.

 

(ii)           No
Grantor shall become the beneficiary of any Letters of Credit, unless the
issuer of the Letter of Credit has consented to the assignment of the proceeds
of such Letter of Credit to the Administrative Agent which consent shall not be
unreasonably withheld, such assignment to be in form and substance acceptable
to the Administrative Agent.

 

(iii)          Each
Grantor, at any time and from time to time, will (a) take such steps as
the Administrative Agent may reasonably request from time to time for the
Administrative Agent to obtain “control” of any Investment Property or
electronic Chattel Paper, with any agreements establishing control to be in
form and substance reasonably satisfactory to the Administrative Agent, and (b) otherwise
to insure the continued perfection and priority of the Administrative Agent’s
security interest in any of the Collateral and of the preservation of its
rights therein.

 

(f)            Commercial Tort Claims.  If any Grantor shall at any time acquire a “commercial
tort claim” (as such term is defined in the UCC) with a claim for damages that
could reasonably be expected to be in excess of $1,000,000, such Grantor shall promptly
notify the Administrative Agent thereof in a writing, providing a reasonable
description and summary thereof, and shall execute a supplement to this
Agreement granting a security interest in such commercial tort claim to the
Administrative Agent.

 

(g)           Insurance.  Each Grantor shall have its Equipment and
Inventory insured against loss or damage by fire, theft, burglary, pilferage,
loss in transportation and such other hazards as the Administrative Agent shall
reasonably specify, by reputable and financially viable

 

13

 

insurers (having a
rating of A or A-:  Class V or
better by Best’s Key Rating Guide), in amounts consistent with market and
industry standards and under policies containing loss payable clauses
satisfactory to the Administrative Agent. 
Any such insurance policies, or certificates or other evidence thereof
satisfactory to the Administrative Agent, shall be deposited with the
Administrative Agent.  Each Grantor
agrees that the Administrative Agent, for the ratable benefit of the Lenders,
shall have a security interest in such policies and the proceeds of such
policies thereof, and if any loss shall occur during the continuation of an
Event of Default, the proceeds relating to the loss or damage of the Equipment
or Inventory may be applied to the payment of the Obligations or to the
replacement or restoration of the Inventory or Equipment damaged or destroyed,
as the Administrative Agent may elect or direct.  After the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right to file claims under any insurance policies, to receive receipt and give
acquittance for any payments that may be made thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect to the collection, compromise, or
settlement of any claims under any of the insurance policies.

 

SECTION 5.  Reporting
and Recordkeeping.  Each
Grantor covenants and agrees with the Administrative Agent that from and after
the date of this Agreement and until the Secured Obligations have been
indefeasibly paid in full in cash:

 

(a)           Maintenance of Records Generally.  Each Grantor will keep and maintain at its
own cost and expense records of its Collateral, complete in all material
respects, including, without limitation, a record of all payments received and
all credits granted with respect to the Collateral and all other dealings with
its Collateral.  For the Administrative
Agent’s further security, each Grantor agrees that the Administrative Agent
shall have a security interest in all of such Grantor’s books and records
pertaining to its Collateral and, upon the occurrence and during the
continuation of any Event of Default, such Grantor shall deliver and turn over
full and complete copies of any such books and records to the Administrative
Agent or to its representatives at any time on demand of the Administrative
Agent.  Upon reasonable prior notice from
the Administrative Agent, each Grantor shall permit any representative of the
Administrative Agent, to inspect such books and records during normal business
hours and will provide photocopies thereof to the Administrative Agent.

 

(b)           Special Provisions Regarding
Maintenance of Records and Reporting Re: Accounts, Inventory and Equipment;

 

(i)            Each
Grantor shall keep complete and accurate records of its Accounts.  Upon the request of the Administrative Agent,
and prior to an Event of Default no more frequently than two times per Fiscal
Year and without limit after the occurrence and during the continuance of an
Event of Default, such Grantor shall deliver to the Administrative Agent all
documents, including, without limitation, repayment histories and present
status reports, relating to its Accounts so scheduled and such other matters
and information relating to the status of its then existing Accounts as the
Administrative Agent shall reasonably request.

 

(ii)           In
the event any amounts due and owing in excess of $2,500,000 in the aggregate
are in dispute between any Account Debtor and any Grantor, such

 

14

 

Grantor shall provide the
Administrative Agent with written notice thereof promptly after such Grantor’s
learning thereof summarizing the reason for the dispute, the principal claims
related thereto and the amount in controversy.

 

(iii)          Each
Grantor shall maintain itemized records, accurate in all material respects,
itemizing and describing  the kind, type,
quality, quantity, location and book value of its Inventory and Equipment and
shall, upon request by the Administrative Agent (given on no more than two
occasions in each Fiscal Year prior to the occurrence of an Event of Default
and without limit after the occurrence and during the continuance of an Event
of Default), furnish the Administrative Agent with a current schedule containing
the foregoing information.

 

(iv)          Each
Grantor will promptly upon, but in no event later than five (5) Business
Days after:such Grantor’s learning thereof, inform the Administrative Agent, in
writing, of any material delay in such Grantor’s performance of any of its
obligations to any Account Debtor if such delay is reasonably likely to have a
Material Adverse Effect and of any assertion of any claims, offsets or counterclaims
by any Account Debtor and of any allowances, credits or other monies granted by
such Grantor to any Account Debtor, in each case involving amounts in excess of
$2,500,000 in the aggregate for all Accounts
of such Account Debtor;

 

(v)           Intentionally
Deleted.

 

(vi)          Such
Grantor at its expense will cause independent public accountants reasonably
satisfactory to the Administrative Agent to prepare and deliver to the
Administrative Agent at any time and from time to time promptly upon the
Administrative Agent’s request made when any Event of Default exists, the
following reports: (A) a reconciliation of all of its Accounts, (B) an
aging of all of its Accounts, (C) trial balances, and (D) a test
verification of such Accounts.

 

(c)           Further Identification of Collateral.  Upon the occurrence of an Event of Default,
each Grantor will if so requested by the Administrative Agent furnish to the
Administrative Agent, as often as the Administrative Agent reasonably requests
but in no event more frequently than two times per Fiscal Year and without
limit after the occurrence and during the continuance of an Event of Default,
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.

 

(d)           Notices.  In addition to the notices required by Section 5(b) hereof,
each Grantor will advise the Administrative Agent promptly, but in no event
later than thirty (30) days after the occurrence thereof, in reasonable detail,
(i) of any Lien or claim made or asserted against any of the Collateral
that is not expressly permitted by the terms of the Credit Agreement, and (ii) of
the occurrence of any other event which would have a material adverse effect on
the aggregate value of the Collateral or on the validity, perfection or
priority of the Security Interests.

 

 

15

 

SECTION 6.  General
Authority.  Each Grantor
hereby irrevocably appoints, so long as any Obligations remain outstanding, the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Grantor, the Administrative Agent or
otherwise, for the sole use and benefit of the Administrative Agent on its
behalf and on behalf of the Lenders, but at such Grantor’s expense, to
exercise, at any time (subject to the proviso below) all or any of the
following powers:

 

(i)            to
file the financing statements, financing statement amendments and continuation
statements referred to in Section 4(a)(iii),

 

(ii)           to
demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due with respect to any Collateral or by virtue thereof,

 

(iii)          to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect to any Collateral,

 

(iv)          to
sell, transfer, assign or otherwise deal in or with the Collateral or the
proceeds or avails thereof, as fully and effectually as if the Administrative
Agent were the absolute owner thereof, and

 

(v)           to
extend the time of payment of any or all thereof and to make any allowance and
other adjustments with reference to the Collateral.

 

provided, however,
that the powers described in clauses (ii), (iii), (iv) and (v) above
may be exercised by the Administrative Agent only if an Event of Default then
exists.

 

SECTION 7.  Events
of Default.  Each of the
following specified events shall constitute an Event of Default under this
Agreement:

 

(a)           The existence or occurrence of any “Event of Default” as
provided under the terms of the Credit Agreement;

 

(b)           Any representation or warranty made by or on behalf of any
Grantor under or pursuant to this Agreement shall have been false or misleading
in any material respect when made; or

 

(c)           Any Grantor shall fail to observe or perform any covenant or
agreement set forth in this Agreement other than those referenced in paragraphs
(a) and (b) above, and if such failure is capable of being remedied,
such failure shall remain unremedied for thirty (30) days after the earlier to
occur of receipt by such Grantor of written notice from the Administrative
Agent or a Responsible Officer of a Grantor obtaining knowledge of such
failure.

 

SECTION 8.  Remedies
upon Event of Default.

 

(a)           If any Event of Default has occurred and is continuing, the
Administrative Agent may, without further notice, exercise all rights and
remedies under this Agreement or any other Loan Document or that are available
to a secured creditor under the UCC or that are

 

16

 

otherwise available
at law or in equity, at any time, in any order and in any combination,
including to collect any and all Secured Obligations from the Grantors, and, in
addition, the Administrative Agent may sell the Collateral or any part thereof
at public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Administrative Agent may deem satisfactory.  The Administrative Agent shall give the
Borrower not less than ten days’ prior written notice of the time and place of
any sale or other intended disposition of Collateral, except any Collateral
which is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. 
Each Grantor agrees that any such notice constitutes “reasonable
notification” within the meaning of Section 9-611 of the UCC (to the
extent such Section or any successor provision under the UCC is
applicable).

 

(b)           The Administrative Agent may be the purchaser of any or all
of the Collateral so sold at any public sale (or, if such Collateral is of a
type customarily sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations or if otherwise
permitted under applicable law, at any private sale) and thereafter hold the
same, absolutely, free from any right or claim of whatsoever kind.  Each Grantor agrees during an Event of
Default to execute and deliver such documents and take such other action as the
Administrative Agent deems necessary or advisable in order that any such sale
may be made in compliance with law.  Upon
any such sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall hold
the Collateral so sold to it absolutely, free from any claim or right of any
kind, including any equity or right of redemption of the Grantors.  To the extent permitted by law, each Grantor
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted.  The notice (if any) of such sale shall (1) in
case of a public sale, state the time and place fixed for such sale, and (2) in
the case of a private sale, state the day after which such sale may be
consummated.  Any such public sale shall
be held at such time or times within ordinary business hours and at such place
or places as the Administrative Agent may fix in the notice of such sale.  At any such sale Collateral may be sold in
one lot as an entirety or in separate parcels, as the Administrative Agent may
determine.  The Administrative Agent
shall not be obligated to make any such sale pursuant to any such notice.  The Administrative Agent may, without notice
or publication (other than any notices required by this Section 8 or by
applicable law), adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be
so adjourned.  In case of any sale of all
or any part of the Collateral on credit or for future delivery, such Collateral
so sold may be retained by the Administrative Agent until the selling price is
paid by the purchaser thereof, but the Administrative Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for such
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice.  The
Administrative Agent, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.  The Grantors shall remain liable for any
deficiency.

 

(c)           For the purpose of enforcing any and all rights and remedies
under this Agreement, the Administrative Agent may (i) require any Grantor
to, and each Grantor agrees that it will, at the joint and several expense of
the Grantors, and upon the request of the

 

17

 

Administrative
Agent, forthwith assemble all or any part of its Collateral as directed by the
Administrative Agent and make it available at a place designated by the
Administrative Agent which is reasonably convenient to the Administrative Agent
and such Grantor, whether at the premises of such Grantor or otherwise, (ii) to
the extent permitted by applicable law, enter, with or without process of law
and without breach of the peace, any premise where any such Collateral is or
may be located and, without charge or liability to the Administrative Agent,
seize and remove such Collateral from such premises, (iii) have access to
and use such Grantor’s books and records, computers and software (subject to
the terms of applicable licenses) relating to the Collateral, and (iv) prior
to the disposition of any of the Collateral, store or transfer such Collateral
without charge in or by means of any storage or transportation facility owned
or leased by such Grantor, process, repair or recondition such Collateral or
otherwise prepare it for disposition in any manner and to the extent the
Administrative Agent deems appropriate and, in connection with such preparation
and disposition, use without charge any trademark, trade name, copyright,
patent or technical process used such Grantor.

 

(d)           Without limiting the generality of the foregoing, if any
Event of Default has occurred and is continuing:

 

(i)            the
Administrative Agent may (without assuming any obligations or liability
thereunder), at any time and from time to time, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee all rights and
remedies of any Grantor in, to and under any Licenses and take or refrain from
taking any action under any thereof, and each Grantor hereby releases the
Administrative Agent from, and agrees to hold the Administrative Agent free and
harmless from and against any claims arising out of, any lawful action so taken
or omitted to be taken with respect thereto except
for the Administrative Agent’s gross negligence, bad faith or willful
misconduct as determined by a final and nonappealable decision of a court of
competent jurisdiction; and

 

(ii)           upon
request by the Administrative Agent, each Grantor agrees to execute and deliver
to the Administrative Agent powers of attorney, in form and substance
satisfactory to the Administrative Agent, for the implementation of any lease,
assignment, license, sublicense, grant of option, sale or other disposition of
any Intellectual Property, in each case subject to the terms of the applicable
License.  In the event of any such
disposition pursuant to this Section, each Grantor shall supply its know-how
and expertise relating to the manufacture and sale of the products bearing
Trademarks or the products or services made or rendered in connection with
Patents or Copyrights, and its customer lists and other records relating to
such Intellectual Property and to the distribution of said products, to the
Administrative Agent.

 

SECTION 9.  Limitation
on Duty of Administrative Agent in Respect of Collateral.  Beyond reasonable care in the custody
thereof, the Administrative Agent shall have no duty as to any Collateral of
any Grantor in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody of the Collateral of the Grantors
in its possession if such Collateral

 

18

 

is accorded
treatment substantially equal to that which it accords its own property, and
the Administrative Agent shall not be liable or responsible for any loss or
damage to any of the Grantors’ Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by the
Administrative Agent in good faith.

 

SECTION 10.  Application
of Proceeds. The proceeds of any sale of, or other realization
upon, all or any part of the Collateral of the Grantors shall be applied by the
Administrative Agent in the manner set forth in Section 2..22 of
the Credit Agreement.

 

SECTION 11.  Concerning
the Administrative Agent. 
The provisions of Article 9 of the Credit Agreement shall inure to the
benefit of the Administrative Agent in respect of this Agreement and shall be
binding upon the parties to the Credit Agreement in such respect.  In furtherance and not in derogation of the
rights, privileges and immunities of the Administrative Agent therein set
forth:

 

(a)           The Administrative Agent is authorized to take all such
action as is provided to be taken by it as the Administrative Agent hereunder
or otherwise permitted under the Credit Agreement and all other action
reasonably incidental thereto.  As to any
matters not expressly provided for herein or therein, the Administrative Agent
may request instructions from the Lenders and shall act or refrain from acting
in accordance with written instructions from the Required Lenders or, in the
absence of such instructions, in accordance with its discretion.

 

(b)           The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Grantors’ Collateral or for the
validity, perfection, priority or enforceability of the Security Interests,
whether impaired by operation of law or by reason of any action or omission to
act on its part.  The Administrative
Agent shall have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement by the Grantors.

 

SECTION 12.  Appointment
of Co-Administrative Agents. 
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Administrative Agent may appoint another bank or trust
company or one or more other Persons reasonably acceptable to the Required
Lenders and, so long as no Event of Default has occurred or is continuing, the
Borrower, either to act as co-agent or co-agents, jointly with the
Administrative Agent, or to act as separate agent or agents on behalf of the
Administrative Agent and the Lenders with such power and authority as may be
necessary for the effectual operation of the provisions hereof and specified in
the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 11).

 

SECTION 13.  Expenses.  In the event that any Grantor fails to comply
with the provisions of the Credit Agreement, this Agreement or any other Loan
Document, such that the value of any of its Collateral or the validity,
perfection, rank or value of the Security Interests are thereby diminished or
potentially diminished or put at risk, the Administrative Agent may, but shall
not be required to, effect such compliance on behalf of such Grantor, and the
Grantors shall jointly and severally reimburse the Administrative Agent for the
reasonable and actual costs

 

19

 

thereof on
demand.  All insurance expenses and all
expenses of protecting, storing, warehousing, appraising, insuring, handling,
maintaining and shipping such Collateral, any and all excise, stamp,
intangibles, transfer, property, sales, and use taxes imposed by any state,
federal, or local authority or any other governmental authority on any of such
Collateral, or in respect of periodic appraisals and inspections of such
Collateral, or in respect of the sale or other disposition thereof, shall be
borne and paid by the Grantors jointly and severally; and if the Grantors fail
promptly to pay any portion thereof when due, the Administrative Agent may, at
its option, but shall not be required to, pay the same and charge the Grantors’
accounts therefor, and the Grantors agree jointly and severally to reimburse
the Administrative Agent therefor on demand. 
All sums so paid or incurred by the Administrative Agent for any of the
foregoing and any and all other sums for which the Grantors may become liable
hereunder and all reasonable costs and expenses (including reasonable attorneys’
fees, legal expenses and court costs) incurred by the Administrative Agent in
enforcing or protecting the Security Interests or any of its rights or remedies
thereon shall be payable by the Grantors on demand and shall bear interest
(after as well as before judgment) until paid at the default rate of interest
set forth in the Credit Agreement and shall be additional Secured Obligations
hereunder.

 

SECTION 14.  Termination
of Security Interests; Release of Collateral.  Upon the repayment in full in cash of all
Secured Obligations, termination of all commitments of the Lenders under the
Credit Agreement and the cash collateralization of the LC Exposure, the
Security Interests shall terminate and all rights to the Collateral shall
revert to the Grantors.  Upon any such
termination of the Security Interests or release of such Collateral, the
Administrative Agent will promptly upon the Grantor’s request and
contemporaneously with any refinancing of the Obligations, at the expense of
the Borrower, execute and deliver to the Borrower such documents as the
Grantors shall reasonably request, but without recourse or warranty to the
Administrative Agent, including but not limited to written authorization to
file termination statements to evidence the termination of the Security
Interests in such Collateral.

 

SECTION 15.  Notices.  All notices, requests and other
communications to the Grantors or the Administrative Agent hereunder shall be
delivered in the manner required by the Credit Agreement and shall be
sufficiently given to the Administrative Agent or any Grantor if addressed or
delivered to them at, in the case of the Administrative Agent and the Borrower,
its addresses and telecopier numbers specified in the Credit Agreement and in the
case of any other Grantors, at their respective addresses and telecopier
numbers provided in the Subsidiary Guaranty Agreement.  All such notices and communications shall be
deemed to have been duly given at the times set forth in the Credit Agreement.

 

SECTION 16.  No
Waiver; Remedies Cumulative. 
No failure or delay on the part of the Administrative Agent in
exercising any right or remedy hereunder, and no course of dealing between any
Grantor on the one hand and the Administrative Agent or any holder of any Note
on the other hand shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy hereunder or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right or remedy hereunder or thereunder. 
The rights and remedies herein and in the other Loan Documents are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent would otherwise have.  No notice to
or demand on the Grantors not required hereunder in any case shall entitle any
Grantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the

 

20

 

Administrative Agent
to any other or further action in any circumstances without notice or demand.

 

SECTION 17.  Successors
and Assigns.  This
Agreement is for the benefit of the Administrative Agent and the Lenders and
their permitted successors and assigns, and in the event of an assignment of
all or any of the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness.  This Agreement shall be
binding on the Grantors and their successors and assigns; provided, however, that no
Grantor may assign any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and the Lenders.

 

SECTION 18.  Amendments.  No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Grantors herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

 

SECTION 19.  Governing
Law; Waiver of Jury Trial.

 

(a)           THIS AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE
OF NEW YORK, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION
AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY
JURISDICTION OTHER THAN NEW YORK.  THIS
AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES SECTIONS 5-1401 AND 5-1402
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

(b)           GRANTORS IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR
THEMSELF AND THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, SUCH FEDERAL COURT.  EACH
GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT,
THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION

 

21

 

OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST SUCH GRANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (B) OF THIS SECTION AND
BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH GRANTOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)           EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

 

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

 

SECTION 20.  Severability.  In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable, in whole or in part,
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

SECTION 21.  Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instruments.

 

SECTION 22.  Headings
Descriptive.  The headings
of the several sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

 

22

 

[Signature Page Follows]

 

23

 

 

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

 

 

	
   

  	
  STANLEY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip O. Nolan

  	
   

  
	
   

  	
  Name: 
  Philip O. Nolan

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STANLEY ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip O. Nolan

  	
   

  
	
   

  	
  Name: 
  Philip O. Nolan

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  MORGAN RESEARCH CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip O. Nolan

  	
   

  
	
   

  	
  Name: 
  Philip O. Nolan

  
	
   

  	
  Title:   
  President and Chief Executive Officer

  

 

[SIGNATURE
PAGE TO SECURITY AGREEMENT]

 

 

EXHIBIT A

to Security
Agreement

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Agreement”), dated as of                       ,
is made between                                       ,
a                                         
(the “Grantor”), and SUNTRUST BANK,
a Georgia banking corporation, as the Administrative Agent (the “Administrative
Agent”), on its behalf and on behalf of the other banks and lending
institutions (the “Lenders”) from time to time party to the Revolving
Credit and Term Loan Agreement, dated as of February 16, 2006, by and
among the Stanley, Inc., the Lenders, the Administrative Agent, and
SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W  I  T  N  E  S
S  E  T  H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security Agreement, dated as of February 16, 2006
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security
Agreement, the Grantor is required to execute and deliver this Agreement and to
grant to the Administrative Agent a continuing security interest in all of the
Patent Collateral (as defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of the Administrative Agent and each Lender, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.

 

SECTION 2.  Grant of
Security Interest.  For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Lender, all of the following property (the “Patent Collateral”),
whether now owned or hereafter acquired or existing by it:

 

(a)           all
letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing anywhere in the
world and including each patent and patent application referred to in Item A
of Schedule I attached hereto;

 

1

 

(b)           all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clause (a);

 

(c)           all
patent licenses, including each patent license referred to in Item B of Schedule I
attached hereto; and

 

(d)           all
proceeds of, and rights associated with, the foregoing (including license
royalties and proceeds of infringement suits), the right to sue third parties
for past, present or future infringements of any patent or patent application,
including any patent or patent application referred to in Item A of Schedule I
attached hereto, and for breach or enforcement of any patent license,
including any patent license referred to in Item B of Schedule I
attached hereto, and all rights corresponding thereto throughout the world.

 

SECTION 3.  Security
Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Administrative Agent in the Patent Collateral with the
United States Patent and Trademark Office and corresponding offices in other
countries of the world (subject to Sections 2 and 4(d) of
the Security Agreement), .  The security
interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for
its benefit and the benefit of each Lender under the Security Agreement.  The Security Agreement (and all rights and
remedies of the Administrative Agent and each Lender thereunder) shall remain
in full force and effect in accordance with its terms subject to Section 4
hereof.

 

SECTION 4.  Release of
Security Interest.  Upon (i) the
sale, transfer or other disposition of any Patent Collateral in accordance with
the Credit Agreement or (ii) the Termination Date, the Administrative
Agent shall promptly upon the Grantor’s request and contemporaneously with any
refinancing of the Obligations, at the Grantor’s expense, execute and deliver
to the Grantor all instruments and other documents as may be necessary or
proper to release the lien on and security interest in the Patent Collateral
which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with
respect to the security interest in the Patent Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

 

SECTION 6.  Loan Document, etc.  This
Agreement is a Loan Document executed pursuant to the Credit Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions of the Credit
Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement.

 

2

 

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

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST BANK,

  
	
   

  	
    as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

3

 

EXHIBIT B

to Security
Agreement

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as
of                       ,
is made between                                       ,
a                                         
(the “Grantor”), and SUNTRUST BANK,
a Georgia banking corporation, as the Administrative Agent (the “Administrative
Agent”), on its behalf and on behalf of the other banks and lending
institutions (the “Lenders”) from time to time party to the Revolving
Credit and Term Loan Agreement, dated as of February 16, 2006, by and
among the Stanley, Inc., the Lenders, the Administrative Agent, and
SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security Agreement, dated as of February 16, 2006
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security
Agreement, the Grantor is required to execute and deliver this  Agreement and to grant to the Administrative
Agent a continuing security interest in all of the Trademark Collateral (as
defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of the Administrative Agent each Lender, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by
reference) in the Security Agreement.

 

SECTION 2.  Grant of
Security Interest.  For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Lender, all of the following property (the “Trademark Collateral”),
whether now owned or hereafter acquired or existing by it:

 

(a)           all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification marks,
collective marks, logos, other source of business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of a like nature (all of the foregoing items in this clause
(a) being collectively called a

 

1

 

“Trademark”), now existing anywhere in the world or hereafter
adopted or acquired, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any foreign
country, including those referred to in Item A of Schedule I
attached hereto;

 

(b)           all
Trademark licenses, including each Trademark license referred to in Item B
of Schedule I attached hereto;

 

(c)           all
reissues, extensions or renewals of any of the items described in clause (a) and
(b);

 

(d)           all
of the goodwill of the business connected with the use of, and symbolized by
the items described in, clauses (a) and (b); and

 

(e)           all
proceeds of, and rights associated with, the foregoing, including any claim by
the Grantor against third parties for past, present or future infringement or
dilution of any Trademark, Trademark registration or Trademark license,
including any Trademark, Trademark registration or Trademark license referred
to in Item A and Item B of Schedule I attached
hereto, or for any injury to the goodwill associated with the use of any such
Trademark or for breach or enforcement of any Trademark license.

 

SECTION 3.  Security
Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Administrative Agent in the Trademark Collateral with
the United States Patent and Trademark Office and corresponding offices in
other countries of the world (subject to Sections 2 and 4(d) of
the Security Agreement).  The security
interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for
its benefit and the benefit of each Lender under the Security Agreement.  The Security Agreement (and all rights and
remedies of the Administrative Agent and each Lender thereunder) shall remain
in full force and effect in accordance with its terms subject to Section 4
hereof.

 

SECTION 4.  Release of
Security Interest.  Upon (i) the
sale, transfer or other disposition of any Trademark Collateral in accordance
with the Credit Agreement or (ii) the Termination Date, the Administrative
Agent shall promptly upon the Grantor’s request and contemporaneously with any
refinancing of the Obligations, at the Grantor’s expense, execute and deliver
to the Grantor all instruments and other documents as may be necessary or
proper to release the lien on and security interest in the Trademark Collateral
which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with
respect to the security interest in the Trademark Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.

 

2

 

SECTION 6.  Loan Document, etc.  This
Agreement is a Loan Document executed pursuant to the Credit Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions of the Credit
Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement.

 

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

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST BANK

  
	
   

  	
    as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

3

 

EXHIBIT C

to Security
Agreement

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Agreement”), dated as
of                       ,
is made between                                       ,
a                                         
(the “Grantor”), and SUNTRUST BANK,
a Georgia banking corporation, as the Administrative Agent (the “Administrative
Agent”), on its behalf and on behalf of the other banks and lending
institutions (the “Lenders”) from time to time party to the Revolving
Credit and Term Loan Agreement, dated as of February 16, 2006, by and
among the Stanley, Inc., the Lenders, the Administrative Agent, and
SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security Agreement, dated as of February 16, 2006
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security
Agreement, the Grantor is required to execute and deliver this  Agreement and to grant to the Administrative
Agent a continuing security interest in all of the Copyright Collateral (as
defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of the Administrative Agent and each Lender, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by
reference) in the Security Agreement.

 

SECTION 2.  Grant of
Security Interest.  For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Administrative Agent, and grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Lender, all of the following property (the “Copyright Collateral”),
whether now owned or hereafter acquired or existing by it, being all copyrights
(including all copyrights for semi-conductor chip product mask works) of the
Grantor, whether statutory or common law, registered or unregistered, now or
hereafter in force throughout the world including all of the Grantor’s right,
title and interest in and to all copyrights registered in the United States
Copyright Office or anywhere else in the world and also including the
copyrights referred to in Item A of Schedule I attached
hereto, and all applications for registration thereof, whether pending or in
preparation, all copyright licenses, including each copyright license referred
to in Item B of Schedule I attached hereto, the right to

 

4

 

sue for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

 

SECTION 3.  Security
Agreement.  This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Administrative Agent in the Copyright Collateral with
the United States Copyright Office and corresponding offices in other countries
of the world (subject to Sections 2 and 4(d) of the Security
Agreement).  The security interest
granted hereby has been granted as a supplement to, and not in limitation of,
the security interest granted to the Administrative Agent for its benefit and
the benefit of each Lender under the Security Agreement.  The Security Agreement (and all rights and
remedies of the Administrative Agent and each Lender thereunder) shall remain
in full force and effect in accordance with its terms subject to Section 4.

 

SECTION 4.  Release of
Security Interest.  Upon (i) the
sale, transfer or other disposition of any Copyright Collateral in accordance
with the Credit Agreement or (ii) the Termination Date, the Administrative
Agent shall promptly upon the Grantor’s request and contemporaneously with any
refinancing of the Obligations, at the Grantor’s expense, execute and deliver
to the Grantor all instruments and other documents as may be necessary or
proper to release the lien on and security interest in the Copyright Collateral
which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with
respect to the security interest in the Copyright Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

 

SECTION 6.  Loan Document, etc.  This
Agreement is a Loan Document executed pursuant to the Credit Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions of the Credit
Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
(whether such counterpart is originally executed or an electronic copy of an
original) and all of which shall constitute together but one and the same
agreement.

 

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

 

5

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST BANK

  
	
   

  	
    as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

6

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