SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 30, 2002 FTI Consulting, Inc. (Exact Name of Registrant as Specified in Charter) Maryland 001-14875 52-1261113 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 900 Bestgate Road, Suite 100, Annapolis, Maryland 21401 (Address of Principal Executive Offices) (ZIP Code) Registrant's telephone number, including area code (410) 224-8770 Item 2. Acquisition or Disposition of Assets. On July 24, 2002, FTI Consulting, Inc. ("FTI") entered into an Agreement for the Purchase and Sale of Assets (the "Purchase Agreement") by and between FTI and PricewaterhouseCoopers LLP ("PwC"), pursuant to which FTI agreed to acquire certain assets and assume certain liabilities of PwC's U.S. Business Recovery Services Division. The U.S. Business Recovery Services Division is one of the leading providers of bankruptcy, turnaround and financial restructuring services to businesses in the United States. On August 30, 2002, FTI completed the acquisition of the U.S. Business Recovery Services Division. The purchase price plus other acquisition costs included approximately $143.0 million of cash and 3.0 million shares of FTI common stock. FTI financed the cash portion of the purchase price from its existing cash and a new credit facility that it entered into with Bank of America, N.A. on August 30, 2002. At September 3, 2002, FTI's aggregate outstanding indebtedness under the credit facility consisted of a term loan of $74.0 million and $45.0 million drawn under a $100.0 million revolving credit line, and its current term loan of $26.0 million remained outstanding. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, incorporated herein by reference, and the credit facility, attached as an exhibit hereto. A press release issued by FTI on September 3, 2002 announcing the acquisition and the credit facility is attached as an exhibit hereto. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Acquired Business. The required financial statements will be filed as soon as practicable, but not later than 60 days after the filing date of this Form 8-K report. (b) Pro Forma Financial Information. It is impracticable to provide the required pro forma financial information at this time. The required pro forma financial information will be filed as soon as practicable, but not later than 60 days after the filing date of this Form 8-K report. (c) Exhibits. 2.1* Agreement for the Purchase and Sale of Assets dated as of July 24, 2002, by and between PricewaterhouseCoopers LLP and FTI Consulting, Inc. 4.1 Registration Rights Agreement dated as of August 30, 2002, by and between FTI Consulting, Inc., PricewaterhouseCoopers LLP and the other signatories thereto. 10.1 Credit Agreement dated as of August 30, 2002, by and among FTI Consulting, Inc. and its subsidiaries named therein, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders and the arranger and book manager named therein. 10.2 Pledge Agreement dated as of August 30, 2002, by and among the pledgors named therein and Bank of America, N.A., as Administrative Agent. -1- 10.3 Security Agreement dated as of August 30, 2002, by and among the grantors named therein and Bank of America, N.A., as Administrative Agent. 10.4 Transition Services Agreement dated as of August 30, 2002, by and between PricewaterhouseCoopers LLP and FTI Consulting, Inc. 99.1 Press Release dated September 3, 2002, of FTI Consulting, Inc. * Filed as an exhibit to FTI's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 26, 2002, and incorporated herein by reference. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FTI CONSULTING, INC. By: /s/ Theodore I. Pincus --------------------------- Theodore I. Pincus Executive Vice President and Chief Financial Officer Date: September 13, 2002 -3- EXHIBIT INDEX Exhibit Description 4.1 Registration Rights Agreement dated as of August 30, 2002, by and between FTI Consulting, Inc., PricewaterhouseCoopers LLP and the other signatories thereto. 10.1 Credit Agreement dated as of August 30, 2002, by and among FTI Consulting, Inc. and its subsidiaries named therein, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders and the arranger and book manager named therein. FTI will furnish to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request. 10.2 Pledge Agreement dated as of August 30, 2002, by and among the pledgors named therein and Bank of America, N.A., as Administrative Agent. 10.3 Security Agreement dated as of August 30, 2002, by and among the grantors named therein and Bank of America, N.A., as Administrative Agent. 10.4 Transition Services Agreement dated as of August 30, 2002 by and between PricewaterhouseCoopers LLP and FTI Consulting, Inc. 99.1 Press Release dated September 3, 2002, of FTI Consulting, Inc. -4-
Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of August 30, 2002, is by and between FTI Consulting, Inc., a Maryland corporation (the "Company"), the security holders of the Company listed on the signature pages hereto and the other security holders of the Company who become parties to this Agreement by the execution and delivery of counterpart signature pages hereto (collectively, the "Holders") RECITALS Pursuant to the Asset Purchase Agreement, dated as of July 24, 2002 (the "Asset Purchase Agreement"), between the Company and PricewaterhouseCoopers LLP ("PwC"), on the date hereof, PwC is receiving from the Company 3,000,000 shares of Common Stock, $0.01 par value per share, of the Company (the "Common Stock") on the terms and conditions set forth therein. Immediately following receipt of such Common Stock, PwC is transferring a portion thereof to the other Holders, who are PwC Partners or Principals withdrawing from PwC in connection with the transactions contemplated under the Asset Purchase Agreement. It is a condition to the consummation of the transactions contemplated by the Asset Purchase Agreement (from which the Company and the Holders will derive significant benefits) that the parties hereto enter into this Agreement. Accordingly, the parties agree as follows: AGREEMENT SECTION 1. Definitions; Rules of Interpretation. (a) When used in this Agreement: "Affiliate" means, when used with respect to a specified Person, a limited or general partner of such Person or another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified, where "control" means possession, directly or indirectly, of power to direct or cause the direction of management or policies of the specified Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. "Form S-3" means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC. "Governmental Authority" means any government, court, administrative agency or commission or other governmental agency, authority or instrumentality, domestic or foreign, of competent jurisdiction. "Investor Representative" means PwC for so long as it remains a holder of capital stock of the Company, any other holder of capital stock of the Company designated by PwC as its replacement in writing or, if PwC no longer holds Registrable Securities, such Person as designated by the Majority Shareholders from time to time. "Majority Holders" means PwC or, should PwC no longer hold Registrable Securities, Holders holding a majority of Registrable Securities. "Person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Authority or other entity, and shall include any successor (by merger or otherwise) of such entity. "Public Sale" means any sale of Registrable Securities to the public pursuant to a public offering registered under the Securities Act or to the public through a broker or market-maker pursuant to the provisions of Rule 144 (or any successor rule) adopted under the Securities Act. "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document. "Registrable Securities" means (i) any Common Stock, and (ii) any Common Stock or other securities issued as (or issuable upon the conversion, exercise or exchange of any option, warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the securities referred to in clause (i), in each case held at any time by the Holders; provided that Registrable Securities shall not include shares of Common Stock or other securities that have been sold in a Public Sale or held by a Holder whose entire holdings of Registrable Securities are then eligible for resale without registration and without regard to volume or time limitations under Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder. (b) Headings and Rules of Interpretation. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. Except as otherwise expressly provided in this Agreement, the following rules of interpretation apply to this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) "or" and "any" are not exclusive and "include" and "including" are not limiting; (iii) a reference to any agreement or other contract includes permitted supplements and amendments; (iv) a reference to a law includes any amendment or modification to such law and any rules or regulations issued thereunder; (v) a reference to a Person includes its permitted successors and assigns; and (vi) a reference in this Agreement to an Article, Section, Annex, Exhibit or Schedule is to the Article, Section, Annex, Exhibit or Schedule of this Agreement. SECTION 2. Demand Registrations. (a) Exercise of Rights. The Company shall, upon the written demand of either (1) the Majority Holders or (2) Holders of Registrable Securities meeting the limitations of Section 2(b)(i) below, use its reasonable commercial efforts to effect as expeditiously as possible, the registration (a "Demand Registration") under the Securities Act of (i) all Registrable Securities held by such Holders which are requested to be registered in the initial written demand and (ii) any additional Registrable Securities requested to be registered by any Holders who elect to include Registrable Securities in such Demand Registration in a written notice or notices given within five business days of the date the Demand Registration Notice (as defined below) is given by the Company (together with the Registrable Securities described in clause (i), the "Included Securities"). Promptly (but in no event later than five business days) after the receipt by the Company of any written demand pursuant to clause (i) of the immediately preceding sentence, the Company will give written notice of such demand to all the Holders (the "Demand Registration Notice"). The Company shall effect the registration under the Securities Act of the Included Securities as expeditiously as possible and use its reasonable commercial efforts to have such registration become and remain effective as provided in Section 4 hereof. Notwithstanding the foregoing, the Company shall have the right to delay any Demand Registration for a single period of not more than 90 days in the aggregate in any given twelve month period (an "Interruption Period") after the date of any request to register the Registrable Securities pursuant to the Demand Registration, if, in the case of the second and third Demand Registration hereunder, at the time of such request, the Company is preparing, or within ten days thereafter engages an underwriter, and commences in good faith to prepare, a Registration Statement for a public offering (other than a registration relating solely to employee benefit plans) which is in fact filed and becomes effective within 90 days after the date the holders of the Registrable Securities have provided the written registration request, or is engaged in any material acquisition or divestiture or other business transaction with a third party which the Board of Directors of the Company reasonably determines in good faith would be adversely affected by the Demand Registration to the material detriment of the Company. The Company shall have the right to select the underwriters for a Demand Registration that is to be an underwritten offering, subject to the reasonable approval of the Majority Holders; provided, that the selected underwriter shall be an internationally recognized investment bank and the selection shall not, in the reasonable opinion of PwC, cause adverse restrictions or conditions under the rules and regulations governing the independence of auditors to become applicable to PwC or its Affiliates. Each holder of Included Securities shall be permitted to withdraw all or any part of the Included Securities of such holder from any Demand Registration at any time prior to the effective date of such Demand Registration; provided, that such Demand Registration shall count as a Demand Registration unless the holders of the Included Securities pay all expenses referred to in Section 8(a) in connection with the withdrawn registration except in the case of the second Demand Registration, in which case such withdrawn registration will count as the second Demand Registration but in no event will such holders be required to pay the expenses referred to in Section 8(a) in connection with such withdrawn second Demand Registration; provided, further, that if at the time of such withdrawal, the Holders of the Included Securities have learned of a material adverse change in the conditions, business or prospects of the Company from that known to the holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to this Section 2(a). (b) Limitations. Notwithstanding Section 2(a), the Company shall be required to effect no more than three Demand Registrations; provided, that the Holders shall be entitled to unlimited additional Demand Registrations if such additional Demand Registrations would be eligible for registration on Form S-3 and; provided, further, that the Company shall not be required to effect more than two such Demand Registrations on Form S-3 in any twelve month period and that the Company shall not be required to effect any Demand Registration if any such Demand Registration does not either (i) result in an offering price to the public of at least $10 million or (ii) include all the Registrable Securities held by PwC permitted to be included in such Demand Registration. (c) Additional Requirements. Any registration initiated pursuant to Section 2(a) shall not count as a Demand Registration (i) unless and until a registration statement with respect to all Registrable Securities to be sold in connection therewith shall have become effective and remained effective for a period of 120 days, or, if a shorter time until all of the Included Securities not withdrawn by the Holders from the registration shall have been sold (unless all Included Securities are withdrawn by the holders thereof prior to the effectiveness and the Company has performed its obligations under this Agreement in all material respects, in which case such registration will count as a Demand Registration unless the holders of the Included Securities pay all expenses referred to in Section 8(a) in connection with the withdrawn registration, subject to the last clause of Section 2(a)), (ii) if after it has become effective such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or any other Governmental Authority for any reason not attributable to the holders of Included Securities, such that no sales are possible thereunder for a period of ten consecutive days or more, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of the holders of Included Securities. (d) Inclusion of Other Securities. Neither the Company nor any of its security holders other than the Holders shall be entitled to include any securities in any underwritten Demand Registration unless the Investor Representative shall have agreed to such inclusion and unless the Company and the Investor Representative shall have agreed in writing to sell such securities on the same terms and conditions as shall apply to the Registrable Securities to be included in such Demand Registration; provided, however, that, subject to paragraph (e) below, with respect to the First Demand Registration, the Company shall be permitted to include primarily (together with Company common stock held by officers, directors and employees of the Company) issued common stock that would result in an offering to the public of not more than 2,400,000 million shares (the Company, together with the holders of any such Company issued common stock, shall herein be referred to as the "Company Holders" ). (e) Cutbacks. If the managing underwriters of any Demand Registration advise the Company in writing that in their good faith judgment the number of securities to be included in a Demand Registration exceeds the number that can be sold in the offering in light of marketing factors or because the sale of a greater number would adversely affect the price of the Registrable Securities to be sold in such Demand Registration, then the total number of securities the underwriters advise can be included in such Demand Registration shall be allocated (i) first, to each holder of Included Securities in proportion to such holder's ownership of the total number of Included Securities; and (ii) second, among any securities the Company proposes to issue and sell for its own account or register for sale by any Person (other than a holder of Included Securities) in such Demand Registration in accordance with any contractual provisions binding on the Company and/or the holders of such securities or, if no contractual provisions apply, as the Company may determine; provided, however, that with respect to the First Demand Registration, the total number of securities the underwriters advise can be included in such Demand Registration shall be allocated pro rata to each holder of Included Securities and the Company Holders in proportion to the number of securities requested to be included by such Holders and the Company Holders to the total number of securities requested to be included, according Holders and the Company Holders the same priority in any such cutback. (f) Termination. This Section 2 shall terminate with respect to any shares of Common Stock or other securities that have been sold in a Public Sale or are held by a Stockholder whose entire holdings of Registrable Securities are then eligible for resale without registration and without being limited by any volume or time limitations under Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. (g) First Demand Registration. PwC shall make a written demand to the Company for the first Demand Registration of all the Registrable Securities held by it (the "First Demand Registration") at the time of the Closing (as defined in the Asset Purchase Agreement). SECTION 3. Piggyback Registrations. (a) Exercise of Rights. Should the Company propose to register any of its securities under the Securities Act for sale (other than in connection with a Demand Registration, or the registration of securities issuable pursuant to an employee stock option, stock purchase or similar plan), the Company shall give the Holders notice of such proposed registration (a "Piggyback Registration") at least 30 days prior to the filing of a registration statement in connection therewith. At the written request of any Holder delivered to the Company within 15 days after the receipt of the notice from the Company, which request shall state the number of Registrable Securities that such Holder wishes to sell or distribute publicly in the Piggyback Registration, the Company shall effect the registration under the Securities Act of the Registrable Securities requested to be included in the Piggyback Registration (the "Piggyback Securities") as expeditiously as possible and use its reasonable commercial efforts to have such registration become and remain effective as provided in Section 4 hereof. Each Holder of Piggyback Securities shall be permitted to withdraw all or any part of the Piggyback Securities of such holder from any Piggyback Registration at any time prior to the effective date of such Piggyback Registration; provided, in the case of an underwritten offering, that such Holder is permitted to do so by the managing underwriters or pursuant to any agreement with such managing underwriters. (b) Additional Requirements. No Holder shall be entitled to include any securities in any underwritten Piggyback Registration unless such Holder shall have agreed in writing to sell such securities on the same terms and conditions as shall apply to the securities (other than Piggyback Securities) to be included in such Piggyback Registration. If a Piggyback Registration is to cover, in whole or in part, any underwritten distribution, then the Company shall use its reasonable commercial efforts to cause all Piggyback Securities to be included in the underwriting on the same terms and conditions as the securities (other than Piggyback Securities) being sold through the underwriters. (c) Cutbacks. If the managing underwriters of any Piggyback Registration advise the Company in writing that in their good faith judgment the number of securities to be included in the Piggyback Registration exceeds the number that can be sold in the offering in light of marketing factors or because the sale of a greater number would adversely affect the price of the Registrable Securities to be sold in such Piggyback Registration, then the total number of securities the underwriters advise can be included in such Piggyback Registration shall be allocated (i) first, to the securities of the Company the Company proposes to issue and sell for its own account; (ii) second, to each Holder holding Piggyback Securities in proportion to such Holder's ownership of the total number of Piggyback Securities; and (iii) third, among any securities of the Company the Company proposes to register for sale by any Person (other than a holder of Piggyback Securities) in such Piggyback Registration in accordance with any contractual provisions binding on the Company and/or the holders of such securities or, if no contractual provisions apply, as the Company may determine. SECTION 4. Registration Covenants of the Company. If any Registrable Securities of any Holder are to be registered pursuant to Section 2 or Section 3, the Company covenants and agrees that it shall use its reasonable commercial efforts to effect the registration and cooperate in the sale of the Registrable Securities to be registered and shall as expeditiously as possible: (a) (i) prepare and file with the SEC a registration statement with respect to the Registrable Securities (including all amendments and supplements thereto, a "Registration Statement") and (ii) use its reasonable commercial efforts to cause the Registration Statement to become effective; (b) prior to the filing described above in paragraph (a), furnish to each Holder participating in such offering copies of the Registration Statement and any amendments or supplements thereto and any prospectus forming a part thereof, which documents shall be subject to the review of counsel representing the Holders; (c) notify each such Holder, promptly after receiving notice thereof, of the time when the Registration Statement becomes effective or when any amendment or supplement or any prospectus forming a part of the Registration Statement has been filed; (d) notify each Holder participating in such offering promptly of any request by the SEC for the amending or supplementing of the Registration Statement or prospectus or for additional information; (e) (i) advise each Holder participating in such offering after the Company shall receive notice or otherwise obtain knowledge of the issuance of any order by the SEC suspending the effectiveness of the Registration Statement or any amendment thereto or of the initiation or threatening of any proceeding for that purpose and (ii) promptly use its reasonable commercial efforts to prevent the issuance of any stop order or to obtain its withdrawal promptly if a stop order should be issued; (f) (i) prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus forming a part thereof as may be necessary to keep the Registration Statement effective for a period of time necessary to permit each Holder participating in such offering to dispose of all its Registrable Securities and (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during such period in accordance with the intended methods of disposition by each such Holder set forth in the Registration Statement; (g) furnish to each Holder participating in such offering such number of copies of the Registration Statement, each amendment and supplement thereto, the prospectus included in the Registration Statement (including such preliminary prospectus) and such other documents such Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder; (h) use its reasonable commercial efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as determined by the underwriters after consultation with the Company and the Holders participating in the offering and do any and all other acts and things which may be reasonably necessary or advisable to enable each Holder to consummate the disposition in such jurisdictions of the Registrable Securities (provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction in which it would not otherwise be required to qualify but for this paragraph (h), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction); (i) notify each Holder of any Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, promptly upon the Company's becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, as promptly as possible (but in no event later than three days) or in the case where the untrue statement or omission referred to in this Section 4(i) is in the event of or is related to a pending financing, acquisition, corporate reorganization or any other material corporate development of the Company (or would require premature disclosure thereof), if the Board of Directors of the Company in its reasonable judgment believes it may possess material non-public information the disclosure of which in its reasonable judgment would have a material adverse effect on the Company and its subsidiaries taken as a whole, no later than 50 days after the Company provides the notice required by this Section 4(i) (a "Black Out Right"), prepare and furnish to such Holder a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the sellers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that (i) the Company, during any 12-month period, may not impose more than two Black Out Rights, (ii) the period of such Black Out Rights shall not exceed 50 days in the aggregate and (iii) the period of such Black Out Rights plus all Interruption Periods and Suspension Periods (Section 5(c)) may not exceed 90 days in any given twelve month period; (j) cause senior representatives of the Company to participate in any "road show" or "road shows" reasonably requested by any underwriter of an underwritten or "best efforts" offering of any Registrable Securities; (k) provide a transfer agent and registrar, which may be a single entity, for all the Registrable Securities not later than the effective date of the Registration Statement; (l) enter into such customary agreements (including an underwriting agreement in customary form) and take all such other action, if any, as the Holders participating in such offering or the underwriters shall reasonably request in order to expedite or facilitate the disposition of the Registrable Securities pursuant to this Agreement; (m) (i) make available for inspection by the Holders participating in such offering, any underwriter participating in any distribution pursuant to the Registration Statement and any attorney, accountant or other agent retained by such Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors and employees to supply all relevant information reasonably requested by such Holders or any such underwriter, attorney, accountant or agent in connection with the Registration Statement; (n) furnish to each Holder participating in the offering a signed counterpart, addressed to the Holders (or to the underwriters, in the case of any underwritten offering), of (i) an opinion of counsel for the Company, dated the effective date of the registration statement, and (ii) a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in the registration statement, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and (in the case of the "comfort" letter), as are customarily covered (at the time of such registration) in opinions of issuer's counsel and in "comfort" letters, respectively, delivered to the underwriters in underwritten public offerings of securities; and (o) notify each Holder of any Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, promptly upon the Company's becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such Holder, promptly prepare and furnish to such Holder (but in any event within three days following such notice) a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the sellers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. SECTION 5. Cooperation by the Holders. (a) Lock-Up Agreements. Each Holder, if and for the period of time the managing underwriters so request in connection with any underwritten registration of Registrable Securities, will not, to the extent requested by such underwriters during the time period specified, effect any Public Sale or other distribution of any equity securities of the Company without the prior written consent of such underwriters; provided, however, that (i) all executive officers and directors of the Company, all beneficial owners of 5% or more of the outstanding capital stock of the Company and all other persons with registration rights (whether or not pursuant to this Agreement) enter into similar agreements, (ii) such market stand-off time period shall not extend beyond 180 days following the date of the final prospectus and 30 days prior to the date of the final prospectus and (iii) any such market stand-off or lock-up agreements contains reasonable and customary exceptions. (b) Cooperation. Each prospective seller of Registrable Securities will furnish to the Company in writing such information as the Company may reasonably require and which is customary in such transactions from such seller, and otherwise reasonably cooperate with the Company in connection with any registration statement with respect to such Registrable Securities. The failure of any prospective seller of Registrable Securities to furnish any information or documents in accordance with any provision contained in this Agreement shall not affect the obligations of the Company under this Agreement to any remaining sellers who furnish such information and documents unless in the reasonable opinion of counsel to the Company or the underwriters such failure impairs or may impair the viability of the offering or the legality of the registration statement or the underlying offering. (c) Suspension by Company. Holders of Registrable Securities included in any registration statement will not effect sales of Registrable Securities included in any registration statement during a period when the Company has validly exercised and maintained a Black Out Right pursuant to Section 4(i); but the obligations of the Company with respect to maintaining any registration statement current and effective shall be extended by a period of days equal to the period such suspension is in effect (such period, a "Suspension Period"). SECTION 6. Additional Covenants of the Company. (a) Other Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of a Majority Holders, grant to any holder or prospective holder of any securities of the Company the right to request the Company to register any securities of the Company on a parity with or superior to the rights granted herein. The Company has in effect no such parity or superior rights. (b) Rule 144 Information. After the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, but only for so long as the Company is so subject, the Company shall take all actions necessary to enable the Holders to sell the Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC, including filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. (c) Restrictions on Public Sale by the Company. The Company agrees, unless it obtains the consent of the managing underwriter(s) of any underwritten offering of Registrable Securities pursuant to this Agreement, not to effect any Public Sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such equity securities, during the period commencing on the 30/th/ day prior to, and ending on the 180/th/ day following, the effective date of any underwritten Demand Registration or Piggyback Registration, except in connection with any such underwritten registration, or pursuant to any registration statements on Form S-8 or the then equivalent form. SECTION 7. Indemnification. (a) Indemnification by the Company. To the fullest extent permitted by law, in the event of any registration of any Registrable Securities pursuant to the provisions of this Agreement, the Company shall indemnify, defend and hold harmless each selling Holder, each other Person who participates as an underwriter in the offering or sale of such Registrable Securities, each other Person, if any, who controls such Holder or any such underwriter within meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and their respective directors, officers, agents, partners, employees, stockholders and representatives (collectively, "Indemnitees") from and against any losses, claims, damages or liabilities, joint or several, to which such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which the Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, and the Company shall reimburse each such Indemnitee for any legal or any other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided, that the Company shall not be liable in any such case to any Indemnitee to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information about such Indemnitee furnished to the Company in a writing duly provided by or on behalf of such Indemnitee specifically stating that it is for use in the preparation thereof; and provided further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of Registrable Securities or any other Person, if any, who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereon) or expense arises out of such Person's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, to the Person asserting a claim based upon an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or, omission was corrected in such final prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Indemnitee and shall survive the transfer of the Registrable Securities of each Indemnitee. (b) Indemnification by Holders. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to this Agreement, that the Company shall have received an undertaking reasonably satisfactory to it from each Holder offering Registrable Securities under such registration statement, severally and not jointly, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 7(a)) the Company, each director of the Company, each officer of the Company signing such registration statement and each other Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act with respect to (i) any untrue statement or alleged untrue statement in or (ii) omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein or any amendment or supplement thereto, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information about such Holder as a stockholder of the Company furnished to the Company in a writing duly executed by such Holder specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer by the seller of the securities of the Company being registered. Notwithstanding the foregoing, each Holder's liability under this Section 7(b) with respect to any particular registration shall be limited to an amount equal to the net proceeds received by such Holder from the Registrable Securities sold by such Holder in such registration. (c) Contribution. If the indemnification provided for in Section 7(a) or Section 7(b) above is unavailable to an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities, in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified parties on the other in connection with the statements or omissions or violations which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 7(c) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities or actions in respect thereof referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentations (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligation of any Holder obliged to make contribution pursuant to this Section 7(c) shall be several and not joint, and no such Holder shall be obliged to make contribution in excess of an amount equal to the net proceeds received by such Holder from the Registrable Securities sold by such Holder in such registration. (d) Indemnification Procedures. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 7(a) or 7(b), such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give notice to the latter of the commencement of such action; provided, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under Section 7(a) or 7(b), except to the extent that the indemnifying party is actually and materially prejudiced by such failure to give notice. In case any such action is brought against any indemnified party, unless in the opinion of such indemnified party's counsel a conflict of interest between such indemnified and indemnifying parties or other indemnified party may exist or the indemnified party may have defenses not available to the indemnifying party or any other indemnified party in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall be liable for any settlement of any action or proceeding affected without its written consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation or which involves relief other than the payment of money damages. (e) Payments. The indemnification required by this Section 7 shall be made by periodic payments of the amount thereof during the course of investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. SECTION 8. Miscellaneous. (a) Expenses. Subject to the last sentence of Section 2(a), the Company shall pay all expenses of the Holders in connection with any Demand Registration or Piggyback Registration, including without limitation all registration, filing and NASD fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, all messenger and delivery expenses, all fees and disbursements of one counsel for the Holders and the Company and of its independent public accountants (including the expenses of comfort letters required by or incident to such performance and compliance) and any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting discounts and commissions, if any, relating to the Registrable Securities being sold by a Holder, which shall be paid by such Holder. (b) Specific Performance. The parties acknowledge that the Holders' damages at law would be an inadequate remedy for the breach or non-performance of any provision of this Agreement by the Company, and agree in the event of such breach that the aggrieved party may obtain temporary and permanent injunctive relief restraining the Company from such breach or compelling specific performance of such provision, and, to the extent permissible under applicable statutes and rules of procedure, a temporary injunction may be granted immediately upon the commencement of any such suit without proof of actual harm. Nothing contained in this Agreement shall be construed as prohibiting any party from pursuing other remedies available at law or equity for such breach or non-performance. (c) Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service or sent by facsimile as follows: if to the Holders: PricewaterhouseCoopers LLP 1301 Avenue of the Americas New York, NY 10019 Attention: Chief Financial Officer Facsimile: (646) 394-6241 with a copy to: PricewaterhouseCoopers LLP Office of the General Counsel 1301 Avenue of the Americas New York, NY 10019 Attention: General Counsel Facsimile: (646) 394-6717 with an additional copy to: Gibson Dunn & Crutcher 200 Park Avenue New York, New York 10166-0193 Attention: David M. Wilf Facsimile: (212) 351-6277 if to the Company: FTI Consulting, Inc. 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 Attention: Jack B. Dunn, IV Facsimile: (410) 224-3552 with a copy to: Piper Rudnick LLP 6225 Smith Avenue Baltimore, Maryland 21209 Attention: Richard C. Tilghman, Jr. Facsimile: (410) 580-3274 if to any other Holder, to the address or facsimile number given on the signature pages to this Agreement, or in any case to such other address as any party hereto shall have communicated to the other parties hereto by notice in accordance with this provision. All notices and other communications given to any party in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile in each case delivered or sent (properly addressed) to such party as provided in this Section 8(c) or in accordance with the latest unrevised direction from such party given in accordance with this Section 8(c). (d) Assignment. This Agreement and the rights, interests and obligations hereunder shall not be assignable or transferable by the Company without the prior written consent of the Majority Holders and, while PwC is the Majority Holder, Holders of a majority of the Registrable Securities. Any Holder may assign, in its sole discretion, any or all of its, his or her rights, interests and obligations under this Agreement to any of its, his or her Affiliates or any of its, his or her limited or general partners or to any transferee of Registrable Securities who agrees to become bound by the provisions of this Agreement other than a transferee who shall acquire such Registrable Securities in a Public Sale. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. (e) No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such successors and assigns, any legal or equitable rights hereunder, except to the extent otherwise provided in Section 7. (f) Waivers. Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Company and all of the Holders. (g) Incorporation by Reference. The provisions of Sections 10.3, 10.4, 10.5, 10.10, 10.11, 10.14 and 10.15 of the Asset Purchase Agreement are incorporated herein by reference. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. FTI CONSULTING, INC. By: /s/ Theodore I. Pincus ------------------------------------------ Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer PRICEWATERHOUSECOOPERS LLP By: _____________________________________ Name: Colin McKay Title: Principal [REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE] IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. FTI CONSULTING, INC. By:___________________________________ Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer PRICEWATERHOUSECOOPERS LLP By: /s/ Colin McKay ---------------------------- Name: Colin McKay Title: Principal [REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE] Signature Page of Other Holders under the REGISTRATION RIGHTS AGREEMENT Other Holders: ___________________________________ Printed name: _______________________ [REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
Exhibit 10.1 ================================================================================ CREDIT AGREEMENT Dated as of August 30, 2002 among FTI CONSULTING, INC., as the Borrower, THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN, as the Guarantors, BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and The Other Lenders Party Hereto Arranged By: BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager ================================================================================ i
TABLE OF CONTENTS ARTICLE I DEFINITIONS AND ACCOUNTING TERMS ............................. 1 1.01 Defined Terms. .................................................... 1 1.02 Other Interpretive Provisions ..................................... 22 1.03 Accounting Terms .................................................. 22 1.04 Rounding .......................................................... 23 1.05 References to Agreement and Laws .................................. 23 1.06 Times of Day ...................................................... 24 1.07 Letter of Credit Amounts .......................................... 24 ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS ........................ 24 2.01 Revolving Loans and Term Loans .................................... 24 2.02 Borrowings, Conversions and Continuations of Loans ................ 25 2.03 Letters of Credit ................................................. 26 2.04 Swing Line Loans .................................................. 33 2.05 Prepayments ....................................................... 35 2.06 Termination or Reduction of Aggregate Revolving Commitments ....... 37 2.07 Repayment of Loans ................................................ 38 2.08 Interest .......................................................... 39 2.09 Fees .............................................................. 39 2.10 Computation of Interest and Fees .................................. 40 2.11 Evidence of Debt .................................................. 40 2.12 Payments Generally ................................................ 41 2.13 Sharing of Payments ............................................... 42 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY ...................... 43 3.01 Taxes ............................................................. 43 3.02 Illegality ........................................................ 44 3.03 Inability to Determine Rates ...................................... 44 3.04 Increased Cost and Reduced Return; Capital Adequacy ............... 45 3.05 Funding Losses .................................................... 45 3.06 Matters Applicable to all Requests for Compensation. .............. 46 3.07 Survival .......................................................... 46 ARTICLE IV GUARANTY ..................................................... 46 4.01 The Guaranty. ..................................................... 46 4.02 Obligations Unconditional ......................................... 47 4.03 Reinstatement ..................................................... 48 4.04 Certain Additional Waivers ........................................ 48 4.05 Remedies .......................................................... 48 4.06 Rights of Contribution ............................................ 48 4.07 Guarantee of Payment; Continuing Guarantee ........................ 49 ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS ..................... 50 5.Ol Conditions of Initial Credit Extension ............................ 50 5.02 Conditions to all Credit Extensions ............................... 53 ii
ARTICLE VI REPRESENTATIONS AND WARRANTIES .................................... 54 6.01 Existence, Qualification and Power .................................... 54 6.02 Authorization; No Contravention. ...................................... 54 6.03 Governmental Authorization; Other Consents ............................ 55 6.04 Binding Effect ........................................................ 55 6.05 Financial Statements; No Material Adverse Effect ...................... 55 6.06 Litigation ............................................................ 56 6.07 No Default ............................................................ 56 6.08 Ownership of Property; Liens .......................................... 56 6.09 Environmental Compliance .............................................. 56 6.10 Insurance ............................................................. 57 6.11 Taxes ................................................................. 58 6.12 ERISA Compliance ...................................................... 58 6.13 Subsidiaries .......................................................... 58 6.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act ........................................................... 59 6.15 Disclosure ............................................................ 59 6.16 Compliance with Law ................................................... 59 6.17 Intellectual Property; Licenses, Etc .................................. 59 6.18 Solvency .............................................................. 60 6.19 Perfection of Security Interests in the Collateral .................... 60 6.20 Business Locations .................................................... 60 6.21 Brokers' Fees ......................................................... 60 6.22 Labor Matters ......................................................... 60 6.23 Representations and Warranties from Purchase Agreement ................ 60 ARTICLE VII AFFIRMATIVE COVENANTS ............................................ 61 7.01 Financial Statements .................................................. 61 7.02 Certificates; Other Information ....................................... 61 7.03 Notices ............................................................... 63 7.04 Payment of Obligations ................................................ 64 7.05 Preservation of Existence Etc ......................................... 64 7.06 Maintenance of Properties ............................................. 64 7.07 Maintenance of Insurance .............................................. 64 7.08 Compliance with Laws .................................................. 65 7.09 Books and Records ..................................................... 65 7.10 Inspection Rights ..................................................... 65 7.11 Use of Proceeds ....................................................... 65 7.12 Additional Subsidiaries ............................................... 65 7.13 ERISA Compliance ...................................................... 66 7.14 Pledged Assets ........................................................ 66 ARTICLE VIII NEGATIVE COVENANTS .............................................. 67 8.01 Liens ................................................................. 67 8.02 Investment ............................................................ 68 8.03 Indebtedness .......................................................... 69 iii
8.04 Fundamental Changes ....................................................... 70 8.05 Dispositions .............................................................. 71 8.06 Restricted Payments ....................................................... 71 8.07 Change in Nature of Business .............................................. 72 8.08 Transactions with Affiliates and Insiders ................................. 72 8.09 Burdensome Agreements ..................................................... 72 8.10 Use of Proceeds ........................................................... 73 8.11 Financial Covenants ....................................................... 73 8.12 [Reserved] ................................................................ 73 8.13 Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity ............................................................ 73 8.14 Ownership of Subsidiaries; Limitations on Parent .......................... 73 8.15 Sale Leasebacks ........................................................... 74 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES ........................................ 74 9.01 Events of Default ......................................................... 74 9.02 Remedies Upon Event of Default ............................................ 76 9.03 Application of Funds ...................................................... 77 ARTICLE X ADMINISTRATIVE AGENT ................................................... 77 10.01 Appointment and Authorization of Administrative Agent ..................... 77 10.02 Delegation of Duties ...................................................... 78 10.03 Liability of Administrative Agent ......................................... 78 10.04 Reliance by Administrative Agent .......................................... 78 10.05 Notice of Default ......................................................... 79 10.06 Credit Decision; Disclosure of Information by Administrative Agent ........ 79 10.07 Indemnification of Administrative Agent ................................... 80 10.08 Administrative Agent in its Individual Capacity ........................... 80 10.09 Successor Administrative Agent ............................................ 81 10.10 Administrative Agent May File Proofs of Claim ............................. 81 10.11 Collateral and Guaranty Matters ........................................... 82 10.12 Other Agents; Arrangers and Managers ...................................... 82 ARTICLE XI MISCELLANEOUS ......................................................... 83 11.01 Amendments, Etc ........................................................... 83 11.02 Notices and Other Communications; Facsimile Copies ........................ 84 11.03 No Waiver; Cumulative Remedies ............................................ 85 11.04 Attorney Costs, Expenses and Taxes ........................................ 85 11.05 Indemnification by the Borrower ........................................... 86 11.06 Payments Set Aside ........................................................ 87 11.07 Successors and Assigns .................................................... 87 11.08 Confidentiality ........................................................... 90 11.09 Set-off ................................................................... 90 11.10 Interest Rate Limitation .................................................. 91 11.11 Counterparts .............................................................. 91 11.12 Integration ............................................................... 91 iv
11.13 Survival of Representations and Warranties .................... 91 11.14 Severability .................................................. 91 11.15 Tax Forms ..................................................... 92 11.16 Replacement of Lenders ........................................ 93 11.17 Release of Collateral and Guarantees .......................... 94 11.18 Governing Law ................................................. 94 11.19 Waiver of Right to Trial by Jury .............................. 95 SCHEDULES 2.01 Commitments and Pro Rata Shares 2.03 Existing Letters of Credit 6.10 Insurance 6.13 Subsidiaries 6.17 IP Rights 6.20(a) Locations of Real Property 6.20(b) Locations of Tangible Personal Property 6.20(c) Legal Name; State of Formation; Location of Chief Executive Office 8.01 Liens Existing on the Closing Date 8.02 Investments Existing on the Closing Date 8.03 Indebtedness Existing on the Closing Date 11.02 Certain Addresses for Notices EXHIBITS A Form of Loan Notice B Form of Swing Line Loan Notice C-l Form of Revolving Note C-2 Form of Swing Line Note C-3 Form of Tranche A Term Note C-4 Form of Tranche B Term Note D Form of Compliance Certificate E Form of Assignment and Assumption F Form of Joinder Agreement v CREDIT AGREEMENT This CREDIT AGREEMENT is entered into as of August 30, 2002 among FTI CONSULTING, INC., a Maryland corporation (the "Borrower"), the Guarantors (defined herein), the Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Borrower has requested that the Lenders provide $200,000,000 in credit facilities for the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set forth herein. In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: "Acquired Company" means certain of the assets of the Business Recovery Services division of PricewaterhouseCoopers as identified in the Transaction Documents. "Acquisition", by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of all or any substantial portion of the Property of another Person or at least a majority of the Voting Stock of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities or otherwise. "Administrative Agent" means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent. "Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 11.02 or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders. "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. "Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent. "Agent-Related Persons" means the Administrative Agent, together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Afliliates. "Aggregate Revolving Commitments" means the Revolving Commitments of all the Lenders. The initial amount of the Aggregate Revolving Commitments in effect on the Closing Date is ONE HUNDRED MILLION DOLLARS ($100,000,000). "Agreement" means this Credit Agreement, as amended, modified, supplemented and extended from time to time. "Applicable Rate" means the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b): Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered. The Applicable Rate in effect from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.02(b) for the fiscal year ending December 31, 2002 shall be determined based upon Pricing Level 1. "Arranger" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. "Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit E. "Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and, without duplication, the allocated cost of internal legal services and all expenses and disbursements of internal counsel. "Attributable Indebtedness" means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease and (c) in respect of any Securitization Transaction of any Person, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments, determined by the Administrative Agent in its reasonable judgment. * means less than ** means greater than or equal to
- ------------------------------------------------------------------------------------------------ Pricing Consolidated Letters of Credit and Tier Leverage Ratio Commitment Fee Eurodollar Loans Base Rate Loans - ------------------------------------------------------------------------------------------------ 1 **2.0:1.0 0.500% 2.250% 0.750% - ------------------------------------------------------------------------------------------------ 2 *2.0:1.0 but **1.5:1.0 0.500% 2.000% 0.500% - ------------------------------------------------------------------------------------------------ 3 *1.5:l.O but **1.0:l.0 0.375% 1.750% 0.250% - ------------------------------------------------------------------------------------------------ 4 *1.0:l.0 0.375% 1.500% 0.000% - ------------------------------------------------------------------------------------------------ "Audited Financial Statements" means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2001, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto. "Availability Period" means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the of the L/C Issuer to make L/C Credit Extensions pursuant to Section 9.02. "Bank of America" means Bank of America, N.A. and its successors. "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus l/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the "prime rate" announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Loan" means a Loan that bears interest based on the Base Rate. "Base Rate Revolving Loan" means a Revolving Loan that bears interest based on the Base Rate. "Borrower" has the meaning specified in the introductory paragraph hereto. "Borrowing" means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01. "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent's Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market. "Businesses" means, at any time, a collective reference to the businesses operated by the Borrower and its Subsidiaries at such time. "Capital Lease" means, as applied to any Person, any lease of any Property by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person. "Capital Stock" means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Collateralize" has the meaning specified in Section 2.03(g). "Cash Equivalents" means, as at any date, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of(i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-l or the equivalent thereof or from Moody's is at least P-l or the equivalent thereof (any such bank being an "Approved Bank"), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d). "Change of Control" means an event or series of events by which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all Capital Stock that such person or group has the right to acquire (such right, an "option right"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of thirty percent (30%) of the Capital Stock of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors). "Closing Date" means the date hereof. "Collateral" means a collective reference to all real and personal Property with respect to which Liens in favor of the Administrative Agent are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents. "Collateral Documents" means a collective reference to the Security Agreement, the Pledge Agreement and such other security documents as may be executed and delivered by the Loan Parties pursuant to the terms of Section 7.14. "Commitment" means, as to each Lender, the Revolving Commitment of such Lender, the Tranche A Term Loan Commitment of such Lender and/or the Tranche B Term Loan Commitment of such Lender. "Compliance Certificate" means a certificate substantially in the form of Exhibit D. "Consolidated Adjusted EBITDA" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) Consolidated EBITDA for such period minus (ii) Consolidated Capital Expenditures for such period minus (iii) Consolidated Cash Taxes for such period, all as determined in accordance with GAAP. "Consolidated Capital Expenditures" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, all capital expenditures, as determined in accordance with GAAP; provided, however, that Consolidated Capital Expenditures shall not include (a) expenditures made with proceeds of any Involuntary Disposition to the extent such expenditures are used to purchase Property that is the same as or similar to the Property subject to such Involuntary Disposition or (b) Permitted Acquisitions. "Consolidated Cash Taxes" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the aggregate of all taxes, as determined in accordance with GAAP, to the extent the same are paid in cash during such period. "Consolidated EBITDA" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus the following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Charges for such period, (b) the provision for federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period and (c) the amount of depreciation and amortization expense for such period, all as determined in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b) to (b) Consolidated Fixed Charges for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b). "Consolidated Fixed Charges" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) the cash portion of Consolidated Interest Charges for such period plus (ii) Consolidated Scheduled Funded Debt Payments for such period plus (iii) Restricted Payments for such period plus (iv) earn-out payments for such period, all as determined in accordance with GAAP. "Consolidated Funded Indebtedness" means Funded Indebtedness of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP. "Consolidated Interest Charges" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (ii) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP. "Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b). "Consolidated Net Income" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding extraordinary gains and extraordinary losses and excluding the effects of FAS 142) for that period. "Consolidated Net Worth" means, as of any date of determination, consolidated shareholders' equity of the Borrower and its Subsidiaries as of that date determined in accordance with GAAP. "Consolidated Scheduled Funded Debt Payments" means for any period for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all scheduled payments of principal on Consolidated Funded Indebtedness, as determined in accordance with GAAP, and (b) all prepayments of Indebtedness permitted under Section 8.03(b), (e), (f), (g), or (h) unless such prepayment is made within 90 days of the date such Indebtedness is incurred or assumed or unless such prepayment is in connection with a refunding or refinancing of such Indebtedness (to the extent such refunding or refinancing is permitted under Section 8.03). For purposes of this definition, "scheduled payments of principal" (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments made during the applicable period, (b) shall be deemed to include the Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.05. "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Control" has the meaning specified in the definition of "Affiliate." "Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C Credit Extension. "Debt Issuance" means the issuance by the Borrower or any Subsidiary of any Indebtedness other than Indebtedness permitted under Section 8.03. "Debtor Relief Laws" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. "Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default. "Default Rate" means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws. "Defaulting Lender" means any Lender that (a) has failed to fund any portion of the Loans participations in L/C Obligations or participations in Swing Line Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. "Disposition" or "Dispose" means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any Property by the Borrower or any Subsidiary (including the Capital Stock of any Subsidiary), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding (i) the sale, lease, license, transfer or other disposition of inventory in the ordinary course of business of the Borrower and its Subsidiaries, (ii) the sale, lease, license, transfer or other disposition of machinery and equipment no longer used or useful in the conduct of business of the Borrower and its Subsidiaries, (iii) any sale, lease, license, transfer or other disposition of Property by the Borrower or any Subsidiary to any Loan Party, provided that the Loan Parties shall cause to be executed and delivered such documents, instruments and certificates as the Administrative Agent may request so as to cause the Loan Parties to be in compliance with the terms of Section 7.14 after giving effect to such transaction, (iv) any Involuntary Disposition by the Borrower or any Subsidiary, (v) any Disposition by the Borrower or any Subsidiary constituting a Permitted Investment, (vi) any sale, lease, license, transfer or other disposition of Property by any Foreign Subsidiary to another Foreign Subsidiary and (vii) the sale of delinquent receivables in the ordinary course of business in connection with the collection or compromise thereof. "Dollar" and "$" mean lawful money of the United States. "Domestic Subsidiary" means any Subsidiary that is organized under the laws of any political subdivision of the United States. "Eligible Assignee" has the meaning specified in Section 11.07(g). "Environmental Laws" means any and all federal, state, local, foreign and other applicable statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems. "Environmental Liability" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. "Equity Issuance" means any issuance by the Borrower to any Person of shares of its Capital Stock, other than (a) any issuance of shares of its Capital Stock pursuant to the exercise of options or warrants, (b) any issuance of shares of its Capital Stock pursuant to the conversion of any debt securities to equity or the conversion of any class equity securities to any other class of equity securities, (c) any issuance of options or warrants relating to its Capital Stock, (d) any issuance by the Borrower of shares of its Capital Stock as consideration for a Permitted Acquisition and (e) any stock grant to an employee of any Consolidated Party under a stock option plan of the Borrower. The term "Equity Issuance" shall not be deemed to include any Disposition. "ERISA" means the Employee Retirement Income Security Act of 1974. "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code). "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 400l(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. "Eurodollar Base Rate" means, for any Interest Period with respect to any Eurodollar Rate Loan: (a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars of an amount equal to the principal amount of such Eurodollar Rate Loan (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 1l:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum (rounded upward to the next l/l00/th/ of 1%) determined by the Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period. "Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (a) the Eurodollar Base Rate for such Eurodollar Loan for such Interest Period by (b) one minus the Eurodollar Reserve Percentage for such Eurodollar Loan for such Interest Period. "Eurodollar Rate Loan" means a Loan that bears interest at a rate based on the Eurodollar Rate. "Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. "Event of Default" has the meaning specified in Section 9.01. "Excluded Property" means, with respect to any Loan Party, including any Person that becomes a Loan Party after the Closing Date as contemplated by Section 7.12, (a) any owned real or personal Property which is located outside of the United States unless requested by the Administrative Agent or the Required Lenders, (b) any personal Property (including, without limitation, motor vehicles) in respect of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code or (ii) effected by appropriate evidence of the Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office, unless requested by the Administrative Agent or the Required Lenders, (c) any Property which, subject to the terms of Section 8.09, is subject to a Lien permitted under Section 8.01(b), (i) or (p) pursuant to documents which prohibit such Loan Party from granting any other Liens in such Property and (d) any lease, license or other contract if the grant of a Lien in such lease, license or contract in the manner contemplated by the Loan Documents is prohibited by the terms of such lease, license or contract and would result in the termination of such lease, license or contract, but only to the extent that (i) after reasonable efforts, consent from the relevant party or parties has not been obtained and (ii) any such prohibition could not be rendered ineffective pursuant to the UCC or any other applicable law (including Debtor Relief Laws) or principles of equity. "Existing Credit Agreement" means the Credit Agreement dated as of December 22, 2000 among the Borrower, the lenders identified therein, SunTrust Bank, as documentation agent, Allfirst Bank, as co-agent, and Bank of America, N.A., as administrative agent. "Existing Letters of Credit" means the letters of credit outstanding on the Closing Date and identified on Schedule 2.03. "Facilities" means, at any time, a collective reference to the facilities and real properties owned, leased or operated by the Borrower or any Subsidiary. "Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of l/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent. "Fee Letter" means the letter agreement, dated July 18, 2002 among the Borrower, the Administrative Agent and the Arranger. "Foreign Lender" has the meaning specified in Section 11.15(a)(i). "Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary. "FRB" means the Board of Governors of the Federal Reserve System of the United States. "Funded Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all obligations for borrowed money, whether current or long-term (including the Obligations) and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all purchase money Indebtedness; (c) all obligations arising under letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds and similar instruments; (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (e) the Attributed Principal Amount of capital leases and Synthetic Leases; (f) the Attributed Principal Amount of Securitization Transactions; (g) all preferred stock or other equity interests providing for mandatory redemptions, sinking fund or like payments prior to the Maturity Date for the Tranche B Term Loan; and (h) all Guarantees with respect to Indebtedness of the types specified in clauses (a) through (g) above of another Person; and (i) all Indebtedness of the types referred to in clauses (a) through (h) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person. For purposes hereof, (x) the amount of any direct obligation arising under letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds and similar instruments shall be the maximum amount available to be drawn thereunder and (y) the amount of any Guarantee shall be the amount of the Indebtedness subject to such Guarantee. "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Guarantee" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning. "Guaranty" means the Guaranty made by the Guarantors in favor of the Administrative Agent and the Lenders pursuant to Article IV hereof. "Guarantors" means each Domestic Subsidiary of the Borrower and each other Person that joins as a Guarantor pursuant to Section 7.12, together with their successors and permitted assigns. "Hazardous Materials" means 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. "Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all Funded Indebtedness; (b) net obligations under any Swap Contract; (c) all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) and (b) above of any other Person; and (d) all Indebtedness of the types referred to in clauses (a) through (c) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary. For purposes hereof(y) the amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date and (z) the amount of any Guarantee shall be the amount of the Indebtedness subject to such Guarantee. "Indemnified Liabilities" has the meaning set forth in Section 11.05. "Indemnitees" has the meaning set forth in Section 11.05. "Interest Payment Date" means (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date. "Interest Period" means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided that: (i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (iii) no Interest Period shall extend beyond the Maturity Date. "Internal Revenue Code" means the Internal Revenue Code of 1986. "Investment" means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Capital Stock of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. "Involuntary Disposition" means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any Property of any Consolidated Party. "IP Rights" has the meaning set forth in Section 6.17. "IRS" means the United States Internal Revenue Service. "Joinder Agreement" means a joinder agreement substantially in the form of Exhibit F executed and delivered by a Domestic Subsidiary in accordance with the provisions of Section 7.12. "Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. "L/C Advance" means, with respect to each Lender, such Lender's funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share. "L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing of Revolving Loans. "L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof. "L/C Issuer" means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder. "L/C Obligations" means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. "Lender" means each of the Persons identified as a "Lender" on the signature pages hereto and their successors and assigns and, as the context requires, includes the L/C Issuer and the Swing Line Lender. "Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent. "Letter of Credit" means any letter of credit issued hereunder and shall include the Existing Letters of Credit. A Letter of Credit may be a commercial letter of credit or a standby letter of credit. "Letter of Credit Application" means an application and agreement for the issuance or amendment of a letter of credit in the form from time to time in use by the L/C Issuer. "Letter of Credit Expiration Date" means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day). "Letter of Credit Sublimit" means an amount equal to the lesser of the Aggregate Revolving Commitments and $15,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing). "Loan" means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan, Swing Line Loan, Tranche A Term Loan or Tranche B Term Loan. "Loan Documents" means this Agreement, each Note, each Letter of Credit, each Letter of Credit Application, each Joinder Agreement, the Collateral Documents, each Request for Credit Extension, each Compliance Certificate, the Fee Letter, the Syndication Side Letter and each other document, instrument or agreement from time to time executed by the Borrower or any of its Subsidiaries or any Responsible Officer thereof and delivered in connection with this Agreement. "Loan Notice" means a notice of (a) a Borrowing of Revolving Loans or Term Loans, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A. "Loan Parties" means, collectively, the Borrower and each Guarantor. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Borrower and its Subsidiaries taken as a whole to perform their obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party. "Maturity Date" means (a) as to the Revolving Loans, Letters of Credit (and the related L/C Obligations), Swingline Loans and the Tranche B Term Loan, August 30, 2006, and (b) as to the Tranche A Term Loan, December 1, 2005. "Moody's" means Moody's Investors Service, Inc. and any successor thereto. "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions. "Net Cash Proceeds" means the aggregate cash or Cash Equivalents proceeds received by the Borrower or any Subsidiary in respect of any Disposition, Equity Issuance, Debt Issuance or Involuntary Disposition, net of (a) direct costs incurred in connection therewith (including, without limitation, legal, accounting and investment banking fees, and sales commissions), (b) taxes paid or payable as a result thereof and (c) in the case of any Disposition, the amount necessary to retire any Indebtedness secured by a Permitted Lien (ranking senior to any Lien of the Administrative Agent) on the related Property; it being understood that "Net Cash Proceeds" shall include, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received by the Borrower or any Subsidiary in any Disposition, Equity Issuance, Debt Issuance or Involuntary Disposition. "Note" or "Notes" means the Revolving Notes, the Swing Line Note, the Tranche A Term Notes and/or the Tranche B Term Notes, individually or collectively, as appropriate. "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing shall also include any Swap Contract between any Loan Party and any Lender or Affiliate of a Lender. "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. "Outstanding Amount" means (i) with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date. "Participant" has the meaning specified in Section 11.07(d). "PBGC" means the Pension Benefit Guaranty Corporation. "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years. "Permitted Acquisitions" means Investments consisting of an Acquisition by the Borrower or any Subsidiary of the Borrower, provided that (i) the Property acquired (or the Property of the Person acquired) in such Acquisition is used or useful in the same or a similar line of business as the Borrower and its Subsidiaries were engaged in on the Closing Date (or any reasonable extensions or expansions thereof), (ii) the Administrative Agent shall have received all items in respect of the Capital Stock or Property acquired in such Acquisition required to be delivered by the terms of Section 7.12 and/or Section 7.14, (iii) in the case of an Acquisition of the Capital Stock of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (iv) the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect to such Acquisition on a Pro Forma Basis, the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b), (v) the representations and warranties made by the Loan Parties in any Loan Document shall be true and correct in all material respects at and as if made as of the date of such Acquisition (after giving effect thereto) except to the extent such representations and warranties expressly relate to an earlier date, (vi) if such transaction involves the purchase of an interest in a partnership between the Borrower (or a Subsidiary of the Borrower) as a general partner and entities unaffiliated with the Borrower or such Subsidiary as the other partners, such transaction shall be effected by having such equity interest acquired by a corporate holding company directly or indirectly wholly-owned by the Borrower newly formed for the sole purpose of effecting such transaction, (vii) immediately after giving effect to such Acquisition, there shall be at least $10,000,000 of availability existing under the Aggregate Revolving Commitments, (viii) the aggregate consideration (including cash and non-cash consideration, any assumption of Indebtedness and any earn-out payments, but excluding consideration consisting of any Capital Stock of the Borrower issued to the seller of the Capital Stock or Property acquired in such Acquisition) paid by the Borrower or any Subsidiary for any such Acquisition occurring after the Closing Date shall not exceed $50,000,000, and (ix) the aggregate consideration (including cash and non-cash consideration, any assumption of Indebtedness and any earn-out payments, but excluding consideration consisting of any Capital Stock of the Borrower issued to the seller of the Capital Stock or Property acquired in such Acquisition) paid by the Borrower or any Subsidiary for all such Acquisitions occurring after the Closing Date shall not exceed $75,000,000, provided that such $75,000,000 limit shall automatically be permanently increased to $100,000,000 on the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 7.02(b) which demonstrates that the Consolidated Leverage Ratio as of the end of the two most recently ended fiscal quarters is less than 1.50:1.0. "Permitted Disposition" means the sale or other disposition of the Capital Stock or Property of the Subsidiaries that constitute the Applied Sciences Division of the Borrower (as of the Closing Date, FTI Applied Sciences (Annapolis), LLC, L.W.G., Inc., Restortek, Inc., and S.E.A., Inc. constitute the Applied Sciences Division of the Borrower). "Permitted Investments" means, at any time, Investments by the Consolidated Parties permitted to exist at such time pursuant to the terms of Section 8.02. "Permitted Liens" means, at any time, Liens in respect of Property of the Consolidated Parties permitted to exist at such time pursuant to the terms of Section 8.01. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Plan" means any "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate. "Pledge Agreement" means the pledge agreement dated as of the Closing Date executed in favor of the Administrative Agent by each of the Loan Parties, as amended, modified, restated or supplemented from time to time. "Pro Forma Basis" means, for purposes of calculating the Consolidated Leverage Ratio and the Consolidated Net Worth, that any Disposition, Involuntary Disposition, Acquisition or Restricted Payment shall be deemed to have occurred as of the first day of the most recent four fiscal quarter period preceding the date of such transaction for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b). In connection with the foregoing, (a) with respect to any Disposition or Involuntary Disposition, (i) income statement and cash flow statement items (whether positive or negative) attributable to the Property disposed of shall be excluded to the extent relating to any period occurring prior to the date of such transaction and (ii) Indebtedness which is retired shall be excluded and deemed to have been retired as of the first day of the applicable period and (b) with respect to any Acquisition, (i) income statement items attributable to the Person or Property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (A) such items are not otherwise included in such income statement items for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.1 and (B) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent and (ii) any Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or Property acquired) in connection with such transaction and any Indebtedness of the Person or Property acquired which is not retired in connection with such transaction (A) shall be deemed to have been incurred as of the first day of the applicable period and (B) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination. "Pro Forma Compliance Certificate" means a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculations of the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter end for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b) after giving effect to the applicable transaction on a Pro Forma Basis. "Pro Forma Statements" has the meaning specified in Section 5.01(g). "Pro Rata Share" means, as to each Lender at any time, (a) with respect to such Lender's Revolving Commitment at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Revolving Commitment of such Lender at such time and the denominator of which is the amount of the Aggregate Revolving Commitments at such time; provided that if the commitment of each Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof, (b) with respect to such Lender's outstanding Tranche A Term Loan at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the principal amount of the Tranche A Term Loan held by such Lender at such time and the denominator of which is the aggregate principal amount of the Tranche A Term Loan at such time and (c) with respect to such Lender's outstanding Tranche B Term Loan at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the principal amount of the Tranche B Term Loan held by such Lender at such time and the denominator of which is the aggregate principal amount of the Tranche B Term Loan at such time. The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. "Property" means any interest of any kind in any property or asset, whether real, personal or mixed, or tangible or intangible. "Purchase Agreement" means the Agreement for the Purchase and Sale of Assets dated as of July 24, 2002 between the Seller and the Borrower. "Register" has the meaning set forth in Section 11.07(c). "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived. "Request for Credit Extension" means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice. "Required Lenders" means, at any time, Lenders holding in the aggregate more than fifty percent (50%) of (a) the Revolving Commitments and the outstanding Term Loans or (b) if the Revolving Commitments have been terminated, the outstanding Loans, L/C Obligations, Swing Line Loans and participations therein. The Revolving Commitments of, and the outstanding Term Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. "Responsible Officer" means the chief executive officer, president or chief financial officer of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Capital Stock or of any option, warrant or other right to acquire any such Capital Stock. "Revolving Commitment" means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. "Revolving Loan" has the meaning specified in Section 2.0l(a). "Revolving Note" has the meaning specified in Section 2.1l(a). "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto. "Sale and Leaseback Transaction" means, with respect to the Borrower or any Subsidiary, any arrangement, directly or indirectly, with any person whereby the Borrower or such Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter 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 being sold or transferred. "SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. "Securitization Transaction" means any financing transaction or series of financing transactions (including fact arrangements) pursuant to which the Borrower or any Subsidiary may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate of the Borrower. "Security Agreement" means the security agreement dated as of the Closing Date executed in favor of the Administrative Agent by each of the Loan Parties, as amended, modified, restated or supplemented from time to time. "Seller" means PricewaterhouseCoopers LLP, a Delaware limited liability partnership. "Solvent" or "Solvency" means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's Property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the Property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (e) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Capital Stock having ordinary voting power for the election of directors or other governing body (other than Capital Stock having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower. "Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender). "Swing Line" means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04. "Swing Line Lender" means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder. "Swing Line Loan" has the meaning specified in Section 2.04(a). "Swing Line Loan Notice" means a notice of a Borrowing of Swing Line Loans pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B. "Swing Line Note" has the meaning specified in Section 2.11(a). "Swing Line Sublimit" means an amount equal to the lesser of (a) $5,000,000 and (b) the Aggregate Revolving Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. "Syndication Side Letter" means that certain side letter dated as of the Closing Date between Bank of America and the Borrower regarding the syndication of the Commitments and Loans after the Closing Date. "Synthetic Lease" means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing arrangement whereby the arrangement is considered borrowed money indebtedness for tax purposes but is classified as an operating lease or does not otherwise appear on the balance sheet under GAAP. "Term Loans" means the Tranche A Term Loans and the Tranche B Term Loans. "Threshold Amount" means $5,000,000. "Total Revolving Outstandings" means the aggregate Outstanding Amount of all Revolving Loans, all Swing Line Loans and all L/C Obligations. "Tranche A Term Loan" has the meaning specified in Section 2.01(b). "Tranche A Term Loan Commitment" means, as to each Lender, its obligation to make its portion of the Tranche A Term Loan to the Borrower pursuant to Section 2.01(b), in the principal amount set forth opposite such Lender's name on Schedule 2.01. The aggregate principal amount of the Tranche A Term Loan Commitments of all of the Lenders as in effect on the Closing Date is TWENTY-SIX MILLION DOLLARS ($26,000,000). "Tranche A Term Note" has the meaning specified in Section 2.11(a). "Tranche B Term Loan" has the meaning specified in Section 2.01(c). "Tranche B Term Loan Commitment" means, as to each Lender, its obligation to make its portion of the Tranche B Term Loan to the Borrower pursuant to Section 2.01(c), in the principal amount set forth opposite such Lender's name on Schedule 2.01. The aggregate principal amount of the Tranche B Term Loan Commitments of all of the Lenders as in effect on the Closing Date is SEVENTY-FOUR MILLION DOLLARS ($74,000,000). "Tranche B Term Note" has the meaning specified in Section 2.11(a). "Transaction" means the acquisition by the Borrower of the Acquired Company. "Transaction Documents" means the Purchase Agreement, the Transition Services Agreement and the other documents and agreements delivered in connection therewith. "Transition Services Agreement" means the Transition Services Agreement dated as of July 24, 2002 between PricewaterhouseCoopers LLP. "Type" means, with respect to any Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan. "Unfunded Pension Liability" means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Internal Revenue Code for the applicable plan year. "United States" and "U.S." mean the United States of America. "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i). "Voting Stock" means, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency. "Wholly Owned Subsidiary" means any Person 100% of whose Capital Stock is at the time owned by the Borrower directly or indirectly through other Persons 100% of whose Capital Stock is at the time owned, directly or indirectly, by the Borrower. 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears. (iii) The term "including" is by way of example and not limitation. (iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form. (c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." (d) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document. 1.03 Accounting Terms. (a) Except as otherwise specifically prescribed herein, all accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements; provided, however, that calculations of Attributable Indebtedness under any Synthetic Lease Obligations or the implied interest component of any Synthetic Lease Obligations shall be made by the Borrower in accordance with accepted financial practice and consistent with the terms of such Synthetic Lease Obligations. (b) The Borrower will provide a written summary of material changes in GAAP and in the consistent application thereof with each annual and quarterly Compliance Certificate delivered in accordance with Section 7.02(b). If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. (c) Notwithstanding the above, the parties hereto acknowledge and agree that: (i) all calculations of the Consolidated Leverage Ratio for purposes of determining compliance with Section 8.11(a) and determining the Applicable Rate shall be made on a Pro Forma Basis; (ii) all calculations of the Consolidated Net Worth for purposes of determining compliance with Section 8.11(b) shall be made on a Pro Forma Basis; and (iii) all calculations of the Consolidated Fixed Charge Coverage Ratio for purposes of determining compliance with Section 8.11(c) shall be made on a historical basis (i.e., not on a Pro Forma Basis). 1.04 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number). 1.05 References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law. 1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). 1.07 Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time. ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS 2.01 Revolving Loans and Term Loans. (a) Revolving Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a "Revolving Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Revolving Commitment; provided, however, that after giving effect to any Borrowing of Revolving Loans, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Revolving Commitment. Within the limits of each Lender's Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein, provided, however, all Borrowings of Revolving Loans made on the Closing Date shall be made as Base Rate Loans. (b) Tranche A Term Loan. Subject to the terms and conditions set forth herein, each Lender severally agrees to make its portion of a term loan (the "Tranche A Term Loan") to the Borrower on the Closing Date in an amount not to exceed such Lender's Tranche A Term Loan Commitment. Amounts repaid on the Tranche A Term Loan may not be reborrowed. The Tranche A Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein, provided that, notwithstanding any provision in this Agreement or any other Loan Document to the contrary, the Borrowing of the Tranche A Term Loan made on the Closing Date shall be made as (i) with respect to the portion of the Tranche A Term Loan that corresponds to the portion of the Existing Term Loan with an "Interest Period" (as defined in the Existing Credit Agreement immediately prior to the Closing Date) expiring on the Closing Date, as a Eurodollar Loan with an Interest Period of one month and (ii) with respect to the portion of the Tranche A Term Loan that corresponds to the portion of the Existing Term Loan with an "Interest Period' (as defined in the Existing Credit Agreement immediately prior to the Closing Date) expiring after the Closing Date, as a Eurodollar Loan with (A) an Interest Period equal to the remaining term of the "Interest Period" (as defined in the Existing Credit Agreement immediately prior to the Closing Date) applicable to such portion of the Existing Term Loan immediately prior to the Closing Date and (B) a Eurodollar Rate equal to the "Eurodollar Rate" (as defined in the Existing Credit Agreement immediately prior to the Closing Date) applicable to such portion of the Existing Term Loan immediately prior to the Closing Date. (c) Tranche B Term Loan. Subject to the terms and conditions set forth herein, each Lender severally agrees to make its portion of a term loan (the "Tranche B Term Loan") to the Borrower on the Closing Date in an amount not to exceed such Lender's Tranche B Term Loan Commitment. Amounts repaid on the Tranche B Term Loan may not be reborrowed. The Tranche B Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein, provided, however, the Borrowing of the Tranche B Term Loan made on the Closing Date shall be made as Base Rate Loans. 2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(b) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Credit Extension, Section 5.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date a Borrowing of Revolving Loans, there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings, second, to the payment in full of any such Swing Line Loans, and third, to the Borrower as provided above. (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans. (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change. (e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than (i) eight Interest Periods in effect with respect to Revolving Loans, (ii) eight Interest Periods in effect with respect to the Tranche A Term Loan and (iii) eight Interest Periods in effect with respect to the Tranche B Term Loan. 2.03 Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or any of its Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided that the L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Revolving Outstandings would exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Revolving Commitment or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof. (ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if: (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it; (B) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date; (C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date; (D) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer; or (E) such Letter of Credit is in an initial amount less than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit, or is to be denominated in a currency other than Dollars. (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. (iv) The L/C Issuer shall be under no obligation to issue or amend any Letter of Credit if the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, on or prior to the Business Day prior to the requested date of issuance or amendment of such Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied. (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Letter of Credit. (iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "Auto-Renewal Letter of Credit"); provided that any such Auto-Renewal Letter of Credit must permit the L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such renewal if (A) the L/C Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is two Business Days before the Nonrenewal Notice Date from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 5.02 is not then satisfied. (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 1l:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Base Rate Revolving Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section 5.02 (other than the delivery of a Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Revolving Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer. (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Revolving Loans because the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03. (iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Share of such amount shall be solely for the account of the L/C Issuer. (v) Each Lender's obligation to make Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Revolving Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 5.02 (other than delivery by the Borrower of a Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein. (vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error. (d) Repayment of Participations. (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's L/C Advance was outstanding) in the same funds as those received by the Administrative Agent. (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, any other Loan Document or any other agreement or instrument relating thereto; (ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or (v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower. The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid. (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. (h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the "a") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of Credit. (i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share (i) a Letter of Credit fee for each commercial Letter of Credit equal to the Applicable Rate times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit) and (ii) a Letter of Credit fee for each standby Letter of Credit equal to the Applicable Rate times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such letter of credit fees shall be due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit in an amount equal to l/8 of 1% per annum on the daily maximum amount available to be drawn thereunder, due and payable quarterly in arrears on the Business Day immediately following the last Business Day of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable. (k) Conflict with Letter of Credit Application. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control. 2.04 Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing Line Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving Loans and L/C Obligations of the Swing Line Lender in its capacity as a Lender of Revolving Loans, may exceed the amount of such Lender's Revolving Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Revolving Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Swing Line Loan. (b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be made upon the Borrower's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower. (c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably requests and authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Base Rate Revolving Loan in an amount equal to such Lender's Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Revolving Loans, but subject to the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section 5.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m. on the day specified in such Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made a Base Rate Revolving Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender. (ii) If for any reason any Swing Line Loan cannot be refinanced by such a Borrowing of Revolving Loans in accordance with Section 2.04(c)(i), the request for Base Rate Revolving Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation. (iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error. (iv) Each Lender's obligation to make Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Revolving Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 5.02. No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein. (d) Repayment of Participations. (i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's risk participation was funded) in the same funds as those received by the Swing Line Lender. (ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender funds its Revolving Loans that are Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender. (f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender. 2.05 Prepayments. (a) Voluntary Prepayments of Loans. (i) Revolving Loans and Term Loans. The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans and the Term Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B) on the date of prepayment of Base Rate Loans; (ii) any such prepayment of Eurodollar Rate Loans shall be in a principal amount of $l,000,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); (iii) any such prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding) and (iv) any such prepayment of the Term Loans made on or before December 31, 2003 shall be applied to the Tranche B Term Loan until paid in full and then to the Tranche A Term Loan (in each case to the remaining principal amortization payments in inverse order of maturity) and any such prepayment of the Term Loans made after December 31, 2003 shall be applied to the Tranche A Term Loan or the Tranche B Term Loan, as the Borrower may elect (in each case to the remaining principal amortization payments in inverse order of maturity). Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares. (ii) Swing Line Loans. The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. (b) Mandatory Prepayments of Loans. (i) Aggregate Revolving Commitments. If for any reason the Total Revolving Outstandings at any time exceed the Aggregate Revolving Commitments then in effect, the Borrower shall immediately prepay Revolving Loans and/or the Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of the Revolving Loans and Swing Line Loans the Total Revolving Outstandings exceed the Aggregate Revolving Commitments then in effect. (ii) Dispositions and Involuntary Dispositions. The Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount equal to 100% of the Net Cash Proceeds of all Dispositions and involuntary Dispositions to the extent (A) such Net Cash Proceeds are not reinvested in the same or similar Property within 180 days of the date of such Disposition and (B) the aggregate amount of such Net Cash Proceeds not reinvested in accordance with the foregoing clause (A) shall exceed $2,500,000 in any fiscal year. Such prepayment shall be due immediately upon the expiration of the 180 day period set forth in clause (A) (to the extent such prepayment exceeds the threshold in clause (B)). (iii) Debt Issuances. Immediately upon receipt by the Borrower or any Subsidiary of the Net Cash Proceeds of any Debt Issuance, the Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount equal to 100% of such Net Cash Proceeds (such prepayment to be applied as set forth in clause (v) below). (iv) Equity Issuances. Immediately upon the receipt by the Borrower or any Subsidiary of the Net Cash Proceeds of any Equity Issuance, the Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations in an aggregate amount equal to 50% of such Net Cash Proceeds (such prepayment to be applied as set forth in clause (vi) below). (v) Application of Mandatory Prepayments. All amounts required to be paid pursuant to this Section 2.05(b) shall be applied as follows: (A) with respect to all amounts prepaid pursuant to Section 2.05(b)(i), to Revolving Loans and Swing Line Loans and (after all Revolving Loans and all Swing Line Loans have been repaid) to Cash Collateralize L/C Obligations; and (B) with respect to all amounts prepaid pursuant to Section 2.05(b)(ii), (iii) and (iv), first to the Tranche B Term Loan (to the remaining principal amortization payments in inverse order of maturity), then (after the Tranche B Term Loan has been paid in full) to the Revolving Loans and Swing Line Loans (but without any reduction in the Aggregate Revolving Commitments) and then (after all Revolving Loans and all Swing Line Loans have been repaid) to Cash Collateralize L/C Obligations (but without any reduction in the Aggregate Revolving Commitments). Within the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans and then to Eurodollar Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.05(b) shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment. 2.06 Termination or Reduction of Aggregate Revolving Commitments. The Borrower may, upon notice from the Borrower to the Administrative Agent, terminate the Aggregate Revolving Commitments or permanently reduce the Aggregate Revolving Commitments to an amount not less than the Outstanding Amount of Revolving Loans, Swing Line Loans and L/C Obligations; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction and (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Lender according to its Pro Rata Share. All commitment fees accrued until the effective date of any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such termination. 2.07 Repayment of Loans. (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans outstanding on such date. (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Loan is made and (ii) the Maturity Date. (c) Tranche A Term Loan. The Borrower shall repay the outstanding principal amount of the Tranche A Term Loan in installments on the dates and in the amounts set forth in the table below (as such installments may hereafter be adjusted as a result of prepayments made pursuant to Section 2.05), unless accelerated sooner pursuant to Section 9.02: ============================================== Principal Amortization Payment Dates Payment ---------------------------------------------- ---------------------------------------------- September 30, 2002 $1,083,333 ---------------------------------------------- December 31, 2002 $1,083,333 ---------------------------------------------- March 31, 2003 $1,625,000 ---------------------------------------------- June 30, 2003 $1,625,000 ---------------------------------------------- September 30, 2003 $1,625,000 ---------------------------------------------- December 31, 2003 $1,625,000 ---------------------------------------------- March 31, 2004 $2,166,667 ---------------------------------------------- June 30, 2004 $2,166,667 ---------------------------------------------- September 30, 2004 $2,166,667 ---------------------------------------------- December 31, 2004 $2,166,667 ---------------------------------------------- March 31, 2005 $2,166,667 ---------------------------------------------- June 30, 2005 $2,166,667 ---------------------------------------------- September 30, 2005 $2,166,667 ---------------------------------------------- Maturity Date Unpaid balance of the Tranche A Term Loan ---------------------------------------------- ============================================== (d) Tranche B Term Loan. The Borrower shall repay the outstanding principal amount of the Tranche B Term Loan in installments on the dates and in the amounts set forth in the table below (as such installments may hereafter be adjusted as a result of prepayments made pursuant to Section 2.05), unless accelerated sooner pursuant to Section 9.02: ============================================== Principal Amortization Payment Dates Payment ---------------------------------------------- ---------------------------------------------- September 30, 2002 --- ---------------------------------------------- December 31, 2002 --- ---------------------------------------------- March 31, 2003 $3,375,000 ---------------------------------------------- June 30, 2003 $3,375,000 ---------------------------------------------- September 30, 2003 $3,375,000 ---------------------------------------------- December 31, 2003 $3,375,000 ---------------------------------------------- March 31, 2004 $4,138,889 ---------------------------------------------- June 30, 2004 $4,138,889 ---------------------------------------------- September 30, 2004 $4,138,889 ---------------------------------------------- December 31, 2004 $5,333,333 ---------------------------------------------- March 31, 2005 $5,333,333 ---------------------------------------------- June 30, 2005 $5,333,333 ---------------------------------------------- September 30, 2005 $5,333,333 ---------------------------------------------- December 31, 2005 $5,333,333 ---------------------------------------------- March 31, 2006 $7,138,889 ---------------------------------------------- June 30, 2006 $7,138,889 ---------------------------------------------- Maturity Date Unpaid balance of the Tranche B Term Loan ---------------------------------------------- ============================================== 2.08 Interest. (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of (A) the Eurodollar Rate for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate. (b) If any amount payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand. (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. 2.09 Fees. In addition to certain fees described in subsections (i) and (j) of Section 2.03: (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a commitment fee equal to the product of (i) the Applicable Rate times (ii) the actual daily amount by which the Aggregate Revolving Commitments exceed the sum of (y) the Outstanding Amount of Revolving Loans and (z) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. (b) Other Fees. (i) The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall non-refundable for any reason whatsoever. (ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever. 2.10 Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. 2.11 Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall evidence such Lender's Loans in addition to such accounts or records. Each such promissory note shall (i) in the case of Revolving Loans, be in the form of Exhibit C-1 (a "Revolving Note"), (ii) in the case of Swing Line Loans, be in the form of Exhibit C-2 (a "Swing Line Note"), (iii) in the case of the Tranche A Term Loan, be in the form of Exhibit C-3 (a "Tranche A Term Note") and (iv) in the case of the Tranche B Term Loan, be in the form of Exhibit C-4 (a "Tranche B Term Note"). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto. (b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. 2.12 Payments Generally. (a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. (b) Subject to the definition of "Interest Period", if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. (c) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under Article III) incurred by the Administrative Agent and each Lender, (ii) second, toward repayment 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 (iii) third, toward repayment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties. (d) Unless the Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then: (i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder. A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error. (e) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest. (f) The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint. The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation. (g) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. 2.13 Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it (but not including any amounts applied by the Swing Line Lender to outstanding Swing Line Loans), any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 11.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased. ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 3.01 Taxes. (a) Any and all payments by any Loan Party to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its overall net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains a lending office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If any Loan Party shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (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), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make such deductions, (iii) such Loan Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within thirty days after the date of such payment, such Loan Party shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes"). (c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount that the Administrative Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Administrative Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed. (d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within thirty days after the date the Lender or the Administrative Agent makes a demand therefor. 3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. 3.03 Inability to Determine Rates. If the Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein. 3.04 Increased Cost and Reduced Return; Capital Adequacy. (a) If any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or has its Lending Office, and (iii) reserve requirements utilized, as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. (b) If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction. 3.05 Funding Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of: (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.16; including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. 3.06 Matters Applicable to all Requests for Compensation. (a) A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods. (b) Upon any Lender's making a claim for compensation under Section 3.01 or 3.04, the Borrower may replace such Lender in accordance with Section 11.16. 3.07 Survival. All of the Borrower's obligations under this Article III shall survive termination of the Aggregate Revolving Commitments and repayment of all other Obligations hereunder. ARTICLE IV GUARANTY 4.01 The Guaranty. Each of the Guarantors hereby jointly and severally guarantees to each Lender, each Affiliate of a Lender that enters into a Swap Contract, and the Administrative Agent as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof, The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal. Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or Swap Contracts, the obligations of each Guarantor under this Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under the Debtor Relief Laws or any comparable provisions of any applicable state law. 4.02 Obligations Unconditional. The obligations of the Guarantors under Section 4.01 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or Swap Contracts, or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article IV until such time as the Obligations have been paid in full and the Commitment have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above: (a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived; (b) any of the acts mentioned in any of the provisions of any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or such Swap Contracts shall be done or omitted; (c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or such Swap Contracts shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with; (d) any Lien granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Obligations shall fail to attach or be perfected; or (e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor). With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or such Swap Contracts, or against any other Person under any other guarantee of, or security for, any of the Obligations. 4.03 Reinstatement. The obligations of the Guarantors under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. 4.04 Certain Additional Waivers. Without limiting the generality of the provisions of this Article IV, each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. (S)(S) 26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02 and through the exercise of rights of contribution pursuant to Section 4.06. 4.05 Remedies. The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 9.02 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 4.01. The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the Lenders may exercise their remedies thereunder in accordance with the terms thereof. 4.06 Rights of Contribution. The Guarantors hereby agree as among themselves that, if any Guarantor shall make an Excess Payment (as defined below), such Guarantor shall have a right of contribution from each other Guarantor in an amount equal to such other Guarantor's Contribution Share (as defined below) of such Excess Payment. The payment obligations of any Guarantor under this Section 4.06 shall be subordinate and subject in right of payment to the Obligations until such time as the Obligations have been paid in full and the Commitments have expired or terminated, and none of the Guarantors shall exercise any right or remedy under this Section 4.06 against any other Guarantor until such Obligations have been paid in full and the Commitments have expired or terminated. For purposes of this Section 4.06, (a) "Excess Payment" shall mean the amount paid by any Guarantor in excess of its Ratable Share of any Guaranteed Obligations; (b) "Ratable Share" shall mean, for any Guarantor in respect of any payment of Obligations, the ratio (expressed as a percentage) as of the date of such payment of Guaranteed Obligations of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of all of the Loan Parties exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties hereunder) of the Loan Parties; provided, however, that, for purposes of calculating the Ratable Shares of the Guarantors in respect of any payment of Obligations, any Guarantor that became a Guarantor subsequent to the date of any such payment shall be deemed to have been a Guarantor on the date of such payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such payment; (c) "Contribution Share" shall mean, for any Guarantor in respect of any Excess Payment made by any other Guarantor, the ratio (expressed as a percentage) as of the date of such Excess Payment of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assets and other properties of the Loan Parties other than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties) of the Loan Parties other than the maker of such Excess Payment; provided, however, that, for purposes of calculating the Contribution Shares of the Guarantors in respect of any Excess Payment, any Guarantor that became a Guarantor subsequent to the date of any such Excess Payment shall be deemed to have been a Guarantor on the date of such Excess Payment and the financial information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such Excess Payment; and (d) "Guaranteed Obligations" shall mean the Obligations guaranteed by the Guarantors pursuant to this Article IV. This Section 4.06 shall not be deemed to affect any right of subrogation, indemnity, reimbursement or contribution that any Guarantor may have under Law against the Borrower in respect of any payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights of contribution against any Guarantor shall terminate from and after such time, if ever, that such Guarantor shall be relieved of its obligations in accordance with Section 10.11. 4.07 Guarantee of Payment; Continuing Guarantee. The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising. ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS 5.01 Conditions of Initial Credit Extension. The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent: (a) Loan Documents. Receipt by the Administrative Agent of executed counterparts of this Agreement and the other Loan Documents, each property executed by a Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each Lender. (b) Transaction Documents. The Administrative Agent shall have received a certified copy of the Purchase Agreement and all other related material documentation for the Transaction (including, without limitation, the Transition Services Agreement) (in each case including schedules and exhibits), together with all amendments, modifications, supplements and waivers, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent. (c) Consummation of Transaction. The Administrative Agent shall have received reasonably satisfactory evidence that the Transaction shall have been consummated (or contemporaneous with the advances of the initial Loans hereunder will be consummated) substantially in accordance with the terms of the Transaction Documents and substantially in compliance with applicable law and regulatory approvals. (d) Organization Documents, Resolutions, Etc. Receipt by the Administrative Agent's of the following, each of which shall be originals or facsimiles (followed promptly by originals), dated as of a recent date before the Closing Date and in form and substance satisfactory to the Administrative Agent and its legal counsel: (i) copies of the Organization Documents of each Loan Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of such Loan Party to be true and correct as of the Closing Date; (ii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party; and (iii) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in its state of organization or formation, the state of its principal place of business and each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. (e) Opinions of Counsel. Receipt by the Administrative Agent's of a favorable opinion of Piper Rudnick LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, dated as of the Closing Date, and in form and substance satisfactory to the Administrative Agent. (f) Perfection and Priority of Liens. Receipt by the Administrative Agent of the following: (i) searches of Uniform Commercial Code filings in the jurisdiction of formation of each Loan Party, the jurisdiction of the chief executive office of each Loan Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent's security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens; (ii) all certificates evidencing any certificated Capital Stock pledged to the Administrative Agent pursuant to the Pledge Agreement, together with duly executed in blank, undated stock powers attached thereto (unless, with respect to the pledged Capital Stock of any Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion under the law of the jurisdiction of incorporation of such Person); (iii) searches of ownership of, and Liens on, intellectual property of each Loan Party in the appropriate governmental offices; (iv) duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agent's sole discretion, to perfect the Administrative Agent's security interest in the intellectual property of the Loan Parties; (v) in the case of any personal property Collateral located at a premises leased by a Loan Party, such estoppel letters, consents and waivers from the landlords on such real property as may be required by the Administrative Agent. (g) Financial Statements. The Administrative Agent shall have received: (i) interim quarterly financial statements of the Borrower and its Subsidiaries for the fiscal quarter ending June 30, 2002; (ii) a pro forma balance sheet and income statement of the Borrower and its Subsidiaries giving effect to the Transaction and the other transactions contemplated hereby and reflecting estimated purchase price accounting adjustments; (iii) a pro forma income statement of the Acquired Company satisfactory to the Administrative Agent demonstrating a minimum standalone EBITDA of $45,000,000 for the period of four consecutive fiscal quarters ending June 30, 2002 (together with the pro forma financial statements described in clause (B) above, the "Pro Forma Statements"); (iv) the projections of the Borrower's financial condition, results of operations and cash flows for (x) the fiscal quarters of the Borrower ending March 31, 2002, June 30, 2002 September 30, 2002 and December 31, 2002 and (y) the fiscal years ending December 31, 2003, December 31, 2004, December 31, 2005 and December 31, 2006 (collectively, the "Closing Date Proiections"); and (v) such other information relating to the Transaction as the Administrative Agent may reasonably request. (h) No Material Adverse Change. There shall not have occurred a material adverse change since December 31, 2001 with regard to the Borrower and since June 30, 2001 with regard to the Acquired Company in the business, assets, liabilities (actual or contingent), operations, financial condition or prospects of the Borrower or the Acquired Company, in each case together with its Subsidiaries taken as a whole. (i) Consents. All material governmental, shareholder and third party consents (including, but not limited to, Hart-Scott-Rodino clearance) and approvals necessary in connection with the Transaction and the other transactions contemplated hereby shall have been obtained (or appropriate waivers obtained); all such consents and approvals shall be in force and effect; and all applicable waiting periods shall have expired without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on the Transaction or such other transactions or that could seek or threaten any of the foregoing. (j) Judgments; Litigation. There shall not exist (a) any order, decree, judgment, ruling or injunction which restrains the consummation of the Transaction in the manner contemplated by the Transaction Documents, and (b) any pending or threatened action, suit, investigation or proceeding which is reasonably likely to be adversely determined and, if adversely determined, could reasonably be expected to have a Material Adverse Effect. (k) Evidence of Insurance. Receipt by the Administrative Agent of copies of insurance policies or certificates of insurance of the Loan Parties evidencing liability and casualty insurance meeting the requirements set forth in the Loan Documents, including, but not limited to, naming Administrative Agent as additional insured (in the case of liability insurance) or loss payee (in the case of hazard insurance) on behalf of the Lenders. (1) Closing Certificate. Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Borrower certifying that the conditions specified in Sections 5.01(h), (i) and (j) and Sections 5.02(a), (b) and (c) have been satisfied. (m) Termination of Existing Credit Agreement. Receipt by the Administrative Agent of evidence that the loans and other obligations under the Existing Credit Agreement have been repaid (or will be repaid with the initial Loans made hereunder on the Closing Date) and the commitments thereunder have been terminated. (n) Fees. Receipt by the Administrative Agent and the Lenders of any fees required to be paid on or before the Closing Date shall have been paid. (o) Attorney Costs. Unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent). (p) Other. Receipt by the Administrative Agent and the Lenders of such other documents, instruments, agreements and information as reasonably requested by the Administrative Agent or any Lender, including, but not limited to, information regarding litigation, tax, accounting, labor, insurance, pension liabilities (actual or contingent), real estate leases, environmental matters, material contracts, debt agreements, property ownership, contingent liabilities, employment agreements, non-compete agreements and management of the Borrower, the Acquired Company and their respective Subsidiaries. 5.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than (i) any request for a conversion of a Eurodollar Loan to a Base Rate Loan or (ii) any request for an extension of a Eurodollar Loan as, or a conversion of a Base Rate Loan into, a Eurodollar Loan for an Interest Period of one month) is subject to the following conditions precedent: (a) The representations and warranties of the Borrower and each other Loan Party contained in Article VI or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes of this Section 5.02, the representations and warranties contained in subsections (a) and (b) of Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01. (d) No Default shall exist, or would result from such proposed Credit Extension. (c) There shall not have been commenced against the Borrower or any Subsidiary an involuntary case under any applicable Debtor Relief Law, now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed. (d) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof. Each Request for Credit Extension (other than (i) any request for a conversion of a Eurodollar Loan to a Base Rate Loan or (ii) any request for an extension of a Eurodollar Loan as, or a conversion of a Base Rate Loan into, a Eurodollar Loan for an Interest Period of one month) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a), (b) and (c) have been satisfied on and as of the date of the applicable Credit Extension. ARTICLE VI REPRESENTATIONS AND WARRANTIES The Loan Parties represent and warrant to the Administrative Agent and the Lenders that: 6.01 Existence, Qualification and Power. Each Loan Party (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. 6.02 Authorization; No Contravention. This execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Person's Organization Documents; (b) conflict with or result in any breach or contravention of (i) any Contractual Obligation to which such Person is a party if the breach or contravention of such Contractual Obligation could reasonably be expected to have a Material Adverse Effect or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; (c) result in the creation of any Lien under any Contractual Obligation to which such Person is a party; or (d) violate any Law (including, without limitation, Regulation U or Regulation X issued by the FRB). 6.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document or with the consummation of the Transaction, other than (i) those that have already been obtained and are in full force and effect and (ii) filings to perfect the Liens created by the Collateral Documents. 6.04 Binding Effect. This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto. This Agreement and each other Loan Document constitutes a legal, valid and binding obligation of each Loan Party that is party thereto, enforceable against each such Loan Party in accordance with its terms. 6.05 Financial Statements; No Material Adverse Effect. (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, commitments and Indebtedness. (b) The unaudited consolidated financial statements of the Borrower and its Subsidiaries dated June 30, 2002 and the related consolidated statements of income or operations, shareholders' equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness. (c) From the date of the Audited Financial Statements to and including the Closing Date, there has been no Disposition by the Borrower or any Subsidiary, or any Involuntary Disposition, of any material part of the business or Property of the Borrower and its Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them or any business or property (including any Capital Stock of any other Person) material in relation to the consolidated financial condition of the Borrower and its Subsidiaries, taken as a whole, in each case, which is not reflected in the foregoing financial statements or in the notes thereto and has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date. (d) The Pro Forma Statements and the Closing Date Projections are based upon reasonable assumptions made known to the Lenders and upon information not known to be incorrect or misleading in any material respect. (e) The financial statements delivered pursuant to Section 7.01(a) and (b) have been prepared in accordance with GAAP (except as may otherwise be permitted under Section 7.01(a) and (b)) and present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated and, in the case of consolidating annual financial statements (if any) delivered pursuant to Section 7.01(a), consolidating, financial condition, results of operations and cash flows of the Borrower and its Subsidiaries as of such date and for such periods. (f) Since the date of the Audited Financial Statements, there has been no event or circumstance that has had or could reasonably be expected to have a Material Adverse Effect. 6.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Loan Parties after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, (b) restrains the consummation of the Transaction in the manner contemplated by the Transaction Documents or (c) is reasonably likely to be determined adversely to the Borrower or any of its Subsidiaries and, if determined adversely, could reasonably be expected to have a Material Adverse Effect. 6.07 No Default. (a) Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse Effect. (b) No Default has occurred and is continuing. 6.08 Ownership of Property; Liens. Each of the Borrower and its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens. 6.09 Environmental Compliance. Except as could not reasonably be expected to have a Material Adverse Effect: (a) Each of the Facilities and all operations at the Facilities are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Facilities or the Businesses, and there are no conditions relating to the Facilities or the Businesses that could give rise to liability under any applicable Environmental Laws. (b) None of the Facilities contains, or has previously contained, any Hazardous Materials at, on or under the Facilities in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws. (c) Neither the Borrower nor any Subsidiary has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Facilities or the Businesses, nor does any Responsible Officer of any Loan Party have acknowledge or reason to believe that any such notice will be received or is being threatened. (d) Hazardous Materials have not been transported or disposed of from the Facilities, or generated, treated, stored or disposed of at, on or under any of the Facilities or any other location, in each case by or on behalf the Borrower or any Subsidiary in violation of, or in a manner would be reasonably likely to give rise to liability under, any applicable Environmental Law. (e) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened, under any Environmental Law to which the Borrower or any Subsidiary is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Borrower, any Subsidiary, the Facilities or the Businesses. (f) There has been no release or, threat of release of Hazardous Materials at or from the Facilities, or rising from or related to the operations (including, without limitation, disposal) of the Borrower or any Subsidiary in connection with the Facilities or otherwise in connection with the Businesses, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws. 6.10 Insurance. The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies 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 the applicable Subsidiary operates. The insurance coverage of the Loan Parties as in effect on the Closing Date is outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 6.10. 6.11 Taxes. The Borrower and its Subsidiaries have filed all federal, state and other material tax returns and reports required to be filed, and have paid all federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. 6.12 ERISA Compliance. (a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Loan Parties, nothing has occurred which would prevent, or cause the loss of, such qualification. Each Loan Party and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Internal Revenue Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been made with respect to any Plan. (b) There are no pending or, to the best knowledge of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect. (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) no Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. 6.13 Subsidiaries. Set forth on Schedule 6.13 is a complete and accurate list as of the Closing Date of each Subsidiary, together with (i) number of shares of each class of Capital Stock outstanding, (ii) number and percentage of outstanding shares of each class owned (directly or indirectly) by the Borrower or any Subsidiary and (iii) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto. The outstanding Capital Stock of each Subsidiary is validly issued, fully paid and non-assessable. 6.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act. (a) Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 8.01 or Section 8.05 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 9.01(e) will be margin stock. (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is required to be registered as an "investment company" under the Investment Company Act of 1940. 6.15 Disclosure. Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. 6.16 Compliance with Laws. Each of the Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 6.17 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess the legal right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, "IP Rights") that are reasonably necessary for the operation of their respective businesses. Set forth on Schedule 6.17 is a list of all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office and owned by each Loan Party as of the Closing Date. Except for such claims and infringements that could not reasonably be expected to have a Material Adverse Effect, no claim has been asserted and is pending by any Person challenging or questioning the use of any IP Rights or the validity or effectiveness of any IP Rights, nor does any Loan Party know of any such claim, and, to the knowledge of the Responsible Officers of the Loan Parties, the use of any IP Rights by the Borrower or any Subsidiary or the granting of a right or a license in respect of any IP Rights from the Borrower or any Subsidiary does not infringe on the rights of any Person. As of the Closing Date, none of the IP Rights owned by any of the Loan Parties is subject to any material licensing agreement or similar arrangement except as set forth on Schedule 6.17. 6.18 Solvency. The Loan Parties are Solvent on a consolidated basis. 6.19 Perfection of Security Interests in the Collateral. The Collateral Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are currently perfected security interests and Liens, prior to all other Liens other than Permitted Liens. 6.20 Business Locations. Set forth on Schedule 6.20(a) is a list of all real property located in the United States that is owned or leased by the Loan Parties as of the Closing Date. Set forth on Schedule 6.20(b) is a list of all locations where any tangible personal property of any Loan Party is located as of the Closing Date. Set forth on Schedule 6.20(c) is the legal name, chief executive office and jurisdiction of formation of each Loan Party as of the Closing Date. 6.21 Brokers' Fees. Neither the Borrower nor any Subsidiary has any obligation to any Person in respect of any finder's, broker's, investment banking or other similar fee in connection with any of the transactions contemplated under the Loan Documents. 6.22 Labor Matters. There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower or any Subsidiary as of the Closing Date and neither the Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years. 6.23 Representations and Warranties from Purchase Agreement. As of the Closing Date, each of the representations and warranties made by the Seller in Sections 3.6, 3.9, 3.12, 3.14 and 3.16 of the Purchase Agreement is true and correct in all material respects. ARTICLE VII AFFIRMATIVE COVENANTS So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties shall and shall cause each Subsidiary to: 7.01 Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders: (a) as soon as available, but in any event within ninety days after the end of each fiscal year of the Borrower, a consolidated and, if requested by the Administrative Agent, consolidating, balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated and, if requested by the Administrative Agent, consolidating, statements of income or operations, shareholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit; and (b) as soon as available, but in any event within forty-five days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal quarter and for the portion of the Borrower's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting the financial condition, results of operations, shareholders' equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes. 7.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders: (a) concurrently with the delivery of the financial statements referred to in Section 7.01(a), a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default as at the date of such financial statements or, if any such Default shall exist, stating the nature and status of such event; (b) concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower; (c) not more than five days after approval by the Borrower's board of directors, the annual business plan and budget of the Borrower and its Subsidiaries containing, among other things, projected financial statements for each quarter of the next fiscal year, beginning with the fiscal year ending December 31, 2003. (d) concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (b), a certificate of a Responsible Officer of the Borrower containing information regarding the amount of all Dispositions, Involuntary Dispositions, Debt Issuances, Equity Issuances and Acquisitions that occurred during the period covered by such financial statements. (e) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them; (f) promptly after the same are available, (i) copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or to a holder of any Indebtedness owed by the Borrower or any Subsidiary in its capacity as such a holder and not otherwise required to be delivered to the Administrative Agent pursuant hereto and (ii) upon the request of the Administrative Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters; (g) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request; and (h) concurrently with the delivery of the financial statements referred to in Sections 7.01 (a) and (b), a certificate of a Responsible Officer of the Borrower (i) listing all registration numbers for all patents, trademarks, service marks, trade names and copyrights awarded to any Loan Party all patent applications, trademark applications, service mark applications, trade name applications and copyright applications submitted by any Loan Party, in each case since the date of the last such certificate (or, if it is the first such certificate, the Closing Date), and (ii) attaching the insurance binder or other evidence of insurance for any insurance coverage of the Borrower or any Subsidiary that was renewed, replaced or modified during the period covered by such financial statements. Documents required to be delivered pursuant to Section 7.01(a) or (b) or Section 7.02(f) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower's website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Borrower's behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 7.02(b) to the Administrative Agent and each of the Lenders. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. 7.03 Notices. (a) Promptly notify the Administrative Agent and each Lender of the occurrence of any Default. (b) Promptly notify the Administrative Agent and each Lender of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws. (c) Promptly notify the Administrative Agent and each Lender of the occurrence of any ERISA Event. (d) Promptly notify the Administrative Agent and each Lender of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary. (e) Upon the reasonable written request of the Administrative Agent following the occurrence of any event or the discovery of any condition which the Administrative Agent or the Required Lenders reasonably believe has caused (or could be reasonably expected to cause) the representations and warranties set forth in Section 6.09 to be untrue in any material respect, the Loan Parties will furnish or cause to be furnished to the Administrative Agent, at the Loan Parties' expense, a report of an environmental assessment of reasonable scope, form and depth, (including, where appropriate, invasive soil or groundwater sampling) by a consultant reasonably acceptable to the Administrative Agent as to the nature and extent of the presence of any Materials of Environmental Concern on any Real Properties (as defined in Section 6.09) and as to the compliance by any Consolidated Party with Environmental Laws at such Real Properties. If the Loan Parties fail to deliver such an environmental report within seventy-five (75) days after receipt of such written request then the Administrative Agent may arrange for same, and the Consolidated Parties hereby grant to the Administrative Agent and its representatives access to the Real Properties to reasonably undertake such an assessment (including, where appropriate, invasive soil or groundwater sampling). The reasonable cost of any assessment arranged for by the Administrative Agent pursuant to this provision will be payable by the Loan Parties on demand and added to the obligations secured by the Collateral Documents. Each notice pursuant to this Section 7.03(a) through (e) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached. 7.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary. 7.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 8.04 or 8.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business; and (c) preserve or renew all of its material registered patents, trademarks, trade names and service marks. 7.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear and Involuntary Dispositions excepted; (b) make all necessary repairs thereto and renewals and replacements thereof; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities. 7.07 Maintenance of Insurance. Maintain in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) with financially sound and reputable insurance companies 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 the applicable Subsidiary operates. The Administrative Agent shall be named as loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or canceled. 7.08 Compliance with Laws. Comply with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 7.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be. 7.10 Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. The Loan Parties agree that the Administrative Agent, and its representatives, may conduct an annual audit of the Collateral, at the expense of the Loan Parties. 7.11 Use of Proceeds. Use the proceeds of the Credit Extensions (a) to finance working capital, capital expenditures and other general corporate purposes, (b) to refinance existing Indebtedness of the Borrower and its Subsidiaries, (c) to finance the cash portion of the purchase price of the Transaction and (d) to finance Permitted Acquisitions, provided that in no event shall be the proceeds of the Credit Extensions be used in contravention of any Law or of any Loan Document. 7.12 Additional Subsidiaries. Within thirty (30) days after the acquisition or formation of any Subsidiary: (a) notify the Administrative Agent thereof in writing, together with (i) jurisdiction of formation, (ii) number of shares of each class of Capital Stock outstanding, (iii) number and percentage of outstanding shares of each class owned (directly or indirectly) by the Borrower or any Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto; and (b) if such Subsidiary is a Domestic Subsidiary, cause such Person to (i) become a Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement or such other document as the Administrative Agent shall deem appropriate for such purpose, and (ii) deliver to the Administrative Agent documents of the types referred to in Sections 5.01(d) and (f) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent. The Administrative Agent and the Lenders acknowledge and agree that FTI Merger & Acquisition Advisors, LLC, a Subsidiary of the Borrower, shall not be subject to the requirements of clause (b) above. 7.13 ERISA Compliance. Do, and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state law; (b) cause each Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such qualification; and (c) make all required contributions to any Plan subject to Section 412 of the Internal Revenue Code. 7.14 Pledged Assets. Each Loan Party will (i) cause all of its owned real and personal Property other than Excluded Property to be subject at all times to first priority, perfected and, in the case of real Property, title insured Liens in favor of the Administrative Agent to secure the Obligations pursuant to the terms and conditions of the Collateral Documents or, with respect to any such Property acquired subsequent to the Closing Date, such other additional security documents as the Administrative Agent shall reasonably request, subject in any case to Permitted Liens and (ii) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, real estate title insurance policies, surveys, environmental reports, landlord's waivers, certified resolutions and other organizational and authorizing documents of such Person, favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative Agent's Liens thereunder) and other items of the types required to be delivered pursuant to Section 5.01(f), all in form, content and scope reasonably satisfactory to the Administrative Agent. Without limiting the generality of the above, the Loan Parties will cause (a) 100% of the issued and outstanding Capital Stock of each Domestic Subsidiary and (b) 65% (or such greater percentage that, due to a change in an applicable Law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's United States parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Parent or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Collateral Documents or such other security documents as the Administrative Agent shall reasonably request. ARTICLE VIII NEGATIVE COVENANTS So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly: 8.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following: (a) Liens pursuant to any Loan Document; (b) Liens existing on the date hereof and listed on Schedule 8.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 8.03(b); (c) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP; (d) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established; (e) pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA; (f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person; (h) Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not in excess of the Threshold Amount (except to the extent covered by independent third-party insurance as to which the insurer has acknowledged in writing its obligation to cover), unless any such judgment remains undischarged for a period of more than thirty consecutive days during which execution is not effectively stayed; (i) Liens securing Indebtedness permitted under Section 8.03(e); provided that (i) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, (ii) the Indebtedness secured thereby does not exceed the purchase price of the Property being acquired and (iii) such Liens attach to such Property concurrently with or within ninety days after the acquisition thereof; (j) leases or subleases granted to others not interfering in any material respect with the business of any Loan Party; (k) any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement; (1) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 8.02; (m) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (n) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection; (o) Liens of sellers of goods to the Borrower and any of its Subsidiaries arising under Article 2 of the Uniform Commercial Code or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses; and (p) Liens on fixed assets securing Indebtedness permitted by Section 8.03(h). 8.02 Investments. Make any Investments, except: (a) Investments held by the Borrower or such Subsidiary in the form of cash or Cash Equivalents; (b) Investments existing as of the Closing Date and set forth in Schedule 8.02; (c) Investments consisting of advances or loans to directors and "officers" as defined in Rule 16a-1(f) of the Securities and Exchange Act of 1934 for travel, entertainment, relocation and analogous business purposes in an aggregate principal amount (including Investments of such type set forth in Schedule 8.02) not to exceed $1,000,000 at any time outstanding; (d) Investments consisting of advances or loans to employees for travel, entertainment, relocation and analogous business purposes made in the ordinary course of business on terms consistent with past practices of the Borrower in an aggregate principal amount (including Investments of such type set forth in Schedule 8.02) not to exceed $5,000,000 at any time outstanding; (e) Investments in any Person which is a Loan Party prior to giving effect to such Investment; (f) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; (g) Guarantees permitted by Section 8.03; (h) Investments consisting of deferred purchase price payment obligations of the purchasers of the Permitted Disposition; (i) Investments in FTI Merger & Acquisition Advisors, LLC in an aggregate principal amount not to exceed $500,000 at any time outstanding; (j) Permitted Acquisitions; and (k) Investments of a nature not contemplated in the foregoing clauses in an amount not to exceed $2,500,000 in the aggregate at any time outstanding. 8.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness under the Loan Documents; (b) Indebtedness of the Borrower and its Subsidiaries set forth in Schedule 8.03 (and renewals, refinancings and extensions thereof on terms and conditions not materially less favorable to the applicable debtor(s)); (c) intercompany Indebtedness permitted under Section 8.02; (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a "market view;" and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; (e) purchase money Indebtedness (including obligations in respect of Capital Leases or Synthetic Lease Obligations) hereafter incurred by the Borrower or any of its Subsidiaries to finance the purchase of fixed assets, and renewals, refinancings and extensions thereof, provided that (i) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed; and (ii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing; (f) unsecured Indebtedness in addition to the Indebtedness described in clauses (a) through (e) and (g) through (i) of this Section in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding, and renewals, refinancings and extensions thereof on terms and conditions not materially less favorable to the applicable debtor(s)); (g) unsecured Indebtedness assumed in Permitted Acquisitions and renewals, refinancings and extensions thereof on terms and conditions not materially less favorable to the applicable debtor(s)); (h) secured Indebtedness assumed in Permitted Acquisitions in an aggregate principal amount not to exceed $15,000,000 at any one time outstanding, and renewals, refinancings and extensions thereof; and (i) Guarantees with respect to Indebtedness permitted under clauses (a) through (h) of this Section 8.03. 8.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person; provided that, notwithstanding the foregoing provisions of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, (a) the Borrower may merge or consolidate with any of its Subsidiaries provided that the Borrower shall be the continuing or surviving corporation, (b) any Loan Party other than the Borrower may merge or consolidate with any other Loan Party other than the Borrower, (c) any Foreign Subsidiary may be merged or consolidated with or into any Loan Party provided that such Loan Party shall be the continuing or surviving corporation, (d) any Foreign Subsidiary may be merged or consolidated with or into any other Foreign Subsidiary, (e) any Subsidiary of the Borrower may merge with any Person that is not a Loan Party in connection with a Disposition permitted under Section 8.05 or a Permitted Acquisition provided that, if such transaction involves the Borrower, the Borrower shall be the continuing or surviving corporation, (g) any Wholly Owned Subsidiary of the Borrower may dissolve, liquidate or wind up its affairs at any time provided that such dissolution, liquidation or winding up, as applicable, could not have a Material Adverse Effect and (h) the Borrower and its Subsidiaries may enter into the Permitted Disposition. 8.05 Dispositions. Make any Disposition unless (a) the consideration paid in connection therewith shall be cash or Cash Equivalents paid contemporaneous with consummation of transaction (except up to 20% of the consideration of the Permitted Disposition may be deferred purchase price payment obligations of the purchasers) and shall be in an amount not less than the fair market value of the Property disposed of, (b) if such transaction is a Sale and Leaseback Transaction, such transaction is not prohibited by the terms of Section 8.16, (c) such transaction does not involve the sale or other disposition of a minority equity interest in any Subsidiary, (d) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other Property concurrently being disposed of in a transaction otherwise permitted under this Section 8.05, (e) the aggregate net book value of all of the assets sold or otherwise disposed of by the Borrower and its Subsidiaries in all such transactions (other than the Permitted Disposition) in any fiscal year of the Borrower shall not exceed $2,500,000, and (f) in the case of the Permitted Disposition, no later than five (5) Business Days prior to such Disposition, the Borrower shall have delivered to the Administrative Agent (i) a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such transaction, the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter end for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b), and (ii) a certificate of a Responsible Officer of the Borrower specifying the anticipated date of such Disposition, briefly describing the assets to be sold or otherwise disposed of and setting forth the net book value of such assets, the aggregate consideration and the Net Cash Proceeds to be received for such assets in connection with such Disposition. 8.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that: (a) each Subsidiary may make Restricted Payments (directly or indirectly) to any Loan Party; (b) the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Capital Stock of such Person; and (c) the Borrower may make any other Restricted Payments so long as the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculations demonstrating that if such Restricted Payment had been made on the first day of the most recent four fiscal quarter period preceding the date of such transaction for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or (b), the Loan Parties would have been in compliance with Section 8.1l(c) (Consolidated Fixed Charge Coverage Ratio) as of the end of such four fiscal quarter period. 8.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date or any business substantially related or incidental thereto. 8.08 Transactions with Affiliates and Insiders. Enter into or permit to exist any transaction or series of transactions with any officer, director or Affiliate of such Person other than (a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party, (c) intercompany transactions expressly permitted by Section 8.02, Section 8.03, Section 8.04, Section 8.05 or Section 8.06, (d) compensation and reimbursement of expenses of officers and directors and (e) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person's business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transaction with a Person other than an officer, director or Affiliate. 8.09 Burdensome Agreements. (a) Enter into any Contractual Obligation that encumbers or restricts on the ability of any such Person to (i) pay dividends or make any other distributions to any Loan Party on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its Property to any Loan Party, (v) pledge its Property (other than Excluded Property) pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof or (vi) act as a Loan Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (i)-(v) above) for (1) this Agreement and the other Loan Documents, (2) any document or instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (3) any Permitted Lien or any document or instrument governing any Permitted Lien, provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien or (4) customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05 pending the consummation of such sale. (b) Enter into any Contractual Obligation that prohibits or otherwise restricts the existence of any Lien upon any of its Property in favor of the Administrative Agent (for the benefit of the Lenders) for the purpose of securing the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such Property is given as security for the Obligations, except (i) any document or instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (ii) in connection with any Permitted Lien or any document or instrument governing any Permitted Lien, provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien and (iii) pursuant to customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05, pending the consummation of such sale. 8.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose. 8.11 Financial Covenants. (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than (i) for any fiscal quarter ending during the period from the Closing Date to and including September 30, 2003, 2.50:1.0, and (ii) for any fiscal quarter ending on and after October 1, 2003, 2.25:1.0. (b) Consolidated Net Worth. Permit Consolidated Net Worth at any time to be less than the sum of an amount equal to ninety percent (90%) of Consolidated Net Worth as of June 30, 2002 after giving pro forma effect to the Transaction, increased on a cumulative basis as of the end of each fiscal quarter of the Borrower, commencing with the fiscal quarter ending September 30,2002 by an amount equal to 50% of Consolidated Net Income (to the extent positive) for the fiscal quarter then ended plus 100% of the proceeds of all Equity Issuances after the Closing Date (excluding any Equity Issuances in connection with the Transaction). (c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than (i) for any fiscal quarter ending during the period from the Closing Date to and including September 30, 2003, 1.25:1.0, and (ii) for any fiscal quarter ending on and after October 1, 2003, 1.35: 1.0. 8.12 [Reserved.] 8.13 Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity. (a) Amend, modify or change its Organization Documents in a manner adverse to the Lenders. (b) Change its fiscal year. (c) Without providing ten (10) days prior written notice to the Administrative Agent, change its name, state of formation or form of organization. 8.14 Ownership of Subsidiaries; Limitations on Parent. Notwithstanding any other provisions of this Agreement to the contrary, (i) permit any Person (other than the Borrower or any Wholly Owned Subsidiary of the Borrower) to own any Capital Stock of any Subsidiary of the Borrower, except to qualify directors where required by applicable law or to satisfy other requirements of applicable law with respect to the ownership of Capital Stock of Foreign Subsidiaries, (ii) permit any Subsidiary of the Borrower to issue or have outstanding any shares of preferred Capital Stock or (iii) create, incur, assume or suffer to exist any Lien on any Capital Stock of any Subsidiary of the Borrower, except for Permitted Liens. 8.15 Sale Leasebacks. Enter into any Sale and Leaseback Transaction unless (i) if such Sale and Leaseback Transaction results in a Capital Lease, such Sale and Leaseback Transaction is permitted by Section 8.03(e) or (ii) if such Sale and Leaseback Transaction does not result in a Capital Lease, the underlying lease is for a term of no more than three (3) years. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES 9.01 Events of Default. Any of the following shall constitute an Event of Default: (a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any commitment fee or other fee due hereunder, or (iii) within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or (b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 7.01, 7.02, 7.03, 7.10, 7.11 or 7.12 or Article VIII or (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty days; or (d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event (other than an Involuntary Disposition which is covered by independent third-party insurance as to which the insurer does not dispute coverage and which does not constitute a default) occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty calendar days, or an order for relief is entered in any such proceeding; or (g) Inability to Pay Debts; Attachment. (i) Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within thirty days after its issue or levy; or (h) Judgments. There is entered against the Borrower or any Subsidiary (i) one or more final judgments or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of thirty consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or (i) ERISA (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or (j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or (k) Change of Control. There occurs any Change of Control. 9.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions: (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated; (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law; provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender. 9.03 Application of Funds. After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order: First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts payable under Article III) payable to the Administrative Agent in its capacity as such; Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them; Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders in proportion to the respective amounts described in this clause third payable to them; Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and Swap Contracts between any Loan Party and any Lender or Affiliate of a Lender and to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them; and Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law. Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above. ARTICLE X ADMINISTRATIVE AGENT 10.01 Appointment and Authorization of Administrative Agent. (a) Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. (b) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article X with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in this Article X and in the definition of "Agent-Related Person" included the L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the L/C Issuer. 10.02 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct. 10.03 Liability of Administrative Agent. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof. 10.04 Reliance by Administrative Agent. (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall fast receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. (b) For purposes of determining compliance with the conditions specified in Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 10.05 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default and stating that such notice is a "notice of default." The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default as may be directed by the Required Lenders in accordance with Article IX; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the best interest of the Lenders. 10.06 Credit Decision; Disclosure of Information by Administrative Agent. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower and the other Loan Parties hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 10.07 Indemnification of Administrative Agent. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person's own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertaking in this Section shall survive termination of the Aggregate Revolving Commitments, the payment of all other Obligations and the resignation of the Administrative Agent. 10.08 Administrative Agent in its Individual Capacity. Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Loan Parties and their respective Affiliates as though Bank of America were not the Administrative Agent or the L/C Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Loan Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders" include Bank of America in its individual capacity. 10.09 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon thirty days' notice to the Lenders; provided that any such resignation by Bank of America shall also constitute its resignation as L/C Issuer and Swing Line Lender. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent, L/C Issuer and Swing Line Lender and the respective terms "Administrative Agent", "L/C Issuer" and "Swing Line Lender" shall mean such successor administrative agent, Letter of Credit issuer and swing line lender, and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated and the retiring L/C Issuer's and Swing Line Lender's rights, powers and duties as such shall be terminated, without any other or further act or deed on the part of such retiring L/C Issuer or Swing Line Lender or any other Lender, other than the obligation of the successor L/C Issuer to issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or to make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article X and Sections 11.04 and 11.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date thirty days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 10.10 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 11.04) allowed in such judicial proceeding; and (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 10.11 Collateral and Guaranty Matters. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, (a) to release any Lien on any Collateral granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Revolving Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is transferred or to be transferred as part of or in connection with any Disposition permitted hereunder or under any other Loan Document or any Involuntary Disposition, or (iii) as approved in accordance with Section 11.01; (b) to subordinate (or, if requested by the Borrower, release) any Lien on any Property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such Property that is permitted by Section 8.01(b), (i) or (p); and (c) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's authority to release or subordinate its interest in particular types or items of Property, or to release any Guarantor from its obligations under the Guaranty, pursuant to this Section 10.11. 10.12 Other Agents; Arrangers and Managers. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a "syndication agent," "documentation agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger" or "co-arranger" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. ARTICLE XI MISCELLANEOUS 11.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall: (a) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of such Lender (it being understood and agreed that a waiver of any condition precedent set forth in Section 5.02 or of any Default or Event of Default or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender); (b) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal (excluding mandatory prepayments), interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; (c) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of "Default Rate" or to waive any obligation of the Borrower to pay interest at the Default Rate; (d) change Section 2.13 or Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby; (e) change any provision of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender directly affected thereby; (f) except in connection with a Disposition permitted under Section 8.05, release all or substantially all of the Collateral without the written consent of each Lender directly affected thereby; or (g) release the Borrower or, except in connection with a merger or consolidation permitted under Section 8.04 or a Disposition permitted under Section 8.05, all or substantially all of the Guarantors, from its or their obligations under the Loan Documents without the written consent of each Lender directly affected thereby; and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender. Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (y) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders. 11.2 Notices and Other Communications: Facsimile Copies. (a) General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or (subject to subsection (c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and (ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided, however, that notices and other communications to the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant to Article II shall not be effective until actually received by such Person. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually signed originals and shall be binding on all Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually signed original thereof provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) Limited Use of Electronic Mail. Electronic mail and internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information as provided in Section 7.02, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. 11.03 No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 11.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs and costs and expenses in connection with the use of Intralinks, Inc. or other similar information transmission systems in connection with this Agreement, and (b) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, tiling, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. All amounts due under this Section 11.04 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the termination of the Aggregate Revolving Commitments and repayment of all other Obligations. 11.05 Indemnification by the Borrower. Whether or not the transactions contemplated hereby are consummated, the Borrower agrees to indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer 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), (c) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower, any Subsidiary or any other Loan Party, or any Environmental Liability related in any way to the Borrower, any Subsidiary or any other Loan Party, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements 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. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this Section 11.05 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations. 11.06 Payments Set Aside. To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. 11.07 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 each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (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 subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) 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 Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of this Section) with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 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) 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 or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of Swing Line Loans; (iii) any assignment of a Revolving Commitment must be approved by the Administrative Agent, the L/C Issuer and the Swing Line Lender unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (which fee is not payable by the Borrower). Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 subsection (d) of this Section. (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office 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 amounts of the Loans and L/C Obligations 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 or the Administrative Agent, sell participations to any Person (other than a natural person or 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 (including such Lender's participations in L/C Obligations and/or Swing Line 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 and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.0l that directly affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. (e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 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 3.01 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 11.15 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including 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. (g) As used herein, the following terms have the following meanings: "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Borrower or any of the Borrower's Affiliates or Subsidiaries. "Fund" means 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. "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. (h) Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon thirty days' notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon thirty days' notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights and obligations of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). 11.08 Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of the Loan Parties; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower; or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender's or its Affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the purposes of this Section, "Information" means all information received from any Loan Party relating to any Loan Party or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan Party; provided that, in the case of information received from a Loan Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 11.09 Set-off. In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. 11.10 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. 11.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11.12 Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 11.13 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. 11.14 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 11.15 Tax Forms. (a) (i) Each Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Internal Revenue Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Internal Revenue Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by the Borrower pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax, including any exemption pursuant to Section 881(c) of the Internal Revenue Code. Thereafter and from time to time, each such Foreign Lender shall (A) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Foreign Lender by the Borrower pursuant to this Agreement, (B) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender. (ii) Each Foreign Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Internal Revenue Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender. (iii) The Borrower shall not be required to pay any additional amount to any Foreign Lender under Section 3.01 (A) with respect to any Taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this Section 11.15(a) or (B) if such Lender shall have failed to satisfy the foregoing provisions of this Section 11.15(a); provided that if such Lender shall have satisfied the requirement of this Section 11.15(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 11.15(a) shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.01 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate. (iv) The Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan Documents with respect to which the Borrower is not required to pay additional amounts under this Section 11.15(a). (b) Upon the request of the Administrative Agent, each Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Internal Revenue Code shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Internal Revenue Code, without reduction. (c) If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnity the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Aggregate Revolving Commitments, repayment of all other Obligations hereunder and the resignation of the Administrative Agent. 11.16 Replacement of Lenders. Under any circumstances set forth herein providing that the Borrower shall have the right to replace a Lender as a party to this Agreement, the Borrower may, upon notice to such Lender and the Administrative Agent, replace such Lender by causing such Lender to assign its Commitment and outstanding Loans (with the assignment fee to be paid by the Borrower in such instance) pursuant to Section 11.07(b) to one or more other Lenders or Eligible Assignees procured by the Borrower. The Borrower shall (x) pay in full all principal, interest, fees and other amounts owing to such Lender through the date of replacement (including any amounts payable pursuant to Section 3.05), (y) provide appropriate assurances and indemnities (which may include letters of credit) to the L/C Issuer and the Swing Line Lender as each may reasonably require with respect to any continuing obligation to fund participation interests in any L/C Obligations or any Swing Line Loans then outstanding, and (z) release such Lender from its obligations under the Loan Documents. Any Lender being replaced shall execute and deliver an Assignment and Assumption with respect to such Lender's Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans. 11.17 Release of Collateral and Guarantees. The Administrative Agent hereby agrees with the Borrower that the Administrative Agent shall, upon the request of the Borrower: (a) release any Lien on any Collateral granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Revolving Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is transferred or to be transferred as part of or in connection with any Disposition permitted hereunder or under any other Loan Document or any Involuntary Disposition, or (iii) as approved in accordance with Section 11.01; (b) subordinate or release any Lien on any Property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such Property that is permitted by Section 8.01(b), (i) or (p); and (c) release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. 11.18 Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA SITTING IN CHARLOTTE, NORTH CAROLINA OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 11.19 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. [SIGNATURE PAGES FOLLOW] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. BORROWER: FTI CONSULTING, INC., a Maryland corporation By: /s/ Theodore I. Pincus ----------------------------------- Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer GUARANTORS: FTI APPLIED SCIENCES (ANNAPOLIS), LLC, a Maryland limited liability company FTI CORPORATE RECOVERY, INC., a Maryland corporation FTI LITIGATION CONSULTING, LLC, a Maryland limited liability company KAHN CONSULTING, INC., a New York corporation KLICK, KENT & ALLEN, INC., a Virginia corporation L.W.G., INC., an Illinois corporation POLICANO & MANZO, L.L.C., a New Jersey limited liability company RESTORTEK, INC., an Illinois corporation S.E.A., INC., an Ohio corporation TECHNOLOGY & FINANCIAL CONSULTING, INC., a Texas corporation TEKLICON, INC., a California corporation By: /s/ Theodore I. Pincus ----------------------------------- Name: Theodore I. Pincus Title: Treasurer of each of the Guarantors ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Michael Brashler ----------------------------------- Name: Michael Brashler Title: Agency Officer LENDERS: BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender By:___________________________________ Name: Michael J. Landini Title: Senior Vice President SUNTRUST BANK By:___________________________________ Name: Title: ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., as Administrative Agent By:______________________________ Name: Michael Brashler Title: Agency Officer LENDERS: BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender By: /s/ Michael J. Landini ------------------------------ Name: Michael J. Landini Title: Senior Vice President SUNTRUST BANK By:______________________________ Name: Title: Schedule 2.01 COMMITMENTS AND PRO RATA SHARES
- --------------------------------------------------------------------------------------------------- Revolving Tranche A Term Tranche A Term Lender Pro Rata Share Commitment Loan Commitment Loan Commitment - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Bank of America, N.A. 100.00000000% $100,000,000 $26,000,000 $74,000,000 - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- 100.00000000% $100,000,000 $26,000,000 $74,000,000 - --------------------------------------------------------------------------------------------------- Schedule 2.03 EXISTING LETTERS OF CREDIT
- ------------------------------------------------------------------------------------------------------- L/C Type L/C # Current Amount Beneficiary Issue Date Expiration Date - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Standby 3023806 $637,000.00 622 Building LLC 3/8/00 3/8/03 - ------------------------------------------------------------------------------------------------------- Standby 3039137 $245,437.50 1215 Eye St. NW Associates 8/9/01 7/30/03 - ------------------------------------------------------------------------------------------------------- Schedule 6.10 INSURANCE See attached certificates of insurance. ACORD (TM) EVIDENCE OF PROPERTY INSURANCE DATE (MM/DD/YY) 8/29/02 THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY. - -------------------------------------------------------------------------------- PRODUCER PHONE COMPANY (A/C No. Ext): 410-339-7263 ------------------------------ Riggs, Counselman, Michaels & American Motorist Ins Co Downes, Inc. 555 Fairmount Avenue Baltimore, MD 21286 - ------------------------------------------------ CODE: 1 SUB CODE: - ------------------------------------------------ AGENCY CUSTOMER ID #: 221186
- ---------------------------------------------------------------------------------------------------------------------------- INSURED LOAN NUMBER POLICY NUMBER 3MG52745404 FTI Consulting Inc. -------------------------------------------------------------------------- 909 Commerce Road EFFECTIVE DATE EXPIRATION DATE Annapolis MD 21401 5/01/02 5/01/03 [_] CONTINUED UNTIL TERMINATED IF CHECKED -------------------------------------------------------------------------- THIS REPLACES PRIOR EVIDENCE DATED: 8/29/02 - ---------------------------------------------------------------------------------------------------------------------------- PROPERTY INFORMATION LOCATION/DESCRIPTION - ---------------------------------------------------------------------------------------------------------------------------- COVERAGE INFORMATION COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE - ---------------------------------------------------------------------------------------------------------------------------- INSURING AGAINST RISKS OF DIRECT PHYSICAL LOSS OR DAMAGE EXCEPT AS MODIFIED OR EXCLUDED. BLANKET BUSINESS PERSONAL PROPERTY 16,970,000 $5000 - ---------------------------------------------------------------------------------------------------------------------------- REMARKS (including Special Conditions) BANK OF AMERICA, N.A. IS INCLUDED AS LOSS PAYEE ATIMA - ---------------------------------------------------------------------------------------------------------------------------- CANCELLATION THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ----- ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW. - ---------------------------------------------------------------------------------------------------------------------------- ADDITIONAL INTEREST MORTGAGEE ADDITIONAL INSURED NAME AND ADDRESS --- --- X LOSS PAYEE BANK OF AMERICA, N.A. AS A.A. ---------------------------------------------------------------- MAIL CODE: IL 1-231-08-30 LOAN# 231 SOUTH LASALLE STREET CHICAGO, IL 60697 ---------------------------------------------------------------- AUTHORIZED REPRESENTATIVE /s/ [ILLEGIBLE] ACORD 27 (3/93) 7.71 22:136 . 094804 ACORD CORPORATION 1993 - ---------------------------------------------------------------------------------------------------------------------------- COVERAGES - -------------------------------------------------------------------------------- THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. - --------------------------------------------------------------------------------
ACORD CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YY) -----(TM) 8/29/02 - ------------------------------------------------------------------------------------------------------------------- PRODUCER 410-339-7263 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY Riggs, Counselman, Michaels & AND CONFERS NO RIGHTS UPON THE CERTIFICATE Downes, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 555 Fairmount Avenue ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Baltimore, MD 21286 -------------------------------------------------------------- INSURERS AFFORDING COVERAGE - ------------------------------------------------------------------------------------------------------------------- INSURED INSURER A: American Manuf, Mutual Ins. Co FTI Consulting, Inc. et al -------------------------------------------------------------- 909 Commerce Road INSURER B: Lumbermens Mutual Casualty Co Annapolis MD 21401 -------------------------------------------------------------- INSURER C: -------------------------------------------------------------- INSURER D: -------------------------------------------------------------- INSURER E: - -------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ INSR POLICY EFFECTIVE POLICY EXPIRATION LTR TYPE OF INSURANCE POLICY NUMBER DATE (MM/DD/YY) DATE (MM/DD/YY) LIMITS - ------------------------------------------------------------------------------------------------------------------------------------ A GENETAL LIABILITY 3MH52745404 5/01/02 5/01/03 EACH OCCURRENCE $ 1000000 ------------------------------------- [X] COMMERCIAL GENERAL LIABILITY FIRE DAMAGE (Any one fire)$ 500000 ------------------------------------- [_][_] CLAIMS MADE [X] OCCUR MED EXP (Any one person) $ 10000 ------------------------------------- [_] ___________________________ PERSONAL & ADV INJURY $ 1000000 ------------------------------------- [_] ___________________________ GENERAL AGGREGATE $ 2000000 ------------------------------------- OCN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMP/OP AGG $ 2000000 ------------------------------------- [_] POLICY [X] PROJECT [X] LOC - ------------------------------------------------------------------------------------------------------------------------------------ B AUTOMOBILE LIABILITY F3R03399800 5/01/02 5/01/03 COMBINED SINGLE LIMIT $ 1000000 (Ea accident) ------------------------------------- [X] ANY AUTO BODILY INJURY $ [_] ALL OWNED AUTOS (Per person) ------------------------------------- [_] SCHEDULE AUTOS BODILY INJURY $ [X] HIRED AUTOS (Per accident) ------------------------------------- [X] NON-OWNED AUTOS PROPERTY DAMAGE $ [_] ___________________________ Per accident [_] - ------------------------------------------------------------------------------------------------------------------------------------ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ------------------------------------- [_] ANY AUTO OTHER THAN EA ACC $ ----------------------- [_] AUTO ONLY: AGG $ - ------------------------------------------------------------------------------------------------------------------------------------ B EXCESS LIABILITY 3SX04777304 5/01/02 5/01/03 EACH OCCURRENCE $ 20000000 ------------------------------------- [_] OCCUR [_] CLAIMS MADE AGGREGATE $ 20000000 ------------------------------------- $ ------------------------------------- [_] DEDUCTIBLE $ ------------------------------------- [X] RETENTION $ 0 $ - ------------------------------------------------------------------------------------------------------------------------------------ B WORKERS COMPENSATION AND 3BA131229-01 5/01/02 5/01/03 [X] WC STATUTORY [_] OTHER EMPLOYERS' LIABILITY LIMITS ------------------------------------- E.L. EACH ACCIDENT $ 500000 ------------------------------------- E.L. DISEASE-EA EMPLOYEE $ 500000 ------------------------------------- E.L. DISEASE-POLICY LIMIT $ 500000 - ------------------------------------------------------------------------------------------------------------------------------------ OTHER - ------------------------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS BANK OF AMERICA, N.A IS INCLUDED AS ADDITIONAL INSURED UNDER GENERAL LIABILITY, ATIMA - ------------------------------------------------------------------------------------------------------------------------------------ CERTIFICATE HOLDER [X] ADDTIONAL INSURED; INSURED LETTER: CANCELLATION - ------------------------------------------------------------------------------------------------------------------------------------ BANK OF AMERICA, N.A. AS A.A. SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED MAIL CODE: IL 1-231-08-30 BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER 231 SOUTH LASALLE STREET WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CHICAGO, IL 60697 CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OR ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. ----------------------------------------------------------- AUTHORIZED REPRESENTATIVE /s/ ILLEGIBLE - ------------------------------------------------------------------------------------------------------------------------------------ IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon, Schedule 6.13 SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------------------- Percentage of Number of options, warrants, Number of Shares Outstanding Capital rights of conversion or of Outstanding Stock owned by the purchase and all other similar Capital Stock or Borrower or any rights with respect to Subsidiary Membership Units Subsidiary outstanding Capital Stock - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- FTI Applied Sciences 1,000 100% owned by the None (Annapolis), LLC Borrower - --------------------------------------------------------------------------------------------------------------------- FTI Corporate Recovery, Inc. 1,000 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- FTI Litigation Consulting, LLC 1,000 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- FTI Merger & Acquisition 1,000 100% owned by the None Advisors, LLC Borrower - --------------------------------------------------------------------------------------------------------------------- Kahn Consulting, Inc. 2,000 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- Klick, Kent & Allen, Inc. 400 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- L.W.G., Inc. 1,000 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- Policano & Manzo, L.L.C. Not quantified 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- RestorTek, Inc. 1,000 100% owned by LWG, None Inc. - --------------------------------------------------------------------------------------------------------------------- S.E.A., Inc. 60 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- Technology & Financial 10,000 100% owned by the None Consulting, Inc. Borrower - --------------------------------------------------------------------------------------------------------------------- Teklicon, Inc. 100 100% owned by the None Borrower - --------------------------------------------------------------------------------------------------------------------- Schedule 6.17 IP RIGHTS Trademarks FTI Consulting, Inc. 1. DESIGN OF A DIAMOND WITH WAVES; Serial No. 74/256289; registered January 26, 1993 [Registration No. 1749050); declarations of continued use and incontestability accepted June 17, 1999. 2. FTI; Serial No. 76/368439; filed February 8, 2002. 3. TRIALMAX; Serial No. 76/003124; registered on March 27, 2001 (Registration No. 2438462). 4. FTI; Serial No. 73/583120; registered October 28, 1986 (Registration No. 1415368); declarations of continued use and incontestability accepted March 10, 1992. 5. FTI (STYLIZED LETTERS); Serial No. 73/583119; registered October 28, 1986 (Registration No. 1415367); declarations of continued use and incontestability accepted March 10, 1992. 6. CB TRIAL; Serial No. 74/573351; registered July 2, 1996 (Registration No. 1983429). L.W.G., Inc. 1. YOUR TRUSTED ADVISOR; Serial No. 76/339726; published on June 25,2002 (FTI/LWG Consulting). 2. LWG INCORPORATED AND DESIGN; Serial No. 74/655810; registered September 17, 1996 (Registration No. 2000833) (LWG Incorporated). 3. LWG INCORPORATED; Serial No. 74/655809; registered June 4, 1996 (Registration No. 1978051) (LWG Incorporated). RestorTek, Inc. 1. CRYOBLASTER; Serial No. 75/092100; registered July 29, 1997 (Registration No. 2083448). 2. GLOWSAN; Serial No. 75/031385; registered October 22, 1996 (Registration No. 2010239). 3. PARAZINE; Serial No. 75/031386; registered October 22, 1996 (Registration No. 2010240). 4. DYNAK; Serial No. 75/031388; registered October 8, 1996 (Registration No. 2006407). 5. VITRON; Serial No. 75/031387; registered October 8, 1996 (Registration No. 2006406). 6. AMAX; Serial No. 75/030711; registered March 11, 1997 (Registration No. 2043089). 7. LEXOR; Serial No. 75/030714; registered October 22, 1996 (Registration No. 2010230). 8. CRYOBLAST; Serial No. 74/688924; registered May 28, 1996 (Registration No. 1976600). 9. RESTORTEK; Serial No. 74/689059; registered May 28, 1996 (Registration No. 1976604). Copyrights FTI Consulting, Inc. 1. "Hinsdale Central Office Fire-Scaled Cable Fire Testing"; Registration No. PA415435; registered April 20, 1989 (Forensic Technologies International Corporation). S.E.A., Inc. 1. "Arson Analysis Newsletter"; Registration No. TX1992002; registered February 12, 1987 (SEA, Inc.). 2. "Arson Analysis Newsletter"; Registration No. TX2074769; registered May 21, 1987 (SEA, Inc.). 3. "Arson Analysis Newsletter"; Registration No. TX1718131; registered January 10, 1986 (SEA Investigations Division, Inc.). 4. "Arson Analysis Newsletter"; Registration No. TX1664834; registered October 3, 1985 (SEA Investigations Division, Inc.). 5. "Arson Analysis Newsletter"; Registration No. TX1474515; registered December 17, 1984 (SEA Investigations Division, Inc.). 6. "Arson Analysis Newsletter"; Registration No. TX1360566; registered May 25, 1984 (SEA Investigations Division, Inc.). 7. "Arson Analysis Newsletter"; Registration No. TX1428762; registered September 14, 1984 (SEA Investigations Division, Inc.). 8. "Arson Analysis Newsletter"; Registration No. TX1131644; registered June 6, 1983 (SEA Investigations Division, Inc.). 9. "Arson Analysis Newsletter"; Registration No. TX1145445; registered July 5, 1983 (SEA Investigations Division, Inc.). 10. "Arson Analysis Newsletter"; Registration No. TX1208148; registered October 17, 1983 (SEA Investigations Division, Inc.). 11. "Arson Analysis Newsletter"; Registration No. TX1114869; registered May 9, 1983 (SEA Investigations Division, Inc.). 12. "Arson Analysis Newsletter"; Registration No. TX941356; registered July 8, 1982 (SEA Investigations Division, Inc.). 13. "Arson Analysis Newsletter"; Registration No; TX983669; registered September 27, 1982 (SEA Investigations Division, Inc.). 14. "Arson Analysis Newsletter"; Registration No. TX1025579; registered December 10, 1982 (SEA Investigations Division, Inc.). 15. "Arson Analysis Newsletter"; Registration No. TX1038271; registered January 3, 1983 (SEA Investigations Division, Inc.). 16. "Arson Analysis Newsletter"; Registration No. TX832307; registered November 27, 1981 (SEA Investigations Division, Inc.). 17. "Arson Analysis Newsletter"; Registration No. TX869246; registered March 15, 1982 (SEA Investigations Division, Inc.). 18. "Arson Analysis Newsletter"; Registration No. TX723506; registered July 6, 1981 (SEA Investigations Division, Inc.). 19. "Arson Analysis Newsletter"; Registration No. TX772068; registered September 25, 1981 (SEA Investigations Division, Inc.). 20. "Arson Analysis Newsletter"; Registration No. TX788559; registered October 23, 1981 (SEA Investigations Division, Inc.). 21. "Arson Analysis Newsletter"; Registration No. TX638180; registered February 20, 1981 (SEA Investigations Division, Inc.). 22. "Arson Analysis Newsletter"; Registration No. TX678693; registered April 23, 1981 (SEA Investigations Division, Inc.). 23. "Arson Analysis Newsletter"; Registration No. TX593277; registered December 8, 1980 (SEA Investigations Division, Inc.). Teklicon, Inc. 1. "TekBriefs: A Practical Guide to Technology Issues in Current Litigation"; Registration No. TX3022750; registered March 18, 1991. 2. "TekBriefs: A Practical Guide to Technology Issues in Current Litigation"; Registration No. TX3042150; registered April 2, 1991. 3. "TekBriefs: A Practical Guide to Technology Issues in Current Litigation"; Registration No. TX2849068; registered May 17, 1990. 4. "TekBriefs: A Practical Guide to Technology Issues in Current Litigation"; Registration No. TX2884838; registered August 22, 1990. 5. "TekBriefs: A Practical Guide to Technology Issues in Current Litigation"; Registration No. TX2938151; registered October 29, 1990. Licenses 1. Agreement for the Purchase and Sale of Assets by and between PricewaterhouseCoopers LLP as Seller and FTI Consulting, Inc. as Buyer dated as of July 24,2002. 2. FTI licenses use of its TrialMax software in connection with providing its consulting services. Schedule 6.20(a) LOCATIONS OF REAL PROPERTY [to be provided - please provide full address] Schedule 6.20(b) LOCATIONS OF TANGIBLE PERSONAL PROPERTY None. Schedule 6.20(c) LEGAL NAME; STATE OF FORMATION; LOCATION OF CHIEF EXECUTIVE OFFICE - ------------------------------------------------------------------------------------------------------ Legal Name State of Formation Chief Executive Office - ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------ FTI Consulting, Inc. Maryland 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 - ------------------------------------------------------------------------------------------------------ FTI Applied Sciences (Annapolis), LLC Maryland 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 - ------------------------------------------------------------------------------------------------------ FTI Corporate Recovery, Inc. Maryland 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 - ------------------------------------------------------------------------------------------------------ FTI Litigation Consulting, LLC Maryland 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 - ------------------------------------------------------------------------------------------------------ FTI Merger & Acquisition Advisors, LLC Maryland 900 Bestgate Road, Suite 100 Annapolis, Maryland 21401 - ------------------------------------------------------------------------------------------------------ Kahn Consulting, Inc. New York 622 Third Avenue 31/st/ Floor New York, New York - ------------------------------------------------------------------------------------------------------ Klick, Kent & Allen, Inc. Virginia 1201 Eye Street, N.W., Suite 400 Washington, DC 20005 - ------------------------------------------------------------------------------------------------------ L.W.G., Inc. Illinois 3455 Commercial Avenue Northbrook, Illinois - ------------------------------------------------------------------------------------------------------ Policano & Manzo, L.L.C. New Jersey Park 80 West, Plaza 2 Saddle Brook, New Jersey 07663 - ------------------------------------------------------------------------------------------------------ RestorTek, Inc. Illinois 3455 Commercial Avenue Northbrook, Illinois - ------------------------------------------------------------------------------------------------------ S.E.A., Inc. Ohio 7349 Worthington-Galena Road Columbus, Ohio 43085 - ------------------------------------------------------------------------------------------------------ Technology & Financial Consulting, Inc. Texas 10000 Memorial Drive, Suite 510 Houston, Texas 77024 - ------------------------------------------------------------------------------------------------------ Teklicon, Inc. California South Bay Office Tower 3031 Tisch Way, Suite 1010 San Jose, California 95128 - ------------------------------------------------------------------------------------------------------ Schedule 8.01 LIENS EXISTING ON THE CLOSING DATE Liens securing the Capital Leases identified on Schedule 8.03 covering the property subject to such Capital Leases Schedule 8.02 INVESTMENTS EXISTING ON THE CLOSING DATE None. Schedule 8.03 INDEBTEDNESS EXISTING ON THE CLOSING DATE Capital Leases with an aggregate principal amount of $962,000. Schedule 11.02 CERTAIN NOTICE ADDRESSES 1. Loan Parties: FTI Consulting, Inc. 2021 Research Drive Annapolis, Maryland 21401 Attention: Theodore I. Pincus, Chief Financial Officer and Executive Vice President Telephone: 410-224-1476 Facsimile: 410-224-2809 Electronic Mail: ted.pincus@fticonsulting.com Website Address: www.fticonsulting.com/ 2. Administrative Agent: For payments and Requests for Credit Extensions: Bank of America, N.A. 101 N. Tryon St. Charlotte, NC 28255-0001 Mail Code: NC1-001-15-04 Attention: Cynthia Grembecki, Credit Services Officer Telephone: 704-387-1184 Facsimile: 704-409-0034 Electronic Mail: cynthia.grembecki@bankofamerica.com Account No.: 136-621-225-0600 ABA#: 053-000-196 Attn: Corporate Credit Services Reference: FTI Consulting For all other Notices: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Mail Code: IL1-231-08-30 Agency Management Attention: Michael Brashler, Agency Officer Telephone: 312-828-3706 Facsimile: 877-206-8414 Electronic Mail: michael.brashler@bankofamerica.com 3. L/C Issuer: Bank of America, N.A. Trade Operations - Los Angeles 333 S. Beaudry Avenue, 23/rd/ Floor Mail Code: CA9-703-19-23 Los Angeles, CA 90017-1466 Attention: Teela Yung, Trade Financial Service Specialist Telephone: 213-345-0145 Facsimile: 213-345-6710 Electronic Mail: teela.p.yung@bankofamerica.com 4. Swing Line Lender: Bank of America, N.A. 101 N. Tryon St. Charlotte, NC 28255-0001 Mail Code: NC1-001-15-04 Attention: Cynthia Grembecki, Credit Services Officer Telephone: 704-387-1184 Facsimile: 704-409-0034 Electronic Mail: cynthia.grembecki@bankofamerica.com Exhibit A FORM OF LOAN NOTICE Date: ________, 200_ To: Bank of America, N.A., as Administrative Agent Re: Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among FTI Consulting, Inc., a Maryland corporation (the "Borrower"), the Guarantors identified therein, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. Ladies and Gentlemen: The undersigned hereby requests (select one): [_] A Borrowing of Revolving Loans [_] A conversion or continuation of Revolving Loans or Term Loans 1. On __________, 200_ (which is a Business Day). 2. In the amount of $________. 3. Comprised of _________ (Type of Committed Loan requested). 4. For Eurodollar Rate Loans: with an Interest Period of _________ months. With respect to any Borrowing or any conversion or continuation requested herein, the Borrower hereby represents and warrants that (i) in the case of a Borrowing of Revolving Loans, such request complies with the requirements of the proviso to the first sentence of Section 2.01 of the Credit Agreement and (ii) in the case of a Borrowing or any conversion or continuation, each of the conditions set forth in Section 5.02 of the Credit Agreement have been satisfied on and as of the date of such Borrowing or such conversion or continuation. FTI CONSULTING, INC., a Maryland corporation By:__________________________ Name: Title: Exhibit B FORM OF SWING LINE LOAN NOTICE Date: ___________, 200_ To: Bank of America, N.A., as Swing Line Lender Cc: Bank of America, N.A., as Administrative Agent Re: Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among FTI Consulting, Inc., a Maryland corporation (the "Borrower"), the Guarantors identified therein, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. Ladies and Gentlemen: The undersigned hereby requests a Swing Line Loan: 1. On ___________, 200_ (a Business Day). 2. In the amount of $__________. With respect to such Borrowing of Swing Line Loan, the Borrower hereby represents and warrants that (i) such request complies with the requirements of the proviso to the first sentence of Section 2.04(a) of the Credit Agreement and (ii) each of the conditions set forth in Section 5.02 of the Credit Agreement have been satisfied on and as of the date of such Borrowing of Swing Line Loans. FTI CONSULTING, INC., a Maryland corporation By: _____________________ Name: Title: Exhibit C-1 FORM OF REVOLVING NOTE August 30, 2002 FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to ____________ or registered assigns (the "Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Revolving Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement. This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Revolving Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Revolving Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Note. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. FTI CONSULTING, INC., a Maryland corporation By:_________________________ Name: Title: Exhibit C-2 FORM OF SWING LINE NOTE August 30, 2002 FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to BANK OF AMERICA, N.A. or registered assigns (the "Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Swing Line Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each Swing Line Loan from the date of such Swing Line Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement. This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Swing Line Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Swing Line Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Note. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. FTI CONSULTING, INC., a Maryland corporation By:__________________________ Name: Title: Exhibit C-3 FORM OF TRANCHE A TERM NOTE August 30, 2002 FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to BANK OF AMERICA, N.A. or registered assigns (the "Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Tranche A Term Note from time to time made by the Lender to the Borrower under that certain Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each Tranche A Term Loan from the date of such Tranche A Term Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement. This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Tranche A Term Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Tranche A Term Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Note. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. FTI CONSULTING, INC., a Maryland corporation By:_________________________ Name: Title: Exhibit C-4 FORM OF TRANCHE B TERM NOTE August 30, 2002 FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to BANK OF AMERICA, N.A. or registered assigns (the "Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Tranche B Term Note from time to time made by the Lender to the Borrower under that certain Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each Tranche B Term Loan from the date of such Tranche B Term Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement. This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Tranche B Term Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Tranche B Term Loans and payments with respect thereto. The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Note. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. FTI CONSULTING, INC., a Maryland corporation By:__________________________ Name: Title: Exhibit D FORM OF COMPLIANCE CERTIFICATE Financial Statement Date: ______________,200_ To: Bank of America, N.A., as Administrative Agent Re: Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August ___, 2002 among FTI Consulting, Inc., a Maryland corporation (the "Borrower"), the Guarantors identified therein, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. Ladies and Gentlemen: The undersigned Responsible Officer hereby certifies as of the date hereof that [he/she] is the _____________ of the Borrower, and that, in [his/her] capacity as such, [he/she] is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that: [Use following paragraph 1 for fiscal year-end financial statements:] [l. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 7.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.] [Use following paragraph 1 for fiscal quarter-end financial statements:] [l. Attached hereto as Schedule 1 are the unaudited financial statements required by Section 7.01(b) of the Credit Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.] 2. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements. 3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and [select one:] [to the best knowledge of the undersigned during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it.] [or:] [the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:] 4. The representations and warranties of the Loan Parties contained in the Credit Agreement, any other Loan Document or any other certificate or document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 6.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01 of the Credit Agreement, including the statements in connection with which this Compliance Certificate is delivered. 5. The financial covenant analyses and information set forth on Schedule 2 hereto are true and accurate on and as of the date of this Certificate. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of __________, 200__. FTI CONSULTING, INC., a Maryland corporation By: ________________________ Name: Title: Exhibit E FORM OF ASSIGNMENT AND ASSUMPTION This Assignment and Assumption (this "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the "Assignee"). Capitalized terms used but not defined herein have the meanings provided in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including, without limitation, Letters of Credit, Guarantees and Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 1. Assignor: _________________________________ 2. Assignee: _________________________________ [and is an Affiliate/Approved Fund of [identify Lender]] 3. Borrower: FTI Consulting, Inc., a Maryland corporation 4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement 5. Credit Agreement: The Credit Agreement dated as of August 30, 2002 by and among the Borrower, the Guarantors, the Lenders parties thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender 6. Assigned Interest: 7. Trade Date: ___________________/4/ 8. Effective Date: ___________________/5/ The terms set forth in this Assignment and Assumption are hereby agreed to: ASSIGNOR: [NAME OF ASSIGNOR] By:_____________________________ Name: Title: ASSIGNEE: [NAME OF ASSIGNEE] By:_____________________________ Name: Title: [Consented to and]/6/ Accepted: BANK OF AMERICA, N.A., as Administrative Agent By:_____________________________ Name: Title: [Consented to:]/7/ FTI CONSULTING, INC. ________________________ /1/ Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. "Revolving Credit Commitment," "Tranche A Term Loan Commitment" and "Tranche B Term Loan Commitment") /2/ Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. /3/ Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. /4/ To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. /5/ To be inserted by Administrative Agent and shall be the effective date of recordation of transfer in the register therefor. /6/ To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. /7/ To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
- -------------------------------------------------------------------------------------------------------------- Aggregate Amount of Amount of Commitment/Loans Commitment/Loans Percentage Assigned of Facility Assigned/1/ for all Lenders Assigned/2/ Commitment/Loans/3/ - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- By:_____________________________ Name: Title: [Consented to:]/8/ BANK OF AMERICA, N.A., as L/C Issuer and Swing Line Lender By:_____________________________ Name: Title: _________________________ /8/ To be added only if the consent of the Swing Line Lender and L/C Issuer is required by the terms of the Credit Agreement. Annex 1 to Assignment and Assumption STANDARD TERMS AND CONDITIONS 1. Representations and Warranties. 1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document. 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. 3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of North Carolina. Exhibit F FORM OF JOINDER AGREEMENT THIS JOINDER AGREEMENT (the "Agreement") dated as of __________, 200__ is by and between _________, a ____________ (the "New Subsidiary"), and Bank of America, N.A., in its capacity as Administrative Agent under that certain Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of August 30, 2002 among FTI Consulting, Inc., a Maryland corporation (the "Borrower"), the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Loan Parties are required by Section 7.12 of the Credit Agreement to cause the New Subsidiary to become a "Guarantor" thereunder. Accordingly, the New Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders: 1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent, as provided in Article IV of the Credit Agreement, the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof. 2. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Security Agreement, and shall have all the obligations of a "Grantor" (as defined in the Security Agreement) thereunder as if it had executed the Security Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Security Agreement. Without limiting generality of the foregoing terms of this paragraph 2, the New Subsidiary hereby grants to the Administrative Agent, for the benefit of the Lenders, a continuing security interest in, and a right of set off against, any and all right, title and interest of the New Subsidiary in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary to secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations (as defined in the Security Agreement). 3. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Pledge Agreement, and shall have all the obligations of a "Pledgor" (as defined in the Pledge Agreement) thereunder as if it had executed the Pledge Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Pledge Agreement. Without limiting generality of the foregoing terms of this paragraph 3, the New Subsidiary hereby grants, pledges and assigns to the Administrative Agent, for the benefit of the Lenders, a continuing security interest in, and a right of set off against, any and all right, title and interest of the New Subsidiary in and to the Capital Stock identified on Schedule 5 hereto and all other Pledge Collateral (as defined in the Pledge Agreement) of the New Subsidiary to secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations (as defined in the Pledge Agreement). 4. The Subsidiary hereby represents and warrants to the Agent that: (a) The New Subsidiary's exact legal name and state of formation are as set forth on Schedule 1 hereto. (b) The New Subsidiary's chief executive office is located at the location set forth on Schedule 2 hereto. (c) Other than as set forth on Schedule 3 hereto, the New Subsidiary has not changed its legal name, changed its state of formation, been party to a merger, consolidation or other change in structure or used any tradename in the prior five years. (d) Schedule 4 hereto includes all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses owned by the New Subsidiary in its own name, or to which the New Subsidiary is a party, as of the date hereof. None of the Copyrights, Patents and Trademarks of the New Subsidiary set forth in Schedule 4 hereto is the subject of any licensing or franchise agreement, except as set forth on Schedule 4 hereto. (e) Schedule 5 hereto includes all Commercial Tort Claims before any Governmental Authority by or in favor of the New Subsidiary. (f) Schedule 6 hereto lists all real property located in the United States that is owned or leased by the New Subsidiary as of the date hereof. (g) Schedule 7 hereto lists all locations in the United States of tangible personal property that is owned or leased by the New Subsidiary as of the date hereof. 5. The address of the New Subsidiary for purposes of all notices and other communications is the address designated for all Loan Parties on Schedule 11.02 to the Credit Agreement or such other address as the New Subsidiary may from time to time notify the Administrative Agent in writing. 6. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary under Section 4 of the Credit Agreement upon the execution of this Agreement by the New Subsidiary. 7. This Agreement may be executed in multiple counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract. 8. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written. [NEW SUBSIDIARY] By:_____________________________ Name: Title: Acknowledged and accepted: BANK OF AMERICA, N.A., as Administrative Agent By: ______________________________ Name: Title: Schedule 1 Legal Name and State of Formation Schedule 2 Location of Chief Executive Office Schedule 3 Mergers, Consolidations and other Changes in Structure; Tradenames Schedule 4 IP Rights Schedule 5 Commercial Tort Claims Schedule 6 Real Property Locations Schedule 7 Tangible Personal Property Locations
Exhibit 10.2 PLEDGE AGREEMENT THIS PLEDGE AGREEMENT (this "Pledge Agreement") dated as of August 30, 2002 is by and among the parties identified as "Pledgors" on the signature pages hereto and such other parties as may become Pledgors hereunder after the date hereof (individually a "Pledgor", and collectively the "Pledgors") and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the holders of the Secured Obligations referenced below. W I T N E S S E T H WHEREAS, a $200 million credit facility has been established in favor of FTI Consulting, Inc., a Maryland corporation (the "Borrower"), pursuant to the terms of that Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent; and WHEREAS, this Pledge Agreement is required under the terms of the Credit Agreement. NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. (a) Capitalized terms used and not otherwise defined herein shall have the meanings provided in the Credit Agreement. (b) As used herein, the following terms shall have the meanings assigned thereto in the Uniform Commercial Code in effect in the State of North Carolina on the date hereof: Accession, Financial Asset, Proceeds and Security. (c) As used herein, the following terms shall have the meanings set forth below: "Event of Default" has the meaning provided in Section 8 hereof. "Pledged Collateral" has the meaning provided in Section 2 hereof. "Pledged Shares" has the meaning provided in Section 2 hereof. "Secured Obligations" means, without duplication, (a) all of the obligations of the Loan Parties to the Lenders (including the L/C Issuer and the Swing Line Lender) and the Administrative Agent under the Credit Agreement or any other Loan Document (including, but not limited to, any interest accruing after the commencement by or against any Loan Party of a proceeding under any Debtor Relief Laws, regardless of whether such interest is an allowed claim under such proceeding), whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, howsoever evidenced, created, held or acquired, whether primary, secondary, direct, contingent, or joint and several, as such obligations may be amended, modified, increased, extended, renewed or replaced from time to time, (b) all of the obligations owing by the Loan Parties under any Swap Contract with any Lender or any Affiliate of a Lender, whether now existing or hereafter arising, and (c) all costs and expenses incurred in connection with enforcement and collection of the foregoing obligations, including reasonable attorneys' fees and the allocated cost of internal counsel. "UCC" means the Uniform Commercial Code. 2. Pledge and Grant of Security Interest. To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Pledgor hereby grants, pledges and assigns to the Administrative Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right to set-off against, any and all right, title and interest of such Pledgor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the "Pledged Collateral"): (a) Pledged Shares. (i) One hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such Pledgor of each Domestic Subsidiary set forth on Schedule 2(a) attached hereto and (ii) sixty-five percent (65%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding shares of Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Voting Equity") and one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such Pledgor of each Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such Capital Stock, and all options and other rights, contractual or otherwise, with respect thereto (collectively, together with the Capital Stock described in Section 2(b) and 2(c) below, the "Pledged Shares"), including, but not limited to, the following: (A) all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Shares, or representing a distribution or return of capital upon or in respect of the Pledged Shares, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Shares; and (B) without affecting the obligations of the Pledgors under any provision prohibiting such action hereunder or under the Credit Agreement, in the event of any consolidation or merger involving the issuer of any Pledged Shares and in which such issuer is not the surviving entity, all Capital Stock of the successor entity formed by or resulting from such consolidation or merger. (b) Additional Shares. (i) One hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the issued and outstanding Capital Stock owned by such Pledgor of any Person that hereafter becomes a Domestic Subsidiary and (ii) sixty-five percent (65%) (or, if less, the full amount owned by such Pledgor) of the Voting Equity and one hundred percent (100%) (or, if less, the full amount owned by such Pledgor) of the Non-Voting Equity owned by such Pledgor of any Person that hereafter becomes a Foreign Subsidiary, including, without limitation, the certificates (or other agreements or instruments) representing such Capital Stock. (c) Accessions and Proceeds. All Accessions and all Proceeds of any and all of the foregoing. Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that a Pledgor may from time to time hereafter deliver additional Capital Stock to the Administrative Agent as collateral security for the Secured Obligations. Upon delivery to the Administrative Agent, such additional Capital Stock shall be deemed to be part of the Pledged Collateral of such Pledgor and 2 shall be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such additional Capital Stock. 3. Security for Secured Obligations. The security interest created hereby in the Pledged Collateral of each Pledgor constitutes continuing collateral security for all of the Secured Obligations. 4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that: (a) Each Pledgor shall deliver to the Administrative Agent (i) simultaneously with or prior to the execution and delivery of this Pledge Agreement, all certificates representing the Pledged Shares of such Pledgor and (ii) promptly upon the receipt thereof by or on behalf of a Pledgor, all other certificates and instruments constituting Pledged Collateral of a Pledgor. Prior to delivery to the Administrative Agent, all such certificates and instruments constituting Pledged Collateral of a Pledgor shall be held in trust by such Pledgor for the benefit of the Administrative Agent pursuant hereto. All such certificates shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided in Schedule 4(a) attached hereto. (b) Additional Securities. If such Pledgor shall receive by virtue of its being or having been the owner of any Pledged Collateral, any (i) certificate, including without limitation, any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares or other equity interests, stock splits, spin-off or split-off, promissory notes or other instruments; (ii) option or right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends payable in securities; or (iv) distributions of securities in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then such Pledgor shall receive such certificate, instrument, option, right or distribution in trust for the benefit of the Administrative Agent, shall segregate it from such Pledgor's other property and shall deliver it forthwith to the Administrative Agent in the exact form received together with any necessary endorsement and/or appropriate stock power duly executed in blank, substantially in the form provided in Schedule 4(a), to be held by the Administrative Agent as Pledged Collateral and as further collateral security for the Secured Obligations. (c) Financing Statements. Each Pledgor authorizes the Administrative Agent to file one or more financing statements (with collateral descriptions broader and/or less specific than the description of the Collateral contained herein) disclosing the Administrative Agent's security interest in the Pledged Collateral. Each Pledgor agrees to execute and deliver to the Administrative Agent such financing statements and other filings as may be reasonably requested by the Administrative Agent in order to perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor. 5. Representations and Warranties. Each Pledgor hereby represents and warrants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated: (a) Authorization of Pledged Shares. The Pledged Shares are duly authorized and validly issued, are fully paid and nonassessable and are not subject to the preemptive rights of any Person. 3 (b) Title. Each Pledgor has good and indefeasible title to the Pledged Collateral of such Pledgor and is the legal and beneficial owner of such Pledged Collateral free and clear of any Lien, other than Permitted Liens. There exists no "adverse claim" within the meaning of Section 8-102 of the UCC with respect to the Pledged Shares of such Pledgor. (c) Exercising of Rights. The exercise by the Administrative Agent of its rights and remedies hereunder will not violate any law or governmental regulation or any material contractual restriction binding on or affecting a Pledgor or any of its property. (d) Pledgor's Authority. No authorization, approval or action by, and no notice or filing with any Governmental Authority or with the issuer of any Pledged Stock is required either (i) for the pledge made by a Pledgor or for the granting of the security interest by a Pledgor pursuant to this Pledge Agreement (except as have been already obtained) or (ii) for the exercise by the Administrative Agent or the holders of the Secured Obligations of their rights and remedies hereunder (except as may be required by laws affecting the offering and sale of securities). (e) Security Interest/Priority. This Pledge Agreement creates a valid security interest in favor of the Administrative Agent for the benefit of the holders of the Secured Obligations, in the Pledged Collateral. The taking of possession by the Administrative Agent of the certificates representing the Pledged Shares and all other certificates and instruments constituting Pledged Collateral will perfect and establish the first priority of the Administrative Agent's security interest in the Pledged Shares and, when properly perfected by filing or registration, in all other Pledged Collateral represented by such Pledged Shares and instruments securing the Secured Obligations. Except as set forth in this Section 5(e), no action is necessary to perfect or otherwise protect such security interest. (f) Partnership and Membership Interests. Except as previously disclosed to the Administrative Agent, none of the Pledged Shares consisting of partnership or limited liability company interests (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset. 6. Covenants. Each Pledgor hereby covenants, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated, such Pledgor shall: (a) Books and Records. Mark its books and records (and shall cause the issuer of the Pledged Shares of such Pledgor to mark its books and records) to reflect the security interest granted to the Administrative Agent, for the benefit of the holders of the Secured Obligations, pursuant to this Pledge Agreement. (b) Defense of Title. Warrant and defend title to and ownership of the Pledged Collateral of such Pledgor at its own expense against the claims and demands of all other parties claiming an interest therein, keep the Pledged Collateral free from all Liens, except for Permitted Liens, and not sell, exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of such Pledgor or any interest therein, except as permitted under the Credit Agreement and the other Loan Documents. (c) Further Assurances. Promptly execute and deliver at its expense all further instruments and documents and take all further action that may be necessary and desirable or that 4 the Administrative Agent may reasonably request in order to (i) perfect and protect the security interest created hereby in the Pledged Collateral of such Pledgor (including, without limitation, any and all action necessary to satisfy the Administrative Agent that the Administrative Agent has obtained a first priority perfected security interest in all Pledged Collateral); (ii) enable the Administrative Agent to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral of such Pledgor; and (iii) otherwise effect the purposes of this Pledge Agreement, including, without limitation and if requested by the Administrative Agent, delivering to the Administrative Agent irrevocable proxies in respect of the Pledged Collateral of such Pledgor. (d) Amendments. Not make or consent to any amendment or other modification or waiver with respect to any of the Pledged Collateral of such Pledgor or enter into any agreement or allow to exist any restriction with respect to any of the Pledged Collateral of such Pledgor other than pursuant hereto or as may be permitted under the Credit Agreement. (e) Compliance with Securities Laws. File all reports and other information now or hereafter required to be filed by such Pledgor with the United States Securities and Exchange Commission and any other state, federal or foreign agency in connection with the ownership of the Pledged Collateral of such Pledgor. (f) Issuance or Acquisition of Capital Stock. Not, without executing and delivering, or causing to be executed and delivered, to the Administrative Agent such agreements, documents and instruments as the Administrative Agent may require, issue or acquire any Capital Stock consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset. 7. Advances by Holders of the Secured Obligations. On failure of any Pledgor to perform any of the covenants and agreements contained herein, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures that the Administrative Agent or the holders of the Secured Obligations may make for the protection of the security hereof or may be compelled to make by operation of law. All such sums and amounts so expended shall be repayable by the Pledgors on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall bear interest from the date said amounts are expended at the default rate specified in Section 2.08 of the Credit Agreement for Base Rate Revolving Loans. No such performance of any covenant or agreement by the Administrative Agent or the holders of the Secured Obligations on behalf of any Pledgor, and no such advance or expenditure therefor, shall relieve the Pledgors of any default under the terms of this Pledge Agreement, the other Loan Documents or any other documents relating to the Secured Obligations. The holders of the Secured Obligations may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Pledgor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP. 8. Events of Default. The occurrence of an event that would constitute an Event of Default under the Credit Agreement shall be an Event of Default hereunder (an "Event of Default"). 5 9. Remedies. (a) General Remedies. Upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent and the holders of the Secured Obligations shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documents relating to the Secured Obligations, or by law (including, without limitation, levy of attachment and garnishment), the rights and remedies of a secured party under the UCC of the jurisdiction applicable to the affected Pledged Collateral. (b) Sale of Pledged Collateral. Upon the occurrence of an Event of Default and during the continuation thereof, without limiting the generality of this Section 9 and without notice, the Administrative Agent may, in its sole discretion, sell or otherwise dispose of or realize upon the Pledged Collateral, or any part thereof, in one or more parcels, at public or private sale, at any exchange or broker's board or elsewhere, at such price or prices and on such other terms as the Administrative Agent may deem commercially reasonable, for cash, credit or for future delivery or otherwise in accordance with applicable law. To the extent permitted by law, any holder of the Secured Obligations may in such event, bid for the purchase of such securities. Each Pledgor agrees that, to the extent notice of sale shall be required by law and has not been waived by such Pledgor, any requirement of reasonable notice shall be met if notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to such Pledgor, in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten days before the time of such sale. The Administrative Agent shall not be obligated to make any sale of Pledged Collateral of such Pledgor regardless of notice of sale having been given. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (c) Private Sale. Upon the occurrence of an Event of Default and during the continuation thereof, the Pledgors recognize that the Administrative Agent may deem it impracticable to effect a public sale of all or any part of the Pledged Shares or any of the securities constituting Pledged Collateral and that the Administrative Agent may, therefore, determine to make one or more private sales of any such Pledged Collateral to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the prices and other terms that might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and that the Administrative Agent shall have no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit the issuer of such Pledged Collateral to register such Pledged Collateral for public sale under the Securities Act. Each Pledgor further acknowledges and agrees that any offer to sell such Pledged Collateral that has been (i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act), or (ii) made privately in the manner described above shall be deemed to involve a "public sale" under the UCC, notwithstanding that such sale may not constitute a "public offering" under the Securities Act, and the Administrative Agent may, in such event, bid for the purchase of such Pledged Collateral. (d) Retention of Pledged Collateral. To the extent permitted under applicable law, in addition to the rights and remedies hereunder, upon the occurrence of an Event of Default, the Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable law of the relevant jurisdiction, accept or retain all or any portion of the Pledged Collateral in satisfaction of the Secured Obligations. Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall 6 not be deemed to have accepted or retained any Pledged Collateral in satisfaction of any Secured Obligations for any reason. (e) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the holders of the Secured Obligations are legally entitled, the Pledgors shall be jointly and severally liable for the deficiency, together with interest thereon at the default rate specified in Section 2.08 of the Credit Agreement for Base Rate Revolving Loans, together with the costs of collection and reasonable attorneys' fees (including the allocated cost of internal counsel). Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Pledgors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto. 10. Rights of the Administrative Agent. (a) Power of Attorney. In addition to other powers of attorney contained herein, each Pledgor hereby designates and appoints the Administrative Agent, on behalf of the holders of the Secured Obligations, and each of its designees or agents, as attorney-in-fact of such Pledgor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default: (i) to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Pledged Collateral, all as the Administrative Agent may reasonably deem appropriate; (ii) to commence and prosecute any actions at any court for the purposes of collecting any of the Pledged Collateral and enforcing any other right in respect thereof; (iii) to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Administrative Agent may reasonably deem appropriate; (iv) to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Pledged Collateral; (v) to direct any parties liable for any payment in connection with any of the Pledged Collateral to make payment of any and all monies due and to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (vi) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Pledged Collateral; (vii) to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Pledged Collateral; (viii) to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Pledge Agreement and in order to fully consummate all of the transactions contemplated therein; (ix) to exchange any of the Pledged Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Collateral with any committee, depository, 7 transfer agent, registrar or other designated agency upon such terms as the Administrative Agent may reasonably deem appropriate; (x) to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Collateral into the name of the Administrative Agent or one or more of the holders of the Secured Obligations or into the name of any transferee to whom the Pledged Collateral or any part thereof may be sold pursuant to Section 9 hereof; and (xi) to do and perform all such other acts and things as the Administrative Agent may reasonably deem appropriate or convenient in connection with the Pledged Collateral. This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of the Secured Obligations shall remain outstanding and until all of the commitments relating thereto shall have been terminated. The Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Pledge Agreement, and shall not be liable for any failure to do so or any delay in doing so. The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Pledged Collateral. (b) Performance by the Administrative Agent of Obligations. If any Pledgor fails to perform any agreement or obligation contained herein, the Administrative Agent itself may perform, or cause performance of, such agreement or obligation, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by the Pledgors on a joint and several basis pursuant to Section 25 hereof. (c) Assignment by the Administrative Agent. The Administrative Agent may from time to time assign the Secured Obligations and any portion thereof and/or the Pledged Collateral and any portion thereof, and the assignee shall be entitled to all of the rights and remedies of the Administrative Agent under this Pledge Agreement in relation thereto. (d) The Administrative Agent's Duty of Care. Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while being held by the Administrative Agent hereunder, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Pledgors shall be responsible for preservation of all rights in the Pledged Collateral, and the Administrative Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to the Pledgors. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Administrative Agent has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any of the Pledged Collateral. (e) Voting Rights in Respect of the Pledged Collateral. 8 (i) So long as no Event of Default shall have occurred and be continuing, to the extent permitted by law, each Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral of such Pledgor or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement or the Credit Agreement; and (ii) Upon the occurrence and during the continuance of an Event of Default, all rights of a Pledgor to exercise the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon become vested in the Administrative Agent, which shall then have the sole right to exercise such voting and other consensual rights. (f) Dividend Rights in Respect of the Pledged Collateral. (i) So long as no Event of Default shall have occurred and be continuing and subject to Section 4(b) hereof, each Pledgor may receive and retain any and all dividends (other than stock dividends and other dividends constituting Pledged Collateral addressed hereinabove) or interest paid in respect of the Pledged Collateral to the extent they are allowed under the Credit Agreement. (ii) Upon the occurrence and during the continuance of an Event of Default: (A) all rights of a Pledgor to receive the dividends and interest payments that it would otherwise be authorized to receive and retain pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon be vested in the Administrative Agent, which shall then have the sole right to receive and hold as Pledged Collateral such dividends and interest payments; and (B) all dividends and interest payments that are received by a Pledgor contrary to the provisions of paragraph (A) of this subsection shall be received in trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of such Pledgor, and shall be forthwith paid over to the Administrative Agent as Pledged Collateral in the exact form received, to be held by the Administrative Agent as Pledged Collateral and as further collateral security for the Secured Obligations. (g) Release of Pledged Collateral. The Administrative Agent may release any of the Pledged Collateral from this Pledge Agreement or may substitute any of the Pledged Collateral for other Pledged Collateral without altering, varying or diminishing in any way the force, effect, lien, pledge or security interest of this Pledge Agreement as to any Pledged Collateral not expressly released or substituted, and this Pledge Agreement shall continue as a first priority lien on all Pledged Collateral not expressly released or substituted. 11. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders. 12. Application of Proceeds. Upon the occurrence and during the continuation of an Event of Default, any payments in respect of the Secured Obligations and any proceeds of the Pledged Collateral, when received by the Administrative Agent or any of the holders of the Secured Obligations in cash or its equivalent, will be applied in reduction of the Secured Obligations in the order set forth in the Credit Agreement or other document relating to the Secured Obligations, and each Pledgor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Administrative Agent shall have the continuing and exclusive right to apply and 9 reapply any and all such payments and proceeds in the Administrative Agent's sole discretion, notwithstanding any entry to the contrary upon any of its books and records. 13. Continuing Agreement. (a) This Pledge Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated (other than any obligations with respect to the indemnities and the representations and warranties set forth in the Loan Documents). Upon such payment and termination, this Pledge Agreement shall be automatically terminated and the Administrative Agent and the holders of the Secured Obligations shall, upon the request and at the expense of the Pledgors, forthwith release all of its liens and security interests hereunder and shall execute and deliver all UCC termination statements and/or other documents reasonably requested by the Pledgors evidencing such termination. Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survive termination of this Pledge Agreement. (b) This Pledge Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any holder of the Secured Obligations as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar law, all as though such payment had not been made; provided that in the event payment of all or any part of the Secured Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including, without limitation, attorneys' fees, the allocated cost of internal counsel and disbursements) incurred by the Administrative Agent or any holder of the Secured Obligations in defending and enforcing such reinstatement shall be deemed to be included as a part of the Secured Obligations. 14. Amendments and Waivers. This Pledge Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement. 15. Successors in Interest. This Pledge Agreement shall create a continuing security interest in the Collateral and shall be binding upon each Pledgor, its successors and assigns, and shall inure, together with the rights and remedies of the Administrative Agent and the holders of the Secured Obligations hereunder, to the benefit of the Administrative Agent and the holders of the Secured Obligations and their successors and permitted assigns; provided, however, that none of the Pledgors may assign its rights or delegate its duties hereunder without the prior written consent of the requisite Lenders under the Credit Agreement. To the fullest extent permitted by law, each Pledgor hereby releases the Administrative Agent and each holder of the Secured Obligations, and their respective successors and assigns, from any liability for any act or omission relating to this Pledge Agreement or the Collateral, except for any liability arising from the gross negligence or willful misconduct of the Administrative Agent or such holder, or their respective officers, employees or agents. 16. Notices. All notices required or permitted to be given under this Pledge Agreement shall be given as provided in Section 11.02 of the Credit Agreement. 17. Counterparts. This Pledge Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Pledge Agreement to produce or account for more than one such counterpart. 10 18. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Pledge Agreement. 19. Governing Law; Submission to Jurisdiction; Venue. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA SITTING IN CHARLOTTE, NORTH CAROLINA OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS PLEDGE AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 20. Waiver of Right to Trial by Jury. EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 21. Severability. If any provision of this Pledge Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 22. Entirety. This Pledge Agreement, the other Loan Documents and the other documents relating to the Secured Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment 11 letters or correspondence relating to the Loan Documents, any other documents relating to the Secured Obligations, or the transactions contemplated herein and therein. 23. Survival. All representations and warranties of the Pledgors hereunder shall survive the execution and delivery of this Pledge Agreement, the other Loan Documents and the other documents relating to the Secured Obligations, the delivery of the Notes and the extension of credit thereunder or in connection therewith. 24. Other Security. To the extent that any of the Secured Obligations are now or hereafter secured by property other than the Pledged Collateral (including, without limitation, real and other personal property owned by a Pledgor), or by a guarantee, endorsement or property of any other Person, then the Administrative Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence of any Event of Default, and the Administrative Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Administrative Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Secured Obligations or any of the rights of the Administrative Agent or the holders of the Secured Obligations under this Pledge Agreement, under any of the other Loan Documents or under any other document relating to the Secured Obligations. 25. Joint and Several Obligations of Pledgors. (a) Each of the Pledgors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the holders of the Secured Obligations, for the mutual benefit, directly and indirectly, of each of the Pledgors and in consideration of the undertakings of each of the Pledgors to accept joint and several liability for the obligations of each of them. (b) Each of the Pledgors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Pledgors with respect to the payment and performance of all of the Secured Obligations arising under this Pledge Agreement, the other Loan Documents and any other documents relating to the Secured Obligations, it being the intention of the parties hereto that all the Secured Obligations shall be the joint and several obligations of each of the Pledgors without preferences or distinction among them. (c) Notwithstanding any provision to the contrary contained herein, in any other of the Loan Documents or in any other documents relating to the Secured Obligations, the obligations of each Guarantor under the Credit Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law. [Signature Pages Follow] 12 Each of the parties hereto has caused a counterpart of this Pledge Agreement to be duly executed and delivered as of the date first above written. PLEDGORS: FTI CONSULTING, INC., a Maryland corporation By: /s/ Theodore I. Pincus ------------------------- Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer FTI APPLIED SCIENCES (ANNAPOLIS), LLC, a Maryland limited liability company FTI CORPORATE RECOVERY, INC., a Maryland corporation FTI LITIGATION CONSULTING, LLC, a Maryland limited liability company KAHN CONSULTING, INC., a New York corporation KLICK, KENT & ALLEN, INC., a Virginia corporation L.W.G., INC., an Illinois corporation POLICANO & MANZO, L.L.C., a New Jersey limited liability company RESTORTEK, INC., an Illinois corporation S.E.A., INC., an Ohio corporation TECHNOLOGY & FINANCIAL CONSULTING, INC., a Texas corporation TEKLICON, INC., a California corporation By: /s/ Theodore I. Pincus ------------------------ Name: Theodore I. Pincus Title: Treasurer of each of the foregoing Pledgors Accepted and agreed to as of the date first above written. BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Michael Brashler ------------------------- Name: Michael Brashler Title: Agency Officer Schedule 2(a) Pledged Stock
Number of Certificate Percentage Pledgor Issuer Shares Number Ownership FTI Consulting, Inc. FTI Applied Sciences (Annapolis), LLC uncertificated uncertificated 100% FTI Consulting, Inc. FTI Corporate Recovery, Inc. 1,000 1 100% FTI Consulting, Inc. FTI Litigation Consulting, LLC uncertificated uncertificated 100% FTI Consulting, Inc. FTI Merger & Acquisition Advisors, LLC uncertificated uncertificated 100% FTI Consulting, Inc. Kahn Consulting, Inc. 2,000 10 100% FTI Consulting, Inc. Klick, Kent & Allen, Inc. 400 15 100% FTI Consulting, Inc. L.W.G., Inc. 1,000 2 100% FTI Consulting, Inc. Policano & Manzo, L.L.C. uncertificated uncertificated 100% FTI Consulting, Inc. S.E.A., Inc. 60 13 100% FTI Consulting, Inc. Technology & Financial Consulting, Inc. 10,000 3 100% FTI Consulting, Inc. Teklicon, Inc. 100 7 100% L.W.G., Inc. RestorTek, Inc. 1,000 2 100% Schedule 4(a) Form of Irrevocable Stock Power FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to the following shares of capital stock of ____________________, a ____________ corporation: Number of Shares Certificate Number and irrevocably appoints __________________________________ its agent and attorney-in-fact to transfer all or any part of such capital stock and to take all necessary and appropriate action to effect any such transfer. The agent and attorney-in-fact may substitute and appoint one or more persons to act for him. The effectiveness of a transfer pursuant to this stock power shall be subject to any and all transfer restrictions referenced on the face of the certificates evidencing such interest or in the certificate of incorporation or bylaws of the subject corporation, to the extent they may from time to time exist. [HOLDER] By:_____________________________ Name: Title:
Exhibit 10.3 SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Security Agreement") dated as of August 30, 2002 is by and among the parties identified as "Grantors" on the signature pages hereto and such other parties as may become Grantors hereunder after the date hereof (individually a "Grantor", and collectively the "Grantors") and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the holders of the Secured Obligations referenced below. W I T N E S S E T H WHEREAS, a $200 million credit facility has been established in favor of FTI Consulting, Inc., a Maryland corporation (the "Borrower"), pursuant to the terms of that Credit Agreement (as amended, modified, supplemented and extended from time to time, the "Credit Agreement") dated as of the date hereof among the Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent; and WHEREAS, this Security Agreement is required under the terms of the Credit Agreement. NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. (a) Capitalized terms used and not otherwise defined herein shall have the meanings provided in the Credit Agreement. (b) The following terms shall have the meanings assigned thereto in the Uniform Commercial Code in effect in the State of North Carolina on the date hereof: Accession, Account, As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Commingled Goods, Consumer Goods, Deposit Account, Document, Equipment, Farm Products, Fixtures, General Intangible, Goods, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Manufactured Home, Proceeds, Software, Standing Timber, Supporting Obligation and Tangible Chattel Paper. (c) As used herein, the following terms shall have the meanings set forth below: "Collateral" has the meaning provided in Section 2 hereof. "Copyright License" means any written agreement, naming any Grantor as licensor, granting any right under any Copyright including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement. "Copyrights" means (a) all registered United States copyrights in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement, and (b) all renewals thereof including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement. "Patent License" means any agreement, whether written or oral, providing for the grant by or to a Grantor of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement. "Patents" means (a) all letters patent of the United States or any other country and all reissues and extensions thereof, including, without limitation, any letters patent referred to in Schedule 6.17 to the Credit Agreement, and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement. "Secured Obligations" means, without duplication, (i) all of the obligations of the Loan Parties to the Lenders (including the L/C Issuer and the Swing Line Lender) and the Administrative Agent under the Credit Agreement or any other Loan Document (including, but not limited to, any interest accruing after the commencement of a proceeding by or against any Loan Party under any Debtor Relief Laws, regardless of whether such interest is an allowed claim under such proceeding), whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, howsoever evidenced, created, held or acquired, whether primary, secondary, direct, contingent, or joint and several, as such obligations may be amended, modified, increased, extended, renewed or replaced from time to time, (ii) all of the obligations owing by the Loan Parties under any Swap Contract between any Loan Party and any Lender or Affiliate or a Lender, whether now existing or hereafter arising and (iii) all costs and expenses incurred in connection with enforcement and collection of the obligations described in the foregoing clauses (i) and (ii), including reasonable attorneys' fees and the allocated cost of internal counsel. "Trademark License" means any agreement, written or oral, providing for the grant by or to a Grantor of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement. "Trademarks" means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise, including, without limitation, any thereof referred to in Schedule 6.17 to the Credit Agreement, and (b) all renewals thereof. "UCC" means the Uniform Commercial Code. "Work" means any work that is subject to copyright protection pursuant to Title 17 of the United States Code. 2. Grant of Security Interest in the Collateral. To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Grantor hereby grants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right to set off against, any and all right, title and interest of such Grantor in and to all of the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the "Collateral"): (a) all Accounts; (b) all cash and currency; (c) all Chattel Paper; (d) those Commercial Tort Claims identified on Schedule 2(d) attached hereto; 2 (e) all Copyrights; (f) all Copyright Licenses; (g) all Deposit Accounts; (h) all Documents; (i) all Equipment; (j) all Fixtures; (k) all General Intangibles; (l) all Instruments; (m) all Inventory; (n) all Investment Property; (o) all Letter-of-Credit Rights; (p) all Patents; (q) all Patent Licenses; (r) all Software; (s) all Supporting Obligations; (t) all Trademarks; (u) all Trademark Licenses; (v) all other personal property of such Grantor of whatever type or description; and (w) to the extent not otherwise included, all Accessions and all Proceeds of any and all of the foregoing. Notwithstanding anything to the contrary contained herein, the security interests granted under this Security Agreement shall not extend to (i) any Property that is subject to a Lien securing Indebtedness permitted under Section 8.01(b), (i) or (p) of the Credit Agreement pursuant to documents that prohibit such Grantor from granting any other Liens in such Property or (ii) any lease, license or other contract if the grant of a security interest in such lease, license or contract in the manner contemplated by this Security Agreement is prohibited by the terms of such lease, license or contract and would result in the termination thereof, but only to the extent that (A) after reasonable efforts, consent from the relevant party or parties has not been obtained and (B) any such prohibition could not be rendered ineffective pursuant to the UCC or any other applicable law (including Debtor Relief Laws) or principles of equity. 3 The Grantors and the Administrative Agent, on behalf of the holders of the Secured Obligations, hereby acknowledge and agree that the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations, whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses. 3. Provisions Relating to Accounts. (a) Anything herein to the contrary notwithstanding, each of the Grantors shall remain liable under each of the Accounts 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. Neither the Administrative Agent nor any holder of the Secured Obligations shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Security Agreement or the receipt by the Administrative Agent or any holder of the Secured Obligations of any payment relating to such Account pursuant hereto, nor shall the Administrative Agent or any holder of the Secured Obligations be obligated in any manner to perform any of the obligations of a Grantor under or pursuant to any Account (or any agreement giving rise thereto), 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), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times. (b) At any time after the occurrence and during the continuation of an Event of Default, 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 require in connection with such test verifications, (ii) upon the Administrative Agent's request and at the expense of the Grantors, the Grantors shall cause independent public accountants or others 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 and (iii) 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 satisfaction the existence, amount and terms of any Accounts. 4. Representations and Warranties. Each Grantor hereby represents and warrants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated: (a) Legal Name; Chief Executive Office. As of the date hereof: (i) Each Grantor's exact legal name and state of formation are (and for the prior five years have been) as set forth on Schedule 6.20(c) to the Credit Agreement. (ii) Each Grantor's chief executive office is located (and for the prior five years has been) at the location set forth on Schedule 6.20(c) to the Credit Agreement attached hereto. (iii) Other than as set forth on Schedule 4(a) attached hereto, no Grantor has been party to a merger, consolidation or other change in structure or used any tradename in the prior five years. 4 (b) Ownership. Each Grantor is the legal and beneficial owner of its Collateral and has the right to pledge, sell, assign or transfer the same. (c) Security Interest/Priority. This Security Agreement creates a valid security interest in favor of the Administrative Agent, for the benefit of the holders of the Secured Obligations, in the Collateral of such Grantor and, when properly perfected by filing, shall constitute a valid perfected security interest in such Collateral, to the extent such security interest can be perfected by filing under the UCC, free and clear of all Liens except for Permitted Liens. (d) Types of Collateral. None of the Collateral consists of, or is the Accessions or the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes, or Standing Timber. (e) Accounts. (i) Each Account of the Grantors and the papers and documents relating thereto are genuine and in all material respects what they purport to be, (ii) each Account arises out of (A) a bona fide sale of goods sold and delivered by such Grantor (or is in the process of being delivered) or (B) services theretofore actually rendered by such Grantor to, the account debtor named therein, and (iii) no surety bond was required or given in connection with any Account of a Grantor or the contracts or purchase orders out of which they arose. (f) Inventory. No Inventory is held by any Person other than a Grantor pursuant to consignment, sale or return, sale on approval or similar arrangement. 5. Covenants. Each Grantor covenants that, so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated, such Grantor shall: (a) Other Liens. Defend the Collateral against the claims and demands of all other parties claiming an interest therein other than Permitted Liens. (b) Instruments/Tangible Chattel Paper/Documents. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Tangible Chattel Paper, or if any property constituting Collateral shall be stored or shipped subject to a Document, (i) ensure that such Instrument, Tangible Chattel Paper or Document is either in the possession of such Grantor at all times or, if requested by the Administrative Agent, is immediately delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent and (ii) ensure that any Collateral consisting of Tangible Chattel Paper is marked with a legend acceptable to the Administrative Agent indicating the Administrative Agent's security interest in such Tangible Chattel Paper. (c) Tradenames. Not use any tradename other than as set forth on Schedule 4(a) attached hereto without providing written notice to the Administrative Agent within thirty (30) days after commencing to use such tradename. (d) Perfection of Security Interest. Execute and deliver to the Administrative Agent such agreements, assignments or instruments (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Administrative Agent may reasonably request) and do all such other things as the Administrative Agent may reasonably deem necessary, appropriate or convenient (i) to assure to the Administrative Agent the effectiveness and priority of its security interests hereunder, including (A) such instruments as the Administrative Agent may from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC, (B) with regard to Copyrights, a Notice of Grant of Security Interest in Copyrights for filing with the United States Copyright Office in the form of Schedule 5 5(f)(i) attached hereto, (C) with regard to Patents, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the form of Schedule 5(f)(ii) attached hereto and (D) with regard to Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with the United States Patent and Trademark Office in the form of Schedule 5(f)(iii) attached hereto, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder. To that end, each Grantor authorizes the Administrative Agent to file one or more financing statements (with collateral descriptions broader and/or less specific than the description of the Collateral contained herein) disclosing the Administrative Agent's security interest in any or all of the Collateral of such Grantor without such Grantor's signature thereon, and further each Grantor also hereby irrevocably makes, constitutes and appoints the Administrative Agent, its nominee or any other Person whom the Administrative Agent may designate, as such Grantor's attorney-in-fact with full power and for the limited purpose to sign in the name of such Grantor any such financing statements (including renewal statements), amendments and supplements, notices or any similar documents that in the Administrative Agent's reasonable discretion would be necessary, appropriate or convenient in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable so long as the Secured Obligations remain unpaid and until the commitments relating thereto shall have been terminated. Each Grantor hereby agrees that a carbon, photographic or other reproduction of this Security Agreement or any such financing statement is sufficient for filing as a financing statement by the Administrative Agent without notice thereof to such Grantor wherever the Administrative Agent may in its sole discretion desire to file the same. In the event for any reason the law of any jurisdiction other than North Carolina becomes or is applicable to the Collateral of any Grantor or any part thereof, or to any of the Secured Obligations, such Grantor agrees to execute and deliver all such instruments and to do all such other things as the Administrative Agent in its sole discretion reasonably deems necessary, appropriate or convenient to preserve, protect and enforce the security interests of the Administrative Agent under the law of such other jurisdiction (and, if a Grantor shall fail to do so promptly upon the request of the Administrative Agent, then the Administrative Agent may execute any and all such requested documents on behalf of such Grantor pursuant to the power of attorney granted hereinabove). If any Collateral is in the possession or control of a Grantor's agents and the Administrative Agent so requests, such Grantor agrees to notify such agents in writing of the Administrative Agent's security interest therein and, upon the Administrative Agent's request, instruct them to hold all such Collateral for the account of the holders of the Secured Obligations and subject to the Administrative Agent's instructions. Each Grantor agrees to mark its books and records to reflect the security interest of the Administrative Agent in the Collateral. (e) Control. After the occurrence and during the continuation of an Event of Default, execute and deliver all agreements, assignments, instruments or other documents as the Administrative Agent shall reasonably request for the purpose of obtaining and maintaining control within the meaning of the UCC with respect to any Collateral consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper. (f) Collateral held by Warehouseman, Bailee, etc. If any Collateral is at any time in the possession or control of a warehouseman, bailee, agent or processor of such Grantor, (i) notify the Administrative Agent of such possession or control, (ii) notify such Person of the Administrative Agent's security interest in such Collateral, (iii) instruct such Person to hold all such Collateral for the Administrative Agent's account and subject to the Administrative Agent's instructions and (iv) use its best efforts to obtain an acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent. (g) Treatment of Accounts. Not grant or extend the time for payment of any Account, or compromise or settle any Account for less than the full amount thereof, or release any Person or 6 property,in whole or in part, from payment thereof, or allow any credit or discount thereon, other than as normal and customary in the ordinary course of a Grantor's business or as required by law. (h) Covenants Relating to Copyrights. (i) Not do any act or knowingly omit to do any act whereby any material Copyright may become invalidated and (A) not do any act, or knowingly omit to do any act, whereby any material Copyright may become injected into the public domain; (B) notify the Administrative Agent immediately if it knows that any material Copyright may become injected into the public domain or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any court or tribunal in the United States or any other country) regarding a Grantor's ownership of any such Copyright or its validity; (C) take all necessary steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each material Copyright owned by a Grantor including, without limitation, filing of applications for renewal where necessary; and (D) promptly notify the Administrative Agent of any material infringement of any material Copyright of a Grantor of which it becomes aware and take such actions as it shall reasonably deem appropriate under the circumstances to protect such Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement. (ii) Not make any assignment or agreement in conflict with the security interest in the Copyrights of each Grantor hereunder. (i) Covenants Relating to Patents and Trademarks. (i) (A) Continue to use each Trademark on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (B) maintain as in the past the quality of products and services offered under such Trademark, (C) employ such Trademark with the appropriate notice of registration, (D) not adopt or use any mark that is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for the ratable benefit of the holders of the Secured Obligations, shall obtain a perfected security interest in such mark pursuant to this Security Agreement, and (E) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any Trademark may become invalidated. (ii) Not do any act, or omit to do any act, whereby any Patent may become abandoned or dedicated. (iii) Notify the Administrative Agent and the holders of the Secured Obligations immediately if it knows that any application or registration relating to any Patent or Trademark may become abandoned or dedicated, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding a Grantor's ownership of any Patent or Trademark or its right to register the same or to keep and maintain the same. (iv) Whenever a Grantor, either by itself or through an agent, employee, licensee or designee, shall file an application for the registration of any Patent or Trademark with the United States Patent and Trademark Office or any similar office or agency in any 7 other country or any political subdivision thereof, a Grantor shall report such filing to the Administrative Agent and the holders of the Secured Obligations within five Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Administrative Agent, a Grantor shall execute and deliver any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the security interest of the Administrative Agent and the holders of the Secured Obligations in any Patent or Trademark and the goodwill and general intangibles of a Grantor relating thereto or represented thereby. (v) Take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Patents and Trademarks, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability. (vi) Promptly notify the Administrative Agent and the holders of the Secured Obligations after it learns that any Patent or Trademark included in the Collateral is infringed, misappropriated or diluted by a third party and promptly sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution, or to take such other actions as it shall reasonably deem appropriate under the circumstances to protect such Patent or Trademark. (vii) Not make any assignment or agreement in conflict with the security interest in the Patents or Trademarks of each Grantor hereunder. (j) Insurance. Insure, repair and replace the Collateral of such Grantor as set forth in the Credit Agreement. All insurance proceeds shall be subject to the security interest of the Administrative Agent hereunder. (k) Commercial Tort Claims. (i) Promptly notify the Administrative Agent in writing of the initiation of any Commercial Tort Claim before any Governmental Authority by or in favor of such Grantor or any of its Subsidiaries. (ii) Execute and deliver such statements, documents and notices and do and cause to be done all such things as the Administrative Agent may reasonably deem necessary, appropriate or convenient, or as are required by law, to create, perfect and maintain the Administrative Agent's security interest in any Commercial Tort Claim. 6. Advances by Holders of the Secured Obligations. On failure of any Grantor to perform any of the covenants and agreements contained herein, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures that the Administrative Agent or the holders of the Secured Obligations may make for the protection of the security hereof or that may be compelled to make by operation of law. All such sums and amounts so expended shall be repayable by the Grantors on a joint and several basis (subject to Section 23 hereof) promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall bear interest from the 8 date said amounts are expended at the default rate specified in Section 2.08 of the Credit Agreement for Base Rate Revolving Loans. No such performance of any covenant or agreement by the Administrative Agent or the holders of the Secured Obligations on behalf of any Grantor, and no such advance or expenditure therefor, shall relieve the Grantors of any default under the terms of this Security Agreement, the other Credit Documents or any other documents relating to the Secured Obligations. The holders of the Secured Obligations may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by a Grantor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP. 7. Remedies. (a) General Remedies. Upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent and the holders of the Secured Obligations shall have, in addition to the rights and remedies provided herein, in the Credit Documents, in any other documents relating to the Secured Obligations, or by law (including, without limitation, levy of attachment and garnishment), the rights and remedies of a secured party under the UCC of the jurisdiction applicable to the affected Collateral and, further, the Administrative Agent may, with or without judicial process or the aid and assistance of others, (i) enter on any premises on which any of the Collateral may be located and, without resistance or interference by the Grantors, take possession of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require the Grantors to assemble and make available to the Administrative Agent at the expense of the Grantors any Collateral at any place and time designated by the Administrative Agent that is reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the purpose of effecting sale or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearing or process of law, all of which each of the Grantors hereby waives to the fullest extent permitted by law, at any place and time or times, sell and deliver any or all Collateral held by or for it at public or private sale, by one or more contracts, in one or more parcels, for cash, upon credit or otherwise, at such prices and upon such terms as the Administrative Agent deems advisable, in its sole discretion (subject to any and all mandatory legal requirements). Each of the Grantors acknowledges that any private sale referenced above may be at prices and on terms less favorable to the seller than the prices and terms that might have been obtained at a public sale and agrees that such private sale shall be deemed to have been made in a commercially reasonable manner. Neither the Administrative Agent's compliance with applicable law nor its disclaimer of warranties relating to the Collateral shall be considered to adversely affect the commercial reasonableness of any sale. In addition to all other sums due the Administrative Agent and the holders of the Secured Obligations with respect to the Secured Obligations, the Grantors shall pay the Administrative Agent and each of the holders of the Secured Obligations all reasonable documented costs and expenses incurred by the Administrative Agent or any such holder of the Secured Obligations, including, but not limited to, reasonable attorneys' fees, the allocated cost of internal counsel and court costs, in obtaining or liquidating the Collateral, in enforcing payment of the Secured Obligations, or in the prosecution or defense of any action or proceeding by or against the Administrative Agent or the holders of the Secured Obligations or the Grantors concerning any matter arising out of or connected with this Security Agreement, any Collateral or the Secured Obligations, including, without limitation, any of the foregoing arising in, arising under or related to a case under the Bankruptcy Code. To the extent the rights of notice cannot be legally waived hereunder, each Grantor agrees that any requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage prepaid, to the Borrower in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten Business Days before the time of sale or other event giving rise to the requirement of such notice. The Administrative Agent and the holders of the Secured Obligations shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given. To the extent permitted by law, any holder of the Secured Obligations may be a purchaser at any such sale. To the extent permitted by applicable law, each of the Grantors hereby waives all of its rights of redemption with respect to any such sale. Subject to the provisions of applicable law, the Administrative Agent and the holders of the 9 Secured Obligations may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, to the extent permitted by law, be made at the time and place to which the sale was postponed, or the Administrative Agent and the holders of the Secured Obligations may further postpone such sale by announcement made at such time and place. (b) Remedies relating to Accounts. Upon the occurrence of an Event of Default and during the continuation thereof, whether or not the Administrative Agent has exercised any or all of its rights and remedies hereunder, (i) each Grantor will promptly upon request of the Administrative Agent instruct all account debtors to remit all payments in respect of Accounts to a mailing location selected by the Administrative Agent and (ii) the Administrative Agent shall have the right to enforce any Grantor's rights against its customers and account debtors, and the Administrative Agent or its designee may notify any Grantor's customers and account debtors that the Accounts of such Grantor have been assigned to the Administrative Agent or of the Administrative Agent's security interest therein, and may (either in its own name or in the name of a Grantor or both) demand, collect (including without limitation by way of a lockbox arrangement), receive, take receipt for, sell, sue for, compound, settle, compromise and give acquittance for any and all amounts due or to become due on any Account, and, in the Administrative Agent's discretion, file any claim or take any other action or proceeding to protect and realize upon the security interest of the holders of the Secured Obligations in the Accounts. Each Grantor acknowledges and agrees that the Proceeds of its Accounts remitted to or on behalf of the Administrative Agent in accordance with the provisions hereof shall be solely for the Administrative Agent's own convenience and that such Grantor shall not have any right, title or interest in such Accounts or in any such other amounts except as expressly provided herein. The Administrative Agent and the holders of the Secured Obligations shall have no liability or responsibility to any Grantor for acceptance of a check, draft or other order for payment of money bearing the legend "payment in full" or words of similar import or any other restrictive legend or endorsement or be responsible for determining the correctness of any remittance. Each Grantor hereby agrees to indemnify the Administrative Agent and the holders of the Secured Obligations from and against all liabilities, damages, losses, actions, claims, judgments, costs, expenses, charges and reasonable attorneys' fees (including the allocated cost of internal counsel) suffered or incurred by the Administrative Agent or the holders of the Secured Obligations (each, an "Indemnified Party") because of the maintenance of the foregoing arrangements except as relating to or arising out of the gross negligence or willful misconduct of an Indemnified Party or its officers, employees or agents. In the case of any investigation, litigation or other proceeding, the foregoing indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by a Grantor, its directors, shareholders or creditors or an Indemnified Party or any other Person or any other Indemnified Party is otherwise a party thereto. (c) Access. In addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent shall have the right to enter and remain upon the various premises of the Grantors without cost or charge to the Administrative Agent, and use the same, together with materials, supplies, books and records of the Grantors for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise. In addition, the Administrative Agent may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral. (d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the holders of the Secured Obligations to exercise any right, remedy or option under this Security Agreement, any other Credit Document, any other documents relating to the Secured Obligations, or as provided by law, or any delay by the Administrative Agent or the holders of the Secured Obligations in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated, which in the case of the Administrative Agent or the holders of the Secured Obligations 10 shall only be granted as provided herein. To the extent permitted by law, neither the Administrative Agent, the holders of the Secured Obligations, nor any party acting as attorney for the Administrative Agent or the holders of the Secured Obligations, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct hereunder. The rights and remedies of the Administrative Agents and the holders of the Secured Obligations under this Security Agreement shall be cumulative and not exclusive of any other right or remedy that the Administrative Agent or the holders of the Secured Obligations may have. (e) Retention of Collateral. To the extent permitted under applicable law, in addition to the rights and remedies hereunder, upon the occurrence of an Event of Default, the Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable law of the relevant jurisdiction, accept or retain all or any portion of the Collateral in satisfaction of the Secured Obligations. Unless and until the Administrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have accepted or retained any Collateral in satisfaction of any Secured Obligations for any reason. (f) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the holders of the Secured Obligations are legally entitled, the Grantors shall be jointly and severally liable for the deficiency (subject to Section 23 hereof), together with interest thereon at the default rate specified in Section 2.08 of the Credit Agreement for Base Rate Revolving Loans, together with the costs of collection and reasonable attorneys' fees (including the allocated cost of internal counsel). Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Grantors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto. 8. Rights of the Administrative Agent. (a) Power of Attorney. In addition to other powers of attorney contained herein, each Grantor hereby designates and appoints the Administrative Agent, on behalf of the holders of the Secured Obligations, and each of its designees or agents, as attorney-in-fact of such Grantor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default: (i) to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Collateral, all as the Administrative Agent may reasonably deem appropriate; (ii) to commence and prosecute any actions at any court for the purposes of collecting any of the Collateral and enforcing any other right in respect thereof; (iii) to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Administrative Agent may reasonably deem appropriate; (iv) to receive, open and dispose of mail addressed to a Grantor and endorse checks, notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to the Collateral on behalf of and in the name of such Grantor, or securing, or relating to such Collateral; (v) to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral; 11 (vi) to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (vii) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral; (viii) to sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights in respect of, any Collateral or the goods or services that have given rise thereto, as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes; (ix) to adjust and settle claims under any insurance policy relating thereto; (x) to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Security Agreement and in order to fully consummate all of the transactions contemplated therein; (xi) to institute any foreclosure proceedings that the Administrative Agent may reasonably deem appropriate; and (xii) to do and perform all such other acts and things as the Administrative Agent may reasonably deem appropriate or convenient in connection with the Collateral. This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of the Secured Obligations shall remain outstanding and until all of the commitments relating thereto shall have been terminated. The Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Security Agreement, and shall not be liable for any failure to do so or any delay in doing so. The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Collateral. (b) Performance by the Administrative Agent of Obligations. If any Grantor fails to perform any agreement or obligation contained herein, the Administrative Agent itself may perform, or cause performance of, such agreement or obligation, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by the Grantors on a joint and several basis (subject to Section 24 hereof). (c) The Administrative Agent's Duty of Care. Other than the exercise of reasonable care to assure the safe custody of the Collateral while being held by the Administrative Agent hereunder, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Grantors shall be responsible for preservation of all rights in the Collateral, and the Administrative Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it to the Grantors. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, which shall be no less 12 than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any of the Collateral. In the event of a public or private sale of Collateral pursuant to Section 7 hereof, the Administrative Agent shall have no obligation to clean, repair or otherwise prepare the Collateral for sale. 9. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if not exercised by the Administrative Agent, may be exercised by the Required Lenders. 10. Application of Proceeds. Upon the occurrence and during the continuation of an Event of Default, any payments in respect of the Secured Obligations and any proceeds of the Collateral, when received by the Administrative Agent or any of the holders of the Secured Obligations in cash or its equivalent, will be applied in reduction of the Secured Obligations in the order set forth in the Credit Agreement or other document relating to the Secured Obligations, and each Grantor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Administrative Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and proceeds in the Administrative Agent's sole discretion, notwithstanding any entry to the contrary upon any of its books and records. 11. Continuing Agreement. (a) This Security Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated (other than any obligations with respect to the indemnities and the representations and warranties set forth in the Credit Documents). Upon such payment and termination, this Security Agreement and the liens and security interests of the Administrative Agent hereunder shall be automatically terminated and the Administrative Agent shall, upon the request and at the expense of the Grantors, execute and deliver all UCC termination statements and/or other documents reasonably requested by the Grantors evidencing such termination. Notwithstanding the foregoing, all releases and indemnities provided hereunder shall survive termination of this Security Agreement. (b) This Security Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any holder of the Secured Obligations as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar law, all as though such payment had not been made; provided that in the event payment of all or any part of the Secured Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including, without limitation, attorneys' fees, the allocated cost of internal counsel and disbursements) incurred by the Administrative Agent or any holder of the Secured Obligations in defending and enforcing such reinstatement shall be deemed to be included as a part of the Secured Obligations. 12. Amendments and Waivers. This Security Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement. 13. Successors in Interest. This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon each Grantor, its successors and assigns, and shall inure, together with the rights and remedies of the Administrative Agent and the holders of the Secured Obligations hereunder, to the benefit of the Administrative Agent and the holders of the Secured Obligations and their successors and permitted assigns; provided, however, that none of the Grantors may assign its rights or delegate its duties hereunder without the prior written consent of the requisite Lenders under the Credit Agreement. To the fullest extent permitted by law, each Grantor hereby releases the Administrative Agent 13 and each holder of the Secured Obligations, their respective successors and assigns and their respective officers, attorneys, employees and agents, from any liability for any act or omission or any error of judgment or mistake of fact or of law relating to this Security Agreement or the Collateral, except for any liability arising from the gross negligence or willful misconduct of the Administrative Agent or such holder, or their respective officers, attorneys, employees or agents. 14. Notices. All notices required or permitted to be given under this Security Agreement shall be given as provided in Section 11.02 of the Credit Agreement. 15. Counterparts. This Security Agreement may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Security Agreement to produce or account for more than one such counterpart. 16. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Security Agreement. 17. Governing Law; Submission to Jurisdiction; Venue. (a) THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA SITTING IN CHARLOTTE, NORTH CAROLINA OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT, THE BORROWER, THE COLLATERAL Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE COLLATERAL Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE COLLATERAL Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 18. Waiver of Right to Trial by Jury. EACH PARTY TO THIS SECURITY AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE 14 DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS SECURITY AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 19. Severability. If any provision of this Security Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 20. Entirety. This Security Agreement, the other Credit Documents and the other documents relating to the Secured Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents, any other documents relating to the Secured Obligations, or the transactions contemplated herein and therein. 21. Survival. All representations and warranties of the Grantors hereunder shall survive the execution and delivery of this Security Agreement, the other Credit Documents and the other documents relating to the Secured Obligations, the delivery of the Notes and the extension of credit thereunder or in connection therewith. 22. Other Security. To the extent that any of the Secured Obligations are now or hereafter secured by property other than the Collateral (including, without limitation, real property and securities owned by a Grantor), or by a guarantee, endorsement or property of any other Person, then the Administrative Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence of any Event of Default, and the Administrative Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Administrative Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Secured Obligations or any of the rights of the Administrative Agent or the holders of the Secured Obligations under this Security Agreement, under any of the other Credit Documents or under any other document relating to the Secured Obligations. 23. Joint and Several Obligations of Grantors. (a) Subject to subsection (c) of this Section 25, each of the Grantors is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the holders of the Secured Obligations, for the mutual benefit, directly and indirectly, of each of the Grantors and in consideration of the undertakings of each of the Grantors to accept joint and several liability for the obligations of each of them. (b) Subject to subsection (c) of this Section 25, each of the Grantors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Grantors with respect to the payment and performance of all of the Secured Obligations arising under this Security Agreement, the other Credit Documents and any other documents relating to the Secured Obligations, it being the intention of the parties hereto that all the Secured Obligations shall be the joint and several obligations of each of the Grantors without preferences or distinction among them. (c) Notwithstanding any provision to the contrary contained herein, in any other of the Credit Documents or in any other documents relating to the Secured Obligations, the obligations of each Guarantor under the Credit Agreement and the other Credit Documents shall be limited to an aggregate amount equal 15 to the largest amount that would not render such obligations subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law. [Signature Pages Follow] 16 Each of the parties hereto has caused a counterpart of this Security Agreement to be duly executed and delivered as of the date first above written. GRANTORS: FTI CONSULTING, INC., a Maryland corporation By: /s/ Theodore I. Pincus ----------------------------------------- Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer FTI APPLIED SCIENCES (ANNAPOLIS), LLC, a Maryland limited liability company FTI CORPORATE RECOVERY, INC., a Maryland corporation FTI LITIGATION CONSULTING, LLC, a Maryland limited liability company KAHN CONSULTING, INC., a New York corporation KLICK, KENT & ALLEN, INC., a Virginia corporation L.W.G., INC., an Illinois corporation POLICANO & MANZO, L.L.C., a New Jersey limited liability company RESTORTEK, INC., an Illinois corporation S.E.A., INC., an Ohio corporation TECHNOLOGY & FINANCIAL CONSULTING, INC., a Texas corporation TEKLICON, INC., a California corporation By: /s/ Theodore I. Pincus ----------------------------------------- Name: Theodore I. Pincus Title: Treasurer of each of the foregoing Grantors Accepted and agreed to as of the date first above written. Bank of America, N.A., as Administrative Agent By: /s/ Michael Brashler ----------------------------------------- Name: Michael Brashler Title: Agency Officer Schedule 2(d) COMMERCIAL TORT CLAIMS None. Schedule 4(a)(iii) MERGERS, CONSOLIDATIONS, CHANGES IN STRUCTURE, TRADENAMES 1. FTI Consulting, Inc. was formerly known as Forensic Technologies International Corporation. FTI changed its name on June 8, 1998. 2. RestorTek, Inc. was formerly known as Contract Replacement Corp. RestorTek changed its name on March 30, 1995. 3. Technology & Financial Consulting, Inc. has not used any corporate or fictitious name other than its current name. On March 31, 2001, however, in order to convert from a limited liability company to a corporation, Technology & Financial Consulting, Inc. acquired all of the assets and liabilities of Technology & Financial Consulting, LLC. 4. In the State of North Carolina, L.W.G., Inc. does business as Electronic Consultants Group, Inc., and in the State of Ohio, L.W.G., Inc. does business as Electronic Consultants Group. 5. S.E.A., Inc. was formerly known as SEA Investigations Division, Inc. S.E.A., Inc. changed its name on December 19, 1984. Currently, in the States of Florida and North Carolina and the Commonwealth of Virginia, S.E.A., Inc. does business as SEA Investigations of Ohio, Inc. SCHEDULE 5(f)(i) NOTICE OF GRANT OF SECURITY INTEREST IN COPYRIGHTS United States Copyright Office Ladies and Gentlemen: Please be advised that pursuant to the Security Agreement dated as of August 30, 2002 (as the same may be amended, modified, extended or restated from time to time, the "Security Agreement") by and among the Grantors party thereto (each an "Grantor" and collectively, the "Grantors") and Bank of America, N.A., as Administrative Agent (the "Administrative Agent") for the holders of the Secured Obligations referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, the copyrights and copyright applications shown on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the holders of the Secured Obligations. The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured Obligations, hereby acknowledge and agree that the security interest in the copyrights and copyright applications set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement and (ii) is not to be construed as an assignment of any copyright or copyright application. Very truly yours, __________________________________ [Grantor] By:_______________________________ Name: Title: Acknowledged and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By:_________________________________________ Name: Title: SCHEDULE 5(f)(ii) NOTICE OF GRANT OF SECURITY INTEREST IN PATENTS United States Patent and Trademark Office Ladies and Gentlemen: Please be advised that pursuant to the Security Agreement dated as of August 30, 2002 (the "Security Agreement") by and among the Grantors party thereto (each an "Grantor" and collectively, the "Grantors") and Bank of America, N.A., as Administrative Agent (the "Administrative Agent") for the holders of the Secured Obligations referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, the patents and patent applications set forth on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the holders of the Secured Obligations. The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured Obligations, hereby acknowledge and agree that the security interest in the patents and patent applications set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement and (ii) is not to be construed as an assignment of any patent or patent application. Very truly yours, ___________________________ [Grantor] By:________________________ Name: Title: Acknowledged and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By:_________________________________________ Name: Title: SCHEDULE 5(f)(iii) NOTICE OF GRANT OF SECURITY INTEREST IN TRADEMARKS United States Patent and Trademark Office Ladies and Gentlemen: Please be advised that pursuant to the Security Agreement dated as of August 30, 2002 (the "Security Agreement") by and among the Grantors party thereto (each an "Grantor" and collectively, the "Grantors") and Bank of America, N.A., as Administrative Agent (the "Administrative Agent") for the holders of the Secured Obligations referenced therein, the undersigned Grantor has granted a continuing security interest in and continuing lien upon, the trademarks and trademark applications set forth on Schedule 1 attached hereto to the Administrative Agent for the ratable benefit of the holders of the Secured Obligations. The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured Obligations, hereby acknowledge and agree that the security interest in the trademarks and trademark applications set forth on Schedule 1 attached hereto (i) may only be terminated in accordance with the terms of the Security Agreement and (ii) is not to be construed as an assignment of any trademark or trademark application. Very truly yours, ___________________________ [Grantor] By:________________________ Name: Title: Acknowledged and Accepted: BANK OF AMERICA, N.A., as Administrative Agent By:_________________________________________ Name: Title:
Exhibit 10.4 TRANSITION SERVICES AGREEMENT This TRANSITION SERVICES AGREEMENT (this "Agreement") is made as of August 30, 2002 by and between PricewaterhouseCoopers LLP, a Delaware limited liability partnership, having an office at 1301 Avenue of the Americas, New York, New York ("Seller") and FTI Consulting, Inc., a Maryland corporation, having an office at 900 Bestgate Road, Annapolis, Maryland ("Buyer"). RECITALS A. WHEREAS, pursuant to an Agreement for the Purchase and Sale of Assets, dated as of July 24, 2002, between Seller and Buyer (as it may be amended from time to time, the "Asset Purchase Agreement"), Seller transferred certain assets to Buyer and Buyer assumed certain liabilities as set forth therein (the "Transfer"); B. WHEREAS, prior to the Transfer, the Business had been receiving certain internal support services from Seller; C. WHEREAS, in connection with the Transfer, each of Seller and Buyer desires that certain, but not all, of those services continue to be provided to Buyer after the Transfer upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations and warranties contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions hereinafter set forth, and intending to be legally bound hereby, the parties hereto hereby agree as follows: AGREEMENT 1. Definitions 1.1 Defined Terms Unless otherwise defined herein, terms used herein shall take the meaning given them in the Asset Purchase Agreement. Otherwise, for the purposes of this Agreement, the following words and phrases shall have the following meanings whenever used in this Agreement (including the Schedules and Exhibits hereto): "Actual Costs" has the meaning assigned in Section 3.8(a). "Actual Cost Drivers" has the meaning assigned in Section 3.8(a). "Additional Service" has the meaning assigned in Section 2.2 (a). "Additional Service Change Request" has the meaning assigned in Section 2.2(b). "Additional Service Investment Cost" has the meaning assigned in Section 2.2(b). 1 "Additional Services Change Proposal" has the meaning assigned in Section 2.2(b). "Additional Services Cost" has the meaning assigned in Section 2.2(b). "Agreement" has the meaning assigned in the preamble. "Asset Purchase Agreement" has the meaning assigned in recital A. "Basic Services" means those services described on Schedule A. "Buyer" has the meaning assigned in the preamble. "Buyer Payment" has the meaning assigned in Section 3.8(d). "Cost Drivers" has the meaning assigned in Section 2.1(a). "Discontinued Service" has the meaning assigned in Section 7.1(b). "Dispute Notice" has the meaning assigned in Section 3.8(b). "End Date" has the meaning assigned in Section 2.1(c). "Impositions" has the meaning assigned in Section 3.10. "Initial Estimate" has the meaning assigned in Section 3.2(b). "Initial Volume" has the meaning assigned in Section 2.1(a). "Insurance Costs" has the meaning assigned in Section 3.5. "Locations" has the meaning assigned in Section 2.1(a). "Parties" means Seller and Buyer, collectively, and "Party" means each of them. "Pass-Through Costs" has the meaning assigned in Section 3.6. "Quality Standard" has the meaning assigned in Section 2.1(b). "Real Estate Required Services" means those Services identified on Schedule J which Seller is required to provide and Buyer is required to accept for each Location until Buyer vacates such Location; provided, however, that if at any time, Seller ceases to provide a Real Estate Required Service for its own account such Service shall cease to be a Real Estate Required Service upon sixty (60) days advance notice to Buyer. "Seller" has the meaning assigned in the preamble. "Seller Payment" has the meaning assigned in Section 3.8(d). 2 "Services" means the Basic Services and the Additional Services. "Statement" has the meaning assigned in Section 3.8(a). "Term" has the meaning assigned in Section 7.1(a). "Total Payments" has the meaning assigned in Section 3.8(a). "Transfer" has the meaning assigned in recital A. "TSA Databases" has the meaning assigned in Section 2.11. 2. Agreement to Sell and Buy 2.1 Provision of Basic Services (a) Seller agrees to provide or cause to be provided to Buyer, and Buyer agrees to accept, for use in the Business, the Services in the areas of Infrastructure and Information Technology described in Schedule A at such head count, usage, transaction, percentage occupancy and square footage (the "Cost Drivers") levels as used for purposes of determining the pricing set forth on Schedule D (the "Initial Volume"), plus up to a 10% increase based on the applicable Cost Drivers to accommodate normal growth of the current operations of the Business during the term hereof, at the locations set forth on Schedule F (the "Locations"), all in accordance with the terms of this Agreement. (b) Seller shall not be required to provide to Buyer (i) increased volume with respect to any Basic Service more than 10% above the Initial Volume with respect to such Basic Service, (ii) any Basic Service at a level of quality that is higher than the level of quality, if any, at which such Basic Service is generally performed by Seller for itself at the time in question (the "Quality Standard"), or (iii) any Basic Service to a location other than the Locations, subject to Section 2.1(d). (c) If during the Term Seller relocates from an office in which Buyer is sharing space with Seller, Seller shall be obligated to continue to provide to Buyer the Services then being provided to Buyer at such Location (but not at a new location to which Buyer may relocate its employees in the Business then at such existing Location) through the earlier of the end of the current term of the lease for the Location being vacated or the termination of this Agreement (such earlier date, the "End Date"); provided, however, that if Seller determines in Seller's sole discretion that it is not reasonably practicable to provide such Services to Buyer at such Location, Seller may request Buyer to move from a Location at which Buyer shares space with Seller prior to the End Date, and Buyer may, within its sole discretion, agree to relocate to a new location if so requested. In such case, Seller shall provide Buyer with space in the new location reasonably equivalent in terms of size, appearance, quality and functionality as the space being vacated by Buyer at the then existing level of the Business' business operations in the space being vacated by it; provided, however, that if Buyer, within its sole discretion, does not agree to relocate to the new location, then Seller's obligation to continue to provide Buyer the Services then being provided to Buyer shall terminate thirty (30) days following the date Seller initially requested Buyer to move to the new location . The terms of the foregoing sentence shall 3 apply equally when prior to the End Date Seller vacates a Location in which Buyer is sharing space and Buyer as a result is required to relocate; but the terms of such sentence shall not apply in any case in which Seller is relocating and/or Buyer is required to relocate because the term of the applicable lease has ended. (d) If for any reason Buyer relocates employees of the Business from a Location to Buyer's own space that is located within reasonable geographic proximity to the Location, Seller shall during the Term continue to provide Basic Services (other than Real Estate Required Services) remotely to such relocated employees of the Business. Such remotely-provided Basic Services shall be provided in the same manner, and at substantially the same level of functionality, as Seller provides for its employees who are working remotely, subject to any constraints Buyer's own space imposes on Seller's ability to provide such Basic Services remotely, but shall not include the services described on Schedule G. 2.2 Provision of Additional Services (a) Subject to Sections 2.1(b) and 2.3, Seller may agree to furnish to Buyer (i) Basic Services at a volume greater than the Initial Volume, at a level of quality higher than the Quality Standard or at a location other than the Locations, or (ii) services other than Basic Services, as Buyer may reasonably request, including those set forth in Schedule B. Any such service so furnished or so requested by Buyer and provided by Seller shall constitute an "Additional Service" for the purposes of this Agreement. Any agreement by Seller to any requests for Additional Services which do not involve any Additional Service Investment Costs shall be made in Seller's reasonable discretion and subject to reaching agreement on the terms set forth in the penultimate sentence in Section 2.2(b); otherwise such agreement shall be in Seller's sole discretion. (b) Upon receipt of any request for Additional Services (each, an "Additional Service Change Request"), Seller will evaluate (i) the costs Seller would incur in upgrading or expanding its infrastructure, facilities or systems, and the initial costs of any increased hiring, in order to be able to provide the requested Additional Services (the "Additional Service Investment Cost") and (ii) the ongoing costs of providing the Additional Services (the "Additional Services Costs"). As soon as reasonably practicable after receipt of an Additional Service Change Request, Seller shall either (x) inform Buyer in writing that it declines to provide the requested Additional Service or (y) submit in writing to Buyer the results of its evaluation and a proposal that sets forth the terms pursuant to which Seller would be willing to provide the requested Additional Services (the "Additional Services Change Proposal"). If Seller does not so decline, Seller and Buyer will then enter into negotiations to see if agreement can be reached upon the estimated Additional Service Investment Cost, the estimated Additional Services Costs and the parameters under which Seller will provide the requested Additional Services; failing reaching agreement on these terms, Seller shall have no obligation to provide such Additional Services. Each Additional Service Change Proposal must be approved in writing by Buyer or its authorized designee prior to Seller implementing an Additional Service Change Request. 4 2.3 No Obligation to Upgrade Nothing in this Agreement requires Seller to upgrade or expand its infrastructure, facilities or systems, or hire additional employees, to provide Additional Services. If Seller agrees to undertake such upgrade, expansion or increased hiring in connection with an Additional Service Change Request, Buyer will pay all Additional Service Investment Costs attributable to Buyer. If, at the time of such upgrade, expansion or hiring, an Additional Service is also being or will be provided to Seller or other third parties that constitute former business units of Seller, the portion of the Additional Service Investments Cost for such upgrades, expansions and increased hiring shall be prorated among all the parties benefiting from such upgrade, expansion or increased hiring. If Buyer is provided with an Additional Service for which the costs of any required upgrade, expansion or hiring have been previously paid or born by Seller or such other third parties, then at the time of the commencement of such services for Buyer, Buyer shall pay a pro rata share of such costs. Buyer shall not take any action that would result in an upgrade or other change to any Service without Seller's prior written consent which may be withheld in Seller's sole discretion. If Buyer has paid for the costs of any upgrades, expansion or hiring related to any Additional Service being provided to it and thereafter, at any time during the Term, Seller or any such other third party begins receiving such services, then Seller shall charge such other persons for their pro rata share of such costs and refund to Buyer an equitable portion thereof such that Buyer shall have only paid a pro rata portion of such costs. 2.4 Seller Rights and Responsibilities (a) Unless otherwise agreed by the Parties, at any time during the Term and subject to Article 6, Seller shall use its reasonable efforts to provide the Basic Services to Buyer in a manner and at a quality level that is substantially the same as the manner and quality level in which such Basic Services are generally performed at such time by Seller for itself. (b) Seller shall have the right to shut down temporarily for maintenance purposes the operation of any facilities providing any Service whenever in its judgment, reasonably exercised, such action is necessary. Seller shall give Buyer as much advance notice as is practicable of any such shutdown, which notice, where feasible, shall be given in writing. With respect to the Services dependent on the operation of such facilities, Seller shall be relieved of its obligations hereunder to provide such Services during the period that such facilities are so shut down but shall use reasonable efforts to minimize each period of shutdown for such purpose and to schedule such shutdown so as not to inconvenience or disrupt the conduct of the Business by Buyer. (c) Seller may modify a Service to the extent such modification is applicable to Seller's provision of such service for itself; provided, however, that, if a modification by Seller pursuant to this Section is a material modification (as reasonably determined by Seller), Seller shall provide at least thirty (30) days' written notice to Buyer prior to the date on which Seller implements such modifications. Seller may modify a Service to the extent such modification is applicable to Seller's provision of such Service solely for Buyer's account; provided, however, that, if a modification by Seller pursuant to this sentence is a material modification (as reasonably determined by Seller), Seller shall obtain the prior written consent of Buyer, which consent shall not be unreasonably withheld, and Seller shall provide at least thirty 5 (30) days' written notice to Buyer prior to the date on which Seller implements such modification. Buyer's responsibilities set forth in Schedule C hereto shall be amended as necessary to conform to any such modifications made pursuant to this Section 2.4(c), and Buyer shall comply with any amendments to such responsibilities arising from such modifications. Subject only to the foregoing and to Section 2.4(a) above, in providing its Services hereunder, Seller may use any information systems, hardware, software, processes and procedures it deems necessary or desirable in its reasonable discretion. (d) Without the consent of Buyer, Seller may engage any third party (including any affiliate of Seller) to provide a Service hereunder or delegate performance of all or any part of its obligations hereunder to any such third party; provided, that such engagement or delegation does not result in the diminution of the quality of the provision of such Service; and, provided, further, that Seller is using such third party to provide such Service to itself. If Seller wishes to engage a third party to provide a Service, or delegate the performance of any of its obligations hereunder, solely to Buyer, then such engagement or delegation shall be subject to the reasonable consent of Buyer. (e) If during the Term any third party agreement in effect as of the Closing Date pursuant to which a Service is being provided hereunder expires or is terminated and such Service (or a service substantially similar thereto) is not thereafter provided by Seller either by itself or pursuant to another third party agreement, Seller shall use reasonable efforts to provide such Service itself or through a third party designated by Seller in its sole discretion. 2.5 Priorities In providing Services, Seller shall accord Buyer the same priority it accords its own operations. 2.6 Disclaimer of Warranty EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE GOODS AND SERVICES TO BE PROVIDED UNDER THIS AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. SELLER DOES NOT MAKE ANY WARRANTY THAT ANY GOOD OR SERVICE COMPLIES WITH ANY LAW. 2.7 Buyer Responsibilities The provision of the Services by Seller on a continuing basis is dependent on the timely compliance by Buyer with its responsibilities set forth in Schedule C, but the fees and charges of the Services shall only be adjusted if Buyer has not complied with such responsibilities in all material respects and such material non-compliance results in additional costs for Seller to provide such Services. Buyer and Seller agree that the level of quality for delivery of the Services shall be equitably adjusted to reflect the effects of such non-compliance, and Seller shall not be deemed to be in breach of its obligations hereunder by reason of any delays in its performance or diminution in quality of the Services to the extent resulting from any 6 such non-compliance. Buyer shall use the Services for substantially the same purposes and in substantially the same manner as the Business had used the Services immediately prior to the Closing Date. Buyer shall make available to Seller on a timely basis all information and materials reasonably requested by Seller to enable Seller to provide the Services, including the information and materials described on Schedule C. Buyer shall give Seller reasonable access, during regular business hours and at such other times as are reasonably required, to Buyer's premises as necessary for the purpose of providing the Services. 2.8 Use of Services Seller shall be required to provide the Services only to Buyer in connection with the conduct by Buyer of the Business. Buyer shall not resell any Services to any Person whatsoever or permit the use of the Services by any Person; provided, however, that Buyer may use the Services in providing services to third parties in the ordinary course of the Business. 2.9 Books and Records; Equipment Seller shall keep books and records of the Services provided hereunder in the same detail and with the same accuracy that Seller keeps its books and records with respect to its own use of the Services and reasonable supporting documentation of all out-of-pocket costs incurred in connection with providing such Services. Seller shall make such books and records available to Buyer, upon reasonable notice describing in reasonable detail the books and records requested, during normal business hours; provided, that to the extent that such books and records can not be, or are not in the ordinary course, segregated from the books and records relating to any other aspects of Seller's operations in Seller's reasonable judgment Buyer shall have access to such unsegregated books and records; provided, however, that Buyer shall in no event have access to any such books and records relating to a business that both Buyer and Seller are engaged in; provided, further, that, if a competitor of Seller acquires a greater than 10% ownership interest in Buyer (excluding any Person with such ownership percentage who has been agreed by Seller), Buyer shall not have access to any such unsegregated books and records, but, if requested by Buyer, Seller shall prepare, at Buyer's expense, summaries of the information therein related to the Services provided to Buyer. Other than as expressly provided in Schedule A, Buyer shall not have any access to Seller's equipment. 2.10 Provision of Space at the Locations The Transferred Employees may continue to work in the Locations during the Term subject to the terms and conditions hereof and subject to the terms and conditions contained in the form of Desk Sharing License attached hereto as Exhibit A; provided, however, that Buyer agrees that it is an immediate and high priority of Buyer to vacate the Location in New York City and shall therefore use its best commercial efforts to vacate the Location in New York City prior to the end of the Term. Buyer shall provide written notice to Seller at least sixty (60) days in advance of vacating the Location in New York City, and at such time that Buyer vacates the Location in New York City, the terms of this Agreement shall cease to apply to such Location and the Transferred Employees located therein. 7 2.11 Temporary License for Certain Databases Seller grants Buyer a non-exclusive, royalty-free temporary license for the Term to use, in connection with the Services, the databases listed on Schedule H (the "TSA Databases"). The license will terminate, and all rights granted to Buyer to use the TSA Databases shall revert to Seller, upon termination of this Agreement. Buyer covenants that within a reasonable time after the termination of this Agreement it will (i) delete from all personal computers and servers then in Buyer's possession any and all electronic copies of the TSA Databases or any portions thereof and (ii) destroy or return to Seller all printed copies of the TSA Databases or any portions thereof. 2.12 Employee Leasing Arrangement Seller agrees to lease to Buyer certain employees pursuant to the terms set forth in Exhibit B hereto. 3. Cost of Services; Payment 3.1 Cost of Services Buyer shall pay Seller for (i) the fully allocated costs of the Services from and after the Closing Date plus (ii) all personnel and setup costs necessary to enable Seller to segregate the services from those previously delivered to the Business and to enable Seller to deliver Services hereunder. 3.2 Payment of Estimated Basic Service Costs (a) Buyer will make monthly payments to Seller based on estimates of the costs of the Basic Services during the Term, as set forth in this Section. (b) The estimate of the annual costs to be incurred by Seller with respect to the Basic Services to be provided Buyer during the Term is set forth on Schedule D (the "Initial Estimate"). The Initial Estimate is based on (i) the methodologies, and on the headcount, percentage usage, percentage occupancy and square footage assumptions, set forth in Schedule D and (ii) the assumptions set forth on Schedule E. (c) During the Term, Buyer shall make monthly payments to Seller equal to the Initial Estimate multiplied by a fraction the numerator of which is one (1) and the denominator of which is twelve (12), decreased each month by the costs, if any, of any Services terminated in any prior month in accordance with Section 7.1(b). Buyer will make such monthly payment with respect to each month on the first business day of the month for which services are provided. If the Term begins on a day other than the first day of a month, the first monthly payment shall be pro rated based on the number of days between the Closing Date and the end of the first month. 8 3.3 Payment of Estimated Additional Service Costs Upon approval by Buyer of an Additional Service Change Proposal, pursuant to Section 2.2(b) hereof, Buyer shall for the remainder of the Term increase each monthly payment due pursuant to Section 3.2 by an amount equal to the estimated Additional Services Costs for the remainder of such Term divided by the number of months or partial months remaining in such Term. 3.4 Payment of Additional Service Investment Costs Seller shall separately invoice Buyer for Additional Service Investment Costs for any month in which such costs are incurred. Buyer shall pay such invoiced amounts within thirty (30) days after receipt of the invoice. 3.5 Payment of Insurance Costs Buyer shall pay to Seller Buyer's pro rata portion of the costs (the "Insurance Costs") of any insurance maintained by Seller with respect to claims arising for damages insured by usual personal injury liability coverage, claims for damages by reason of injury to or destruction of tangible property and other damages relating to the shared space. Buyer shall be invoiced for such Insurance Costs on a monthly basis. Buyer shall pay such invoiced amounts within ten (10) days after receipt of the invoice. 3.6 Payment of Pass-Through Costs Buyer shall pay to Seller third-party vendor costs incurred by Seller in providing the Services that Seller customarily charges its lines of service as accounts payable rather than includes in overhead allocations ("Pass-Through Costs"). Pass-Through Costs include, but are not necessarily limited to, certain costs related to leased computers (including software license and maintenance fees and computer rental fees), virtual private network (VPN) usage, licenses for intellectual property, Microsoft project licenses, express delivery and courier charges, parking and office supplies. A description of illustrative Pass-Through Costs is attached as Schedule I. Pass-Through Costs will be in addition to the monthly payments required by Section 3.2(c) and Additional Service Investment Costs and will be separately invoiced to Buyer based on the actual costs thereof. Payment will be due within thirty (30) days after receipt of the invoice. 3.7 Withholding Payment Buyer shall not withhold any undisputed amounts due to Seller under this Agreement. Any disputed amounts under this Agreement that may be pending between the Parties (any required adjustment as a result of any such dispute to be made on subsequent invoices from Seller) may be withheld, so long as such dispute is subject to the dispute resolution procedures in accordance with Section 3.8(b). Any amounts not paid when due shall accrue interest until paid at an annual rate equal to the lesser of (i) the London Interbank Offered Rate plus two percentage points or (ii) the maximum rate allowed by applicable law. 9 3.8 Reconciliation (a) Within sixty (60) days after December 31, 2002 and the end of the Term, Seller shall (i) determine, at such level of accounting detail as is reasonable and practicable, (A) the actual levels of the Cost Drivers at which Services were provided to the Business during such term (the "Actual Cost Drivers") and (B) the total costs of the Services provided during such term using the Actual Cost Drivers (1) as can be determined using the same methodologies and assumptions as are set forth in Schedule D or (2) as were agreed in connection with any Additional Services added during such term, in each case, as applied to actual costs (the "Actual Costs") and (ii) deliver to Buyer a statement (the "Statement") setting forth the Actual Costs and the total of the monthly payments made with respect to such term pursuant to Sections 3.2 and 3.3 (the "Total Payments"). The calculation of Actual Costs shall not include Additional Service Investment Costs, Pass-Through Costs and Insurance Costs, inasmuch as such costs are invoiced to Buyer on the basis of Seller's actual costs as incurred pursuant to Sections 3.4, 3.5 and 3.6. As soon as practicable and in any event no later than thirty (30) days after the end of each calendar quarter, Seller shall provide to Buyer non-binding reports of its good faith estimate of the cost of Services provided by Seller in the previous calendar quarter. (b) Buyer shall notify Seller no later than forty-five (45) days after receipt of each Statement if Buyer disagrees with Seller's calculation of Actual Costs or Total Payments as set forth in the Statement, which notice (the "Dispute Notice") shall set forth in reasonable detail the basis for such disagreement and Buyer's calculation of the dollar amount of the Actual Costs and Total Payments. Seller will give Buyer and its representatives access during normal business hours to the personnel, books and records of Seller reasonably necessary to enable Buyer to determine its agreement or disagreement with the Statement prepared by Seller. If no Dispute Notice is received by Seller within such forty-five (45) day period, Seller's calculation of Actual Costs and Total Payments shall be final and binding on the Parties. Upon receipt by Seller of a Dispute Notice, Buyer and Seller shall cooperate and use their best efforts to resolve such dispute among themselves. If they are unable to resolve their dispute within thirty (30) days (or such longer period as may be agreed to between the Parties) after Seller's receipt of the Dispute Notice, then the Parties shall have whatever rights may be available to them at law, subject to Sections 10.4 and 10.5 of the Asset Purchase Agreement. (c) Within thirty (30) days after the determination of Actual Costs and Total Payments has become final as a result of Buyer's failure to submit a timely Dispute Notice, (i) if Actual Costs exceed Total Payments, Buyer shall pay Seller the difference between Actual Costs and Total Payments or (ii) if Total Payments exceed Actual Costs, Seller shall pay Buyer the difference between Total Payments and Actual Costs. (d) If Buyer submits a Dispute Notice, then (i) (A) if Actual Costs exceed Total Payments as calculated by each of Seller and Buyer but in differing amounts, then Buyer will pay Seller the smaller difference within thirty (30) days after submission of the Dispute Notice (the "Buyer Payment"); and then upon resolution, pursuant to Section 3.8(b) or at law, of the dispute covered by such Dispute Notice, (A) if Actual Costs (as finally determined) exceed Total Payments (as finally determined) plus any Buyer Payment, Buyer will pay Seller the difference, plus interest as 10 determined pursuant to Section 3.7, within thirty (30) days after such final determination and (B) if Total Payments (as finally determined) plus any Buyer Payment exceed Actual Costs (as finally determined), Seller will pay Buyer the difference, plus interest as determined pursuant to Section 3.7, within thirty (30) days after such final determination; or (ii) if Total Payments exceed Actual Costs as calculated by each of Seller and Buyer but in differing amounts, Seller will pay Buyer the smaller difference within thirty (30) days after submission of the Dispute Notice (the "Seller Payment"); and then, upon resolution, pursuant to Section 3.8(b) or at law, of the dispute covered by such Dispute Notice, (A) if Total Payments (as finally determined) minus any Seller Payment exceed Actual Costs (as finally determined), Seller will pay Buyer the difference, plus interest as determined pursuant to Section 3.7, within thirty (30) days after such final determination and (B) if Actual Costs (as finally determined) exceed Total Payments (as finally determined) minus any Seller Payment, Buyer will pay Seller the difference, plus interest as determined pursuant to Section 3.7, within thirty (30) days after such final determination; or (iii) if Actual Costs exceed Total Payments as calculated by one Party but Total Payments exceed Actual Costs as calculated by the other Party, then no payment is due from either Party until the dispute is settled; and then, upon resolution, pursuant to Section 3.8(b) or at law, of the dispute covered by such Dispute Notice, (A) if Actual Costs (as finally determined) exceed Total Payments (as finally determined), Buyer will pay Seller the difference, plus interest as determined pursuant to Section 3.7, within thirty (30) days after such final determination and (B) if Total Payments (as finally determined) exceed Actual Costs (as finally determined), Seller will pay Buyer the difference, plus interest as determined pursuant to Section 3.7, within thirty (30) days after such final determination. 3.9 Allocation of Certain Expenses In addition to the foregoing amounts, Buyer shall bear the costs and expenses of obtaining any and all consents from third parties which may be necessary in connection with Seller's provision of Services to Buyer hereunder and which are due to the separation of Buyer from Seller, and Buyer shall reimburse Seller for any such costs and expenses Seller incurs in connection with obtaining any such consents within thirty (30) days after being invoiced therefor; provided, however, that Seller shall be responsible for the costs and expenses relating to obtaining consents from the landlords of facilities at any of the Locations to the extent such costs and expenses exceed $200,000 in the aggregate; provided, further, that if such costs and expenses relating to obtaining consents from the landlords of facilities at any Locations exceed $200,000 in the aggregate, then the Buyer and Seller shall each use their best efforts to find a mutually agreeable solution to minimize such costs and expenses, including relocating Buyer to a new location as reasonably determined by Seller. 3.10 Taxes In addition to any amounts payable to Seller hereunder, within thirty (30) days after receipt of an invoice for Impositions from Seller, Buyer shall reimburse Seller for any sales, use, transfer, privilege, stamp, documentary, value added, excise, commercial rent tax (if applicable) or other similar taxes, charges or assessments of any nature not otherwise included in 11 the payments to be made hereunder (excepting any taxes based on the net income of Seller) that Seller is required to pay on account of the provision of the Services, that are levied or imposed by reason of the transactions contemplated by this Agreement or with respect to payments made by Buyer for such Services pursuant to this Agreement ("Impositions"). If Buyer claims an exemption from any Imposition, or makes a claim that such Imposition is not applicable, then Buyer shall furnish Seller with proper evidence of such exemption, along with appropriate documentation necessary to obtain such exemption, or appropriate documentation regarding the inapplicability of such Imposition, and Seller will use reasonable efforts to obtain an exemption, refund or determination as requested by Buyer at Buyer's expense. Buyer will cooperate with Seller in such efforts. Notwithstanding any claim by Buyer of or for an exemption, refund or inapplicability, if Seller is finally held liable for an Imposition, Buyer shall promptly reimburse Seller for such amount plus any interest or penalties assessed thereon or additions thereto. All payments to Seller pursuant to this Agreement shall be made free and clear of and without deduction for any taxes; provided, that if Buyer is required to deduct any taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable hereunder) Seller shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) Buyer shall make such deductions and (iii) Buyer shall pay the full amount deducted to the relevant governmental authority in accordance with applicable law. 4. Certain Covenants 4.1 Contact Persons Within ten (10) days prior to the Closing Date, Seller and Buyer shall each name an individual to serve as its respective point of contact. Such individuals shall be responsible for the implementation of this Agreement between Seller and Buyer, including resolution of any issues that may arise during the performance hereunder on a day-to-day basis. Such individuals shall meet once each calendar quarter throughout the Term as soon as practicable and in any event no later than thirty (30) days after the end of each calendar quarter and otherwise as reasonably requested by a Party to review the performance of the Parties hereunder as well as the costs of the Services being provided during such quarter and for the year to date. 4.2 Data Protection Seller shall take necessary measures to protect Buyer's data that is processed by Seller from unauthorized destruction, deletion, change or disclosure to third parties, and to allow recovery of such data in events of force majeure; provided, however, that Seller shall be deemed to have satisfied this obligation if the measures taken to protect and recover Buyer's data are equivalent to what Seller uses in carrying out its own businesses. 4.3 Personal Computers Subject to the terms of its master leases for personal computers, Seller agrees that it will provide to Buyer the use of personal computers, together with all software currently thereon, that are Related to the Business on the Closing Date until the termination of this Agreement. At Buyer's election, upon the end of the Term, either (i) Seller and Buyer will use 12 reasonable efforts to negotiate, and obtain the lessor's consent to, a sublease, assignment, partial assignment or other agreement to be effective upon expiration of the Term in form and substance acceptable to each Party setting forth the terms and conditions of Buyer's use of the personal computers from the end of the Term through the end of the then-existing lease periods for such personal computers, although neither Party has any legal obligation to do so, or (ii) Buyer shall buy out the leases for such personal computers through the payment of the remaining rental costs of such personal computers plus the fair market value thereof. Neither the sublease nor any sale of personal computers at the end of the Term gives any rights to the software currently on such personal computers, all of which software shall be removed, overlaid or disabled by Buyer prior to any such sublease or sale. 4.4 Shared Office Locations Buyer shall take such action as is necessary to ensure, to the extent not prohibited under the applicable lease, that, in Locations at which both Seller and Buyer have employees, (i) the office space of Buyer is clearly distinguishable from the office space of Seller and (ii) the Buyer office space has office signage that is distinct and separate from the Seller office signage. Seller shall reasonably cooperate with, and assist, Buyer, at Buyer's expense, with such actions by Buyer. 5. Force Majeure 5.1 Force Majeure Seller shall not be liable for any interruption of a Service, any delay in providing any Service or any other failure to perform under this Agreement when such interruption, delay or failure results, directly or indirectly, from any cause or circumstance beyond Seller's reasonable control, including strikes, lock-outs, acts or orders of any government (or agency or instrumentality thereof), riot, war, insurrection, terrorism or other hostilities, acts of a public enemy, embargo, fuel or energy shortage, power outages or interruptions, fire, flood, earthquake or other acts of God, accidents, telecommunication failures, malfunctions of equipment or software programs, sabotage or computer viruses. In any such event, Seller's obligations hereunder shall be postponed for such time as its performance is suspended or delayed on account thereof. Seller will promptly notify Buyer, either orally or in writing, upon learning of the occurrence of any such force majeure event. Upon the cessation of the force majeure event, Seller will use reasonable efforts to resume its performance hereunder with the least possible delay. 6. Liabilities 6.1 Obligation to Reperform In the event of any breach of this Agreement by Seller as a result of any error or defect in the provision of any Service, Seller shall use its reasonable efforts to correct such error or defect or reperform such Service at Seller's expense, and such correction or reperformance shall be Buyer's sole remedy for such breach, unless such breach is the direct result of gross negligence or willful misconduct by Seller or Seller is not able to correct the error or defect or reperform the Service. If such a breach by Seller takes place and Seller is not able to correct the 13 error or defect or reperform the Service within a reasonable amount of time after Buyer notifies Seller of such breach or Seller becomes aware of such breach, Seller shall reimburse Buyer for its reasonable out-of-pocket expenses needed to obtain correction of the error or defect or reperformance of the Service from a third party, which reimbursement shall be made within thirty (30) days after receipt from Buyer of reasonably sufficient supporting documentation of such expenses; provided, that Seller's liability for reimbursement of Buyer's out-of-pocket expenses for any such correction or reperformance shall not exceed the fees due and owing for the applicable Service over the immediately preceding three full calendar months and paid to Seller and shall in any event remain subject to Section 6.2. If (i) such a breach by Seller is the direct result of its gross negligence or willful misconduct, or (ii) Seller breaches this Agreement in a manner other than that described in the first sentence of this Section 6.1, then, subject to Section 6.2, in each case, the liability of Seller with respect to this Agreement or anything done in connection with this Agreement (including the performance or breach of this Agreement) or with respect to the provision or use of any Service provided under this Agreement, whether in contract, tort or otherwise, shall not exceed the fees (excluding third-party expenses) actually previously paid to Seller by Buyer in respect of the Service from which any such liability arises. The basket in Section 8.2(g)(i) of the Asset Purchase Agreement shall not apply to claims hereunder, but the limitation in Section 8.2(g)(ii) of the Asset Purchase Agreement shall apply to claims made hereunder and payments made by Seller for breaches hereunder pursuant to Section 8.2 of the Asset Purchase Agreement shall count towards the aggregate cap in Section 8.2(g)(ii) of the Asset Purchase Agreement. Notwithstanding anything to the contrary contained herein, Seller shall not be liable to Buyer by reason of either the taking of any portion of any Location by condemnation by eminent domain or for the unavailability of any portion of and Location by reason of destruction, fire or other casualty. In addition, Seller shall not be liable by reason of a failure of any landlord to satisfy any of its obligations under any lease. Seller will undertake reasonable efforts to enforce the terms of the lease but has no obligation to expend material funds or to commence or pursue litigation. 6.2 Limitation of Liability Seller's aggregate liability under this Agreement for damages for all claims (including, but not limited to, claims arising under Section 8.2 of the Asset Purchase Agreement related to this Agreement) in the aggregate in a calendar year arising out of Seller's performance or non-performance under this Agreement or otherwise, whether in contract, tort or otherwise, shall be limited to an amount not to exceed an amount equal to the fees (excluding third party expenses) actually due to Seller hereunder for the 9 month period immediately preceding the performance or non-performance to which the claim is attributable and paid to Seller. The limitations and exclusions herein represent the Parties' agreement for allocation of risk hereunder and apply to all causes of action or claims in the aggregate, including: breach of contract; breach of warranty; negligence, strict liability, misrepresentations, claims for failure to exercise due care in the performance of the Services hereunder, and other torts; and any statutory claims or cause of action based on the violation of any statute, whether asserted by a governmental entity or private person. 14 6.3 Indemnity Indemnification hereunder shall be handled as set forth in Article 8 of the Asset Purchase Agreement, subject at all times to the limitations set forth herein. 7. Term; Termination 7.1 Term; Termination (a) The Term of this Agreement shall be from 12:01 a.m. on the Closing Date until 11:59 p.m. on the last day of the month that is on or closest to the first anniversary of the Closing Date (the "Term"). The obligation of Buyer to make a payment for any Services previously rendered shall not be affected by the expiration of the Term and shall continue until full payment is made. (b) Buyer may terminate (A) any Service (other than Real Estate Required Services) or all Real Estate Required Services for all Transferred Employees and (B) all Real Estate Required Services for a particular Location, in each case without cost or penalty, upon at least sixty (60) days' prior written notice to Seller; provided, however, that (i) Buyer may not terminate the Real Estate Required Services for a Location unless and until Buyer completely vacates such Location; (ii) Buyer may terminate a Service only as of the last day of a month; and (iii) no Service which appears in the left-hand column entitled "Service" of Schedule K hereto may be discontinued or terminated at any Location (a "Discontinued Service") unless each of the Services appearing on the line opposite such Discontinued Service in the right-hand column entitled "Required Bundle" of Schedule K is also discontinued or terminated at such Location, as the case may be. Such termination will be without prejudice to Buyer's obligation to pay the cost of such Services as provided herein at the same rate as prior to such notice of termination until such service is terminated. (c) Upon the termination of a Service with respect to which Seller holds books, records or files, including current and archived copies of computer files, owned by Buyer and used by Seller in connection with the provision of such Service to Buyer, Seller will return all of such books, records or files as soon as reasonably practicable, but in no event more than thirty (30) days, after such termination. Buyer shall bear Seller's costs and expenses associated with the return of such documents. At its expense, Seller may make a copy of such books, records or files for its legal files. 7.2 Rights of Termination This Agreement is subject to termination as follows: (a) upon expiration of the Term; (b) upon the mutual consent of the Parties; (c) by either Party upon the bankruptcy or insolvency of the other Party; 15 (d) by Seller if any payment due from Buyer hereunder (which amount Buyer has not previously disputed in writing) becomes more than two (2) months past due; or (e) by Seller if required by any law, regulation or order applicable to Seller upon notice to Buyer as soon as reasonably practicable after Seller learns of such law, regulation or order. 7.3 Amounts Due on Termination In the event of a termination of this Agreement, Seller shall be entitled to all outstanding amounts due from Buyer on account of provision of Services up to the date of termination. 7.4 Effect of Termination Sections 3.7, 3.8, 3.9, 3.10 and 4.2 and Articles 6, 7 and 8 shall survive any termination of this Agreement. 8. Miscellaneous 8.1 Incorporation by Reference Those provisions of Article 10 of the Asset Purchase Agreement pertaining expressly to the Collateral Documents are incorporated herein by reference. 8.2 Confidentiality; Security; Title to Data (a) Except as required by law, each Party agrees to maintain as confidential and not to disclose to any third party any and all Confidential Information of the other Party, except that Seller may disclose such Confidential Information for the purpose of providing Services pursuant to this Agreement to any third parties that provide such Services; provided, that any such third party shall have agreed to be bound by this Section 8.2. However, nothing herein will be deemed to prevent the receiving Party from disclosing any Confidential Information received hereunder pursuant to any applicable law, regulation or court order or, in the case of Seller, any professional rule or standard; provided, further, that such receiving Party will immediately notify the disclosing Party of such required disclosure and shall use its reasonable commercial efforts to minimize or prevent such disclosure to the maximum extent allowed under any such applicable law, regulation, court order or professional rule or standard. (b) For so long as Buyer occupies a Location under this Agreement, Buyer and Seller shall comply with the confidentiality policies and procedures set forth in Schedule L hereto with respect to such Location. (c) Buyer acknowledges that it will acquire no right, title or interest (including any license rights or rights of use) in any firmware or software owned by Seller, and the licenses therefor to which Seller is a party, by reason of Seller's provision of the Services hereunder. Buyer also acknowledges that, while it may continue to have access to databases existing on or accessible through the computer systems of Seller, Buyer will acquire no right, title or interest 16 (including any license rights or rights of use) to any such databases, except to the extent expressly licensed by Seller to Buyer. Buyer acknowledges that the information contained in all such databases, including information regarding clients of Seller, shall be treated as Confidential Information of Seller hereunder. Without limitation of the foregoing, Buyer shall comply with the confidentiality policy set forth in Schedule L attached hereto for so long as Buyer occupies any Location. (d) Seller acknowledges that it will acquire no right, title or interest (including any license rights or rights of use) in any firmware or software owned by Buyer, and the licenses therefor for which Buyer is a party, by reason of Seller's use or access thereto in connection with the provision of the Services provided hereunder. Seller also acknowledges that it will acquire no right, title or interest (including any license rights or rights of use) to any databases existing on or accessible through the computer systems of Buyer, except to the extent expressly licensed by Buyer to Seller. Seller acknowledges that the information contained in all such databases, including information regarding clients of Buyer, shall be treated as Confidential Information of Buyer hereunder. 8.3 Independent Contractor Seller shall perform the Services as an independent contractor and this Agreement is not intended to create, nor shall it in any way be interpreted to create, a joint venture, partnership or any other similar relationship between Seller and Buyer. The employees of Buyer who, from time to time, may occupy the Locations, shall not be considered to be employees of Seller for any purpose whatsoever. This Agreement shall not be construed as constituting Seller as agent for Buyer for any purpose whatsoever. Each Party shall conduct its businesses at its own risk and expense and for its own account and neither Party is granted any right or authority to create any obligations on behalf or in the name of the other or to bind the other in any manner whatsoever. 8.4 License This Agreement is a license only and shall not be considered to be a lease between the Seller and Buyer for any purpose whatsoever. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 17 IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed on its behalf by its duly authorized officers as of the date first written above. PRICEWATERHOUSECOOPERS LLP By: /s/ Colin McKay --------------------------------- Name: Colin McKay Title: Principal FTI CONSULTING, INC. By: /s/ Theodore I. Pincus --------------------------------- Name: Theodore I. Pincus Title: Executive Vice President and Chief Financial Officer 18 EXHIBIT B TRANSITIONAL EMPLOYEES LEASING ARRANGEMENT _ In accordance with the provisions of this Exhibit B, Seller hereby agrees to lease to Buyer the following employees: Joachim Englert; Maryam Ghazi; Carl R. Jenkins; and Bobby Rajan (the "Leased Employees") during the Leasing Period (as defined herein). 1. Definitions. Initially capitalized terms used and not otherwise defined herein shall have their respective meanings as set forth in the Asset Purchase Agreement. 2. Use of Employees. During the term of this Exhibit set forth in Section 8 hereof, Seller shall provide Buyer with the exclusive use of the Leased Employees to perform such tasks as Buyer may direct. Notwithstanding the foregoing, the duties and job responsibilities of each Leased Employee shall be consistent with such Leased Employee's responsibilities and position immediately prior to the Closing, as assigned by, and subject to the sole supervision of, Buyer, subject to any applicable employment agreements and except as modified pursuant to express direction from Buyer. Buyer shall have the sole and exclusive responsibility to supervise and direct all activities of the Leased Employees. Seller shall instruct each Leased Employee to take direction from Buyer. Seller agrees and covenants that, during the Leasing Period, Seller shall not direct the job-related activities of the Leased Employees; provided, however, that the Leased Employees shall remain subject to Seller's generally applicable employment-related policies. Subject to the provisions of the next sentence, during the Leasing Period, Seller will not permanently reassign, promote or relocate any Leased Employee, or terminate the employment of any Leased Employee other than for cause, without the prior consent of Buyer. Seller has no obligation and is not responsible for replacing any Leased Employees who resign, retire or otherwise leave the employ of Seller during the Leasing Period, or for ensuring that any other person is available to provide the services provided by such Leased Employees. Seller shall promptly notify Buyer of the resignation, retirement or termination of any Leased Employee's employment during the Leasing Period. Seller makes no representation or warranty (express, implied or by operation of law) regarding the performance, competence, skill or knowledge of any Leased Employee or the quality of the service to be provided by any Leased Employee, except that Seller represents that the Leased Employees were employed by Seller in connection with the Business Recovery Services prior to the date of this Exhibit. Buyer shall be responsible for complying with all safety, health and work-related laws, regulations and rules with respect to the Leased Employees during the Leasing Period. 3. Wages and Benefits. During the Leasing Period, the Leased Employees shall remain at all times employees of Seller. Seller shall continue to provide wages or salary and benefit plans and arrangements to each Leased Employee identical to that provided by Seller immediately prior to the Closing Date, except for changes made in the ordinary course of its business with respect to its employees generally. Without limiting the foregoing, but subject to the compliance by Buyer with its payment obligations set forth in Section 4, Seller shall be responsible for (i) paying the base salaries of the Leased Employees along with any bonuses to which such Leased Employees may be entitled or to which Buyer otherwise agrees, (ii) the costs of the Leased Employees' participation in the retirement and other employee benefit plans B-1 sponsored by Seller (including without limitation the Retirement Benefit Accumulation Plan for Employees of PricewaterhouseCoopers LLP and the Savings Plan for Employees of PricewaterhouseCoopers LLP), (iii) workers' compensation coverage of the Leased Employees, (iv) vacation and leave pay for the Leased Employees, (v) the employer's portion of any health, life, disability or other insurance provided as a part of Seller's employee benefit plans in effect during the Leasing Period and in which the Leased Employees participate, (vi) all employee taxes (including Social Security, Medicare and unemployment taxes) and tax withholdings, and (vii) all payroll processing, payroll deduction, tax withholding and tax reporting services, employee benefit administration, claims processing, personnel administration, and all such related human resources services with respect to the Leased Employees. 4. Payment. (a) In consideration of Seller providing the Leased Employees to Buyer, Buyer shall make the following payments to Seller (i) Buyer shall pay to Seller, on the Closing Date, a payment equal to all of Seller's costs relating to the salary and benefit costs for the Leased Employees for the Leasing Period, including without limitation salary, bonus, benefits, vacation and leave time, unemployment insurance, workers' compensation, taxes benefits and insurance payable to or incurred with respect to Leased Employees during the Leasing Period, as calculated based on a methodology as reasonably determined by Seller in its discretion to ensure complete reimbursement of all such costs allocable to the Leased Employees. For all other costs associated with the Leased Employees, the Leased Employees shall be taken into account in the Cost Drivers used to charge Buyer for the costs to provide the Services under the Transition Services Agreement from the Closing Date. (ii) Buyer shall pay to Seller, within 30 days after receipt of an invoice from Seller, any reasonable business-related out-of-pocket expenses incurred by Seller in connection with the Leased Employees or the provision of services under this Exhibit. (iii) Buyer shall pay to Seller, within 30 days after receipt of an invoice from Seller, any amounts expended by Seller for bonuses or other payments paid to Leased Employees pursuant to any program established at Buyer's direction to induce Leased Employees to maintain their employment with Seller during all or part of the Leasing Period. (b) All amounts due to Seller hereunder shall be paid in U.S. dollars and remitted, by wire transfer of immediately available funds, to such account as Seller may from time to time designate in writing. If Buyer fails to remit any payment by the date on which such is due hereunder, Buyer shall pay interest to Seller on the overdue amount calculated on the basis of the per annum London Interbank Offered Rate plus 1%, pro rated for each day that such amount is overdue, beginning with (and including) the day on which such amount is due. Buyer shall not withhold any undisputed amounts due to Seller under this Exhibit. Any disputed amounts under this Exhibit that may be pending between the parties (any required adjustment as a result of any such dispute to be made on subsequent invoices from Seller) may be withheld, so long as (i) Buyer delivers a written statement to Seller on or before the due date of such payment, describing the basis of the dispute and the amount being withheld and (ii) such statement is B-2 signed by an authorized representative of Buyer who represents that the amount in dispute has been determined after due investigation of the facts and in good faith. The parties shall resolve any such disputed amounts in accordance with Section 7. 5. Records. Seller shall maintain records regarding the Leased Employees in the same manner that it keeps records for itself with respect to its other employees. During and following the Leasing Period, Seller shall make available to Buyer all data, information and other materials within its control that relate to the performance of the services by the Leased Employees during the Leasing Period. 6. Indemnification. (a) Notwithstanding any other provision of this Exhibit, effective as of the date of this Exhibit, Buyer shall be responsible for all liabilities and other amounts with respect to the Leased Employees for which it is responsible pursuant to Section 5.4(d) of the Asset Purchase Agreement, as if such Leased Employees had become employees of Buyer on and as of the Closing Date. Buyer shall indemnify, hold harmless, and defend Seller and its Affiliates and their respective successors, partners, principals, members, employees, officers, directors and agents (collectively, the "Seller Indemnitees") from and against, and agrees promptly to defend any Seller Indemnitee from and reimburse any Seller Indemnitee for, any and all losses, claims, expenses (including the costs of investigation and defense and reasonable attorneys' fees), damages, liabilities, obligations and judgments (whether or not resulting from claims made by third parties) which any Seller Indemnitee may at any time suffer or incur, or become subject to, as a result of or in connection with (i) any liabilities with respect to Leased Employees that are Buyer's responsibility pursuant to the Asset Purchase Agreement, (ii) any acts or omissions of any Leased Employees during the Leasing Period (including without limitation any violation of any local, state or federal law), (iii) any acts or omissions by Buyer, an Affiliate of Buyer or any person acting pursuant to the direction or control of Buyer with respect to the Leased Employees during the Leasing Period, (iv) the employment of the Leased Employees during the Leasing Period, (v) the participation of the Leased Employees in Seller's benefit plans, and (vi) the services Seller is providing under this Exhibit. Buyer's obligations in this Section shall survive the termination or expiration of this Exhibit. (b) Seller shall have no liability to Buyer and Buyer shall have no liability to Seller under this Exhibit except as provided in Section 4, this Section 6 or as otherwise specifically provided under this Exhibit. 7. Dispute Resolution. Any controversy, claim, or dispute between or among the parties and /or their respective Affiliates arising out of or related to this Exhibit, or the breach, termination or validity thereof (a "Dispute") shall be resolved as provided in this Section. (a) In the event of a Dispute, the parties shall first attempt to resolve the Dispute by negotiating in good faith. Any Dispute that has not been resolved by negotiation within thirty (30) days of written notice of the existence of the Dispute may be referred by either party to a panel consisting of a senior executive from each party, and each party shall nominate its member of such panel within five (5) days of such a reference. B-3 (b) Any Dispute that is not resolved by the panel of senior executives within thirty (30) days of the reference of the Dispute to such panel shall at the option of any party be finally resolved by binding arbitration in accordance with the Rules for Non-Administered Arbitration of the CPR Institute for Dispute Resolution (the "CPR Rules"), and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Any such arbitration shall be conducted under the United States Arbitration Act in New York, New York. (c) Any Dispute shall be referred to three arbitrators, named in accordance with the CPR Rules. (d) Any party may, without inconsistency with this agreement to arbitrate, seek from a court any interim or provisional relief that may be necessary to protect the rights or property of that party pending the arbitrators' decision of the merits of the Dispute. (e) The parties acknowledge that breach by either party of any of the confidentiality provisions of this Exhibit would not be fully compensable by money damages and that the arbitrators may award injunctive or other equitable relief with respect to any such breach. (f) Notwithstanding the existence of any Dispute between the parties, (i) Seller shall not discontinue the provision of the Leased Employees, unless it has been determined in an arbitration procedure hereunder that Buyer is in material default of any of its obligations hereunder, or termination of this Exhibit is permitted by Section 9 and (ii) if any such Dispute relates to a payment due hereunder from Buyer, Buyer shall pay as required under this Exhibit any amounts due hereunder that are not in dispute. (g) The costs of any arbitration under this Section, including the arbitrators' fees and expenses, shall be borne equally by the parties. Each party shall bear its own expenses and attorneys fees. 8. Term. Subject to the right of Seller to terminate this Exhibit pursuant to Section 9 hereof, the term of this Exhibit (the "Leasing Period") shall commence on the Closing Date and shall terminate at the end of the day on September 30, 2002. 9. Buyer Default. If Buyer fails to pay any amounts due by it hereunder within fifteen (15) days after receipt from Seller of a notice of such failure (a "notice of default"), Seller may terminate this Exhibit; provided, however, that Seller shall not have the right to terminate this Exhibit for non-payment unless the amounts subject to notices of default under this Section 9 exceeds US$50,000. Upon any such termination by Seller, all obligations of Seller hereunder shall cease immediately, and Seller shall have no liability under this Exhibit or otherwise as a result of such termination or ceasing to provide the Leased Employees thereafter, and all obligations of Buyer hereunder arising through the date of such termination to pay any amounts due to Seller shall continue until paid in full. B-4 Table of Contents 1
SCHEDULE A: BASIC SERVICES .................................................... 2 Infrastructure ................................................................. 2 US Informational Technology (US IT) ............................................ 3 SCHEDULE B: ADDITIONAL SERVICES ............................................... 9 US Information Technology (US IT) .............................................. 9 SCHEDULE C: BUYER RESPONSIBILITIES ............................................ 15 Infrastructure ................................................................. 15 US Information Technology (US IT) .............................................. 16 SCHEDULE D: PRICING BASED ON CURRENT YEAR COST ESTIMATES AND ASSUMPTIONS REGARDING BUSINESS COST DRIVERS ................................................ 17 SCHEDULE E: ASSUMPTIONS ....................................................... 18 SCHEDULE F: REAL ESTATE SHARED FACILITIES ..................................... 19 SCHEDULE G: CERTAIN EXCLUDED SERVICES FOR BUYER RELOCATED EMPLOYEES ........... 20 SCHEDULE H: TSA DATABASES ..................................................... 21 SCHEDULE I: PASS-THROUGH COSTS ................................................ 22 SCHEDULE J: REAL ESTATE REQUIRED SERVICES ..................................... 24 SCHEDULE K: SERVICE BUNDLING SCHEDULE ......................................... 25 SCHEDULE L: POLICY TO MAINTAIN CLIENT CONFIDENTIALITY AT PWC SHARED FACILITIES ..................................................................... 26 Schedule A: Basic Services Infrastructure - -------------------------------------------------------------------------------- Service Description - -------------------------------------------------------------------------------- Operations Services (Shared Facilities only) - -------------------------------------------------------------------------------- Facility Management Operations . Facilities management and maintenance, minor repairs, alterations, redecorating, storage requirements, local landlord relations, office moves, relocations, management of porters and guards, and minor capital acquisitions including printers and fax equipment. - -------------------------------------------------------------------------------- Service Centers/Concierge . Assistance with mailing, printing, filing/retrieving, faxing copying and stocking supplies as requested by BUYER. - -------------------------------------------------------------------------------- Records Management . Filing systems, retrieving, destruction of records, and both on-site and remote storage. - -------------------------------------------------------------------------------- Mail, Express Couriers, and . Outbound/inbound processing of Messengers packages, letters and parcels. - -------------------------------------------------------------------------------- Reprographics . Management of print shop function and stand alone copiers, which includes reprographics and bindery services. Also includes acquisition of copier equipment, maintenance and repairs. - -------------------------------------------------------------------------------- Switch Board/Receptionist . Answer incoming calls to main PwC building number . Supply general office information . Greet visitors - -------------------------------------------------------------------------------- Supplies . Includes but not limited to paper, files, pencils, pens, printer ink cartridges, staplers, binders, stationery and canteen related supplies. - -------------------------------------------------------------------------------- National Services (Shared Facilities only) - -------------------------------------------------------------------------------- Space Cost Management: . Manage occupancy agreement with BUYER Manage Real Estate projects . Manage space portfolio . Administer leases - payables, landlord relations, occupancy cost reporting - -------------------------------------------------------------------------------- Security . Manage Security policies to protect assets: People, information - work with Information and Security Technology Group; Physical assets - laptop computers. . Conduct physical review of space: Determine appropriate security level (1-5); Prepare bid specifications; Install (for Shared Facilities office space only). appropriate mix of card access, alarms, CCTV - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Occupancy (Shared Facilities only) - -------------------------------------------------------------------------------- Occupancy Occupancy services include: . Rent . Depreciation/Amortization . Rental of office equipment . Office relocation & alterations . Maintenance & Repairs-Office Equipment . Utilities - -------------------------------------------------------------------------------- 2 US Informational Technology (US IT) - -------------------------------------------------------------------------------- Service Description COMPUTING SERVICES - -------------------------------------------------------------------------------- Distributed Infrastructure Services Distributed Infrastructure Services (DIS) (Shared Facilities only) includes the installation, management, support and administration of the network and telecommunications cabling infrastructure, local area network and local area file and print services within PwC facilities. In addition, DIS includes the management and administration of authentication services, file and print user IDs and IP networks. Key Features/Functions: . Manage and support Local Area Networks (LANs) in PwC offices . Provide and install hardware, maintain, monitor and administer the ongoing operations of the LAN . Manage and track inventory for the distribution, disposition and disposal of technology assets for LAN/WAN, videoconferencing and Uninterruptible Power Systems (UPS) equipment . Manage and support local file and print sharing in PwC offices . Provide and install hardware, maintain, monitor and administer the ongoing operations of the file and print services . Refresh server operating systems, tools and platform hardware as required to stay current . Manage and track inventory for the distribution, disposition and disposal of technology assets for file and print server equipment, including software licensing . Manage storage, capacity and performance of PwC-standard file and print servers . Manage and report disk space usage and remove non-business related files from servers . Provide account administration and maintenance for file and print infrastructure, including creation, deletion and migration . Provide user account authentication and security for file and print services to prevent unauthorized access, within stated security guidelines . Deploy and maintain all approved Buyer-specific shared software applications on PwC- standard, US IT-managed file and print servers . Install network printers, create print queues and maintain standard naming and driver revisions . Perform twice-yearly security audits on all file and print and local area network environments . Manage and maintain server-based virus protection . Manage break/fix services for PwC-standard file and print servers . Provide server data backup and recovery services . Provide temperature controlled server room facilities with UPS power for file and print servers . Provide computer name resolution services via internal DNS and WINS . Provide automated IP address assignment in customer offices via DHCP . Provide UPS to support maximized uptime of LAN/WAN, computer room systems, PBX and voicemail . Conduct power plant audits to meet National Electrical Code and other standards . Develop, maintain and enforce standard platforms and infrastructure for Distributed Infrastructure . Install and maintain cable plant and manage its warranties, for limited initiatives . Manage shared, office-based print queues - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- Messaging and Groupware Services This service delivers deployment, management, administration and hosting of Lotus Notes messaging and groupware. Also included are e -mail, replication services, administration and maintenance for address books, ID creation, and statistic collection. Key Feaures/Functions: . Provide disk space per Notes mail account . Manage and track inventory for the distribution, disposition and disposal of technology assets for Notes mail and groupware servers . Manage break/fix services for Notes mail and groupware servers . Provide support for groupware applications . Deliver Notes messaging to PwC standards for security and disaster recovery . Issue and manage Notes mail accounts . Maintain the PwC's Notes mail directory . Provide security for messaging systems to prevent unauthorized access, within stated PwC guidelines . Manage storage, capacity and performance of Lotus Notes infrastructure . Refresh server operating systems, messaging software and platform hardware as required to stay current . Provide standard GUID management and authentication services . Provide directory services . Provide replication services to all servers . Support Buyer-branded Notes domains, certificate hierarchy and mail routing as requested . Provide secure mail routing and replication to PwC's clients using Notes . Monitor utilization statistics for the groupware infrastructure . Provide quality assurance reviews for Notes database applications . Administer broadcast e-mail system Global Services: . Provide Internet mail routing and virus blocking services . Provide international Notes mail routing and replication - -------------------------------------------------------------------------------- PC Deployment and Management The PC Deployment and Management service provides deployment, management, and administration of a standard suite of desktop tools. This suite of tools is deployed on an agreed-upon PC platform and an agreed-upon PC hardware refresh program for staff who are located in a PwC facility and receive PwC support. An exception request /approval process is provided and supported when customer needs dictate hardware replacement before the PC hardware program interval expires. The standard suite of tools is the productivity suite, anti-virus, security, operating system and an agreed-upon, customized set of applications. Key Features/Functions: . Deliver, support and maintain a PwC-customized suite of applications on an PwC- standard hardware platform and PwC-standard image . Refresh operating system, standard software suite and system images as required to stay current . Analyze PC supply and demand and provide forecasting recommendations . Provide hardware maintenance support services for leased portfolio and perform on-site repairs as necessary, including hot swaps, or the coordination of third-party depot repait as prescribed by the purchased warranty level. . Establish user policies, requirements and standard operating procedures . Provide controlled requisition, procurement and installation of buyer approved desktop accessories, peripherals, and software . Manage warranty and repair services with vendors . Create and maintain PwC custom PC hardware catalogue with approved PwC pricing and details . Maintain on-site parts inventory as necessary . Electronic distribution of applications and updates . Distribute critical software updates electronically, typically virus signature file updates, via remote access network login "pushes" within bandwidth constraints . Distribute critical software updates electronically or via distributed CD-ROM when required . Manage the PwC's electronic software distribution system . Make available ESD scripts developed by customer and tailored for standard PC configurations via the PwC's ESD solution - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- . Develop core PC architecture, integrating customer requirements . Maintain current virus definition tables and make them available via ESD and/or network login script "pushes" . Maintain current device drivers and PC BIOS levels, i.e., standard modem, printer and network drivers . Maintain and report software license information for products used by the Buyer, limited to applications delivered via ESD . Manage and maintain shared, office-based print queues . Provide asset management systems with systemic links to General Ledger, Accounts Payable, Human Resources and Help Desk to ensure effective management of portfolio . Monitor new hire and termination processes to ensure compliance with PC Deployment and Management procedures . Audit electronic shipping notices with the supplier against original order . Electronically validate proof-of- delivery of orders to PwC locations . Support electronic receiving process for confirmation of equipment receipt and error handling . Manage lease inception process with lessors . Support PwC standard image loading and personalization for Buyer as necessary . Reconcile monthly leasing invoices with asset management system and disputes with lessors including rent, taxes, shipping, returns and damages. . Provide Buyer chargeback and lessor payment details to Accounts Payable . Assign assets and refresh records to reflect current Buyer accounting structure . Coordinate timely PC delivery for new hires, maintenance swaps or lease replacements . Transfer data as necessary for replacement equipment . Maintain asset contract, purchase and physical location information . Coordinate casualty buyout transactions with the Buyer . Remove after-market upgrades, inspect, pack and ship end-of-life assets to the lessor . Provide compliance mechanism to monitor compliance with Global Site Licenses . Perform electronic discovery of PC assets and reconcile to asset management system - -------------------------------------------------------------------------------- NETWORK AND TELECOMMUNICATIONS SERVICES - -------------------------------------------------------------------------------- Internet Services Internet Services provide access to Internet resources required to support business operations and to serve clients for web browsing, streaming video and file transfers. Key Features/Functions: . Provide Internet access and infrastructure to support Web browsing, streaming video and file transfers . Provide, manage, implement and operate the infrastructure, including load balancing, firewall protection, routers, caching and content blocking for Internet connectivity . Manage capacity, performance and availability of Internet services . Refresh server operating systems, tools and platform hardware as required to stay current . Provide security for Internet services based on the PwC's policies and standards, working with Risk Management to prevent unauthorized access . Provide administrative support for content blocking under the direction of Risk Management . Provide disaster recovery support . Manage vendor relationships and contracts . Provide 24x7x365 monitoring and problem resolution along with Level One through Level Three support (Level One = monitor and response support, Level Two = operational support, Level Three = design support) . Manage on Internet availability and usage . Support the PwC-standard Internet browser platform - -------------------------------------------------------------------------------- Remote Access Services Remote Access Services provides the ability to obtain access to PwC IT services, infrastructure and network from a non-PwC location. These locations can include home office, client sites, hotel and other locations. Physical connectivity is via dial-up, ISDN, cable modem or DSL. Currently only dial-up and ISDN are supported in the US. Key Features/Functions: . Provide authentication service for both user ID/password and user ID/password/token challenge authentication for establishing remote access sessions - -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- . Provide IP access to the PwC network from outside of a PwC office . Provide PC client software, including dialer, desktop software to process token challenges and dial local phone numbers . Manage Internet Service Provider and dial provider vendors, including contracts, dial numbers and POP management . Provide soft token administration, generation, archive and escrow services . Provide disaster recovery support consistent with PwC practices . Manage vendor relationships and contracts . Refresh server operating systems, tools and platform hardware as required to stay current . Provide 24x7x365 monitoring and problem resolution along with Level One through Level Three support (Level One = monitor and response support, Level Two = operational support, Level Three = design support) . Provide direct Internet Web access via dial-in . Plan, design and implement the PwC's Virtual Private Network (VPN) solution . Provide VPN access via the Internet for all PwC IP-based applications to which the necessary security has been granted - -------------------------------------------------------------------------------- Voice Communications Services Ongoing voice communications (Shared Facilities only) services are provided by the PwC's infrastructure organization. Design and development of voice and conferencing standards as provided by IT are outlined below. Design, engineering and installation management as provided by IT are delivered as part of the planning and implementation of new PwC offices. . Develop and design voice and conferencing standards . Refresh equipment, software and firmware as required to stay current . Operate and report on the voice interchange system . Develop and design conferencing standards . Provide, maintain and support 24/7 access to the telephone and voicemail networks and services . Coordinate ordering, installation, programming and testing of lines and circuits with vendors for voice network . Order "toll-free" numbers . Monitor voice network usage and identify and fix problems and outages . Analyze call traffic to ensure maximum utilization of network facilities . Perform daily moves and changes to the telephone systems . Process new hires, transfers and separations in all systems and databases . Provide or coordinate repairs on telephone sets and systems . Determine scope of, and coordinate internal relocations . Order new or replacement equipment such as telephone sets, circuit packs and polycoms . Coordinate asset management of existing voice and conferencing inventories for redeployment as necessary . Perform scheduled maintenance backups of telephone systems . Maintain Call Detail Recording (CDR) equipment and database and provide consumption information . Create and analyze CDR reports for traffic and trunk utilization . Record and distribute national voicemail broadcast messages . Set up and troubleshoot video conference sessions . Provide advanced troubleshooting and support for complex customer problem incidents . Refresh equipment, software and firmware as required to stay current - -------------------------------------------------------------------------------- Wide Area Network Services Wide Area Network (WAN) Services deliver connectivity between PwC offices, the PwC Data Center and the global Wide Area Network to support business-related applications reliably move data. For production WAN links, a mixture of technologies is used, including frame relay, point-to-point and ATM. Key Features/Functions . Provide planning, design and deployment functions for WAN services including hardware - -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- and software . Refresh hardware, software and firmware for routers and other equipment as required to stay current . Provide 24x7x365 monitoring and problem resolution along with Level One through Level Three support (Level One = monitor and response support, Level Two = operational support, Level Three = design support) . Manage vendor relationships and contracts . Provide, maintain and support access to the WAN via established minimum bandwidth facilities from specific PwC offices . Monitor capacity and performance including application specific traffic profiles to allow tuning . Acquire all IT network and telecommunications devices and services . Provide low bandwidth ISDN backup circuits for sites with a single WAN link, to provide reduced capacity connectivity in the event of a failure on the main link . Upgrade IOS for WAN hardware as required to stay current . Bill verification - -------------------------------------------------------------------------------- SUPPORT SERVICES - -------------------------------------------------------------------------------- Distributed Support Services The distributed support service is provided (Shared Facilities only) for a standard suite of desktop tools and includes US IT Service Center walk-up window assistance and dispatched deskside assistance. These services include all second level support escalations from the first level help desk. It also includes general support services associated with the delivery, deployment, management, deskside support and administration of the standard suite of desktop tools for the buyer's staff. Typical delivery of these services involves the problem diagnosis, resolution determination and implementation of the solution for desktop and infrastructure issues. Key Features/Functions: . Coordinate the repair of failed or broken PC hardware . Incident logging, tracking, categorization, assessment, troubleshooting, resolution, dispatch, escalation and closure in the incident management system . Manage shared, office-based print queues . On-site and timely replacement of customer PCs according to established guidelines where the customer has funded a hot spares pool . Resolve network connectivity issues in the PwC infrastructure . Resolve desktop hardware issues for PwC-standard PC hardware . Resolve desktop software issues for PwC-standard applications . Provide notification of problems and service outages to customers . Perform password resets . Provide informal ad-hoc orientation and update training on core applications . Assist customers with data backup solutions, including network backups and external device backups . Provide and set up network mini-hub equipment where available in training and conference rooms . Provide and maintain network diagrams and instructions for conference and training rooms . Coordinate data recovery on customer hard drives . Provide complete hardware and software diagnostic repair facilities and full-service walk-up centers in all large core offices . Provide moves, adds and changes of PC and printer equipment - -------------------------------------------------------------------------------- Help Desk Services Help Desk Services provide customers with cohesive options for technology support. Help Desk Services connect the customer with the service provider most likely to resolve the issue during the initial contact. Two support options are offered: . Telephone support . Dispatch to user-located support Key Features/Functions . Provide common point-of-entry for support and service requests . Provide solutions for how -to questions, service requests and problems encountered during use of the PwC's network, PCs and approved PC/Server based software applications and systems . Provide Remote Control software to achieve phone-based resolution and avoid dispatch to field support - -------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------- . Manage incident logging, tracking, categorization, assessment, troubleshooting, resolution, dispatch or escalation and closure of all support requests . Create, review and address Service Exception Reports from within Peregrine ServiceCenter to document deficiencies in service delivery . Provide 24 x 7 telephone-based technology support for core applications, with routing to appropriate service providers - both within and outside of US IT . Provide GUID and Notes account administration/ID-password resets . Author, edit, format, publish, update and maintain PwC proprietary content and solutions documents for all major supported products . Host PwC's primary internal telephone-based support channel (877-GTS-HELP); The 877- GTS-HELP menu offers a single point-of-entry for telephone support, designed to optimize customers' likelihood of having their issues resolved on first contact . Provide and manage all telephony hardware and infrastructure associated with (877-GTS- HELP), including AT&T network-based IVR, ACD, 800 service and management reporting; As stated above, this telephony supports Buyer-owned help desks that provide business application support . Provide telephony technology upgrades and new technology roll-outs, as required . Identify, recommend and implement system enhancements and process improvements to increase productivity or reduce total cost of ownership . Manage incident logging, tracking, categorization, assessment, troubleshooting, resolution, dispatch or escalation and closure of all support requests . Resolve in-scope problems within timeframes established according to business impact consistent with PwC policies and practices . Disaster recovery provided via an alternative site capable of taking calls as promptly as practicable consistent with PwC policies and practices . Out of scope problems resolved on best-effort basis - -------------------------------------------------------------------------------- PROJECT SERVICES - -------------------------------------------------------------------------------- Office Moves Office Moves encompass the creation of a complete technology infrastructure environment, from design and planning of electrical and telecommunications cabling infrastructure through the managed deployment of all active components including PBX, voicemail, hotelling, file and print services, LAN/WAN and UPS systems components. Applies to PwC initiated office moves only. Key Features/Functions . Build and implement all new and enhanced network infrastructures associated with new offices, office moves and office restacks; Refresh components as required . Manage ordering of all voice, data and video circuits associated with project . Plan and implement telecommunications and network infrastructure (planning for servers, cabling, routers, hubs, switches and associated protocols) . Coordinate change management . Coordinate turn-up of centralized monitoring of all network, UPS and environmental systems components . Perform needs assessment to fully understand customer IT needs in new workspace . Liaise with architects and TRES to create plans for IT rooms (including rack layout, equipment elevations, backup power, capabilities, air conditioning, security, jacks diagrams and associated facilities) . Plan and implement hoteling and videoconference systems . Plan and manage installation of the telephone system and voice mail system in conjunction with PwC resources and outside vendors . Implement architecture, policies, hardware standards and operating system standards spanning the UNIX, Windows NT, Netware and legacy OS environments . Redesign and test LAN file and print queues for new workspace . Disconnect, reconnect, configure and install servers, customer's computers, printers and peripherals; Test all computer equipment and cabling . Manage initial installation and configuration of video conferencing system . Test all computer, network, hoteling, phone equipment and cabling . Assist End User Services staff after relocation, documenting problem areas and providing prompt problem resolution . Document the new or revised technology infrastructure environment . Ensure all assets are bar coded and logged into the asset management database . Provide upgrades to video conferencing system - -------------------------------------------------------------------------------- 8 Schedule B: Additional Services As the relationship with BUYER proceeds, we expect that there may be additional requests for services. We have been specific as to the services we will provide in the "Basic Services" section. Unless specifically identified in the Basic Services section (Schedule A hereof), requests for services, reports, etc., will be considered non-basic and not included in our estimate of fees, though we will consider providing these services subject to an agreed upon scope and fee arrangement with BUYER that is agreed to pursuant to the provisions of Section 2.2. Examples of non-basic services, which may not be evident in the Basic Services section, are listed below: US Information Technology (US IT) Additional Services - -------------------------------------------------------------------------------- Service Description - -------------------------------------------------------------------------------- COMPUTING SERVICES - -------------------------------------------------------------------------------- Distributed Infrastructure Services Distributed Infrastructure Services (DIS) includes the installation, management, support and administration of the network and telecommunications cabling infrastructure, local area network and local area file and print services within PwC facilities. In addition, DIS includes the management and administration of authentication services, file and print user IDs and IP networks. Premium Service: . Provide hardware for customer-managed file servers . Provide support for file and print servers that are not compliant with published PwC standards . Perform data recovery services for servers that the customer self-manages . Develop, maintain and support PwC-wide tools such as RTR, Rightfax and LDAP - -------------------------------------------------------------------------------- Messaging and Groupware Services This service delivers deployment, management, administration and hosting of Lotus Notes messaging and groupware. Also included are e-mail, replication services, administration and maintenance for address books, ID creation, and statistic collection. Premium Service: . Provide support for additional groupware servers . Provide e-mail and groupware functions to non-employees . Provide, maintain and administer integration of Fax and Notes . Develop and administer Notes applications (see Custom Application Development service) Service Not Offered: . Management or support services for groupware servers administered by non-US IT entities . Rebranding of Internet mail . Recertification of Notes IDs and rebranding of Notes domain. . Instant messaging facilities . Microsoft Exchange-based mail services - -------------------------------------------------------------------------------- PC Deployment and Management The PC Deployment and Management service provides deployment, management, and administration of a standard suite of desktop tools. This suite of tools is deployed on an agreed-upon PC platform and an agreed-upon PC hardware refresh program. An exception request/approval process is provided and supported when customer needs dictate hardware replacement before the PC hardware program interval expires. The standard suite of tools is the - -------------------------------------------------------------------------------- 9 productivity suite, anti-virus, security, operating system and an agreed-upon, customized set of applications. Premium Service: . Develop ESD scripts for non-standard applications on a time available basis . Maintain non-standard configuration . License management for non-standard software - -------------------------------------------------------------------------------- NETWORK AND TELECOMMUNICATIONS SERVICES - -------------------------------------------------------------------------------- Internet Services Internet Services provide access to Internet resources required to support business operations and to serve clients for web browsing, streaming video and file transfers. Premium Service: . Firewall management for extranet connections, including administration and reporting. . Consulting support for application External vulnerability testing for hosting. internally hosted applications and firewalls. - -------------------------------------------------------------------------------- Remote Access Services Remote Access Services provides the ability to obtain access to PwC IT services, infrastructure and network from a non-PwC location. These locations can include home office, client sites, hotel and other locations. Physical connectivity is via dial-up, ISDN, cable modem or DSL. Currently only dial-up and ISDN are supported in the US. Premium Service: . Provide connectivity from engagement sites. See Engagement Site Services. . Provide access via cable modem and DSL from home offices and hotels - -------------------------------------------------------------------------------- Voice Communications Services Ongoing voice communications services are provided by the PwC's infrastructure organization. Design and development of voice and conferencing standards as provided by IT are outlined below. Design, engineering and installation management as provided by IT are delivered as part of the planning and implementation of new offices. Premium Service: . Program and document complex call vector arrangements and call center designs . Order advanced routing services . Maintain customer call centers on an ongoing basis . Monitor on-site video calls outside of normal setup and troubleshooting . Coordinate ordering of services or circuits (DSL, POTS, toll-free) for customer labs . Coordinate ordering and installation of circuits to PwC client sites . Provide consultative services on special customer or client projects . Coordinate outsourcing of expedited requests for moves, adds and changes . Create customized ad hoc reports . Set up customer labs at PwC locations Service Not Provided: . Order or install lines for employee homes . Install individual internet DSL or broadband lines . Order wireless phones or services for employees . Set up and maintain duplicate voicemail boxes . Maintain unchanged phone numbers for customers who move to a different PwC - -------------------------------------------------------------------------------- 10 - -------------------------------------------------------------------------------- site Order, install or maintain non-firm standard equipment - -------------------------------------------------------------------------------- Wide Area Network Services Wide Area Network (WAN) Services deliver connectivity between PwC offices, the PwC Data Center and the global Wide Area Network to support business- related applications reliably move data. For production WAN links, a mixture of technologies is used, including frame relay, point-to-point and ATM. Premium Service: . Provide connectivity to engagement sites and external See enterprises. Engagement Site Services section. Service Not Provided: . Provide service for additional IPX, DECNet and AppleTalk applications - -------------------------------------------------------------------------------- SUPPORT SERVICES - -------------------------------------------------------------------------------- Distributed Support Services The distributed support service is provided for a standard suite of desktop tools and includes US IT Service Center walk-up window assistance and dispatched deskside assistance. These services include all second level support escalations from the first level help desk. It also includes general support services associated with the delivery, deployment, management, deskside support and administration of the standard suite of desktop tools for PwC staff. Typical delivery of these services involves the problem diagnosis, resolution determination and implementation of the solution for desktop and infrastructure issues. Premium Service: . Perform PC hardware or software upgrades outside of the normal asset management turnover and planned software migration schedule . Provide off-site problem assessment at client engagements, except in situations where the on-site customer population justifies such; These situations may be subject to a request for a client charge code for time and travel A flat expenses; fee will be charged based on per hour time rounded up to the nearest hour including travel time from the nearest office. . Provide support for hoteling applications operated by customer (US IT will assist on a time available basis and will serve as backup if possible) . Upgrade PC operating system as requested by customer to be compatible with their clients' systems . Install non-standard equipment . Install non-standard software for which there is no approved ESD When script. exceptions are negotiated, the ongoing management of or legal responsibility for software licensing is not included . Provide long-term data file archiving, request and maintenance services on customer PCs . Perform data transfer services, outside the process of updating or exchanging a user-assigned PC . Perform data recovery services for PCs . Perform PDA support . Provide video conferencing support Service Not Offered: . Printer hardware maintenance outside of print queue administration and connectivity troubleshooting. This is provided by Office Services. . Provide support for non-PwC PC equipment at employees' homes . Provide support for high-speed internet connections at employees' homes (e.g., cable or DSL modem) - -------------------------------------------------------------------------------- Education Services Education Services develops and delivers 24x7 e-learning and on-demand learning resources. Analysis, content and context development comprise these services. Premium Service: . Consult and develop e-learning or self-service learning resources for Buyer- - -------------------------------------------------------------------------------- 11 - -------------------------------------------------------------------------------- specific applications or requirements . Create interactive online and computer-based training (CBT) courses for firmwide and Buyer-specific applications using HTML, FLASH, JavaScript, Authorware, Dreamweaver and RoboHELP . Author, develop and manage the Technology Education Web portal using Dreamweaver, FLASH, Fireworks and other third-party assessment applications . Deliver technology education for standard desktop applications used in a customized environment, e.g., custom Excel course using customer macros . Analyze, negotiate, manage and promote third-party computer-based training vendor offerings in conjunction with US IT and Learning & Education representatives . Deliver PwC-specific technology education at customer events at the request and funding of the sponsor . Deliver Buyer-specific application technology education, e.g., for FAS DocumentPower, TLS Engage and ABAS TeamAsset . Deliver technology education for customer's clients . Consult, develop and maintain content for PwC's Day Two New Hire orientation, Service Not Offered: . Schedule and track training course sign-up and attendance. This service is performed by PwC Learning and Education. . Procure rooms or facilities for training purposes . Procure or manage hardware for training purposes - -------------------------------------------------------------------------------- Help Desk Services Help Desk Services provide customers with cohesive options for technology support. Help Desk Services connect the customer with the service provider most likely to resolve the issue during the initial contact. Two support options are offered: . Telephone support . Dispatch to user-located support Premium Service: . Support unbudgeted or out-of-scope systems and/or applications. Cost for this service includes start-up fees and ongoing service costs. Start-up fees cover implementation and training costs, and are charged on a time and materials basis. Actual service cost is priced on a standard fee basis or on a usage based per- incident pricing schedule, with minimum volume guarantees, depending on the support requirements as mutually defined . Host customer use of Peregrine ServiceCenter for problem tracking and management - -------------------------------------------------------------------------------- APPLICATION DEVELOPMENT SERVICES - -------------------------------------------------------------------------------- Custom Application Development Custom Application Development provides solutions for Buyer, Industry and Business Unit customers as well as external clients. All Custom Application Development services are provided on a time and materials basis. Premium Service: . Develop written proposals defining scope, potential solutions, benefits, timelines, costs, support requirements, and service level agreements . Develop and support PC and browser based software solutions that can be deployed on a global or national scale, including web development and enablement . Develop and support software solutions for Palm and Windows CE based Mobile Devices . Provide end-to-end project management of the system development life cycle . Develop custom interfaces to and between enterprise core systems . Develop custom applications for internal business units . Migrate Notes R4 to R5 databases and agents . Migrate Notes R4 to R5 databases to the web - -------------------------------------------------------------------------------- 12 - -------------------------------------------------------------------------------- . Conduct feasibility studies . Provide technical guidance and consulting to customer development groups, including best practices, design templates, Lotus Script analysis, and agent signing . Evaluate new software development tools . Perform technical reviews of externally developed applications . Provide graphics arts design including web interface design, gif animation, and logo creation . Provide commercial development expertise in: . Lotus Notes / Domino, Java, JavaScript, LotusScript, HTML, XML, XSL . Visual Interdev, MS Active Server Pages, Java Server Pages, MQSeries, ColdFusion, Websphere, ISyndicate Java . FrontPage, Flash, PhotoShop, Illustrator, Dreamweaver, Homesite, MS Image Composer, Pagemaker, GoLive . C/C++, VBScript, Visual Basic, including multi-tier applications (using MTS COM/DCOM) and communicating with PBX switches, Internet Information Server (IIS) and related distributed and web technologies (DHTML, MTS, COM/COM+) . SQL Server, Oracle, Informix, Sybase, DB2, OLE . Fortran, Perl, REXX, Crystal Reports, Unix shell scripts, Data Integration using Replic Action . CPIC (APPC) . Development for Palm-based Mobile Devices using CodeWarrior and AppForge, Windows CE-based Mobile Devices, development using Flex (Motorola proprietary paging platform) . MS Office integration with Notes and other applications - -------------------------------------------------------------------------------- PROJECT SERVICES - -------------------------------------------------------------------------------- Application Deployment Deployment of new applications and significant updates to applications, such as Team Asset, Comperio, Shockwave, Project 2000, and TLS Superforms. Premium Service: . Provide written proposal defining scope, potential solution, benefits, implementation timeline, cost, support requirements and agreements . Distribute software electronically and via CD . Integrate new application with PwC infrastructure . Schedule rollouts, taking customer schedules into consideration . Manage risk . Perform integration testing . Manage pilot of new update or application . Create and publish support documentation and procedures . Create and publish testing, pilot and deployment communications . Assemble project team . Provide coordination and communication with Buyer technology representatives . Provide end-to-end project management using standard methodology . Manage and report on IT project portfolio - -------------------------------------------------------------------------------- Client Site Connections Client Site Connections provide a variety of broadband connectivity options to enhance engagement functionality. Services include, but are not limited to, assistance for VPN usage from client networks, installation of traditional private - -------------------------------------------------------------------------------- 13 - -------------------------------------------------------------------------------- circuits secured with firewalls, cable modem or DSL links used with VPN and small networks, and site -to-site VPN connections utilizing the IP Secure protocol. All Client Site Services are provided on a time and materials basis. Premium Service: . Provide written proposal defining scope, potential solution, benefits, timeline for implementation, cost of work, on-going support requirements and on-going support agreements . Manage implementation of agreed solutions for client site connections to the PwC WAN . Provide due diligence to determine feasible US IT-sanctioned connectivity solutions to the wide area network. Travel expenses may require charges to the engagement Service Not Provided: . Any connection denied by Risk Management - -------------------------------------------------------------------------------- Office Moves Office Moves encompass the creation of a complete technology infrastructure environment, from design and planning of electrical and telecommunications cabling infrastructure through the managed deployment of all active components including PBX, voicemail, hotelling, file and print services, LAN/WAN and UPS systems components. Premium Service: . Provide enhanced technology infrastructure environments above PwC standards. Priced per enhancement with associated justification provided by Buyer. . Plan and implement Buyer technology labs . Provide additional UPS battery backup or facility generator above PwC standards . Design and co-ordinate implementation of call Centers - -------------------------------------------------------------------------------- 14 Schedule C: Buyer Responsibilities Infrastructure BUYER Responsibilities . Buyer will provide monthly projections of staff in Shared Facilities . Buyer will maintain open, frequent and timely communication with Security Department regarding all security incidents and issues related to shared space . Buyer will ensure communication to Buyer employees regarding what services PwC will provide in Shared Facilities 15 US Information Technology (US IT) BUYER Responsibilities . Buyer will provide a representative authorized to provide customer-specific input and direction on IT requirements including input on infrastructure requirements and capacity planning . Buyer will provide asset management return information . Buyer will communicate openly and frequently with US IT relationship managers and service managers . Buyer will promote and enforce PwC IT standards . Buyer to determine if approval process is necessary for PC Accessories, spare parts or Premium Distributed Support Services. 16 Schedule D: Pricing Based on Current Year Cost Estimates and Assumptions Regarding Business Cost Drivers NOTES: Used % of LoS headcount * LoS budgeted allocation for Usage based drivers 17
----------------------- FY03 Budget (000's) - ------------------------------------------------------------------------------------------------ --------------- Services FY03 Pricing FY03 SLA Methodology (Annual) - ------------------------------------------------------------------------------------------------ --------------- INFRASTRUCTURE/Ops Operations Services (Shared Facilities) Facility Management Operations % Shared Sq ftg 393 Service Centers/Concierge % Shared Sq ftg 125 Records Management % Shared Sq ft - Used 239 Mail, Express Couriers, and Messengers % Shared Sq ftg 264 Reprographics % Shared Sq ftg 492 Switchboard/Receptionists % Shared Sq ftg 152 Supplies % Shared Sq ftg 501 National Services (Shared Facilities) Manage Real Estate Projects % Shared Sq ftg 146 Security % HC 27 Total 2,339 - ------------------------------------------------------------------------------------------------ --------------- US INFORMATION TECHNOLOGY (US IT) Computing Services Distributed Infrastructure Services % Shared Sq ftg 200 Distributed Infrastructure Services - Office Moves % Sq Ft by Location 252 Messaging and Groupware Services - Shared % Subscribers 110 PC Deployment and Management % PCs 279 Network and Telecommunication Services Internet Services % Total Sq Ft 55 Remote Access % Hours 27 Wide Area Network Services % Total Sq F 365 % Shared Sq Ft by Voice & Conferencing Location 832 Support Services Distributed Support Services % Incidents 380 Help Desk % Incidents 181 Total 2,681 - ------------------------------------------------------------------------------------------------ --------------- OCCUPANCY Shared Facility Occupancy Costs Sq Ftg - Shared 4,573 ================================================================================================ =============== TOTAL 9,593 - ------------------------------------------------------------------------------------------------ --------------- Schedule E: Assumptions The following assumptions are the basis for certain of the terms and provisions of this Agreement between PwC and Buyer. .. Leases for locations currently shared with PwC will be honored for the term of the TSA agreement .. Businesses to be charged for space committed, including offices/workstations, commonly used space, dedicated special use space, circulation and rentable/usable mark-ups in leases and any excess space within their committed space. .. Common space that is used by the businesses resident in an office will be broken down into two categories: (1) SBA ("Shared by All") which will be prorated to all resident businesses and (2) SBF ("Shared by Floor") which will be prorated to the businesses on a specific floor. . Examples of SBA space include: Main reception, cafeteria/lunch areas, central file room, mail/reproduction center, VCN area for word processing/reporting/graphics, US IT voice/data and IT support rooms, mother's room, admin services and internal stairs. . Examples of SFA include: Small conference room, satellite coffee/copy centers, service centers and US IT IDF closets. .. Businesses will not be charged for common space they do not use - for example, the dedicated space of another business. Dedicated space of this type includes: ABAS OSRM lab, TLS processing lab, TLS library, FAS war room, business-specific file/storage rooms, business-specific satellite reception, and business-specific HR/Marketing/Graphics space. 18
General - ------- Cost driver data for the Business is assumed to be the following: . Headcount 449 . Sq. ft. - Shared Facilities only 99,860 sq ft . Sq. ft. - Shared and stand alone 99,860 sq ft . % of LoS budget (Subscribers, Servers, Hours, Incidents) 34.62% Real Estate Occupancy --------------------- Schedule F: Real Estate Shared Facilities (1) TSA measured space is calculated as a share of LoS measured space based on headcount as a percentage of LoS headcount. 19
- ------------------------------------------------------------------------------------------------------------------ Office TSA Landlord Expiration Measured Date Office RSF Space (1) ================================================================================================================== 10 Tenth Street Atlanta, GA 30309 10/31/12 97,633 5,458 TCB #11 LLC One Post Office Square Boston, MA 02109 4/30/05 155,178 4,950 One Post Office Sq Assoc c/o EOP 214 North Tryon St Charlotte, NC 28255 2/28/14 70,299 2,114 Bank of America One North Wacker Dr Chicago, IL 60606 10/31/13 230,066 8,934 One North Wacker Drive Venture, LLC 200 Public Square Cleveland, OH 44114 12/31/06 50,354 1,507 EOP - BP Tower LLC 2001 Ross Ave Dallas, TX 75201 12/31/06 180,155 12,245 C-W #11 Limited Partnership 1670 Broadway Denver, CO 80202 2/28/11 55,006 3,857 Aetna Life Insurance 1201 Louisiana Houston, TX 77022 12/31/08 165,716 5,135 RSCPF 1201 Louisiana Place 400 Hope St Los Angeles, CA 90071 6/30/03 120,151 15,852 400 South Hope Street Assoc 1177 Ave Of The Americas New York, NY 10036 12/31/09 513,740 24,574 KG & AA Corporation 2001 Market St Philadelphia, PA 19103 7/31/14 214,260 2,510 New York Central Lines LLC 1850 North Central Ave Phoenix, AZ 85004 11/31/09 25,421 2,600 FP Arizona, Inc. 600 Grant St Pittsburgh, PA 15230 Assoc 12/31/08 74,058 673 600 Grant Street 199 Fremont San Francisco, CA 94105 8/31/10 142,125 5,146 199 Fremont L.P. 1900 K Street Washington, DC 20036 9/30/06 48,475 4,304 NOP, Hines AAF-1900 K ST. Totals 2,142,637 99,860 --------- ------ - ------------------------------------------------------------------------------------------------------------------ Schedule G: Certain Excluded Services for Buyer Relocated Employees INFRASTRUCTURE Facility Management Operations Service Centers/Concierge Records Management Switchboard/Receptionist Mail, Express Couriers, and Messengers Reprographics Supplies Security Space Cost Management US INFORMATION TECHNOLOGY (US IT) Voice Communication Services 20 Schedule H: TSA Databases* - -------------------------------------------------------------------------------- NARS (Name and Request System) 1. Notes Admin Request 2. NARS Configuration 3. Database Deployment Index 4. NARS Certifier Configuration 5. Notes User ID Archive 6. Notes ID Repository 7. Notes System Admin Requests 8. Non-Authorized Users 9. Audit Trail - -------------------------------------------------------------------------------- Monthly Reports - -------------------------------------------------------------------------------- Unapplied Cash - -------------------------------------------------------------------------------- FAS AR - Collections - -------------------------------------------------------------------------------- FAS US Fin Report Repository - -------------------------------------------------------------------------------- Mail template. (fasmail50.ntf) - -------------------------------------------------------------------------------- BRS Database Deployment Request database. (gts\ftibrsdbdeploy.nsf) - -------------------------------------------------------------------------------- Tracker Substitue databases. (to be provided by Scott Parry) - -------------------------------------------------------------------------------- BRS Firm Directory - -------------------------------------------------------------------------------- Mail Automation (attendant.nsf) - -------------------------------------------------------------------------------- DB Listing (dblistng.nsf) - -------------------------------------------------------------------------------- EMEA Global Address Book (GNABEMEA.nsf) - -------------------------------------------------------------------------------- AMER Global Address Book (GNABAMER.nsf) - -------------------------------------------------------------------------------- ASIAPAC Global Address Book (GNABAPAC.nsf) - -------------------------------------------------------------------------------- NARS Audit Trail. (audadmin.nsf) - -------------------------------------------------------------------------------- ACL/Updater v2.0 (acluctrl.ntf, acluctrl.nsf) - -------------------------------------------------------------------------------- BRS Notes User ID Archive (admin\idrepy.nsf) - -------------------------------------------------------------------------------- Non-Authorized Users (admin\notauth.nsf) - -------------------------------------------------------------------------------- BRS NARS Certifier Configuration (admin\certcfg.nsf) - -------------------------------------------------------------------------------- NARS Configuration (admin\nars.nsf) - -------------------------------------------------------------------------------- BRS US Notes Admin Request (admin\notesadm.nsf) - -------------------------------------------------------------------------------- NARS Audit Trail (audadmin.ntf and audadmin.nsf) - -------------------------------------------------------------------------------- Administration Requests (admin4.nsf) - -------------------------------------------------------------------------------- NARS Database Repostiory (dbrposit.nsf and dbbrposity.ntf) - -------------------------------------------------------------------------------- Database Deployment Index (deploy.nsf) - -------------------------------------------------------------------------------- Statistics and Events (events4.nsf and events4.nsf) - -------------------------------------------------------------------------------- Patrol4.3 (patrol41.nsf) - -------------------------------------------------------------------------------- BRS Notes System Admin Request (usysadm.nsf) - -------------------------------------------------------------------------------- FTIBRS Agent (mail\ftibrsagent.nsf) - -------------------------------------------------------------------------------- * If during the term of this Agreement Buyer needs information with respect to Seller's business relationships prior to the Closing Date for purposes of any bankruptcy or court appointed engagement of the Business that has been taken over by Buyer then Seller shall use reasonable efforts to provide such information as requested by Buyer if disclosure thereof is required for any court filing related to such engagement prior to the Closing Date. 21 22
Schedule I: Pass-Through Costs - ------------------------------------------------------------------------------------------------------------------ SLA Function Service Pass Through Item Typical Vendor(s)* - ------------------------------------------------------------------------------------------------------------------ Infrastructure Occupancy Parking (Partner and 400 South Hope Street Associates - LA, AAA Staff) Parking - Atlanta, Adams Mark Hotel - Denver, Allright Central Parking System - Dallas, Ampco System Parking - LA, St Louis, and Dallas, Central Parking System - Houston, Grand Central Square LP - LA, Hurt Plaza Parking Garage - Atlanta, Standard Parking, Inc - Denver and LA, Star Parking - Dallas, Suntrust Bank - Atlanta, TCC DFW Ltd - Dallas, Trammell Crow Center Garage - Dallas, 1100 Louisiana Ltd Partnership - Houston, Aetna Life Ins Co, BP Tower Self Park - Cleveland, Central Parking System - Washington DC and Philadelphia, City Park - San Francisco, Shorenstein Co - SF, Standard Parking Inc - Boston, Cleveland, CPS Parking - Seattle, One North Wacker Services - Chicago - ------------------------------------------------------------------------------------------------------------------ Reprographics Outside Copying Alfred Mossner (Chicago), Color Group Inc, Crystal Press (Washington), Gallery Collection, Gonluco, Ikon Office Solutions, ITC Graphic Services, James Palmer and Daughter, Kinkos, Pitney Bowes Mgt Services, Presentech, Sir Speedy - ------------------------------------------------------------------------------------------------------------------ Mail, Express Mail, Express Couriers DHL, Federal Express, UPS, Airborne Express- Couriers and and Messengers national accounts, Citipost - Chicago, Action Messengers Messenger Service, Jet Messenger, Citysprint - Denver, Comet Messenger- Chicago, Courier Express- Atlanta, Courier Net - Atlanta, Dash Courier Service, Deadline Express- Chicago, Dial Four Delivery - Charlotte, Elliott Bay Messenger- Seattle, Excel Delivery Service - Houston, George Aprile & Sons- NY, Lasership Inc- Washington DC area, Metro Package Delivery- Boston, Quicksilver Express, RR Donnelley - NY, Rush More Delivery Service, United Express Messenger- LA, Urbanfetch Express - NY, Velocity Express, Western Messenger Service- SF, Wingtip Couriers- Dallas - ------------------------------------------------------------------------------------------------------------------ Postage US Postal Service, Postage by Phone - ------------------------------------------------------------------------------------------------------------------ Supplies Office supplies Corporate Express - ------------------------------------------------------------------------------------------------------------------ Records Off-site record storage Iron Mountain, Atlantic Records Mgt Management retrieval - ------------------------------------------------------------------------------------------------------------------ US IT Voice Telecom leasing, PBX, AT&T, AT&T Teleconference Services, Avaya Communications telephones, telephone Communication, Ameritech, Southwest equipment, telecom BellFiberlink Communications Corporation, services Infonxx, Inc., Lucent Technologies, MCI Worldcom, Skytel Corporation, Sprint, Verizon, Worldcom, CMS Communcations, Local Telephone Carriers - ------------------------------------------------------------------------------------------------------------------ PC Deployment and PC leases, Compaq Financial Services, IBM, McCollister's Mgt Maintenance, Moving & Storage, Comdisco, Inc, Dell Financial Transportation Services - ------------------------------------------------------------------------------------------------------------------ PC Deployment and Core software licenses Veritas (, Microsoft, McAfee, Adobe, Lotus, Management and maintenance Real, Winzip Computing, Inc., Network - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------
* The vendors listed represent typical suppliers of the referenced items over the past year. This list is subject to change based upon actual purchases going forward. 23Associates, Corporate Disk Company - ------------------------------------------------------------------------------------------------------------------------------------ PC Deployment and LoS-specific software ASAP Software Express, Inc. Management licenses and maintenance - ------------------------------------------------------------------------------------------------------------------------------------ Remote Access VPN AT&T, Fiberlink - ------------------------------------------------------------------------------------------------------------------------------------ Distributed Support Tech supplies and core Bindview Corporation, Cable Express Service & Help Desk software licenses and Corporation, Cisco Systems, Inc., Services maintenance Communication Pathways, Compaq Capital Corporation, Computing Concepts, Inc., Insight, Metropolis Computers, OnTrack, - ----------------------------------------------------------------------------------------------------------------------------------- Other non- Misc. techology-related DiaSoft Corporation (rental system & db Mgmt), categorized or LoS- payables including SW specific payables licenses, equipment, services, rentals and staffing. - ------------------------------------------------------------------------------------------------------------------------------------ Schedule J: Real Estate Required Services INFRASTRUCTURE Facility Management Operations (for shared facilities) Service Centers/Concierge (for shared facilities) Records Management (for shared facilities) Switchboard/Receptionist(for shared facilities) Mail, Express Couriers, and Messengers (for shared facilities) Reprographics (for shared facilities) Supplies (for shared facilities) Security (for shared facilities) Occupancy (for shared facilities) US INFORMATION TECHNOLOGY (US IT) Distributed Support Services (DSS) Voice Communication Services 24 Schedule K: Service Bundling Schedule 25
Service Required Bundle ------- --------------- Computing Services Application Hosting Services - Shared (AHS) EAD Application Hosting Services - Customer Specific (AHS) EAD Distributed Infrastructure Services (DIS) AHS,WAN, MGS, PCDM, IS, RAS, DSS, HD, EAD Distributed Infrastructure Services - Office Moves (985)(DIS) AHS,WAN, MGS, PCDM, IS, RAS, DSS, HD, EAD Messaging & Groupware Services - Shared (MGS) AHS, EAD, IS, RAS Messaging & Groupware Services - Customer Specific (MGS) AHS, EAD, IS, RAS PC Deployment and Management (PCDM) AHS, DIS, MGS, WAN, IS, RAS, DSS, HD, EAD Network and Telecommunication Services Internet Services (IS) RAS Remote Access Services (RAS) None Wide Area Network Services (WAN) AHS, DIS, MGS, PCDM, IS, RAS, DSS, HD, EAD Support Services Distributed Support Services AHS, DIS, MGS, PCDM, IS, RAS, WAN, HD, EAD Help Desk Services (HD) AHS, DIS, MGS, PCDM, IS, RAS, DSS, WAN, EAD Application Development Services Enterprise Application Development (EAD) AHS Schedule L: Policy to Maintain Client Confidentiality at PwC Shared Facilities BUYER, or its permitted assigns, takes seriously its obligation to preserve the confidentiality of non-public client information. The acquisition of the BRS business will be no exception. BUYER intends to establish firewalls for the BRS business as outlined below. BUYER understands that the SEC has raised concerns about the lack of physical separation at PwC premises that BRS will share with other PwC businesses during the transitional period. Following are the steps BUYER in cooperation with PwC will take to insure the confidentiality of BRS client information (it being understood that PwC will use reasonable efforts to facilitate BUYER's compliance with the following): 1) Physical separation . The BRS employees have been clustered in an area of space within PwC facilities and not inter-dispersed with PwC employee workstations. . Each BRS workspace will be tagged with a nameplate identifying it as BUYER workspace. . BRS and PwC will work together to ensure that the PwC employees nearest to the BRS employees are not consultants engaged in similar activities. . Floor plans making clear that two separate businesses share the area and clearly identifying the BRS space will be posted at shared reception areas at PwC facilities. . Shared reception areas will include BUYER signage making clear that two separate business share the area. . In the event conference rooms are shared with PwC, they will be clearly marked. Reminders will be posted to ensure confidential information is not left behind. In addition, all outside visitors will be escorted by BRS employees directly to the conference room. . BUYER will use reasonable efforts, to the extent practicable, to arrange to have client meetings occur outside of the BRS business offices for so long as PwC and BUYER continue to share space in a particular location. 2) Locks and keys . Non-public information in hard-copy form will be kept in a secure file, marked "confidential". . BRS employees will place all confidential information under lock and key when they are not at their workspace for extended time periods (long meetings, lunch time, before leaving for the day). . Offices will have doors with locks; workstations will have desks or file cabinets that lock. . BUYER shall equip, at BUYER's expense including installation thereof, any doors that do not have locks, or which have locks that are not operational, as of the Closing Date, with locks that provide the level of security which is customary in the geographic area, to the premises. 3) Electronic information . BUYER's network and associated computer services will be fire walled from that of PwC, to the extent that a BUYER employee will not have access to PwC traffic and vice-versa. . BUYER computers will have locking features and password protection features. . Passwords shall be regularly changed and not shared with other employees. 26 . Electronic data on diskettes shall be stored in secure, locked storage compartments, desk drawers or file cabinets. . When printing a document, the employee (or delegate) shall pick up the document in a reasonably prompt manner. . BUYER will have dedicated fax machines such that PwC faxes will not be sent or received over BUYER fax machines (or vice versa). . Fax machines and printers dedicated to BUYER will be located in secure areas of BRS. 4) Policies and procedures . All nonpublic information relating to a client that is obtained on a confidential basis by BRS employees must be kept confidential. . Until and unless such information is made public, BRS employees may disclose that information only to other BRS employees involved in the client engagement and the information is to only be used for purposes of the engagement. . "No discussion" policies in public areas will be adopted (open common areas, hallways, lunch rooms, open cubicles, or elevators). . Phones will be answered "BUYER" or in the person's name. 5) Training and communication . These policies will be distributed to all BRS employees sharing facilities. . Reminders will be distributed periodically. . Additional training and communication will be performed where required. 6) Review compliance . Each office will have a BUYER designee to monitor compliance with the politics. . BUYER employees will also be required to comply with the BUYER's confidentiality policies and procedures, and the BUYER's Code of Conduct. . Failure to comply will be sufficient cause for (but will not require in all cases) disciplinary action, including termination of employment and possible legal action. In conclusion, BUYER believes these steps will ensure that non-public client information remains confidential. 27
Exhibit 99.1 NEWS FRB | WEBER SHANDWICK |FINANCIAL COMMUNICATIONS RE: FTI Consulting, Inc. 900 Bestgate Road Annapolis, MD 21401 (410) 224-8770 FOR FURTHER INFORMATION: AT FTI CONSULTING: AT FRB|WEBERSHANDWICK: Jack Dunn Marilyn Windsor Lisa Fortuna Tim Grace Chairman & CEO General Inquiries Analyst Inquiries Media Inquiries (410) 224-1483 (702) 515-1260 (312) 640-6779 (312) 640-6667 FOR IMMEDIATE RELEASE TUESDAY, SEPTEMBER 3, 2002 FTI CONSULTING COMPLETES ACQUISITION OF U.S. BUSINESS RECOVERY SERVICES DIVISION OF PRICEWATERHOUSECOOPERS FTI Continuing Discussions for Sale of Applied Sciences Division ANNAPOLIS, MD, September 3, 2002--FTI Consulting, Inc. (NYSE: FCN), the premier national provider of turnaround, bankruptcy and litigation-related consulting services, today announced that it has completed the acquisition of the U.S. Business Recovery Services Division (BRS) of PricewaterhouseCoopers. BRS is the leading provider of bankruptcy, turnaround and business restructuring services to corporations in the United States. Headquartered in New York, BRS has more than 350 people housed in 15 offices across the U.S. with significant practices in New York, Dallas, Los Angeles, Chicago and Atlanta. For its fiscal year ended June 30, 2002, BRS had revenues of approximately $170.0 million on a stand-alone basis and pro forma income from operations of approximately $50.0 million, net of estimates for integration costs and the amortization of identifiable intangible assets other than goodwill resulting from a preliminary allocation of the purchase price. The purchase price plus other acquisition costs included approximately $143.0 million of cash and 3.0 million shares of FTI common stock. The cash portion of the purchase price was financed by FTI from its existing cash, a new senior bank term loan of $74.0 million, and $45.0 million from a new $100.0 million revolving credit line. FTI is also continuing discussions for the sale of its Applied Sciences Division with a group led by the division's president. Proceeds from any sale would be used to reduce the debt incurred in connection with the acquisition of BRS, and results of the Applied Sciences Division will be reflected as a MORE FTI Consulting, Inc. Add 1 discontinued operation beginning with the third quarter of 2002. As previously disclosed, the net effect of the acquisition of BRS and the planned sale of Applied Sciences is expected to be significantly accretive to FTI's earnings per share from continuing operations and to earnings per share. FTI said that the integration of the BRS operations with its existing bankruptcy, turnaround and restructuring practice was already well underway. The combined operations will conduct business under the FTI Consulting name. Jack Dunn, FTI's chairman and chief executive officer, stated, "Completing this acquisition and joining Dom DiNapoli and his group with the FTI team headed by Bob Manzo and Mike Policano is the beginning of the next exciting chapter in the FTI story. We see considerable future organic and other growth opportunities for the company and have significantly expanded our resources and ability to realize them." Stewart Kahn, president and chief operating officer of FTI, commented, "The acquisition of BRS has dramatically enhanced our ability to provide our full range of services to even more clients and thereby maximize our opportunities for growth. We also look forward to a meaningful reciprocal client-referral relationship with Applied Sciences as it begins the process of separating from us." About FTI Consulting FTI Consulting is a multi-disciplined consulting firm with leading practices in the areas of bankruptcy, financial restructuring and litigation consulting. Modern corporations, as well as those who advise and invest in them, face growing challenges on every front. From a proliferation of "bet-the-company" litigation to increasingly complicated relationships with lenders and investors in an ever-changing global economy, U.S. companies are turning more and more to outside experts and consultants to meet these complex issues. FTI is dedicated to helping corporations, their advisors, lawyers, lenders and investors meet these challenges by providing a broad array of the highest quality professional practices from a single source. This press release includes "forward-looking" statements that involve uncertainties and risks. There can be no assurance that actual results will not differ from the company's expectations. The company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this may occur from time to time in the future. As a result of these possible fluctuations, the company's actual results may differ from our projections. Other factors that could cause such differences include pace and timing of additional acquisitions, the company's ability to realize cost savings and efficiencies, competitive and general economic conditions, and other risks described in the company's filings with the Securities and Exchange Commission. FTI is on the Internet at www.fticonsulting.com. ###