-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C5ESZBhCoGYj/bJ52nUV1+SZZUtMi8jM2yQqdp3Xhf1N/f/WIhQVHwr4OKkgQp+L iSOwmqh/CGBSnbrikYWU1w== /in/edgar/work/20000721/0000950117-00-001824/0000950117-00-001824.txt : 20000920 0000950117-00-001824.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950117-00-001824 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000721 GROUP MEMBERS: L 3 COMMUNICATIONS CORP GROUP MEMBERS: L-3 COMMUNICATIONS HOLDINGS, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LOGIMETRICS INC CENTRAL INDEX KEY: 0000060128 STANDARD INDUSTRIAL CLASSIFICATION: [3663 ] IRS NUMBER: 112171701 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-33624 FILM NUMBER: 676371 BUSINESS ADDRESS: STREET 1: 50 ORVILLE DR CITY: BOHEMIA STATE: NY ZIP: 11716 BUSINESS PHONE: 5167844110 MAIL ADDRESS: STREET 1: 3 NEW YORK PLAZA 18TH FL STREET 2: 50 ORVILLE DR CITY: BOHEMIA STATE: NY ZIP: 11716 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: L 3 COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001039101 STANDARD INDUSTRIAL CLASSIFICATION: [3663 ] IRS NUMBER: 133937436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 1216971111 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 SC 13D 1 0001.txt L-3 COMMUNICATIONS CORPORATION SC 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 LOGIMETRICS, INC. --------------------------- (Name of Issuer) Common Stock, par value $0.01 per share --------------------------------------------------------------- (Title of Class of Securities) 541410106 ----------- (CUSIP Number) Christopher C. Cambria, Esq. Vice President, General Counsel and Secretary L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Telephone: (212) 697-1111 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: James P. Gerkis, Esq. Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 (212) 351-3000 July 11, 2000 --------------------- (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 541410106 - -------------------------------------------------------------------------------- 1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) L-3 COMMUNICATIONS CORPORATION - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) WC, BK AND SC - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 0 SHARES ---------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER* OWNED BY 108,901,622 EACH ---------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 0 WITH ---------------------------------------------- 10. SHARED DISPOSITIVE POWER* 108,901,622 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 108,901,622 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- - ------------------------ * 40,402,611 shares have been pledged to LogiMetrics, Inc. (the "Company") pursuant to the Stock Pledge Agreement dated as of July 10, 2000, made by L-3 Communications Corporation ("Purchaser"), as pledgor, in favor of the Company, as pledgee, to secure the obligations of Purchaser under the Secured Promissory Note, dated July 10, 2000, made by Purchaser to the Company, in the principal amount of $6,500,000, as payment for a portion of the purchase price for the 93,236,794 newly issued shares of the Company's common stock, par value $0.01 per share, acquired by Purchaser pursuant to the Purchase Agreement, dated July 10, 2000 (the "Purchase Agreement"), between the Company and Purchaser, all as more fully described herein. -2- SCHEDULE 13D CUSIP NO. 541410106 - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 59.0%* (based on 184,535,608 shares outstanding) - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- - ---------------------- * Such percentage is subject to adjustment as set forth in Section 1.3 of the Purchase Agreement. -3- SCHEDULE 13D CUSIP NO. 541410106 - -------------------------------------------------------------------------------- 1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) L-3 COMMUNICATIONS HOLDINGS, INC. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 0 SHARES ---------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER* OWNED BY 108,901,622 EACH ---------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 0 WITH ---------------------------------------------- 10. SHARED DISPOSITIVE POWER* 108,901,622 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 108,901,622 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- - ------------------------ * 40,402,611 shares have been pledged to the Company pursuant to the Stock Pledge Agreement dated as of July 10, 2000, made by Purchaser, as pledgor, in favor of the Company, as pledgee, to secure the obligations of Purchaser under the Secured Promissory Note, dated July 10, 2000, made by Purchaser to the Company, in the principal amount of $6,500,000, as payment for a portion of the purchase price for the 93,236,794 newly issued shares of the Company's common stock, par value $0.01 per share, acquired by Purchaser pursuant to the Purchase Agreement, all as more fully described herein. -4- SCHEDULE 13D CUSIP NO. 541410106 - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 59.0%* (based on 184,535,608 shares outstanding) - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- - ---------------------- * Such percentage is subject to adjustment as set forth in Section 1.3 of the Purchase Agreement. -5- SCHEDULE 13D CUSIP NO. 541410106 ITEM 1. SECURITY AND ISSUER. The title of the class of equity securities to which this statement on Schedule 13D (this "Statement") relates is common stock, par value $0.01 per share (the "Common Stock"), of LogiMetrics, Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 50 Orville Drive, Bohemia, New York 11716. ITEM 2. IDENTITY AND BACKGROUND. This Statement is filed by L-3 Communications Corporation, a Delaware corporation ("Purchaser"), and L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"). Holdings is a publicly traded corporation. Purchaser is a wholly owned subsidiary of Holdings. Holdings conducts all its operations through Purchaser and Purchaser's subsidiaries. Purchaser is a leading merchant supplier of sophisticated secure communication systems and specialized communication products. Purchaser produces secure, high data rate communication systems, microwave components, avionics and ocean systems and telemetry, instrumentation and space products. Both Purchaser and Holdings have their principal executive offices at 600 Third Avenue, New York, New York 10016. The address of the principal business of both Purchaser and Holdings is 600 Third Avenue, New York, New York 10016. The name, citizenship, business address and present principal occupation or employment of each of the directors and executive officers of Purchaser and Holdings are set forth in Appendix A hereto, which Appendix A is incorporated herein by reference. During the last five years, neither Purchaser nor Holdings nor, to the best knowledge of Purchaser or Holdings, any of the persons listed in Appendix A hereto (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to the Purchase Agreement, dated July 10, 2000 (the "Purchase Agreement"), between Purchaser and the Company, on July 11, 2000 Purchaser purchased from the Company an aggregate of 93,236,794 newly issued shares of Common Stock (the "Purchaser Shares") (such aggregate number of Purchaser Shares being subject to adjustment as provided in Section 1.3 of the Purchase Agreement, a copy of which is attached hereto as Exhibit 7.2 and which Section 1.3 is incorporated herein by reference), for a total purchase price of $15,000,000 paid at the closing under the Purchase Agreement as follows: (i) cash in the amount of $8,500,000 (the "Cash Funding"); and (ii) a secured promissory note of the Purchaser in the principal amount of $6,500,000 (the "Secured Promissory Note") initially secured by a pledge of 40,402,611 Purchaser Shares (the "Pledged Shares") pursuant to the Stock Pledge Agreement, dated as of July 10, 2000 (the "Stock Pledge Agreement"), made by Purchaser in favor of the Company. The Secured Promissory Note will be prepaid from time to time as necessary to fund the Company's reasonable ongoing working capital needs. If not paid prior thereto, the Secured Promissory Note will be paid in full on the earlier of (i) January 2, 2001 and (ii) the date that the Company consummates a -6- SCHEDULE 13D CUSIP NO. 541410106 qualifying public offering of its equity securities. The Purchase Agreement, the Secured Promissory Note and the Stock Pledge Agreement, attached hereto as Exhibits 7.2, 7.3 and 7.4, respectively, are incorporated herein by reference. The Cash Funding was, and any payments under the Secured Promissory Note will be financed using: (i) borrowings under Purchaser's senior credit facilities with a syndicate of banks and financial institutions led by Bank of America, N.A., as administrative agent pursuant to (A) the Second Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement"), (B) the Amended and Restated 364 Day Credit Agreement (the "Amended and Restated 364 Day Credit Agreement"), and (C) the New 364 Day Credit Agreement (the "New 364 Day Credit Agreement"), in each case dated as of April 24, 2000, among Purchaser, as Borrower, the Several Lenders from time to time Parties thereto, the Certain Financial Institutions named as Co-Agents therein, Bank of America Securities LLC and Lehman Commercial Paper Inc., as Arrangers, Bank of America, N.A., as Administrative Agent, and Lehman Commercial Paper Inc., as Documentation Agent and Syndication Agent (the Amended and Restated Credit Agreement, the Amended and Restated 364 Day Credit Agreement and the New 364 Day Credit Agreement are sometimes referred to herein, collectively, as the "Senior Credit Facilities"); (ii) Purchaser's working capital; or (iii) a combination of clauses (i) and (ii). The Amended and Restated Credit Agreement provides for a $200,000,000 revolving credit facility expiring on March 31, 2003; the Amended and Restated 364 Day Credit Agreement provides for a $200,000,000 364-day revolving credit facility expiring on August 10, 2000; the New 364 Day Credit Agreement provides for a $300,000,000 364-day revolving credit facility expiring on April 27, 2001; provided, however, that all or a portion of the revolving credit facility under the Amended and Restated 364 Day Credit Agreement may be extended for a period of 364 days following August 10, 2000 with the consent of lenders holding not less than 50% of the commitments; provided further, however, that Purchaser may convert all or portion of the outstanding principal amount of the loans outstanding under the revolving credit facility under the Amended and Restated 364 Day Credit Agreement to term loans on August 10, 2000 or the date 364 days thereafter (the "364 Day Termination Date"). The revolving credit facility under the Amended and Restated 364 Day Credit Agreement includes borrowing capacity available for letters of credit and for borrowing on same-day notice (the "Swingline Loans"). All borrowings under the Senior Credit Facilities bear interest, at Purchaser's option, at either: (i) a "base rate" equal to, for any day, the higher of: (A) 0.50% per annum above the latest Federal Funds Rate; and (B) the rate of interest in effect for such day as publicly announced from time to time by Bank of America National Trust & Savings Association in San Francisco, California, as its "reference rate" plus a spread ranging from 1.75% to 0.375% per annum depending on Purchaser's ratio of debt to EBITDA (as defined in the Senior Credit Facilities ("Bank EBITDA")) at the time of determination; or (ii) a "LIBOR rate" equal to, for any Interest Period (as defined in the Senior Credit Facilities), the London interbank offered rate of interest per annum for such Interest Period as determined by the Administrative Agent, plus a spread ranging from 2.75% to 1.25% per annum depending on Purchaser's ratio of debt to Bank EBITDA; provided, however, that Swingline Loans can only bear interest at a "base rate" plus the applicable spread. Purchaser will pay commitment fees calculated at a rate (i) ranging from 0.50% to 0.30% per annum on the daily amount of the available unused commitment under the revolving credit facility under the Amended and Restated Credit Agreement, and (ii) ranging from 0.30% to 0.20% per annum on the daily amount of the available unused commitment under the revolving credit facilities under both the Amended and Restated 364 Day Credit Agreement and the New 364 Day Credit Agreement, in each case depending on Purchaser's ratio of debt-to-EBITDA in effect on each day. Such commitment fees will be payable quarterly in arrears and upon termination of the Senior Credit Facilities. Purchaser will pay a letter of credit fee calculated at a rate ranging from (i) 1.375% to 0.625% per annum -7- SCHEDULE 13D CUSIP NO. 541410106 in the case of performance letters of credit, and (ii) 2.75% to 1.25% in the case of all other letters of credit, in each case depending on Purchaser's ratio of debt to Bank EBITDA at the time of determination. Purchaser also will pay a fronting fee equal to 0.1250% per annum on the aggregate face amount of all outstanding letters of credit. Such fees will be payable quarterly in arrears and upon the termination of the Senior Credit Facilities. In addition, Purchaser will pay customary transaction charges in connection with any letters of credit. The Senior Credit Facilities provide for the issuance of letters of credit in currencies other than United States Dollars. The foregoing debt-to-EBITDA dependent rates range from the highest rate specified if the ratio of debt-to-EBITDA is greater than 4.75 to 1.0 and the lowest rate specified if such ratio is less than 2.75 to 1.0. If the loans under the Amended and Restated 364 Day Credit Agreement are converted into term loans, such term loans shall be repaid by the Borrower in nine consecutive quarterly installments commencing on March 31, 2001, by funding on each amortization payment date set forth below an amount necessary to cause the aggregate principal amount of term loans outstanding on such date to not exceed an amount equal to the product of (x) the "Applicable Percentage" set forth opposite such amortization payment date multiplied by (y) the aggregate amount of commitments of lenders to make loans under the Amended and Restated 364 Day Agreement on the 364 Day Termination Date (the "Applicable Converted Commitment"):
Applicable Percentage of the Amortization Payment Date Applicable Converted Commitment ------------------------- ------------------------------- 3/31/01 90.0% 6/30/01 80.0% 9/30/01 70.0% 12/31/01 60.0% 3/31/02 50.0% 6/30/02 40.0% 9/30/02 30.0% 12/31/02 20.0% 3/31/03 0.0%
Borrowings under the Senior Credit Facilities are subject to mandatory prepayment (i) with the net proceeds of any incurrence of indebtedness, (ii) with 50% of the net proceeds of the issuance of equity securities, and (iii) with the proceeds of asset sales, in each case subject to certain exceptions. Purchaser's obligations under the Senior Credit Facilities are secured by (i) a pledge by Holdings of the stock of Purchaser, and (ii) a pledge by Purchaser and its material direct and indirect subsidiaries of all of the stock of their respective material domestic subsidiaries and 65% of the stock of Purchaser's material first-tier foreign subsidiaries. In addition, indebtedness under the Senior Credit Facilities is guaranteed by Holdings and by all of Purchaser's direct and indirect material domestic subsidiaries. The Senior Credit Facilities contain customary covenants and restrictions on Purchaser's ability to engage in certain activities. In addition, the Senior Credit Facilities provide that Purchaser must meet or exceed an interest coverage ratio and must not exceed a leverage ratio. The Senior Credit Facilities also include customary events of default. The Amended and Restated Credit Agreement, the Amended and Restated 364 Day Credit Agreement and the New 364 Day Credit Agreement, copies of which are attached hereto as Exhibit 7.7, Exhibit 7.8, and Exhibit 7.9, respectively, are incorporated herein by reference. -8- SCHEDULE 13D CUSIP NO. 541410106 ITEM 4. PURPOSE OF TRANSACTION. Purchaser acquired the Purchaser Shares, which Purchaser Shares constituted at the closing under the Purchase Agreement approximately 55.2% of the outstanding Common Stock (or 53.5% of the outstanding Common Stock on a fully diluted basis (calculated after giving effect to the transactions contemplated by the Purchase Agreement and certain anti-dilution adjustments set forth in the Purchase Agreement)) to obtain a controlling equity interest in the Company. Each of Purchaser and Holdings is the beneficial owner (calculated in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of 108,901,622 shares of Common Stock or 59.0% of the Common Stock (based on 184,535,608 shares outstanding). (a), (d), (e), and (j) -- The information set forth in the following sections of the Company's Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 promulgated thereunder, dated July 20, 2000 (the "Information Statement"), is incorporated herein by reference in its entirety: "The Transaction", "Right to Designate Directors", "L-3 Designees", "Stockholders Agreement", "Employment Agreements and Compensation Arrangements", "Stock Compensation Program", "Transaction Option Grants" and "Certain Related Party Transactions -- Registration Rights Agreements". (b), (c), (f), (g), (h), and (i) -- Not applicable. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) Each of Purchaser and Holdings is the beneficial owner (calculated in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of 108,901,622 shares of Common Stock or 59.0% of the Common Stock (based on 184,535,608 shares outstanding). The information set forth in the following sections of the Information Statement is incorporated herein by reference in its entirety: "The Transaction" and "Transaction Option Grants". (b) Purchaser and Holdings have shared power to vote and dispose of all of the shares of Common Stock referred to above in Item 5 (a), subject, however, in respect of the Pledged Shares only, to the Stock Pledge Agreement a copy of which is attached hereto as Exhibit 7.4. The provisions of Sections 4, 5, 7 and 9 of the Stock Pledge Agreement are incorporated herein by reference. Pursuant to the Stock Pledge Agreement and unless a Triggering Event (as defined in the Stock Pledge Agreement) shall have occurred, Purchaser is entitled to receive all cash dividends paid in respect of the Pledged Shares, to vote the Pledged Shares and to give a consent, waiver or ratification in respect of the Pledged Shares, but only to the extent that such vote, consent, waiver or ratification would not impair the Collateral (as defined in the Stock Pledge Agreement) or violate any provision of the Stock Pledge Agreement. For every prepayment or payment by Purchaser of a portion of the principal amount of the Secured Promissory Note, a number of the Pledged Shares calculated pursuant to the formula set forth in Section 1.1(d) of the Purchase Agreement will be released from the pledge under the Stock Pledge Agreement and delivered to Purchaser. Section 1.1(d) of the Purchase Agreement is incorporated herein by reference. Upon payment of the Secured Promissory Note in full, all Purchaser Shares then subject to the pledge under the Stock Pledge Agreement will be automatically released from such pledge and delivered to Purchaser. (c) Not applicable. (d) Neither Purchaser nor Holdings, nor, to the best knowledge of Purchaser or Holdings, any of the persons listed in Appendix A, know of any other person who has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any of the Purchaser Shares, other than, in respect of the Pledged Stock only, pursuant to the Stock Pledge Agreement. The response to Item 5(b) is incorporated herein by reference in its entirety. -9- SCHEDULE 13D CUSIP NO. 541410106 (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT SECURITIES OF THE ISSUER. The responses to Item 3 and Item 4 are incorporated herein by reference in their entirety. The Joint Filing Agreement, dated as of July 20, 2000, between Purchaser and Holdings (a copy of which is attached hereto as Exhibit 7.1), the Stockholders Agreement, dated July 10, 2000, among the Company, Purchaser and the Existing Holders named therein (a copy of which is attached hereto as Exhibit 7.5), and the Registration Rights Agreement, dated as of July 10, 2000, among the Purchaser and the other signatories thereto (a copy of which is attached hereto as Exhibit 7.6), are incorporated herein by reference in their entirety. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 7.1 Joint Filing Agreement, dated as of July 20, 2000, between Purchaser and Holdings. Exhibit 7.2 Purchase Agreement, dated July 10, 2000, between Purchaser and the Company.* Exhibit 7.3 Secured Promissory Note, dated July 10, 2000, made by Purchaser to the Company, in the principal amount of $6,500,000. Exhibit 7.4 Stock Pledge Agreement, dated as of July 10, 2000, made by Purchaser in favor of the Company. Exhibit 7.5 Stockholders Agreement, dated July 10, 2000, among the Company, Purchaser and the Existing Holders named therein. Exhibit 7.6 Registration Rights Agreement, dated as of July 10, 2000, among the Company, Purchaser and the other signatories thereto. Exhibit 7.7 Second Amended and Restated Credit Agreement, dated as of April 24, 2000, among Purchaser, as Borrower, the Several Lenders from time to time Parties thereto, the Certain Financial Institutions named as Co-Agents therein, Bank of America Securities LLC and Lehman Commercial Paper Inc., as Arrangers, Bank of America, N.A., as Administrative Agent and Lehman Commercial Paper Inc., as Documentation Agent and Syndication Agent.* Exhibit 7.8 Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000, among Purchaser, as Borrower, the Several Lenders from time to time Parties thereto, the Certain Financial Institutions named as Co-Agents therein, Bank of America Securities LLC and Lehman Commercial Paper Inc., as Arrangers, Bank of America, N.A., as Administrative Agent and Lehman Commercial Paper Inc., as Documentation Agent and Syndication Agent.* Exhibit 7.9 New 364 Day Agreement, dated as of April 24, 2000, among Purchaser, as Borrower, the Several Lenders from time to time Parties thereto, the Certain Financial Institutions named as Co-Agents therein, Bank of America Securities LLC and Lehman Commercial Paper Inc., as Arrangers, Bank of America, N.A., as Administrative Agent and Lehman Commercial Paper Inc., as Documentation Agent and Syndication Agent.* Exhibit 7.10 The Company's Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 promulgated thereunder, dated July 20, 2000. - ---------- * The schedules to this agreement have been omitted. Purchaser and Holdings agree to furnish such schedules supplementally to the Commission upon request. -10- SCHEDULE 13D CUSIP NO. 541410106 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: July 20, 2000 L-3 COMMUNICATIONS CORPORATION By: /S/ CHRISTOPHER C. CAMBRIA ---------------------------------------------------- Name: Christopher C. Cambria Title: Vice President, General Counsel and Secretary L-3 COMMUNICATIONS HOLDINGS, INC. By: /S/ CHRISTOPHER C. CAMBRIA ---------------------------------------------------- Name: Christopher C. Cambria Title: Vice President and General Counsel -11- SCHEDULE 13D CUSIP NO. 541410106 APPENDIX A DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER AND HOLDINGS The name, business address and present principal occupation or employment of each director and executive officer of Purchaser and Holdings and certain other information are set forth below. The business address of each such director and executive officer is: c/o L-3 Communications Corporation, 600 Third Avenue, New York, New York 10016. Unless otherwise indicate, each occupation set forth opposite an individual's name refers to employment with Purchaser and Holdings. All directors and executive officers listed below are citizens of the United States.
Name Present Principal Occupation or Employment - ---- ------------------------------------------ Directors - --------- Frank C. Lanza Director since April 1997; Chairman and Chief Executive Officer since April 1997. Robert V. LaPenta Director since April 1997; President & Chief Financial Officer since April 1997. David J. Brand Director since April 1997; Member of the Audit Committee. Mr. Brand is Managing Director of Lehman Brothers and a principal in the Global Mergers & Acquisitions Group, leading Lehman Brothers' Technology Mergers and Acquisitions business. Mr. Brand joined Lehman Brothers in 1987 and has been responsible for merger and corporate finance advisory services for many of Lehman Brothers' technology and defense industry clients. Mr. Brand currently is a director of K&F Industries, Inc. Thomas A. Corcoran Director since July 1997. Member of Audit Committee. Mr. Corcoran has been the President and Chief Executive Officer of Allegheny Teledyne Incorporated ("ATI") since October 1999. Mr. Corcoran is a Director of ATI and Chairman of the Board of Teledyne Technologies Incorporated. Mr. Corcoran also is a member of the Board of Trustees of Stevens Institute of Technology and a Director of Lincoln Electric Holdings, Inc. and REMEC, Inc. Alberto M. Finali Director since April 1997. Mr. Finali is a Managing Director of Lehman Brothers Holdings Inc. ("Lehman Brothers") and principal of the Merchant Banking Group, based in New York. Mr. Finali joined Lehman Brothers in 1987 as a member of the M&A Group in New York and became a Managing Director in 1997. Robert B. Millard Director since April 1997; Chairman of the Compensation Committee. Mr. Millard is a Managing Director of Lehman Brothers, head of Lehman Brothers' Principal Trading & Investments Group and principal of the Merchant Banking Group. Mr. Millard joined Kuhn Loeb & Co. in 1976 and became a Managing Director of Lehman Brothers in 1983. Mr. Millard currently is a director of GulfMark Offshore, Inc. and Weatherford International, Inc. John E. Montague Director since April 1997; Member of Compensation Committee. Mr. Montague has been Vice President and Chief Financial Officer of Lockheed Martin Global Telecommunications, Inc., a wholly owned subsidiary of Lockheed Martin, since September 1998. Mr. Montague is a director of Rational Software Corporation.
Appendix A-1 SCHEDULE 13D CUSIP NO. 541410106 John M. Shalikashvili Director since August 1998; Chairman of the Audit Committee. General Shalikashvili (U.S. Army-ret.) is an independent consultant and a Visiting Professor at Stanford University. General Shalikashvili currently is a director of United Defense Industries Inc., Plug Power, Inc. and Frank Russell Trust Company. Alan H. Washkowitz Director since April 1997; Member of Compensation Committee. Mr. Washkowitz is a Managing Director of Lehman Brothers and head of the Merchant Banking Group, and is responsible for the oversight of Lehman Brothers Merchant Banking Portfolio Partnership L.P. Mr. Washkowitz joined Lehman Brothers in 1978 when Kuhn Loeb & Co. was acquired by Lehman Brothers. Mr. Washkowitz currently is a director of K&F Industries, Inc., McBridge plc. and Peabody Coal Co. Arthur L. Simon Director since April 2000. Mr. Simon is an independent consultant. He currently is a director of Loral Space & Communications, Inc.
Officers - -------- Frank C. Lanza Chairman and Chief Executive Officer since April 1997. Robert V. LaPenta President and Chief Financial Officer of the Company since April 1997. Christopher C. Cambria Vice President - Secretary and General Counsel. Mr. Cambria joined the Company in June 1997. Michael T. Strianese Vice-President - Finance and Controller. Mr. Strianese joined the Company in April 1997. Lawrence W. O'Brien Vice President - Treasurer. Mr. O'Brien joined the Company in June 1997. Robert F. Mehmel Vice President - Planning and Assistant Secretary. Mr. Mehmel joined the Company in April 1997. Joseph S. Paresi Vice-President - Product Development. Mr. Paresi joined the Company in April 1997. Lawrence H. Schwartz Vice-President - Business Development. Mr. Schwartz joined the Company in May 1997. Jimmie V. Adams Vice President - Washington D.C. Operations. General Jimmie V. Adams (U.S.A.F.-ret.) joined the Company in April 1997. Robert RisCassi Vice-President - Washington, D.C. Operations. General Robert W. RisCassi (U.S. Army-ret.) joined the Company in April 1997.
Appendix A-2 STATEMENT OF DIFFERENCES ------------------------ The section symbol shall be expressed as.................................. 'SS' EX-99 2 0002.txt EXHIBIT 7.1 EXHIBIT 7.1 The persons named below hereby agree to file one statement on Schedule 13D to report beneficial ownership as of July 11, 2000 of Common Stock, par value $0.01 per share, of LogiMetrics, Inc., a Delaware corporation, and agree that the statement on Schedule 13D to which this agreement is attached as Exhibit 7.1 is filed on behalf of each of them. This agreement may be executed (including by facsimile transmission) with counterpart signature pages or in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Date: July 20, 2000 L-3 COMMUNICATIONS CORPORATION By: /S/ CHRISTOPHER C. CAMBRIA ---------------------------------------------------- Name: Christopher C. Cambria Title: Vice President, General Counsel and Secretary L-3 COMMUNICATIONS HOLDINGS, INC. By: /S/ CHRISTOPHER C. CAMBRIA ---------------------------------------------------- Name: Christopher C. Cambria Title: Vice President and General Counsel Exhibit 7.1-1 EX-99 3 0003.txt EXHIBIT 7.2 PURCHASE AGREEMENT DATED JULY 10, 2000 BETWEEN LOGIMETRICS, INC. AND L-3 COMMUNICATIONS CORPORATION TABLE OF CONTENTS
PAGE ARTICLE I PURCHASE AND SALE OF COMMON STOCK........................................................... 1 Section 1.1........................................................Purchase and Sale of Purchaser Shares. 1 Section 1.2......................................................................................Closing. 3 Section 1.3...................................................................Purchaser Share Adjustment. 3 Section 1.4............................................................................Additional Shares. 3 Section 1.5.........................................................................Certain Indebtedness. 5 Section 1.6...................................................................Technology Transfer Option. 5 Section 1.7......................................................................Administration Services. 6 Section 1.8............................................................................L-3 Stock Options. 6 ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 7 Section 2.1.................................................Organization and Qualification; Subsidiaries. 7 Section 2.2................................................................................Authorization. 8 Section 2.3............................................................................Non-contravention. 8 Section 2.4..................................................................................No Consents. 9 Section 2.5................................................................Capitalization of the Company. 9 Section 2.6.............................................................................SEC Reports, etc. 10 Section 2.7..............................................................Absence of Certain Developments. 11 Section 2.8...................................................Governmental Authorizations; Licenses; Etc. 12 Section 2.9...................................................................................Litigation. 13 Section 2.10.....................................................................Undisclosed Liabilities. 13 Section 2.11.......................................................................................Taxes. 13 Section 2.12.......................................................................Environmental Matters. 14 Section 2.13..........................................................................Proprietary Rights. 15 Section 2.14...........................................................................Books and Records. 17 Section 2.15.....................................................................................Brokers. 17 Section 2.16.............................................................................Use of Proceeds. 17 Section 2.17............................................................Absence of Questionable Payments. 17 Section 2.18.................................................................Accuracy of Representations. 17 Section 2.19......................................................................................Assets. 18 Section 2.20...................................................................................Contracts. 18
-i- TABLE OF CONTENTS (CONTINUED)
PAGE Section 2.21..........................................................................Product Warranties. 20 Section 2.22...................................................................................Insurance. 20 Section 2.23...............................................................Employees, Labor Matters, etc. 21 Section 2.24..................................................Employee Benefit Plans and Related Matters. 21 Section 2.25...........................................................Transactions with Related Parties. 23 Section 2.26.....................................................................Interest in Competitors. 23 Section 2.27....................................................................Territorial Restrictions. 24 Section 2.28.......................................................................Effect of Transaction. 24 Section 2.29...............................................................................Order Backlog. 24 Section 2.30.....................................................................Suppliers and Customers. 24 Section 2.31.....................................................................Antitakeover Provisions. 24 Section 2.32..........................................................................Extent of Offering. 24 Section 2.33.........................................................................Registration Rights. 24 Section 2.34...............................................................Real Property Holding Company. 25 Section 2.35................................................................No Retention Agreements, etc. 25 Section 2.36..............................................................Newbridge Networks Corporation. 25 Section 2.37.......................................................................Financial Projections. 25 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................. 25 Section 3.1.................................................................................Organization. 25 Section 3.2................................................................................Authorization. 25 Section 3.3........................................................................Access to Information. 25 Section 3.4..........................................................................Accredited Investor. 26 Section 3.5............................................................................Investment Intent. 26 Section 3.6..........................................................................Financial Resources. 26 Section 3.7......................................................................................Brokers. 26 Section 3.8............................................................................Non-contravention. 27 ARTICLE IV MANAGEMENT COVENANTS........................................................................ 27 Section 4.1..........................................Indemnification; Officers' and Directors' Insurance. 27 Section 4.2.........................................................................Employee Option Plan. 28 Section 4.3..........................................................................Other Option Grants. 28
-ii- TABLE OF CONTENTS (CONTINUED)
PAGE Section 4.4.........................................................Actions Requiring a Special Majority. 28 Section 4.5...................................................Indemnification Claims against the Company. 30 Section 4.6................................................................Enforcement against Purchaser. 30 Section 4.7...................................................................................Expiration. 30 ARTICLE V ADDITIONAL COVENANTS........................................................................ 30 Section 5.1........................................................................Investment Commitment. 30 Section 5.2...................................................................Public Offering Commitment. 30 Section 5.3................................................................................Reverse Split. 30 Section 5.4..............................................................................ISRA Compliance. 31 Section 5.5....................................................................Hart-Scott-Rodino Filings. 31 Section 5.6.........................................................................Public Announcements. 31 Section 5.7................................................................Rule 144 Reporting; Rule 144A. 31 Section 5.8...........................................................................Further Assurances. 32 Section 5.9.........................................................................................Debt. 32 Section 5.10..........................................................................Rule 14f-1 Mailing. 32 ARTICLE VI CLOSING DELIVERIES.......................................................................... 33 Section 6.1......................................................................Deliveries to Purchaser. 33 Section 6.2....................................................................Deliveries to the Company. 36 ARTICLE VII SURVIVAL; INDEMNIFICATION................................................................... 37 Section 7.1...................................................Survival of Representations and Warranties. 37 Section 7.2..............................................................................Indemnification. 37 Section 7.3......................................................................................Set-Off. 40 ARTICLE VIII MISCELLANEOUS............................................................................... 40 Section 8.1......................................................................................Notices. 41 Section 8.2.....................................................................................Expenses. 42 Section 8.3.......................................................Governing Law; Consent to Jurisdiction. 42 Section 8.4......................................................................Arbitration of Disputes. 42 Section 8.5....................................Assignment; Successors and Assigns; No Third Party Rights. 43 Section 8.6.................................................................................Counterparts. 43 Section 8.7..........................................................................Titles and Headings. 43
-iii- TABLE OF CONTENTS (CONTINUED)
PAGE Section 8.8.............................................................................Entire Agreement. 44 Section 8.9.................................................................................Severability. 44 Section 8.10......................................................................No Strict Construction. 44 Section 8.11......................................................................Company Acknowledgment. 44 Section 8.12..........................................................Stock Splits and Recapitalizations. 44 Section 8.13.................................................................Shares Subject to Agreement. 44 Section 8.14..................................................................................Amendments. 44 Section 8.15...........................................................................Extension; Waiver. 44 Section 8.16..............................................................................Future Legends. 45 ARTICLE IX DEFINITIONS................................................................................. 45 Section 9.1..........................................................................Certain Definitions. 45 Section 9.2.................................................................................Construction. 52
-iv- LIST OF EXHIBITS EXHIBIT A -- FORM OF SECURED PROMISSORY NOTE EXHIBIT B -- FORM OF STOCK PLEDGE AGREEMENT EXHIBIT C -- FORM OF COMPANY COUNSEL LEGAL OPINION EXHIBIT D -- FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT E -- AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION EXHIBIT F -- FORM OF THE STOCKHOLDERS AGREEMENT EXHIBIT G -- FORM OF PURCHASER SPECIAL COUNSEL LEGAL OPINION EXHIBIT H -- FORM OF PURCHASER GENERAL COUNSEL LEGAL OPINION LIST OF SCHEDULES Schedule 1.5. Certain Indebtedness. Schedule 1.6(a). Technology Transfer Option. Schedule 2.1(d). Company's Major Stockholders. Schedule 2.1(e). The Company's Subsidiaries. Schedule 2.3. Non-contravention. Schedule 2.5(a). Capitalization of the Company Immediately After the Closing. Schedule 2.5(b). Capitalization of the Company Immediately Prior to the Closing. Schedule 2.5(c). Agreements Containing Anti-dilution Provisions. Schedule 2.5(d). Convertible Securities. Schedule 2.6(a). SEC Reports. Schedule 2.6(b). Interim Unaudited Consolidated Financial Statements. Schedule 2.7. Absence of Certain Developments. Schedule 2.8. Governmental Authorizations; Licenses; Etc. Schedule 2.9(a). Litigation. Schedule 2.10. Undisclosed Liabilities.
-v- Schedule 2.11(a). Tax Returns Not Timely Filed. Schedule 2.11(b). Audited Tax Returns; Elections Pursuant to the Code. Schedule 2.11(d). List of Tax Returns Schedule 2.12. Environmental Matters. Schedule 2.13(a). Material Intellectual Property Schedule 2.13(b). Intellectual Property Subject to Encumbrance. Schedule 2.13(c). Intellectual Property Judgments and Infringement. Schedule 2.13(d). Payments Due to Any Governmental Authority Schedule 2.15. Brokers. Schedule 2.16. Use of Proceeds. Schedule 2.19(a). Leases. Schedule 2.19(c). Tangible Property. Schedule 2.19(d). Encumbrances on Assets. Schedule 2.20(a). Contracts. Schedule 2.20(c). Default Under Contracts. Schedule 2.20(d). Signal Agreements. Schedule 2.21. Product Warranties and Claims. Schedule 2.22. Insurance. Schedule 2.23. Employees, Labor Matters, etc. Schedule 2.24(a). Employee Benefit Plans. Schedule 2.24(e). Compensation; Officers and Directors. Schedule 2.24(i). Change in Employee Benefits. Schedule 2.25. Transactions with Related Parties. Schedule 2.26. Interest in Competitors. Schedule 2.29. Order Backlog.
-vi- Schedule 2.30. Suppliers and Customers. Schedule 2.33. Registration Rights. Schedule 2.35. No Retention Agreements, etc. Schedule 2.36. Newbridge Networks Corporation. Schedule 3.8. Non-contravention. Schedule 4.2. Employee Options Plan. Schedule 4.3. Founder Options. Schedule 6.1(a). Good Standing Certificates of the Company. Schedule 6.1(s). Waivers.
-vii- PURCHASE AGREEMENT PURCHASE AGREEMENT, dated July 10, 2000, by and between LogiMetrics, Inc., a Delaware corporation (the "Company"), and L-3 Communications Corporation, a Delaware corporation (the "Purchaser"). Capitalized and other defined terms used herein and not otherwise defined shall have the respective meanings specified in Section 9.1. W I T N E S S E T H: WHEREAS, on the terms and subject to the conditions set forth herein, the Purchaser has agreed to invest an aggregate of $15,000,000 (the "Purchase Price") in the form of cash and a secured promissory note in the Company in exchange for an aggregate of 93,236,794 shares of Common Stock (the "Purchaser Shares"), par value $.01 per share, of the Company (the "Common Stock"); WHEREAS, the Purchaser Shares will constitute at the Closing at least 53.5% of the Company's outstanding Common Stock on a Fully Diluted Basis; and WHEREAS, the proceeds of the Purchase Price will be used as set forth on Schedule 2.16; NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I PURCHASE AND SALE OF COMMON STOCK Section 1.1. Purchase and Sale of Purchaser Shares. (a) Upon the terms and subject to the conditions of this Agreement, the Purchaser shall acquire the Purchaser Shares on the Closing Date in exchange for the Purchase Price to be paid in the form of (i) cash in the amount of $8,500,000 (the "Cash Funding"), and (ii) a secured promissory note of the Purchaser in the principal amount of $6,500,000 in substantially the form of Exhibit A attached hereto (the "Secured Promissory Note"). (b) The Purchaser shall have the right to cancel (in whole or in part), at the Purchaser's option, its obligation to make any payment in respect of the Secured Promissory Note if, in the Purchaser's reasonable discretion: (i) a breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement or any other Transaction Document results from or has resulted in a Material Adverse Effect with respect to either (A) the Company and its Subsidiaries, or (B) the Purchaser; or (ii) a Material Adverse Effect has occurred or shall occur with respect to the Company and its Subsidiaries as a result of any claim or litigation by SpeedUSNY.com L.P. ("SpeedUSNY") against the Company or any of its Subsidiaries, whether now existing or hereafter arising. (c) From time to time after the Closing, the Purchaser shall prepay all or a portion of the Secured Promissory Note, such prepayment to be made within five (5) business days after receipt by the Purchaser of the Required Prepayment Notice, subject to the next succeeding sentence and Section 1.1(b). Each such prepayment shall be conditioned upon (i) the Company's requiring funds at the time of the prepayment for the reasonable ongoing working capital requirements of the Company, and (ii) the delivery of a notice (the "Required Prepayment Notice") from the Company to the Purchaser to the effect of clause (i) above and setting forth the amount of the requested prepayment. In any event, subject to the terms of the Secured Promissory Note and Section 1.1(b), the Purchaser shall pay to the Company all principal in respect of the Secured Promissory Note no later than the date (the "Full Funding Date") that is the earlier to occur of (A) the consummation of the Public Offering and (B) January 2, 2001. (d) The Secured Promissory Note initially will be secured by a pledge of 43.33% of the Purchaser Shares (the "Pledged Shares") pursuant to a Stock Pledge Agreement in substantially the form of Exhibit B hereto (the "Stock Pledge Agreement"). For every prepayment or payment by the Purchaser of a portion of the principal amount of the Secured Promissory Note, a number of the Pledged Shares equal to the Released Pledged Shares shall be released from the Encumbrance of the Stock Pledge Agreement and delivered to the Purchaser. The "Released Pledged Shares" shall mean, as of any time, the product of (A) a fraction, the numerator of which is the amount of the prepayment of the Secured Promissory Note being made at such time, and the denominator of which is the original principal amount of the Secured Promissory Note, and (B) the number of the Pledged Shares (as adjusted pursuant to Section 1.3) initially subject to the Encumbrance of the Stock Purchase Agreement as of the Closing Date. The Company agrees that, upon payment of the Secured Promissory Note in full, all Purchaser Shares then subject to the Encumbrance of the Stock Pledge Agreement shall be automatically released from the Encumbrance of the Stock Pledge Agreement and delivered to the Purchaser. (e) If (i) the Purchaser exercises its right under Section 1.1(b), and (ii) it is determined by a court of competent jurisdiction in a final, non-appealable judgment or order or by a final, non-appealable arbitration award that the Purchaser did not in fact have the right so to cancel its obligation to make any payment in respect of the Secured Promissory Note, then the Purchaser shall pay to the Company the Liability Amount. The Liability Amount shall constitute liquidated damages for loss of a bargain and not a penalty, and (notwithstanding Article VII) shall constitute the sole and exclusive remedy of the Company in connection with such a breach by the Purchaser and the Purchaser shall have no other liability to the Company in respect thereof. The parties hereto hereby acknowledge that (A) the amount of damages that would be incurred by the Company as a result of such a breach by the Purchaser are difficult to ascertain, and (B) the amount of liquidated damages provided for in this Section 1.1(e) are reasonable. The "Liability Amount" shall mean, as of any time, the portion of the Purchase Price not paid in cash by the Purchaser to the Company at such time. Notwithstanding anything in this Agreement or any of the other Transaction Documents to the contrary, if the Purchaser pays the Liability Amount, then all Purchaser Shares then subject to the Encumbrance of the Stock Pledge Agreement shall be automatically released from the Encumbrance of the Stock Pledge Agreement and delivered to the Purchaser. (f) If, subsequent to the Purchaser's exercise of its right under Section 1.1(b), the Purchaser makes any payment to the Company with respect to the Secured Promissory Note, the -2- provisions of Section 1.1(e) shall not have any force and effect with respect to the amount so paid. Section 1.2. Closing. The closing of the transactions contemplated by Section 1.1(a) (the "Closing") shall take place at the offices of Whitman Breed Abbott & Morgan LLP, 200 Park Avenue, New York, New York at 10:00 a.m. on the date of this Agreement. The time and date of the Closing is hereinafter referred to as the "Closing Date". At the Closing, the Purchaser shall pay the Cash Funding in immediately available funds by wire transfer to one or more U.S. bank accounts previously designated by the Company pursuant to the Disbursement Letter and shall deliver the Secured Promissory Note to the Company. Section 1.3. Purchaser Share Adjustment. (a) If, on the date that is the first business day after the 30th day after the Closing, the number of Purchaser Shares exceeds 53.5% of the then outstanding Common Stock on a Fully Diluted Basis, then the Purchaser and the Company shall instruct the pledgee under the Stock Pledge Agreement to surrender to the Company for cancellation a number of Purchaser Shares equal to the amount of such excess. (b) If, on the date that is the first business day after the 30th day after the Closing, the number of Purchaser Shares is less than 53.5% of the then outstanding Common Stock on a Fully Diluted Basis, then the Company shall issue and deliver to the Purchaser, for no additional consideration, such number of shares of Common Stock equal to the amount of such deficiency. If additional shares of Common Stock are issued and delivered to the Purchaser pursuant to this Section 1.3(b), then the Purchaser shall pledge pursuant to the Stock Pledge Agreement a number of such additional shares so that, when aggregated with the Pledged Shares initially pledged at the Closing, the Secured Promissory Note will be secured by a pledge of 43.33% of the Purchaser Shares (such percentage to be appropriately reduced to reflect any Released Pledge Shares between the Closing Date and the date that is the first business day after the 30th day after the Closing). (c) For purposes of this Section 1.3, the Additional Shares and the Investment Bank Shares shall be excluded from the calculation of outstanding Common Stock on a Fully Diluted Basis. Section 1.4. Additional Shares. (a) From time to time, the Purchaser shall acquire on or after January 2, 2001 (unless the Purchaser elects to acquire any Additional Shares in its sole discretion prior to January 2, 2001) (but subject to Section 1.4(b) and to the next succeeding sentence) an aggregate of 3,333,333 shares of Common Stock (collectively, "Additional Shares") at a purchase price of $1.50 per share (such number of shares and price to be appropriately adjusted to give effect to the Reverse Stock Split or any stock split, stock combination, reorganization, recapitalization, etc. affecting the Company's capital stock). The Purchaser's obligation to acquire any portion of the Additional Shares shall be conditioned upon (i) the Company's requiring funds for the reasonable ongoing working capital requirements of the Company, and (ii) the delivery of a notice from the Company to the Purchaser to the effect of clause (i) above and setting forth the -3- amount of funds so required. The total purchase price of $5,000,000 payable for the Additional Shares is herein called the "Additional Share Purchase Price". At the time any Additional Shares are so purchased, the Company will issue one or more certificates to the Purchaser representing such Additional Shares. In any event, subject to Sections 1.4(b) and 1.4(c), the Purchaser shall purchase all the Additional Shares no later than the date of the consummation of the Public Offering. (b) The Purchaser shall have the right to cancel (in whole or in part), at the Purchaser's option, any obligation of the Purchaser to purchase Additional Shares pursuant to Section 1.4(a), if, in the Purchaser's reasonable discretion: (i) a breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement or any other Transaction Document results from or results in a Material Adverse Effect with respect to either (A) the Company and its Subsidiaries, or (B) the Purchaser; or (ii) after the Closing Date, a Material Adverse Effect has occurred or shall occur with respect to the Company and its Subsidiaries. (c) Any purchase of Additional Shares pursuant to Section 1.4(a) shall be subject to the following conditions precedent: (i) the Purchaser and the Company shall have complied with the HSR Act to the extent applicable; (ii) the issuance of the Additional Shares shall not have been restrained, enjoined or otherwise prohibited by any Applicable Law, including any order, injunction, decree or judgment of any court or other Governmental Authority; (iii) no court or other Governmental Authority shall have determined that any Applicable Law makes illegal the issuance or purchase of the Additional Shares, and no proceeding with respect to the application of any such Applicable Law to such effect shall be pending or threatened; and (iv) the Company shall have obtained and shall have delivered to the Purchaser copies of (A) all Governmental Approvals required to be obtained by the Company in connection with the issuance or purchase of the Additional Shares, and (B) all Consents (including all Consents required under any Contract) necessary to be obtained in order to consummate the issuance and sale of the Additional Shares. Each of the Purchaser and the Company shall use commercially reasonable efforts to satisfy the conditions precedent set forth in this Section 1.4(c). (d) If (i) the Purchaser exercises its right under Section 1.4(b), and (ii) it is determined by a court of competent jurisdiction in a final, non-appealable judgment or order or by a final, non-appealable arbitration award that the Purchaser did not in fact have the right so to cancel its obligation to purchase the Additional Shares, then the Purchaser shall pay to the Company the Damage Amount. The Damage Amount shall constitute liquidated damages for loss of a bargain and not a penalty, and (notwithstanding Article VII) shall constitute the sole and exclusive remedy of the Company in connection with such a breach by the Purchaser and the Purchaser shall have no other liability to the Company in respect thereof. The parties hereto hereby acknowledge that (A) the amount of damages that would be incurred by the Company as a result of such a breach by the Purchaser are difficult to ascertain, and (B) the amount of liquidated damages provided for in this Section 1.4(d) are reasonable. The "Damage Amount" shall mean, as of any time, the portion of the Additional Share Purchase Price not paid in cash by the Purchaser to the Company at such time. Notwithstanding anything in this Agreement or any of the other Transaction Documents to the contrary, if the Purchaser pays the Damage Amount, then the Company, simultaneously -4- with such payment, will issue to the Purchaser all Additional Shares not theretofore issued by the Company to the Purchaser. Section 1.5. Certain Indebtedness. (a) If at anytime, or from time to time, the Purchaser or any of its Affiliates issues a guaranty, causes a letter of credit to be issued, enters into a keep-well or other similar agreement, makes any payment, or otherwise incurs a financial obligation (the "Purchaser Credit Support"), in respect of all or any portion of certain indebtedness of the Company specified on Schedule 1.5 (including any refinancing, extension or refunding thereof) (the "Company's Debt"), then the amount of the Purchaser Credit Support shall constitute, to the extent of the amount of the Purchaser Credit Support, a payment to the Company to be applied (i) first, to the principal in respect of the Secured Promissory Note (to the extent such principal then remains unpaid), and (ii) second (to the extent of any excess), to the Additional Share Purchase Price to purchase Additional Shares (a "Credit Support Payment"). (b) If the Company's Debt has been paid in full and none of the Purchaser Credit Support has been utilized or called upon, then the Credit Support Payment pursuant to Section 1.5(a) shall be deemed not to have been made. If, at any time, the amount of the Purchaser Credit Support shall have been permanently reduced by reason other than the payment by or on behalf of the Purchaser of any amount in respect of such Purchaser Credit Support, then the Credit Support Payment pursuant to Section 1.5(a) shall be deemed not to have been made, but only to the extent of such reduction. (c) For the six-month period following the Closing Date, each of the Company and the Purchaser shall use commercially reasonable efforts to restructure the Company's Debt on terms mutually acceptable to the parties. Section 1.6. Technology Transfer Option. (a) The Purchaser hereby grants the Company an option (the "Technology Option") exercisable by a vote of a majority of the Company's entire Board of Directors (the "Board") for the transfer, without further consideration, by the Purchaser, in connection with an imminent Public Offering, of the technology described in Schedule 1.6(a) in existence and owned by the Purchaser at the time of such exercise of the Technology Option (the "Technology") to the Company or its Subsidiaries. Any such exercise of the Technology Option and transfer of the Technology shall be subject to the following conditions precedent: (i) the Purchaser and the Company shall have complied with the HSR Act to the extent applicable; (ii) the transfer of any of the Technology shall not have been restrained, enjoined or otherwise prohibited by any Applicable Law, including any order, injunction, decree or judgment of any court or other Governmental Authority; (iii) no court or other Governmental Authority shall have determined that any Applicable Law makes illegal the transfer of any of the Technology, and no proceeding with respect to the application of any such Applicable Law to such effect shall be pending or threatened; (iv) the Purchaser shall have obtained and shall have delivered to the Company copies of (A) all Governmental Approvals required to be obtained by the Purchaser in connection with the transfer of any of the Technology, and (B) all Consents necessary to be obtained in order to consummate the transfer of the Technology; and (v) the managing underwriter of the -5- Public Offering shall have determined in writing that the transfer of the Technology to the Company or its Subsidiaries is beneficial in connection with the consummation of the Public Offering. Each of the Purchaser and the Company shall use commercially reasonable efforts to satisfy the conditions precedent set forth in this Section 1.6(a). If the Technology Option is exercised pursuant to this Section 1.6(a), the transfer of the Technology shall be effective upon the consummation of the Public Offering. (b) Notwithstanding the foregoing, until the exercise of the Technology Option pursuant to Section 1.6(a), the Company and the Existing Holders acknowledge and agree that the Purchaser may conduct its business and utilize the Technology in any manner as the Purchaser sees fit and at any time and from time to time may sell, transfer, license, lease, create Encumbrances on or otherwise dispose of (each a "Disposition") any of the Technology as it sees fit in the ordinary course of its business (it being understood and agreed that upon the occurrence of any Disposition, the Technology subject to such Disposition thereafter will no longer be subject to the Technology Option). (c) The Technology Option shall expire and this Section 1.6 shall be nugatory and of no force and effect upon the earlier to occur of (i) the consummation of the Public Offering and (ii) December 31, 2001. (d) From and after the effective date of the transfer of the Technology, the Company will (and shall cause its wholly owned Subsidiary mm-Tech, Inc. to) pay promptly all bills referred to in Schedule 1.6(a). (e) Notwithstanding the foregoing provisions of this Section 1.6 (but subject to the conditions precedent set forth in Section 1.6(a)(i) through Section 1.6(a)(ii), inclusive), at any time after the Closing and until the exercise of the Technology Option pursuant to Section 1.6(a), the Purchaser may, in its sole discretion, transfer all or part of the Technology to the Company. Section 1.7. Administration Services. After the Closing, the Purchaser may, in its sole discretion, provide administration and other services and equipment (including team services, support services, facilities, tools and equipment) to the Company or any of its Subsidiaries. Such services and equipment will be billed, from time to time, at cost to the Company or its Subsidiary. Cost will include direct labor, direct material, other direct charges and expenses and overhead (including a corporate expense allocation charge equal to 1.5% of the Company's consolidated sales). Cost will not include any profit. Section 1.8. L-3 Stock Options. (a) At or immediately prior to the Closing, the Company shall grant options to acquire 5,555,555 shares of Common Stock to the Purchaser (the "L-3 Stock Options"). Each L-3 Stock Option shall have an exercise price of $0.54 per share of Common Stock (such price to be appropriately adjusted to give effect to the Reverse Stock Split or any stock split, stock combination, reorganization, recapitalization, etc. affecting the Company's capital stock) for an aggregate exercise price of $3,000,000. -6- (b) The L-3 Stock Options shall become exercisable by the Purchaser upon the date that the aggregate Additional Share Purchase Price is paid (or deemed paid) in full pursuant to Section 1.4 and/or Section 7.3. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Purchaser as of the Closing Date as follows: Section 2.1. Organization and Qualification; Subsidiaries. (a) Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to own or lease its property and assets and to carry on its business as presently conducted, and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the failure to be so qualified and in good standing would have a Material Adverse Effect with respect to the Company and its Subsidiaries. As used herein, "Material Adverse Effect" means, as to any Person, any event, change, occurrence or circumstance that, with or without the passage of time, the giving of notice or both, (i) would result or could reasonably be expected to result in a material adverse change in the business, financial condition, operations, results of operations or prospects (financial and other) of such Person and its Subsidiaries taken as a whole, or (ii) has materially and adversely impaired or could reasonably be expected to materially and adversely impair such Person's ability to perform any of its obligations hereunder or under any other Transaction Document. (b) The Company has made available to the Purchaser true and complete copies of (i) the certificate of incorporation of and all amendments thereto (whether or not filed with any Governmental Authority), and (ii) the by-laws as currently in effect, for each of the Company and its Subsidiaries. (c) True, complete and correct copies of minutes of all meetings of its directors (including committees thereof) and stockholders (or written actions or consents in lieu of meetings) (including minutes and written actions or consents of predecessor companies) since January 1, 1994 through the Closing Date of each of the Company and its Subsidiaries have been made available to the Purchaser. (d) Schedule 2.1(d) sets forth, as of May 31, 2000, a true and complete list of each of the Company's stockholders that, to the Company's best knowledge, beneficially owns 5% or more of any class of the Company's equity securities, listing the number and class of securities beneficially owned, to the knowledge of the Company, by such stockholder and such stockholder's percentage interest in the Company (determined pursuant to Section 13 of the Exchange Act and the rules and regulations promulgated thereunder). (e) Except as set forth on Schedule 2.1(e), the Company does not have any Subsidiaries. The Company does not own any amount of any shares of stock of any corporation or any equity interest in a partnership, joint venture or other Person, and the Company does not -7- control or have the right (whether or not presently exercisable) to control any other Person by means of ownership, management contract or otherwise, other than the Subsidiaries listed on Schedule 2.1(e). Except as set forth on Schedule 2.1(e), all the issued and outstanding capital stock of each Subsidiary of the Company listed on Schedule 2.1(e) is owned, beneficially and of record, by the Company, and no other Person has any voting or other rights in respect of any such Subsidiary. Section 2.2. Authorization. (a) The Company has the power and authority (corporate and other) to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder, all of which have been duly authorized by all requisite corporate action. This Agreement and the other Transaction Documents have been duly authorized, executed and delivered by the Company. This Agreement and the other Transaction Documents constitute valid and binding agreements of the Company, enforceable against the Company in accordance with their terms. (b) The Purchaser Shares (including the Pledged Shares) and the Additional Shares have been duly authorized and, when issued to the Purchaser in accordance with the terms hereof at the Closing, will be duly authorized, validly issued, fully paid and non-assessable, free of pre-emptive, subscription or other similar rights in favor of third persons and free and clear of all Encumbrances (other than the Encumbrance on the Pledged Shares pursuant to the Stock Pledge Agreement and the obligation of the Purchaser to return certain Purchaser Shares as provided in Section 1.3). Section 2.3. Non-contravention. Except as set forth in Schedule 2.3, neither the negotiation, execution or delivery of this Agreement or the other Transaction Documents by the Company nor the performance by the Company of its obligations hereunder or thereunder has or will: (a) contravene any provision contained in the Company's certificate of incorporation or by-laws; (b) violate or result in a breach (with or without the lapse of time, the giving of notice or both) of or constitute a default under (i) any contract, agreement, commitment, indenture, mortgage, lease, pledge, note, license, permit or other instrument or obligation, or (ii) any judgment, order, decree, law, rule or regulation or other restriction of any Governmental Authority, in each case to which the Company or any of its Subsidiaries is a party or by which any of them is bound or to which any of their respective assets or properties is subject, other than, in the case of either clause (i) or clause (ii), such violations, breaches and defaults that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries; (c) result in the creation or imposition of any Encumbrance on any of the assets or properties of the Company or any of its Subsidiaries, other than Encumbrances that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries; or (d) result in the acceleration of, or permit any Person to accelerate or declare due and payable prior to its stated maturity, any material obligation of the Company or any of its Subsidiaries. No Person other than the Company's officers and counsel have been authorized to act for or on behalf of the Company or any of its Subsidiaries, as its agent, representative or otherwise, in respect of any of the negotiations that have resulted in this Agreement or in respect of the execution or delivery of this Agreement or the other Transaction Documents. -8- Section 2.4. No Consents. No notice to, filing with, or authorization, registration, consent or approval of any Governmental Authority or other Person is necessary for the execution, delivery or performance of this Agreement or the other Transaction Documents by the Company or the consummation of the transactions contemplated hereby or thereby by the Company, except for such consents and approvals (a) as have previously been obtained and are in full force and effect, and (b) as are required under the HSR Act and the ISRA. Assuming that the representations and warranties contained in Sections 3.4 and 3.5 are true and correct in all respects, the offer and sale of the Purchaser Shares, the Additional Shares, the L-3 Stock Options and the shares of Common Stock issued or issuable upon the exercise of the L-3 Stock Options as contemplated hereby does not require registration under the provisions of the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities or "blue sky" laws. Section 2.5. Capitalization of the Company. (a) On the date hereof, the Company's authorized capital stock consists solely of: (i) 350,000,000 authorized shares of Common Stock, of which 30,361,265 shares are issued and outstanding; and (ii) 5,000,000 shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of which 25 shares, designated as Series A 12% Cumulative Convertible Redeemable Preferred Stock, stated value $50,000 per share, are issued and outstanding. In addition, (A) no shares of the Company's capital stock are held as treasury shares, and (B) 54,309,052 shares of Common Stock are reserved for issuance upon the exercise, exchange or conversion of outstanding Convertible Securities. Immediately after the Closing, the capitalization of the Company will be as set forth on Schedule 2.5(a). (b) Schedule 2.5(b) sets forth the outstanding Common Stock on a Fully Diluted Basis immediately prior to the Closing. Except as set forth on Schedule 2.5(b), the Company does not have (i) any shares of Common Stock or Preferred Stock reserved for issuance, or (ii) any outstanding Convertible Securities, or other agreements or commitments obligating the Company to issue, grant, award, purchase, acquire, sell or transfer any shares of the Company's Common Stock, or other securities of the Company (including any agreement or commitment obligating the Company to enter into any employee compensation arrangement based on any valuation or transaction price of, or change of ownership in, shares of its capital stock). Other than as set forth on Schedule 2.5(b), there are no voting trusts, proxies or other agreements or understandings to which the Company is a party with respect to the voting of Common Stock of the Company. Upon issuance, the Purchaser Shares will constitute at least 53.5% of the Company's total issued and outstanding Common Stock, on a Fully Diluted Basis. There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any of its securities. There are no pre-emptive or other subscription rights (legal, contractual or otherwise) with respect to any shares of the Company's capital stock or any Convertible Securities. All of the issued and outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable. All of the Company's outstanding securities were offered, issued, sold and delivered by the Company in compliance in all material respects with all applicable state and federal securities laws. None of such securities were issued or sold, and the Purchaser Shares, the Additional Shares, the L-3 Stock Options and the shares of Common Stock issued or issuable upon the exercise of the L-3 Stock Options will not be issued or sold, in violation of any pre-emptive or subscription rights (legal, contractual or otherwise) of any Person. -9- (c) Except as set forth in Schedule 2.5(c), there are no agreements or instruments between the Company and any Person containing anti-dilution or other similar provisions in respect of the issuance or sale of any shares of Common Stock or other securities of the Company. (d) Schedule 2.5(d) sets forth a list of the holders of Convertible Securities, together with the number of Convertible Securities held by such holder (including the class or type of Convertible Security and the number of shares of Common Stock into or for which such Convertible Security is exerciseable, convertible or exchangeable), immediately prior to the Closing. Section 2.6. SEC Reports, etc. (a) The Company has made available to the Purchaser true and complete copies of each report, schedule and registration statement, including the exhibits thereto, filed by the Company with the Securities and Exchange Commission (the "Commission") since June 30, 1998, which, except as set forth in Schedule 2.6(a), are all the documents that the Company was required to file with the Commission since that date and through the date hereof (all of such documents as amended as of the date hereof collectively, the "SEC Documents"). As of their respective dates, the SEC Documents (as amended as of the date hereof) complied as to form in all material respects with the requirements of the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and the rules and regulations of the Commission thereunder. As of their respective dates, except to the extent that information contained therein has been revised or superseded by a later filed SEC Document, none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, are in accordance with and accurately reflect, in all material respects, all entries contained in the books and records of the Company and its Subsidiaries, have been prepared in accordance with GAAP (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-QSB) and fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited financial statements, to normal recurring audit adjustments). (b) The unaudited consolidated financial statements of the Company for the fiscal year ended June 30, 1999 and for the 11 months ended May 31, 2000 (copies of which are attached as Schedule 2.6(b) hereto) comply as to form in all material respects with applicable accounting requirements, are in accordance with and accurately reflect, in all material respects, all entries contained in the books and records of the Company and its Subsidiaries, have been prepared in accordance with GAAP (except that there are no notes thereto) and fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited financial statements, to normal recurring audit adjustments); provided, however, that such financial statements do not include (i) the operations of the New York Business (as defined in the -10- Signal Agreements), (ii) any charges or adjustments required as a result of the Signal Agreements or the transactions contemplated thereby, or (iii) any charges or adjustments resulting from the transfer by Charles S. Brand of 3,000,000 shares to certain lenders in connection with the Legacy Group I Loans. Section 2.7. Absence of Certain Developments. Except as disclosed in the SEC Documents or in Schedule 2.7, since June 30, 1998, there has not been any Material Adverse Effect with respect to the Company and its Subsidiaries, other than any Material Adverse Effect arising out of or resulting from economic conditions affecting the economy as a whole and conditions from capital markets generally. Except as disclosed in the SEC Documents or in Schedule 2.7, since June 30, 1998, the Company has conducted its business in the ordinary and usual course consistent with past practices. Except as set forth in the SEC Documents or in Schedule 2.7 or as expressly contemplated by this Agreement, since June 30, 1998, the Company (including its Subsidiaries) has not: (a) incurred, assumed, guaranteed or discharged any debt, claim, commitment, obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, or any indebtedness (including any Debt), except in the ordinary course of business consistent (in amount and kind) with past practice; (b) mortgaged, pledged or subjected to any other Encumbrance, any property, business or assets, tangible or intangible (other than Permitted Encumbrances); (c) sold, transferred, leased to others or otherwise disposed of any assets, except for Inventories of the Company sold in the ordinary course of business consistent (in amount and kind) with past practice, or canceled or compromised any debt, claim, commitment, liability or obligation, or waived or released any right of substantial value; (d) received any notice of termination of any material Contract; (e) suffered any damage, destruction or loss (whether or not covered by insurance), in any case or in the aggregate, in excess of $50,000; (f) transferred or granted any rights under, or entered into any settlement regarding the breach, misappropriation, infringement or violation of, any Intellectual Property, or modified any existing rights with respect thereto; (g) made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of (i) any employee of the Company whose annual compensation exceeds $40,000, or (ii) any distributor or agent of the Company; (h) made any change in the accounting or auditing methods, practices or principles of the Company; -11- (i) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, distributors, agents, customers or suppliers; (j) entered into any transaction, contract, arrangement, order, license, lease, permit, instrument, agreement or commitment other than in the ordinary course of business consistent (in amount and kind) with past practice, or paid or agreed to pay any legal, accounting, brokerage, finder's fee, Taxes or other expenses in connection with, or incurred any severance pay obligations by reason of, this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby; (k) made any grant of credit to any customer or distributor other than in the ordinary course of business consistent with past practice; (l) amended its certificate of incorporation (other than the Certificate of Amendment) or by-laws, or merged with or into or consolidated with any other Person, or subdivided, combined or in any way reclassified any shares of its capital stock, or changed or agreed to change in any manner the rights of its outstanding capital stock or the character of its business; (m) made any declaration of, or set aside or paid, any dividend or other distribution (whether in cash, stock or other property) with respect to the capital stock of the Company, or issued, pledged or sold any shares of capital stock of the Company, or any other Convertible Securities (or entered into any agreement, arrangement or other understanding to do the same) or directly or indirectly purchased, redeemed, retired or otherwise acquired any shares of capital stock of the Company or other Convertible Securities (or entered into any agreement, arrangement or other understanding to do the same); (n) made, given or granted any bid or proposal, or any customer option relating to any Contract, (i) involving an amount in excess of $50,000 (or amended, supplemented or terminated any existing bid or proposal, or any existing customer option relating to any Contract, involving an amount in excess of $50,000), (ii) involving a loss to the Company, or (iii) not in the ordinary course of business, consistent with past practice; or (o) taken any action or omitted to take any action that has resulted or could reasonably be expected to result in the occurrence of any of the foregoing. Section 2.8. Governmental Authorizations; Licenses; Etc. Except as disclosed in Schedule 2.8, the business of each of the Company and its Subsidiaries has been operated in compliance with Applicable Laws (excluding Environmental Laws which are specifically covered in Section 2.12), except for violations which would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries. Except as disclosed in Schedule 2.8, each of the Company and its Subsidiaries has all permits, licenses, approvals, certificates and other authorizations, and has made all notifications, registrations, certifications and filings with all Governmental Authorities, necessary or advisable for the operation of their respective businesses as currently conducted, except for where the failure to possess such permits, licenses, approvals, certificates or authorizations or to make such notifications, registrations, certifications and filings would not, individually or in the aggregate, -12- have a Material Adverse Effect with respect to the Company and its Subsidiaries. Except as disclosed in Schedule 2.8, there is no action, lawsuit, claim, investigation, case or proceeding pending or, to the Company's best knowledge, threatened by any Governmental Authority with respect to: (a) any violation or alleged violation by the Company, any of its Subsidiaries or any of their respective Affiliates of any Applicable Law; or (b) any failure or alleged failure by the Company, any of its Subsidiaries or any of their respective Affiliates to have any permit, license, approval, certification or other authorization required in connection with the operation of its business. Section 2.9. Litigation. (a) Except as set forth in Schedule 2.9(a) or disclosed in the SEC Documents, there are no lawsuits, actions, proceedings, claims, orders or investigations pending or, to the Company's best knowledge, threatened against the Company or any of its Subsidiaries (i) relating to the Company, any of its Subsidiaries, the business, financial condition, assets, liabilities, operations, results of operations or prospects (financial and other) of the Company or any of its Subsidiaries, or any product alleged to have been manufactured or sold by any of them, (ii) seeking to enjoin the transactions contemplated hereby, or (iii) which, individually or in the aggregate, have resulted or could reasonably be expected to have a Material Adverse Effect with respect to the Company and its Subsidiaries. Except as set forth in Schedule 2.9(a), there are no judgments unsatisfied against the Company or any of its Subsidiaries or consent decrees or injunctions to which any of them is subject. (b) The Company has meritorious defenses to claims made by SpeedUSNY against the Company. In any event, the Company believes that the outcome of the litigation between SpeedUSNY and the Company and any related claims will not have a Material Adverse Effect with respect to the Company and its Subsidiaries. Section 2.10. Undisclosed Liabilities. Except as set forth in Schedule 2.10 and Schedule 2.20(d), other than those reflected as liabilities in the financial statements included in (i) the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998 (the "1998 Form 10-KSB"), and (ii) the Company's Quarterly Reports on Form 10-QSB for the fiscal quarters ended September 30, 1998, December 31, 1998 and March 31, 1999 (collectively, the "Financial Statements"), there are no material liabilities of the Company or any of its Subsidiaries of any kind or nature whatsoever, whether known or unknown, absolute, accrued, contingent or otherwise, or whether due or to become due, other than liabilities incurred in the ordinary course of business consistent with past practices since March 31, 1999. Section 2.11. Taxes. (a) Except as disclosed in Schedule 2.11(a), all federal, state, county, local and foreign Tax Returns and reports of the Company and any of its Subsidiaries required to be filed are complete in all material respects and have been duly filed. Except as disclosed in Schedule 2.11(a), all federal, state, county, local, foreign and any other Taxes (including all income, withholding and employment Taxes), assessments (including interest and penalties), fees and other governmental charges owed by the Company or any of its Subsidiaries have been paid or duly provided for in accordance with GAAP in the Company's financial statements, or are being -13- contested in good faith by appropriate proceedings as previously disclosed to the Purchaser in writing and adequate reserves therefor have been established pursuant to GAAP, or have arisen after the date hereof in the ordinary course of business and are not yet due and payable. (b) The provisions for Taxes listed on the balance sheets included in the Financial Statements are adequate under GAAP to reflect the accrued liability in respect of all accrued and unpaid federal, state, local and foreign Taxes of the Company, whether or not assessed or disputed as of the respective dates of such balance sheets. There are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year. Other than as set forth on Schedule 2.11(b), since January 1, 1994, no Tax Returns of the Company are currently under audit or have been audited by taxing authorities. Other than as set forth on Schedule 2.11(b), the Company has not elected pursuant to the Code to be treated as a collapsible corporation pursuant to Section 341(f) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization or elections made in the ordinary course of business and consistent with past practice) that would have a Material Adverse Effect with respect to the Company and its Subsidiaries. (c) The Company has withheld all required amounts in respect of Taxes from its employees, agents, contractors and nonresidents and, to the extent required, has remitted such amounts to the proper agencies, except where failure to withhold and remit such amounts would not be material. (d) Neither the Company nor any director or officer (or employee responsible for Tax matters) of the Company has received written notice from any taxing authority of assessments of additional Taxes for any period for which Tax Returns have been filed other than those additional Taxes that have been paid or duly provided for in accordance with GAAP in the Company's financial statements. There is no outstanding dispute or claim concerning any Tax liability of the Company claimed or raised by any Governmental Authority. Schedule 2.11(d) hereto lists all federal, state, local and foreign income Tax Returns filed with respect to the Company for taxable periods since June 30, 1998, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. The Company has delivered to the Purchaser correct and complete copies of all federal, state, local and foreign income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company since June 30, 1998. (e) The Company is not a "foreign person" within the meaning of Section 1445(b)(2) of the Code. Section 2.12. Environmental Matters. Except as disclosed in Schedule 2.12, (a) the business of each of the Company and its Subsidiaries is being conducted in compliance with all applicable Environmental Laws, except where the failure to be in such compliance would not have a Material Adverse Effect with respect to the Company and its Subsidiaries, (b) the real property currently or formerly owned or operated by the Company or its Subsidiaries (including soil, groundwater or surface water on or under the properties and buildings thereon) (the "Affected Property") does not contain any Regulated Substance other than as permitted under applicable Environmental Laws, (c) neither the Company nor any of its Subsidiaries has received any notice from any Person (including any Governmental Authority) that the Company or any of -14- its Subsidiaries may be a "potentially responsible party" (as such term is defined under the Comprehensive Environmental Response, Compensation and Control Act, 42 U.S.C. 'SS'9601, et seq.) in connection with any waste disposal site or facility used by the Company or its Subsidiaries, (d) the Company or any of its Subsidiaries and the Affected Property are not presently subject to a suit or judgment arising under any Environmental Law, and (e) none of the Affected Property contains asbestos, lead paint or formaldehyde; provided, however, that the representations and warranties of the Company set forth in clauses (b) and (e) are limited to the best knowledge of the Company in the case of actions and omissions of Persons other than the Company and its Subsidiaries. As used herein, "Environmental Laws" means any federal, state and local law, statute, ordinance, rule, regulation, license, permit, authorization, approval, consent, court order, judgment, decree, injunction, code, requirement or agreement with any governmental authority, (A) relating to pollution (or the cleanup thereof or the filing of information with respect thereto), human health or the protection of air, surface water, ground water, drinking water supply, land (including land surface or subsurface), plant and animal life or any other natural resource, or (B) concerning exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production or disposal of Regulated Substances, in each case as amended and as now or hereafter in effect. The term "Environmental Law" includes, without limitation, (1) the Comprehensive Environmental Response Compensation and Liability Act of 1980, the Water Pollution Control Act, the Clean Air Act, the Clean Water Act, the Solid Waste Disposal Act (including the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984), the Toxic Substances Control Act, the Insecticide, Fungicide and Rodenticide Act, the Occupational Safety and Health Act of 1970, each as amended and as now or hereafter in effect, and (2) any common law or equitable doctrine (including injunctive relief and tort doctrines such as negligence, nuisance, trespass and strict liability) that may impose liability or obligations for injuries or damages due to or threatened as a result of the presence of, exposure to, or ingestion of, any Regulated Substance. As used herein, "Regulated Substances" means pollutants, contaminants, hazardous or toxic substances, compounds or related materials or chemicals, hazardous materials, hazardous waste, flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products (including waste petroleum and petroleum products) as defined in applicable Environmental Laws. Section 2.13. Proprietary Rights. (a) The Company and its Subsidiaries own all right, title and interest in, to and under, or the Company and its Subsidiaries have valid licenses to use, the material Intellectual Property used in their businesses or covering any aspect of their businesses. Schedule 2.13(a) sets forth a list of all material Intellectual Property identified in any prior audit of such Intellectual Property and all trademarks, service marks, trade names, patents, patent applications, copyright registrations, copyright applications, trademark applications, and trademark registrations owned by the Company or its Subsidiaries or which are used in or cover any aspect of their businesses. All such Intellectual Property that is used pursuant to valid licenses are not presently terminable due to any breach or noncompliance by the Company or any of its Subsidiaries, as the case may be, and have not been, and could not reasonably be expected to be, materially affected by the -15- transactions contemplated hereunder or under any other Transaction Document. No Intellectual Property used in or covering any aspect of the businesses of the Company or its Subsidiaries is owned or controlled (in whole or in part) by any of their respective Affiliates. Except as set forth in Schedule 2.13(b), no other Person has any right, title or interest in, to or under any of the Intellectual Property owned by the Company or any of its Subsidiaries. Schedule 2.13(a) indicates which of the Company's and its Subsidiaries' material Intellectual Property is owned by the Company or any of its Subsidiaries and which of the Company's and its Subsidiaries' material Intellectual Property is covered by a license. All granted and issued patents, copyright registrations, and registered trademarks and service marks listed on Schedule 2.13(a) and all copyrights held by the Company and its Subsidiaries are valid, enforceable and subsisting. The Company and its Subsidiaries have the exclusive right to file, prosecute and maintain all applications and registrations with respect to their respective Intellectual Property. (b) Except as set forth in Schedule 2.13(b), none of the material Intellectual Property owned by the Company and its Subsidiaries is subject to any Encumbrance in favor of any third party. No claims with respect to any Intellectual Property have been asserted or, to the Company's knowledge, threatened by any Person (i) against the Company or any of its Subsidiaries, or (ii) to the Company's knowledge, against any other Person based on use of any of the Company's or any of its Subsidiaries' products, technology or Intellectual Property. No use of any of the Company's or any of its Subsidiaries' products, technology or Intellectual Property by any Person (including the Company or any of its Subsidiaries) in accordance with the specifications and other materials furnished by the Company or any of its Subsidiaries constitutes or has constituted an unauthorized use, infringement, misappropriation or other violation of the Intellectual Property of any other Person. Without limiting the generality of the foregoing and except as set forth in Schedule 2.13(b), since January 1, 1994, no Person ever employed or otherwise engaged by the Company or any of its Subsidiaries has asserted or, to the Company's best knowledge, has threatened any claim against the Company or any of its Subsidiaries, as the case may be, relating to any Intellectual Property. To the best knowledge of the Company, there has not been, nor is there presently, any unauthorized use, infringement, misappropriation or violation of any of the Company's or its Subsidiaries' Intellectual Property by any Person. Except as set forth in Schedule 2.13(b), each of the Company and its Subsidiaries has the full right to possess, use, copy, distribute, display, transfer and license all Intellectual Property used in its business. (c) Except as set forth in Schedule 2.20(c), no Intellectual Property of the Company or any of its Subsidiaries is subject to any outstanding order, award, decision, injunction, judgment, decree, stipulation or agreement in any manner restricting the transfer, use, enforcement or licensing thereof by the Company or any of its Subsidiaries, as the case may be. Except as set forth in Schedule 2.13(c), none of the Company and any of its Subsidiaries has entered into any agreement to indemnify any other Person against any charge of infringement of any Intellectual Property. None of the Company and any of its Subsidiaries has entered into any agreement granting any third party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Company's or any of its Subsidiaries' Intellectual Property. (d) Except as set forth in Schedule 2.13(d), the Company and its Subsidiaries have paid all fees, annuities and all other payments which have heretofore become due to any -16- Governmental Authority with respect to their respective Intellectual Property that is registered and has taken all steps reasonable and necessary to prosecute and maintain the same. (e) No computer programs or software (including source code, object code, data and databases) have been supplied by the Company or any of its Subsidiaries to any Person except pursuant to a binding license prohibiting further distribution and disclosure. (f) No current or former employee, independent contractor or consultant has any interest in any Intellectual Property of the Company or any of its Subsidiaries. (g) The Intellectual Property owned by or validly licensed to mmTech, Inc. includes all Intellectual Property required for the continued conduct of its business after the Closing as such business is currently conducted. Section 2.14. Books and Records. The stock records of each of the Company and its Subsidiaries fairly and accurately reflects the record ownership of all of the outstanding shares of the capital stock of the Company or such Subsidiary, as the case may be. The other books and records of the Company and its Subsidiaries, including financial records and books of account, are complete and accurate in all material respects and have been maintained in accordance with GAAP (to the extent GAAP is applicable) and with sound business practices. Section 2.15. Brokers. Except as set forth on Schedule 2.15, no Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from the Company in connection with this Agreement or any of the transactions contemplated hereby. The Company is responsible for, and will pay, any fee referred to on Schedule 2.15. Section 2.16. Use of Proceeds. (a) The Company will use the net proceeds of the sale of the Purchaser Shares (the "Proceeds") as set forth on Schedule 2.16. (b) The Company will deposit the Proceeds immediately upon receipt thereof in a bank account (the "Bank Account") which will require the signature of the President of the Company or another officer authorized by the President of the Company for any withdrawals, wiring or transfer of funds in excess of $5,000. Section 2.17. Absence of Questionable Payments. Neither the Company, nor any of its Subsidiaries nor any of their respective directors, officers, employees and Affiliates, nor, to the best knowledge of the Company, any of the agents, representatives or other Persons acting on behalf of any of the foregoing Persons, has: (a) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activities to government officials or others; or (b) accepted or received any unlawful contributions, payments, gifts or expenditures. Section 2.18. Accuracy of Representations. No representation or warranty made by the Company in this Agreement or any document delivered, or to be delivered, by or on behalf of the Company pursuant hereto contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. -17- Section 2.19. Assets. (a) Except as stated in Schedule 2.19(a), (i) the Leases are in full force and effect and constitute legal and binding obligations of the Company and, to the best knowledge of the Company, the other parties thereto, enforceable according to their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses, (ii) neither the Company nor any of its Subsidiaries is in material default under any of the Leases, and (iii) to the best knowledge of the Company or any of its Subsidiaries, no other party to any of the Leases is in material default thereunder, and there exist no conditions which, with notice or lapse of time, or both, would constitute a material default under any of the Leases. (b) There is no real property owned by the Company and used in the business of the Company. (c) Except as set forth on Schedule 2.19(c), the buildings, facilities, furniture, leasehold improvements, any related capitalized items and other tangible property material to the business or operations of the Company (the "Tangible Property") are in good operating condition and repair (ordinary wear and tear excepted), are suitable for their current use and are currently in use by the Company in the operation of its business in the ordinary course. (d) Except as set forth on Schedule 2.19(d), the Company has good and valid title to or valid leasehold interest in all of its assets and interests in assets, whether real, personal, mixed, tangible, and intangible, which constitute all the assets and interests in assets that are used in the business of the Company. All the assets and interests in assets of the Company are free and clear of all Encumbrances, easements, rights of way, covenants, conditions or restrictions, except (i) those Encumbrances disclosed in Schedule 2.19(d), (ii) Encumbrances for current Taxes not yet due and payable, (iii) matters that, individually or in the aggregate, are not substantial in amount and do not materially detract from or interfere with the present or intended use of any of these assets, and (iv) purchase money security interests securing only the equipment financed by the seller thereof (the items described in clauses (i), (ii), (iii) and (iv) above are herein sometimes called "Permitted Encumbrances"). Section 2.20. Contracts. (a) Schedule 2.20(a), together with the Exhibits filed as part of the 1998 Form 10-KSB, contains a true, complete and correct list of all agreements, contracts, commitments, orders, licenses, leases, and other instruments and arrangements (whether written or oral) (the "Contracts") of the types described below to which the Company (including its Subsidiaries) is a party or by which it or any of its assets is bound: (i) leases (including the Leases covering real property leased by the Company), and material licenses, permits, franchises, insurance policies, Governmental Approvals and other contracts concerning or relating to the real property leased by the Company; -18- (ii) employment, consulting, agency, collective bargaining or other similar contracts, agreements, and other instruments and arrangements relating to or for the benefit of employees, sales representatives, distributors, dealers, agents, or (if material) independent contractors; (iii) loan agreements, indentures, letters of credit, mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes, guarantees, and other agreements and instruments relating to the borrowing of money or obtaining of or extension of credit; (iv) licenses, licensing arrangements and other contracts providing in whole or in part for the use of, or limiting the use of, any Intellectual Property (other than licenses relating to off-the-shelf commercially available software (e.g., Microsoft Windows)); (v) brokerage or finder's agreements; (vi) joint venture, partnership and similar contracts involving a sharing of profits or expenses (including but not limited to joint research and development and joint marketing contracts); (vii) asset purchase agreements, stock purchase agreements and other acquisition or divestiture agreements, including any agreements relating to the sale, lease or disposal of any assets, capital stock, Convertible Securities or other securities of the Company or any of its Subsidiaries for consideration in excess of $50,000 (other than sales of inventory in the ordinary course of business consistent with past practice) or involving continuing indemnity or other obligations; (viii) any contract with respect to which the aggregate amount that could reasonably be expected to be paid or received thereunder in the future exceeds $50,000 per annum; (ix) any material sales agency, representative, marketing or distributorship agreements; (x) purchase commitments for inventory items or supplies that, together with amounts on hand, constitute in excess of six months normal usage; (xi) any agreement, understanding, contract or commitment (written or oral) with (A) any employee, agent, consultant, distributor, dealer or franchisee other than those involving in the aggregate consideration or other expenditure of less than $50,000, or (B) any Affiliate; (xii) any guarantee of the payment or performance of any Person or any agreement to indemnify any Person, or act as a surety, or other agreement to be contingently or secondarily liable for the obligations of any Person other than (A) the endorsement of checks in the ordinary course of business, and (B) guarantees or agreements which in the aggregate do not exceed $50,000; -19- (xiii) any outstanding bid or proposal or any outstanding customer option relating to any contract or agreement in excess of $50,000; (xiv) any agreement, contract, commitment or understanding (written or oral) with Signal Technology Corporation, a Delaware corporation, or any of its Affiliates (individually and collectively, "Signal"); and (xv) any other contracts, agreements or commitments that are material to the Company or any of its Subsidiaries or any of their businesses. (b) The Company has made available to the Purchaser true, complete and correct copies of all written Contracts, together with all amendments thereto, set forth in Schedule 2.20(a). The Company has furnished the Purchaser with a true, complete and correct summary of all oral Contracts listed on Schedule 2.20(a). (c) Except as set forth in Schedule 2.20(c), there does not exist under any Contract, any event of default or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder by any party to any of the Contracts except for such events or conditions that would not, individually and in the aggregate, have a Material Adverse Effect with respect to the Company and Subsidiaries. Except as set forth in Schedule 2.20(c), each Contract (A) is in full force and effect, and (B) is a legal, valid, binding and enforceable obligation of the Company and, to the best knowledge of the Company, the other parties thereto, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses. Except as set forth in Schedule 2.20(c), no Consent of any third party is required under any Contract as a result of or in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby. Except as set forth in Schedule 2.20(c), no outstanding bid or proposal (or series of related bids or proposals) was bid, or when accepted would be made, at a loss. (d) True, correct and complete copies of all agreements between the Company or any of its Subsidiaries (on the one hand), and Signal or any of its Affiliates (on the other hand) are included as Schedule 2.20(d) (the "Signal Agreements"). (e) The consulting agreement, dated December 20, 1995, among the Company, Phipps, Teman & Co. L.L.C. and SFM Group, Ltd. has been terminated and is of no force and effect. Section 2.21. Product Warranties. Schedule 2.21 sets forth a list of all pending or, to the best knowledge of the Company, threatened warranty claims in excess of $50,000. Section 2.22. Insurance. Schedule 2.22 contains a true, complete and correct list of all insurance policies, (including directors' and officers' liability insurance) presently maintained by the Company or any of its Subsidiaries or in which the Company or any of its Subsidiaries has any interest; and no notice of cancellation, termination or reduction of coverage, and no notice of intention to cancel, terminate or reduce coverage has been received. The Company has given to the Purchaser access to true, complete and correct copies of all such policies, together with all -20- riders and amendments thereto. Such policies are in full force and effect, and all premiums due thereon have been paid. The Company does not own or have any interest in any split-dollar insurance policies. Section 2.23. Employees, Labor Matters, etc. (a) Except as set forth in the Exhibits filed as part of the 1998 Form 10-KSB or on Schedule 2.23, the Company does not have employment contracts with any of its employees or any collective bargaining agreements covering any of its employees, nor, to the best knowledge of the Company, has the Company been subject to any material labor organization activity. There are no material controversies or labor troubles pending or, to the best knowledge of the Company, threatened, between the Company and any of its employees. The Company has complied with all applicable federal and state laws and regulations respecting employment and employment practices, terms and conditions of employment, wages and hours and other laws related to employment except where the failure to so comply would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries. There are no overdue arrears in the payments of wages, withholding or social security taxes, unemployment insurance premiums or other similar obligations. No employee or consultant of the Company, the loss of whose services would have a Material Adverse Effect with respect to the Company and its Subsidiaries, has within the prior six months given notice to the Company that he or she intends to leave the employ of the Company or is considering doing so, or is being terminated. (b) Since January 1, 1998, there has been no reduction in work force, plant closing or layoff, which alone or in combination would give rise to any liability or obligation to the Company or any of its Subsidiaries under or relating to the WARN Act. Section 2.24. Employee Benefit Plans and Related Matters. (a) Schedule 2.24(a) lists each pension, retirement, profit-sharing, deferred compensation, bonus, phantom stock, restricted stock plan, stock option plan, stock purchase plan, deferred compensation arrangement, other incentive plan, severance pay plan or policy, supplemental executive retirement plan or policy, or other employee benefit program, arrangement, agreement or understanding, or medical, vision, dental or other health plan, or life insurance or disability plan, or any other employee benefit plan, including any "employee benefit plan" as defined in Section 3(3) of ERISA, to which the Company contributes or is a party or is bound and under which it may have liability and under which employees or former employees of the Company (or their beneficiaries) are eligible to participate or derive a benefit ("Employee Benefit Plans"). For purposes of this Section 2.24, any reference to the term "Company" shall be deemed to refer also to any entity which is under common control or affiliated with the Company within the meaning of Section 4001 of ERISA, and the rules and regulations promulgated thereunder and/or Sections 414(b), (c) (m) or (o) of the Code and the rules and regulations promulgated thereunder. The Company has made available to the Purchaser true, correct and complete copies of all documents, summary plan descriptions, insurance contracts, third party administration contracts and all other documentation created to embody all Employee Benefit Plans, plus descriptions of any Employee Benefit Plans that have not been reduced to writing. -21- (b) Except for required contributions or benefit accruals for the current plan year, no liability has been or is expected to be incurred by the Company under or pursuant to the Code or Title I or IV of ERISA or the penalty, excise tax or joint and several liability provisions of the Code or ERISA relating to Employee Benefit Plans and, to the best knowledge of the Company, no event, transaction or condition has occurred or exists that, with or without the passage of time, the giving of notice or both, would result in any such liability to the Company or, following the Closing, the Company, the Purchaser or any such Employee Benefit Plan. (c) None of the assets of the Company is subject to any Encumbrance in favor of, or enforceable by, the Pension Benefit Guaranty Corporation (the "PBGC"). (d) No Employee Benefit Plan is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA, a "multiple employer plan" within the meaning of Section 413(c) of the Code, or a defined benefit plan within the meaning of Section 3(35) of ERISA. (e) Schedule 2.24(e) lists (i) the name and total of annual rate of compensation (including bonuses, commissions and incentive compensation) of each employee of and consultant to the Company whose annual compensation exceeds $50,000, and (ii) the name of each officer and director of the Company. (f) Each of the Employee Benefit Plans listed in Schedule 2.24(a) is and has at all times been in compliance in all material respects with all applicable provisions of ERISA, the Code and other Applicable Law. (g) Each "employee pension benefit plan" as defined in Section 3(2) of ERISA (each a "Pension Plan") which is intended to meet the requirements of Section 401(a) of the Code now meet, and since their inception have met, the requirements for qualification under Section 401(a) of the Code and no event has occurred that has or could reasonably be expected to materially and adversely affect the qualified status of any such Pension Plan. The IRS has issued a favorable determination letter with respect to the qualification under the Code of each Pension Plan and the IRS has not taken any action to revoke any such letter. (h) Each fiduciary and every plan official of each Employee Benefit Plan is bonded to the extent required by Section 412 of ERISA. Those sections of all annual reports heretofore filed with the IRS, the Department of Labor and the PBGC by or on behalf of every Employee Benefit Plan which were required to be certified were only certified without qualification by the accountants or actuaries of such Employee Benefit Plan. (i) Except as specifically set forth in Schedule 2.24(i), (i) the execution and performance of the transactions contemplated by this Agreement will not (either alone or upon the occurrence of any additional or subsequent event) constitute an event under any Employee Benefit Plan or individual agreement that will or may result in any payment (whether of severance pay or otherwise), acceleration, vesting or increase in benefits with respect to any employee, former employee, consultant, agent or director of the Company or any of its Affiliates, and (ii) no payment which will be or may be made by the Company to any employee, former employee, director, consultant or agent thereof will or could be characterized as an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. -22- (j) Neither the Company nor any of its Affiliates has contributed to, has been required to contribute to, or has incurred any withdrawal liability (within the meaning of Section 4201 of ERISA) with respect to any Employee Benefit Plan which is a multiemployer plan as defined in Section 3(37) of ERISA. (k) The Company does not maintain any Employee Benefit Plan which is funded by an association described in Section 501(c) (9) of the Code. (l) Each "group health plan" (within the meaning of Section 4980B of the Code) maintained by the Company or any of its Affiliates has been administered in material compliance with the coverage continuation requirements contained in the Consolidated Omnibus Budget Reconciliation Act of 1985 and as provided under Section 4980B of the Code and any regulations promulgated or proposed under the Code. (m) With respect to all Employee Benefit Plans which are funded, or are required by Applicable Law to be funded, the present value of all accrued benefits (vested and non vested) of each such Employee Benefit Plan as of the Closing Date, will not exceed the fair market value of the assets of each such Employee Benefit Plan as of the Closing Date. (n) The Company and its Affiliates have made all contributions required to be made to each Employee Benefit Plan under the terms of the plan and Applicable Law. No prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) has occurred with respect to any Employee Benefit Plan listed, which could subject any Employee Benefit Plan or any related trust, the Company, any Affiliate, the Purchaser or any director or employee of any of them to any Tax or penalty imposed under Section 4975 of the Code or Section 502(i) or 502(l) of ERISA, either directly or indirectly, and whether by way of indemnity or otherwise. (o) The Company does not maintain, sponsor or contribute to any plan or program providing retiree medical or life insurance benefits. (p) The Company has never contributed to a Pension Plan subject to Title IV of ERISA or Section 412 of the Code. Section 2.25. Transactions with Related Parties. Except as set forth in the SEC Documents or as disclosed in Schedule 2.25, the Company is not a party to any arrangement, understanding or agreement (whether written or oral) with any of the Company's employees, officers, stockholders or directors or any Affiliate or immediate family member of any of the foregoing under which it: (a) leases any real or personal property (either to or from such Person); (b) has incurred any debt for borrowed money or under which it has lent money or made any guarantees (other than routine travel advances); (c) licenses technology (either to or from such Person); (d) is obligated to purchase any tangible or intangible asset from or sell such asset to such Person; (e) purchases or sells (or has purchased or sold during the last 18 months) products or services from or to, as the case may be, such Person (other than pursuant to employment agreements described in Schedule 2.24(e)); or (f) receives or expends $50,000 or more. Section 2.26. Interest in Competitors. Except as disclosed on Schedule 2.26, neither the Company nor to its best knowledge any of its officers or directors or Affiliates of any of the foregoing, has any interest, either by way of contract or by way of investment (other than as -23- holder of not more than 5% of the outstanding capital stock of a publicly traded Person), directly or indirectly, in any Person other than the Company that provides any services or designs, produces or sells any product or product line or engages in any activity competitive with any activity currently conducted by the Company. Section 2.27. Territorial Restrictions. The Company is not restricted by any agreement or understanding with any other Person from carrying on its business anywhere in the world. Section 2.28. Effect of Transaction. No creditor, employee, consultant or other Person (other than customers or suppliers) having a material business relationship with the Company has informed the Company that such Person intends to terminate, or effect any material adverse change in, its relationship with the Company because of the transactions contemplated by this Agreement and the other Transaction Documents, nor does the Company have knowledge of any such intent. Section 2.29. Order Backlog. A true and complete list of (a) all firm product and service purchase orders and contracts for the sale of goods or the delivery of services by the Company to Persons other than Governmental Authorities, and (b) all firm funded product and service purchase orders and contracts for the sale of goods or the delivery of services by the Company to Governmental Authorities (collectively, the "Backlog") pending as of the latest practical date prior to the date of this Agreement is set forth in Schedule 2.29 attached hereto. Section 2.30. Suppliers and Customers. Schedule 2.30 attached hereto sets forth the 20 largest suppliers of the Company, all sole source suppliers of the Company and the 20 largest customers of the Company as of the date hereof. The Company does not have any knowledge that any of the Company's suppliers or customers intends to cancel or otherwise materially and adversely modify its relationship with the Company or limit its services, supplies or materials to the Company, or its usage, purchase or pricing of the services and products of the Company either as a result of the transactions contemplated hereby or otherwise. Section 2.31. Antitakeover Provisions. Other than ISRA, no "fair price", "moratorium", "control share acquisition" or other form of antitakeover statute, regulation, charter provision or contract is applicable to the purchase of the Purchaser Shares by the Purchaser or any of the other transactions contemplated by this Agreement. Section 2.32. Extent of Offering. Neither the Company nor any agent on its behalf has sold or offered Common Stock, Convertible Securities or any similar securities or instruments for sale to, or has solicited any offers to buy any thereof from, or otherwise approached or negotiated in respect hereof with, any Person(s) whomsoever so as to bring the issuance and sale or delivery of any of the Purchaser Shares and/or the Additional Shares within the provisions of Section 5 of the Securities Act or so as to require registration or qualification thereof under any state securities law. Section 2.33. Registration Rights. Except as set forth in the Exhibits filed as part of the 1998 Form 10-KSB or in Schedule 2.33, the Company is not under any obligation to register any shares of its capital stock under the Securities Act, and as of the Closing Date and after giving effect to the transactions contemplated hereby, will not be under any such obligation. -24- Section 2.34. Real Property Holding Company. The Company is not a real property holding company within the meaning of Section 897 of the Code. Section 2.35. No Retention Agreements, etc. Except as set forth in the Exhibits filed as part of the 1998 Form 10-KSB or in Schedule 2.35, are no retention agreements, severance agreements, change of control agreements and similar arrangements to which the Company or any of its Subsidiaries, on the one hand, and any employee, consultant or other Person, on the other hand, are a party. Section 2.36. Newbridge Networks Corporation. The Company has provided to the Purchaser true, complete and correct copies of all Contracts and material correspondence with, relating to or involving Newbridge Networks Corporation, a Canadian corporation, or any of its Affiliates (collectively, "Newbridge"). Except as set forth in Schedule 2.36, there does not exist under any Contract between the Company and Newbridge any event of default or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder by either party to such Contract, except for such violations, breaches or events of default that would not, individually or in the aggregate, have a Material Adverse Effect. Section 2.37. Financial Projections. The financial projections, dated June 16, 2000 (the "Projections"), were prepared on the basis of assumptions that the Company reasonably believed in good faith at the time of the preparation to be reasonable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser hereby represents and warrants to the Company as of the Closing Date as follows: Section 3.1. Organization. The Purchaser is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware. Section 3.2. Authorization. The Purchaser has the power and authority (corporate and other) to execute and deliver this Agreement and any other Transaction Documents to which the Purchaser is a party and to perform its obligations hereunder and thereunder, all of which have been duly authorized by all requisite corporate action. This Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a valid and binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms. Section 3.3. Access to Information. Without limiting the effect of the Company's representations and warranties contained herein, the Purchaser has received copies of the SEC Documents and has reviewed therein the discussion of risk factors relating to the Company. In addition (but without limiting the effect of the Company's representations and warranties contained herein), the Purchaser has had an opportunity to ask questions of and receive answers from representatives of the Company concerning the business of the Company, its condition and -25- prospects (financial and other) and the terms and conditions of the offering of the Purchaser Shares. Section 3.4. Accredited Investor. The Purchaser is an "Accredited Investor" as such term is defined in Rule 501 of the rules and regulations of the Commission promulgated under the Securities Act. Section 3.5. Investment Intent. (a) The Purchaser is acquiring the Purchaser Shares and the Additional Shares for its own account for investment only and not for or with a present view to resale or distribution (other than the possible sale by the Purchaser of up to 35% of the Purchaser Shares to the Investment Bank in connection with the equity investment in the Company referred to in Section 5.1). The Purchaser has not entered into any contract, undertaking, agreement or arrangement with any Person to sell, transfer or pledge to such Person or anyone else the Purchaser Shares or the Additional Shares, and the Purchaser has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. (b) The Purchaser has the financial ability to bear the economic risk of losing its entire investment in the Purchaser Shares and the Additional Shares, is prepared to bear the economic risk of its investment therein for an indefinite time and can afford to sustain a complete loss of its investment therein. (c) The Purchaser understands that the Purchaser Shares and the Additional Shares constitute restricted securities within the meaning of Rule 144 promulgated under the Securities Act, and that none of the Purchaser Shares, the Additional Shares or any interest therein may be sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act or in a transaction exempt from registration under the Securities Act, and understands the meaning and effect of such restriction. (d) The Purchaser acknowledges that the Purchaser Shares and the Additional Shares may not be transferred, and the Company shall not be required to register any transfer thereof on the books of the Company, unless such transfer is made pursuant to an effective registration statement, in compliance with Rule 144, or pursuant to another exemption under the Securities Act; provided, however, that the Company shall not be required to register any transfer if any securities are offered or sold otherwise than pursuant to an effective registration statement or pursuant to Rule 144 unless the Company shall have received an opinion of counsel to the Purchaser, reasonably satisfactory to the Company, that such transfer does not require registration under the Securities Act or applicable state securities laws. Section 3.6. Financial Resources. The Purchaser has cash or credit facilities presently available to meet all of its payment obligations hereunder. Section 3.7. Brokers. No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from the Purchaser in connection with this Agreement or any of the transactions contemplated hereby. -26- Section 3.8. Non-contravention. Except as set forth in Schedule 3.8, neither the negotiation, execution or delivery of this Agreement or the other Transaction Documents by the Purchaser nor the performance by the Purchaser of its obligations hereunder or thereunder has or will: (a) contravene any provision contained in the Purchaser's certificate of incorporation or by-laws; (b) violate or result in a breach (with or without the lapse of time, the giving of notice or both) of or constitute a default under (i) any contract, agreement, commitment, indenture, mortgage, lease, pledge, note, license, permit or other instrument or obligation, or (ii) any judgment, order, decree, law, rule or regulation or other restriction of any Governmental Authority, in each case to which the Purchaser or any of its Subsidiaries is a party or by which any of them is bound or to which any of their respective assets or properties is subject, other than, in the case of either clause (i) or clause (ii), such violations, breaches and defaults that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Purchaser and its Subsidiaries; (c) result in the creation or imposition of any Encumbrance on any of the assets or properties of the Purchaser or any of its Subsidiaries, other than Encumbrances that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Purchaser and its Subsidiaries; or (d) result in the acceleration of, or permit any to accelerate or declare due and payable prior to its stated maturity, any obligation of the Purchaser or any of its Subsidiaries. ARTICLE IV MANAGEMENT COVENANTS Section 4.1. Indemnification; Officers' and Directors' Insurance. (a) All rights to indemnification or exculpation now existing in favor of the past and present directors, officers, employees and agents of the Company and its Subsidiaries as provided in their respective charters or by-laws or otherwise in effect as of the Closing Date with respect to matters occurring prior to the Closing Date shall survive the transactions contemplated hereby and shall continue in full force and effect. To the maximum extent permitted by the DGCL, such indemnification shall be mandatory rather than permissive and the Company shall advance expenses in connection with such indemnification. The Certificate of Incorporation of the Company shall contain provisions which are substantially similar to the provisions with respect to indemnification and exculpation set forth in Article SEVENTH of the Company's Restated Certificate of Incorporation as in effect on the date hereof, and the Company's by-laws shall contain provisions which are substantially similar to the provisions with respect to indemnification and insurance set forth in Article XI of the Company's by-laws as in effect on the date hereof, which provisions shall not, until the sixth anniversary of the date hereof in either case be amended in any manner that would materially and adversely affect the rights of the Company's past and present employees, agents, directors or officers thereunder for acts or omissions on or prior to the Closing Date, except if any such amendment is required by Applicable Law. Any determination required to be made with respect to whether a party's conduct complies with the standards set forth in the Certificate of Incorporation or by-laws of the Company or under the DGCL shall be made by independent counsel selected by the Company and reasonably acceptable to the indemnified party (whose fees and expenses shall be paid by the Company). -27- (b) The Company shall maintain in effect for not less than six years from the Closing Date the policies of officers' and directors' liability insurance most recently maintained by the Company (provided that the Purchaser may substitute therefor policies of at least the same coverage containing terms and conditions which are not materially less advantageous so long as such substitution does not result in gaps or lapses in coverage) with respect to matters occurring prior to the Closing Date, in each case, however, to the extent available at a reasonable cost (such cost not to exceed 300% of the premiums currently paid by the Company); provided, however; that if the Company is not able to obtain the insurance specified herein, the Company will obtain as much comparable insurance as is then-available at a reasonable cost (such cost not to exceed 300% of the premiums currently paid by the Company). The Company will pay all reasonable, direct, out-of-pocket expenses (including reasonable attorney's fees and expense) that may be incurred by any indemnified party in enforcing the indemnity and other obligations provided for in this Section 4.1. (c) If the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation thereof, or (ii) sells, leases, transfers or otherwise disposes of all or substantially all of its properties and assets to any Person, whether in a single transaction or a series of related transactions, then and in each such case, proper provision shall be made so that the applicable successor or assign of the Company will assume the Company's obligations set forth in this Section 4.1. Section 4.2. Employee Option Plan. Prior to the Closing, the Company shall have amended the Company's Amended and Restated 1997 Stock Compensation Program (the "Plan"), which Plan would cover an aggregate of 7.5% (but, together with the Founder Options, not more than 15%) of the Company's outstanding shares of Common Stock (after issuance of the Purchaser Shares). Schedule 4.2 sets forth a list of persons to be granted options to purchase Common Stock under the Plan at or immediately prior to the Closing by the Company, together with the number of options to be granted to each such holder, at an exercise price of $0.54 per share of Common Stock (such price to be appropriately adjusted to give effect to the Reverse Stock Split or any stock split, stock combination, reorganization, recapitalization, etc. affecting the Company's capital stock). The Plan shall provide for the granting of stock-based incentive compensation to employees, directors and consultants of the Company and its Subsidiaries. The Company shall reserve sufficient shares of its Common Stock for issuance upon the exercise of grants under the Plan. Section 4.3. Other Option Grants. At or immediately prior to the Closing, the Company shall grant options to acquire Common Stock to the persons set forth in Schedule 4.3 (the "Founder Options"). Each Founder Option will have an exercise price of $0.54 per share of Common Stock (such price to be appropriately adjusted to give effect to the Reverse Stock Split or any stock split, stock combination, reorganization, recapitalization, etc. affecting the Company's capital stock). The Company shall reserve, together with the shares issuable under the Plan, 15% of the Company's outstanding shares of Common Stock (after issuance of the Purchaser Shares) for issuance upon the exercise of the Founder Options or grants under the Plan. The issuance at any time after the Closing Date of Common Stock upon the exercise of Future Options will dilute all holders of Common Stock on a pro rata basis. Section 4.4. Actions Requiring a Special Majority. -28- (a) The Company shall not, without the approval of either (i) those holders of Common Stock (excluding the Purchaser, entities controlled, directly or indirectly, by the Purchaser and executive officers (within the meaning of the Exchange Act) of the Purchaser) (the "Minority Stockholders") that represent not less than a majority of the outstanding Common Stock held by all such holders (a "Special Stockholder Majority"), given in writing or at a meeting of the Company's stockholders duly called and held, or (ii) a majority of the Non-Purchaser Directors (a "Special Director Majority"), given in writing or at a meeting of the Board duly called and held: (A) merge or consolidate with or into any Person, permit any Person to merge or consolidate with or into it, effect a share exchange with any other Person (or adopt a plan to do any of the foregoing); provided, however, that the restrictions of this clause (a) shall not apply to any merger or consolidation with or into a wholly owned Subsidiary of the Company, if immediately after such merger or consolidation the stockholders of the Company immediately prior to such merger or consolidation are the stockholders of the Company or of the surviving or resulting entity, and such merger or consolidation effects no change in the percentage ownership of such stockholders in the Company or the surviving or resulting entity from the percentage ownership of such stockholders in the Company immediately prior to such merger or consolidation; (B) sell all or substantially all of its assets in one transaction or a series of related transactions; (C) commence any voluntary proceeding seeking liquidation, reorganization, readjustment or other relief under any bankruptcy, insolvency or similar law or consent to a decree or order for relief or the filing of a petition thereunder or to the appointment of a trustee, receiver or liquidator, or otherwise take any voluntary action in furtherance of the bankruptcy, reorganization, liquidation, dissolution or termination of its corporate status; (D) except (1) as provided in this Agreement, and (2) pursuant to the terms of securities outstanding on the date hereof, (3) for options granted and to be granted under the Plan and Common Stock issued or issuable upon the exercise thereof, and (4) the Founder Options and Common Stock issued or issuable upon the exercise thereof, issue, offer or sell any shares of capital stock or any Convertible Securities; (E) amend its certificate of incorporation or by-laws, if the terms of such amendment would conflict with the terms of this Agreement or any other Transaction Document or would materially and adversely affect the rights of the Minority Stockholders; (F) amend or modify any of the Transaction Documents or waive any provision thereof; (G) enter into a Rule 13e-3 transaction (as defined in Rule 13-3 promulgated under the Exchange Act); or (H) enter into, assume or become bound by any agreement, instrument or understanding to do any of the foregoing or otherwise attempt to do any of the foregoing. -29- (b) Without the prior consent or approval of either the Special Stockholder Majority or the Special Director Majority, the Purchaser shall not sell any of the Purchaser Shares prior to December 31, 2001; provided, however, the restrictions of this clause (b) shall not apply with respect to (i) the sale of up to 53.27% of the Purchaser Shares, or (ii) any sale to any Affiliate of the Purchaser. Section 4.5. Indemnification Claims against the Company. If any Purchaser Indemnified Party asserts a claim against the Company under Section 7.2, then the Non-Purchaser Directors shall have the right to act on behalf of the Company in connection therewith. Section 4.6. Enforcement against Purchaser. The Non-Purchaser Directors shall have the right to enforce on behalf of the Company the covenants of the Purchaser contained in this Agreement and in the other Transaction Documents. Section 4.7. Expiration. The provisions of Sections 4.4, 4.5 and 4.6 shall cease to have any force and effect automatically upon the earlier to occur of (a) the consummation of the and (b) the date upon which the Existing Holders collectively first cease to the owners of at least 10% of the outstanding Common Stock on a Fully Diluted Basis. ARTICLE V ADDITIONAL COVENANTS Section 5.1. Investment Commitment. Until the 60th day after the Closing Date, each of the Purchaser and the Company shall use its reasonable best efforts to obtain a binding commitment from a first-tier investment bank or banks (collectively, the "Investment Bank") to make an equity investment in the Company in an amount no less than $5,000,000 at a purchase price of $1.50 per share of Common Stock (the "Investment Bank Shares") (such number of shares and price to be appropriately adjusted to give effect to the Reverse Stock Split or any stock split, stock combination, reorganization, recapitalization, etc. affecting the Company's capital stock). All actions taken by the Purchaser prior to the Closing Date shall be considered in determining whether the Purchaser has used its reasonable best efforts to obtain such a commitment from an Investment Bank. Section 5.2. Public Offering Commitment. The Company shall use its reasonable best efforts to prepare and file and have declared effective by the Commission a registration statement relating to the Public Offering (the "Registration Statement") as promptly as practicable, but in no event later than December 31, 2000, subject to market and economic conditions. The Company shall use reasonable best efforts to consummate the Public Offering as soon as practicable and, in connection therewith will do all things reasonably necessary or appropriate to cause the consummation of the Public Offering, including causing members of its senior management to participate actively in any marketing and selling efforts for the Public Offering. Section 5.3. Reverse Split. As promptly as practicable following the Closing, the Company shall use its reasonable best efforts to take all actions necessary to effect an at least one-for-ten reverse stock split (the "Reverse Stock Split"). -30- Section 5.4. ISRA Compliance. The Company shall, at its own expense, file any affidavits and applications and pay any fees necessary to secure compliance with or exemption from The New Jersey Industrial Site Review Act ("ISRA"). Section 5.5. Hart-Scott-Rodino Filings. If required by the HSR Act, each of the Purchaser and the Company will use their respective commercially reasonable efforts to file with the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") promptly following the date hereof the notification and report form (the "Report") required under the HSR Act, with respect to the transactions contemplated hereby. Each of the Purchaser and the Company shall cooperate with each other to the extent reasonably necessary to assist each other in the preparation of its Report, shall request early termination of the waiting period required by the HSR Act and, if requested, will promptly amend or furnish additional information thereunder if requested by the Antitrust Division and/or the FTC. The Purchaser shall bear all filing fees incurred in connection with the filing of the Report. Section 5.6. Public Announcements. (a) The Purchaser and the Company shall reasonably cooperate in the making and issuing of any press release or public announcement in respect of this Agreement or the transactions contemplated hereby. (b) Neither the Purchaser nor the Company shall make any press release or public announcement in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other party (such consent not to be unreasonably withheld or delayed); provided, however, that if any press release or public announcement is required by Applicable Law or by the rules of any applicable securities exchange or market, then the nature of the announcement shall be described to the party not making a press release or public announcement and (if time permits) such party shall be allowed reasonable time to comment prior to dissemination to the public. Section 5.7. Rule 144 Reporting; Rule 144A. With a view to making available to each holder of Restricted Securities the benefits of certain rules and regulations of the Commission which may permit the sale of the Purchaser Shares to the public without registration, the Company agrees that: (a) the Company shall, so long as it is subject to the periodic reporting requirements of the Exchange Act: (i) make and keep available public information, as those terms are contemplated by Rule 144 under the Securities Act (or any successor or similar rule then in force); (ii) timely file with the Commission all reports and other documents required to be filed under the Securities Act and the Exchange Act; and (iii) furnish to each holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other information as such holder may reasonably request in order to avail itself of any rule or regulation of the Commission allowing such holder to sell any Purchaser Shares without registration (it being understood and agreed that the Company's covenants and agreements contained in this clause (i) shall not be operative until such time as the -31- Company shall have filed with the Commission its Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999, and its Quarterly Reports on Form 10-QSB for the fiscal quarters ended September 30, 1999, December 31, 1999 and March 31, 2000; the Company agrees to make such filings as soon as practicable); and (b) each holder of Purchaser Shares and each prospective holder of Purchaser Shares who may consider acquiring Purchaser Shares in reliance upon Rule 144A under the Securities Act (or any successor or similar rule then in force) ("Rule 144A") shall have the right to request from the Company, and the Company will provide upon such request, such information regarding the Company and its business, assets and properties, if any, as is at the time required to be made available by the Company under Rule 144A so as to enable such holder to transfer Purchaser Shares to such prospective holder in reliance upon Rule 144A. Section 5.8. Further Assurances. Following the Closing, each party shall from time to time execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by the other, to confirm and assure the rights and obligations provided for in this Agreement and render effective the consummation of the transactions contemplated hereby. Section 5.9. Debt. In the sole discretion of the Purchaser, after the Purchaser has purchased all the Additional Shares, then the Purchaser may (but shall not be required to) lend money to the Company (which loan(s) will not be convertible into equity of the Company) to finance the reasonable working capital requirements of the Company. Nothing in this Section 5.9 shall be deemed to obligate the Purchaser, subject to the terms and conditions hereof, to pay any amounts to the Company other than the Purchase Price and the Additional Purchase Price. Section 5.10. Rule 14f-1 Mailing. (a) Promptly after the Closing (and in any event by July 17, 2000), the Company shall deliver to the Purchaser evidence of the filing and mailing of the informational materials required to be filed with the Commission and sent to the Company's shareholders pursuant to Section 14(f) and Rule 14f-1 of the Exchange Act in connection with the Transaction Documents (the "Rule 14f-1 Materials"). The Purchaser will use its reasonable best efforts to take any actions within its control to assist the Company to effect the foregoing. (b) No later than the date of the filing of the Rule 14f-1 Materials, the Company will provide the Purchaser with an opinion from Lowenstein Sandler PC, special counsel for the Company, relating to the form and content of the Rule 14f-1 Materials and such other matters as the Purchaser may reasonably request, which opinion shall be in form and substance reasonably satisfactory to the Purchaser. -32- ARTICLE VI CLOSING DELIVERIES Section 6.1. Deliveries to Purchaser. At or prior to the Closing, the Company shall deliver to the Purchaser the following in form and substance reasonably satisfactory to the Purchaser and its counsel: (a) Good Standing Certificates. The Company shall have delivered to the Purchaser certificates of good standing from the secretaries of state of the states of the Company's and its Subsidiaries' organization and the states identified in Schedule 6.1(a); (b) FIRPTA Certificate. The Purchaser shall have received a certificate of Seller, dated the Closing Date and sworn under penalty of perjury, setting forth the name, address and federal Tax identification of the Company and stating that the Company is not a "foreign person" within the meaning of Section 1445 of the Code, such certificate to be in the form set forth in the Treasury Regulations hereunder; (c) Consents. The Company shall have obtained and shall have delivered to the Purchaser copies of all Consents (including all Consents required under any Contract) necessary to be obtained in connection with the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby; (d) Stockholders Agreements. Evidence that all existing stockholder and voting agreements relating to the Company or any of its securities (other than the Stockholders Agreement executed and delivered pursuant to Section 6.1(v)) have been terminated, including those with the Existing Holders and with Cerberus Partners, L.P.; (e) Legal Opinion. The Purchaser shall have received the written opinion of Lowenstein Sandler PC, special counsel for the Company, dated and delivered as of the Closing Date, substantially in the form of Exhibit C; (f) Base Period R&E Information. The Company shall have delivered to the Purchaser, on the Company's letterhead, all information reasonably requested by the Purchaser relating to the base period research and experimental expenses and any other information reasonably requested by the Purchaser to allow the Purchaser or the Company to claim research and experimental Tax credits in accordance with the relevant sections of the Code and the regulations promulgated thereunder; (g) Registration Rights Agreement. The Company, the Purchaser and the Existing Holders shall have entered into a Registration Rights Agreement in substantially the form of Exhibit D hereto (the "Registration Rights Agreement"); (h) Stock Certificates. A certificate or certificates representing the Purchaser Shares, duly registered in the name of the Purchaser; (i) Officer's Certificate. A certificate of the President, dated the Closing Date, to the effect that (i) each of the representations and warranties made by the Company in this -33- Agreement and the other Transaction Documents that is qualified as to materiality is true, correct and complete as of the Closing Date, and each such representation and warranty that is not so qualified is true, correct and complete in all material respects as of the Closing Date, and (ii) the Company has duly performed or complied with, in all material respects, all of the covenants, obligations, agreements and conditions to be performed or complied with by it under the terms of this Agreement on or prior to or at the Closing; (j) Secretary's Certificate. A certificate of the Secretary of the Company, dated the Closing Date, as to the incumbency of any officer of the Company executing this Agreement or any document related thereto and covering such other matters as the Purchaser may reasonably request; (k) Board Resolutions. A certified copy of the resolutions of the Company's Board of Directors authorizing the execution, delivery and consummation of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby; (l) Employment Agreements. Executed counterparts of the Employment Agreements; (m) Charter Amendment. The amendment to the Company's certificate of incorporation set forth as Exhibit E hereto (the "Certificate of Amendment") shall have been duly filed under the DGCL; (n) mmTech, Inc. Evidence of the lost stock affidavit for Stock Certificate No. 1 issued by mmTech, Inc. to Charles Brand, as well as evidence of Stock Certificate No. 3 issued by mmTech, Inc. to the Company, shall have been delivered to the Purchaser; (o) Shares Held by Norman M. Phipps. Evidence of the surrender and cancellation for no consideration to Norman M. Phipps of 1,250,000 shares of Common Stock registered in the name of Norman M. Phipps as the result of the supplemental resolutions adopted by the Board on July 7, 2000. (p) Loan Extensions. The Company shall have delivered to the Purchaser copies of an agreement by all the relevant lenders under the Legacy Group I Loans to extend the maturity date of the principal amounts outstanding thereunder to the date that is the earlier to occur of (i) the fifth day following the consummation of the Public Offering and (ii) June 30, 2001; (q) Minute Books. True, correct and complete (through the Closing Date) copies of the minute books of the Company and each of its Subsidiaries; (r) ISRA Certificate. A letter from the New Jersey Department of Environmental Protection certifying the Company's compliance with or exemption from the requirements of ISRA; (s) Waivers. Executed waivers and consents from each of the Existing Holders and the other parties set forth on Schedule 6.1(s) (some of which waivers and consents may be included in the Stockholders Agreement), wherein such Existing Holder or other party irrevocably and forever (i) waives the application of any anti-dilution or other similar provisions contained in any of the agreements or instruments referred to in Schedule 2.5(c) in connection with any -34- Transaction Document or any of the transactions contemplated thereby or in connection with any prior transaction, event, occurrence or circumstances, (ii) waives application of any provision of any agreement or instrument to which the Company or any of its Subsidiaries is a party or by which any of their respective assets is bound, that conflicts with any provision of any Transaction Document, and (iii) consents to the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby; (t) Director Agreement; etc. Executed agreement among Frank A. Brand, Jean-Francois Carreras, Mark B. Fisher (collectively, the "Former Outside Directors") and the Company, wherein the parties agree that the Company will grant each such Former Outside Director non-qualified stock options for 150,000 shares of Common Stock at a per share purchase price of $0.54 in lieu of a bonus payment of $75,000 in the form of Common Stock or cash or any combination thereof, and executed agreement between Lowenstein Sandler PC or its designees and the Company, wherein the parties agree that the Company will grant Lowenstein Sandler PC or its designees non-qualified stock options for 100,000 shares of Common Stock at a per share purchase price of $0.54; (u) Conversion of Debentures. Evidence of the conversion simultaneously with the Closing of an aggregate of 90% of the Company's convertible debentures and preferred stock (including executed waivers and consents from the holders of such convertible debentures and preferred stock to the effect of clauses (i), (ii) and (iii) of Section 6.1(s)); (v) Stockholders Agreement. The Company, the Purchaser and the Existing Holders shall have entered into a stockholders agreement in substantially the form of Exhibit F attached hereto (the "Stockholders Agreement"); (w) Exercise of Warrants. Evidence of the exercise or exchange of 80% of all of the Company's outstanding warrants on a cashless basis; (x) Amendment of the Company's By-laws. Evidence of an amendment of the by-laws of the Company providing for the ability of the holders of a majority of the outstanding Common Stock to call special meetings of the stockholders of the Company; (y) L-3 Option Agreement. Executed agreement between the Purchaser and the Company relating to the L-3 Stock Options; (z) DLJ Engagement Letter. The Company shall have delivered to the Purchaser copies of (i) evidence of the termination of the Engagement Letter, dated August 7, 1998 (the "DLJ Engagement Letter"), between Donaldson Lufkin & Jenrette Securities Corporation ("DLJ") and the Company, and (ii) an executed waiver from DLJ wherein DLJ waives any post-termination rights it may have to any fee pursuant to the terms of the DLJ Engagement Letter, subject to the reimbursement of out-of-pocket fees and expenses in the approximate amount of $30,000; (aa) Projections. Copies of the Projections; -35- (bb) Letter Agreement between Company and Shulman. Evidence of the termination of the Letter Agreement, dated December 16, 1999, between the Company and Gerald Shulman obligating the Company to issue warrants to Gerald Shulman; (cc) Signal Agreements. The Company shall have delivered to the Purchaser copies of a letter from the Company to Signal terminating the Letter of Intent, dated February 17, 2000, between the Company and Signal; (dd) Bank Account. The Company shall have delivered evidence of the establishment of the Bank Account; (ee) Class A Debenture Letter. The Company shall have delivered to the Purchaser a letter regarding the modified conversion price of $0.3451 per share of Common Stock for the holders of the Company's Class A 13% Senior Subordinated Convertible Pay-in-Kind Debentures due July 29, 1999; and (ff) Replacement of Company Officers. The Company shall have delivered to the Purchaser evidence of (i) the resignation of (A) Norman M. Phipps as President, Chief Operating Officer and Interim Chief Financial Officer of the Company, (B) Charles S. Brand as Chairman of the Board and Chief Technical Officer of the Company, and (C) Erik Kruger as Secretary of the Company, and (ii) the appointment of (A) John S. Mega as acting President of the Company, (B) Norman M. Phipps as Senior Vice President of Administration of the Company, (C) Charles S. Brand as Senior Vice President of Technology of the Company, and (D) Christopher C. Cambria as Secretary of the Company. Section 6.2. Deliveries to the Company. At or prior to the Closing, the Purchaser shall deliver to the Company the following in form and substance reasonably satisfactory to the Company and its counsel: (a) Good Standing Certificate. The Purchaser shall have delivered to the Company a certificate of good standing from the Secretary of State of the State of Delaware; (b) Payment. Evidence that the Cash Funding has been paid in full; (c) Secured Promissory Note. The Purchaser shall have delivered to the Company the Secured Promissory Note; (d) Stock Pledge Agreement. The Company and the Purchaser shall have entered into the Stock Pledge Agreement; (e) Officer's Certificate. A certificate of the President or a Vice President of the Purchaser, dated the Closing Date, to the effect that (i) each of the representations and warranties made by the Purchaser in this Agreement and the other Transaction Documents that is qualified as to materiality is true, correct and complete as of the Closing Date, and each such representation and warranty that is not so qualified is true, correct and complete in all material respects as of the Closing Date, and (ii) the Purchaser has duly performed or complied with, in all material respects, all of the covenants, obligations, agreements and conditions to be -36- performed or complied with by it under the terms of this Agreement on or prior to or at the Closing; (f) Secretary's Certificate. A certificate of the Secretary or Assistant Secretary of the Purchaser, dated the Closing Date, as to the incumbency of any officer of the Purchaser executing this Agreement or any document related thereto and covering such other matters as the Company may reasonably request; (g) Board Resolutions. A certified copy of the resolutions of the Purchaser's Board of Directors authorizing the execution, delivery and consummation of this Agreement and the transactions contemplated hereby; (h) Legal Opinion. The Company shall have received the written opinions of Whitman Breed Abbott & Morgan LLP, special counsel for the Purchaser, and Christopher C. Cambria, General Counsel of the Purchaser, dated and delivered as of the Closing Date, substantially in the forms of Exhibits G and H, respectively; (i) Stockholders Agreement. The Company, the Purchaser and the Existing Holders shall have entered into the Stockholders Agreement; (j) Registration Rights Agreement. The Company, the Purchaser, the Existing Holders and certain other parties shall have entered into the Registration Rights Agreement; and (k) L-3 Option Agreement. Executed agreement between the Purchaser and the Company relating to the L-3 Stock Options. ARTICLE VII SURVIVAL; INDEMNIFICATION Section 7.1. Survival of Representations and Warranties. The representations and warranties contained in this Agreement shall survive the Closing and shall apply with respect to claims asserted in writing prior to the earlier of (a) the consummation of the Public Offering and (b) the first anniversary of this Agreement; provided, however, that the representations and warranties contained in Sections 2.5, 2.11 and 2.12 shall survive until the date that is the earlier to occur of (i) the consummation of the Public Offering and (ii) the expiration of the applicable statute of limitations in respect of claims relating thereto. The provisions of this Section 7.1 shall not limit any covenant or agreement of the parties hereto which, by its terms, contemplates performance after the applicable Closing. If an indemnified party delivers a notice of claim for indemnification under this Article VII prior to the end of the applicable survival period, and such claim is finally settled or adjudicated in favor of the indemnified party during or after the end of the applicable survival period, the indemnifying party shall indemnify the indemnified party from and against Losses incurred by such indemnified party as a result of such claim for indemnification. Section 7.2. Indemnification. -37- (a) The Company shall indemnify the Purchaser and its Affiliates and each of their respective officers, directors, employees, stockholders, agents and representatives (each, a "Purchaser Indemnified Party") against, and hold them harmless from, any loss, liability (including any Tax liability), obligation, claim, damage or expense fines, expenses, costs, proceedings, deficiencies, judgments, penalties or damages (whether absolute, accrued, conditional or otherwise and whether or not resulting from third party claims), including reasonable out-of-pocket expenses, consulting fees, court costs, expert witness fees and reasonable attorneys' fees and expenses incurred in the investigation or defense of any of the same or in asserting any of their respective rights hereunder (collectively, "Losses"), as incurred, arising from, in connection with or otherwise with respect to: (i) any breach of any representation or warranty of the Company contained in this Agreement; and (ii) any failure of the Company to perform any covenant or agreement made or contained in this Agreement or fulfill any obligation in respect thereof. (b) The Purchaser shall indemnify the Company and its Affiliates and each of their respective officers, directors, employees, stockholders, agents and representatives against, and hold them harmless from any Loss, as incurred, arising from, in connection with or otherwise with respect to: (i) any breach of any representation or warranty of the Purchaser (and not of the Company) contained in this Agreement; and (ii) any failure of the Purchaser (and not of the Company) to perform any covenant or agreement made or contained in this Agreement or fulfill any obligation in respect thereof. Notwithstanding anything herein to the contrary, the aggregate amount of Losses for which indemnification is provided by the Purchaser pursuant to this Section 7.2(b) shall not exceed in the aggregate $20 million, such $20 million amount to be reduced from time to time beginning on the Closing Date by any and all amounts paid in cash to the Company or on its behalf pursuant to this Agreement (including the Cash Funding, payments or other credits with respect of the Secured Promissory Note and the Additional Share Purchase Price). (c) The amount of any Loss for which indemnification is provided under this Section 7.2 shall be net of any amounts actually recovered by the indemnified party under insurance policies with respect to such Loss. (d) In order for an indemnified party to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim made by any Person against the indemnified party (a "Third Party Claim"), such indemnified party must notify the indemnifying party in writing of the Third Party Claim promptly following receipt by such indemnified party of written notice of the Third Party Claim, such notice to contain the amount of the Loss claimed or, in the event that such Loss is not then liquidated, a good faith estimate thereof (if then available); provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually and materially prejudiced as a result of such failure. Thereafter, the indemnified party shall -38- deliver to the indemnifying party, promptly following the indemnified party's receipt thereof, copies of all notices and documents (including court papers) received by the indemnified party relating to the Third Party Claim. (e) If a Third Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party; provided, however, that such counsel is not reasonably objected to by the indemnified party. Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the indemnified party for any legal expenses subsequently incurred by the indemnified party in connection with the defense thereof (except as provided below). If the indemnifying party assumes such defense, the indemnified party shall have the right to participate in the defense thereof and to employ counsel at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense (except as provided below). The indemnifying party shall be liable for the fees and expenses of counsel employed by the indemnified party for any period during which the indemnifying party has not assumed the defense thereof (other than during any period in which the indemnified party shall have failed to give notice of the Third Party Claim as provided above). If the indemnifying party chooses to defend or prosecute a Third Party Claim, all the indemnified parties shall reasonably cooperate in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the indemnifying party's request) the provision to the indemnifying party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the indemnifying party assumes the defense of a Third Party Claim, the indemnified party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party's prior written consent (which consent shall not be unreasonably withheld or delayed); provided, however, that if the indemnifying party does not consent to such settlement, compromise or discharge, the indemnifying party shall be obligated to assume the defense of such Third Party Claim from and after the date on which the indemnified party first seeks such consent. If the indemnifying party assumes the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third Party Claim proposed by the indemnifying party, provided that such settlement, compromise or discharge (i) either provides for the dismissal of the Third Party Claim against of the indemnified party with prejudice or involves the payment of money only, (ii) provides for the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim, (iii) provides for a complete release of the indemnified party, and (iv) does not require an admission of wrongdoing or liability or any other admission against interest by the indemnified party. If the indemnified party shall in good faith, on the advice of counsel, determine that the indemnified party may have available to it one or more defenses or counterclaims (other than that the indemnified party is entitled to be indemnified by the indemnifying party therefor) that are in conflict with one or more of those that may be available to the indemnifying party in respect of such claim or any litigation relating thereto, the indemnified party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or litigation relating to any such claim at the sole cost of the indemnifying party; provided, however, that if the indemnified party does so take over and assume control, (A) the indemnifying party may participate in, but not control, -39- such defense or litigation, and (B) the indemnified party shall not settle such claim or litigation without the prior written consent of the indemnifying party, such consent not to be unreasonably withheld or delayed. (f) If any indemnified party should have a claim against the indemnifying party under this Section 7.2 that does not involve a Third Party Claim being asserted against or sought to be collected from such indemnified party, the indemnified party shall deliver written notice of such claim with reasonable promptness to the indemnifying party, such notice to contain the amount of the Loss claimed or, in the event that such Loss is not then liquidated, a good faith estimate thereof (if then available). The failure by any indemnified party so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to such indemnified party under this Section 7.2, except to the extent that the indemnifying party demonstrates that it has been actually and materially prejudiced by such failure. (g) If the indemnifying party disputes its liability with respect to any claim for indemnification hereunder, the indemnifying party and the indemnified party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved pursuant to the arbitration procedures specified in Section 8.4 below. (h) Any Loss for which the indemnifying party has admitted its responsibility or any Loss which is determined pursuant to the provisions of this Section 7.2 to be the indemnifying party's responsibility may be paid on its behalf by the Purchaser at the Purchaser's option and, if so paid, the indemnifying party shall issue to the Purchaser a note in the principal amount of such Loss. Any such note shall mature on the date of the consummation of the Public Offering, and bear interest (payable only at maturity) at the "applicable federal rate" for obligations of similar duration (or expected duration). (i) In the absence of fraud, intentional misconduct, intentional misrepresentation or criminal activity, the right of the Purchaser and the other indemnified parties to assert indemnification claims pursuant to this Section 7.2 shall be the sole and exclusive right and remedy exercisable against the indemnifying party for breaches of this Agreement; provided, however, that nothing in this Section 7.2 shall limit or restrict the Purchaser's right to equitable relief (including temporary, preliminary or permanent injunctive relief) for any breach or alleged breach of the provisions of this Agreement. Section 7.3. Set-Off. If the Company is required to indemnify the Purchaser pursuant to this Article VII (as determined by a court of competent jurisdiction or by an arbitration award), then the Purchaser shall be entitled, in addition to any other right or remedy it may have, to exercise rights of set-off against any amounts then due and payable to the Company hereunder or that may thereafter become due and payable to the Company hereunder (including under the Secured Promissory Note and the Additional Share Purchase Price). ARTICLE VIII MISCELLANEOUS -40- Section 8.1. Notices. All notices, requests, claims, demands, approvals, consents, waivers and other communications hereunder (each a "Notice") shall be in writing and shall be delivered by hand, delivered by courier, deposited in the mail (registered or certified mail, postage prepaid, return receipt requested), or sent by facsimile transmission upon receipt of a confirmed transmission report, as follows: If to the Company: LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4130 Attention: Mr. Norman Phipps with a copy to: Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068-1791 Tel: (973) 597-2500 Fax: (973) 597-2400 Attention: John D. Hogoboom, Esq. If to the Purchaser: L-3 Communications Corporation NARDA Microwave 435 Moreland Road Hauppauge, N Y 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: Mr. John Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq. -41- Any party hereto, by Notice given to the other party hereto in accordance with this Section 8.1, may change the address or facsimile transmission number to which such Notices are to be sent to such party. All Notices shall be deemed effective and given upon receipt or refusal of receipt. Section 8.2. Expenses. (a) Except as expressly set forth herein, each party shall be responsible for the costs and expenses incurred by such party in connection with the negotiation, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. (b) If any party hereto initiates any legal action arising out of or in connection with this Agreement, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable costs and expenses (including attorneys' fees and expert witness fees and expenses) incurred by the prevailing party in connection therewith. (c) The Company shall be responsible for and pay in a timely manner of all sales, use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar Taxes and fees ("Transfer Taxes"), arising out of or in connection with or attributable to the transactions effected pursuant to this Agreement, including the sale and purchase of the Purchaser Shares. Each party hereto shall prepare and timely file all Tax Returns required to be filed in respect of Transfer Taxes that are the primary responsibility of such party under applicable law; provided, however, that such party's preparation of any such Tax Returns shall be subject to the other party's approval, which approval shall not be unreasonably withheld or delayed. Section 8.3. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such court and irrevocably waives any claim that any such suit, and action or proceeding brought in any such court has been brought in an inconvenient forum. Section 8.4. Arbitration of Disputes. (a) Except as provided in Section 8.4(d), all disputes, controversies or questions arising under, out of or relating to this Agreement or the breach hereof shall be referred for decision by arbitration in the State of New York to a panel of three arbitrators, one selected by the Purchaser, the second selected by the Company and the third selected jointly by the Purchaser and the Company. Any arbitration proceeding shall be governed by the Commercial Rules of the -42- American Arbitration Association then in effect or such rules last in effect (in the event such Association is not then in existence). If the parties are unable to agree upon the third arbitrator within 21 days after either party has given the other written notice of the desire to submit the dispute, controversy or question for decision as aforesaid, then either party may apply to the American Arbitration Association for a final and binding appointment of the third arbitrator. If, however, such Association is not then in existence or does not act in the matter within 45 days of any such application, any party may apply to the Presiding Justice of the Supreme Court of any county in New York for an appointment of an arbitration panel to hear the parties and such Justice is hereby authorized to make such appointment. (b) Except as provided in Section 8.4(d), if any party submits a dispute, controversy or question arising hereunder to arbitration, the decision of the arbitrators shall be final, conclusive and binding on all interested Persons (absent fraud or evident impartiality), and no action at law or in equity shall be instituted or, if instituted, further prosecuted by either party other than to enforce the arbitration award. (c) The arbitration award may be entered in any court that has jurisdiction. The award shall include interest from and including the date of any breach or violation of this Agreement to but excluding the date that the award is paid in full, at the legal rate of interest in New York applicable to judgments obtained in the courts of New York. The arbitrators may not limit, expand or otherwise modify the terms of this Agreement. The arbitrators shall apply the substance and not the conflicts laws of the State of New York as specified in Section 8.3. (d) The foregoing provisions of this Section 8.4 shall not limit or otherwise affect the right of any party to seek equitable relief (including temporary, preliminary or permanent injunctive relief) for any breach or alleged breach of the provisions of this Agreement. Section 8.5. Assignment; Successors and Assigns; No Third Party Rights. This Agreement may not be assigned by the Company. This Agreement may not be assigned by the Purchaser except to any of its controlled Affiliates or to any successor-in-interest to substantially all of the Purchaser's business. In the event of any permitted assignment of this Agreement, the assigning party shall not be released from its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. This Agreement shall be for the sole benefit of the parties to this Agreement and their respective successors, permitted assigns and legal representatives and is not intended, nor shall be construed, to give any Person, other than the parties hereto and their respective successors, assigns and legal representatives, any legal or equitable right, remedy or claim hereunder. Section 8.6. Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in multiple counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument. Section 8.7. Titles and Headings. The titles and headings in this Agreement are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. -43- Section 8.8. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the matters covered hereby and thereby and supersedes all previous written, oral or implied agreements or understandings between them with respect to such matters. Section 8.9. Severability. The invalidity of any portion hereof shall not affect the validity, force or effect of the remaining portions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by law. Section 8.10. No Strict Construction. Each of the parties hereto acknowledges that this Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed against either party. Section 8.11. Company Acknowledgment. The Company acknowledges that the representations and warranties contained in this Agreement and in any document or instrument delivered to the Purchaser pursuant hereto or in connection herewith shall not be deemed waived or otherwise affected by any investigation by the Purchaser, its officers, directors, employees, counsel, accountants, advisors, representatives and agents. Section 8.12. Stock Splits and Recapitalizations. Whenever a reference is made herein to (a) a price per share of Common Stock or per Additional Share, (b) a number of Purchaser Shares or Additional Shares, or (c) a number of shares of Common Stock, such price or number shall be appropriately adjusted to give effect to the Reverse Stock Split or any stock dividend, stock split, reverse split, stock combination, reclassification, reorganization, recapitalization, merger, consolidation, share exchange or any other transaction affecting the Company's capital stock. Section 8.13. Shares Subject to Agreement. This Agreement shall apply to (a) the Common Stock and Convertible Securities held by the parties hereto, as well as any Common Stock and Convertible Securities hereafter acquired by any such party (including any Common Stock issued upon the exercise, conversion or exchange of any Convertible Securities), and (b) any and all shares of capital stock of the Company that may be issued in respect of, in exchange for or in substitution of any Common Stock or Convertible Securities, by reason of the Reverse Stock Split or any stock dividend, stock split, reverse split, stock combination, reclassification, reorganization, recapitalization, merger, consolidation, share exchange or any other transaction affecting the Company's capital stock. Section 8.14. Amendments. Subject to Section 4.4, this Agreement may not be amended or modified except by an instrument in writing signed on behalf of the Purchaser and the Company. Section 8.15. Extension; Waiver. Subject to Section 4.4, any party hereto may (a) extend the time for performance of any of the obligations or other acts of any of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of any of the other parties hereto contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements of any of the other parties hereto or satisfaction of any of -44- the conditions to such party's obligations contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of a party hereto to assert any of its rights hereunder shall not constitute a waiver of such rights. Section 8.16. Future Legends. At the request of the Purchaser, the Company shall stamp or otherwise imprint such legend(s) as may be requested by the Purchaser on one or more of certificates representing any Common Stock Equivalents owned by the Purchaser or Transferred by the Purchaser to a third party. ARTICLE IX DEFINITIONS Section 9.1. Certain Definitions. As used herein: "1998 Form 10-KSB": has the meaning set forth in Section 2.10(a). "Additional Shares": has the meaning set forth in Section 1.4. "Additional Share Purchase Price": has the meaning set forth in Section 1.4. "Affected Property": has the meaning set forth in Section 2.12. "Affiliate": of a specified Person means a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. "Control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. "Agreement": means this Purchase Agreement (including the Schedules hereto), as the same from time to time may be amended, supplemented or waived. "Applicable Law": means, with respect to any Person, any and all applicable provisions of any and all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances or codes of any Governmental Authority, (ii) Governmental Approvals, and (iii) orders, decisions, injunctions, judgments, awards and decrees of or agreements, in each case specifically naming such Person, with any Governmental Authority. "Antitrust Division": has the meaning set forth in Section 5.5. "Backlog": has the meaning set forth in Section 2.29. "Bank Account": has the meaning set forth in Section 2.16(b). "Board": has the meaning set forth in Section 1.6(a). -45- "Cash Funding": has the meaning set forth in Section 1.1(a). "Certificate of Amendment": has the meaning set forth in Section 6.1(m). "Closing": has the meaning set forth in Section 1.2. "Closing Date": has the meaning set forth in Section 1.2. "Code": means the Internal Revenue Code of 1986, as amended. "Commission": has the meaning set forth in Section 2.6. "Common Stock": has the meaning set forth in the recitals. "Common Stock Equivalents": means, with respect to any holder of the Company's securities, the number of shares of Common Stock owned by such holder and the number of shares of Common Stock into or for which any Convertible Securities owned by such holder shall be convertible, exchangeable or exerciseable as of the date determination thereof. "Company": has the meaning set forth at the head of this Agreement. The term "Company" also shall include for all purposes of this Agreement (including Article II) all Subsidiaries of the Company, unless the context otherwise clearly, unambiguously and expressly requires. The fact that the term "Company" sometimes is used in a particular sentence, paragraph or section herein with the term "Subsidiary" or "Subsidiaries", and sometimes not used with such term in the same sentence, paragraph or section, does not, in and of itself, mean that Subsidiaries are not included in the term "Company" in the latter case. "Company's Debt": has the meaning set forth in Section 1.5(a). "Consent": means any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority. "Contracts": has the meaning set forth in Section 2.20(a). "Convertible Securities": means (i) any rights, options or warrants to acquire Common Stock or any capital stock of the Company or any Subsidiary, and (ii) any notes, debentures, shares of preferred stock or other securities or rights, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company or any Subsidiary. "Credit Support Payment": has the meaning set forth in Section 1.5(a). "Damage Amount": has the meaning set forth in Section 1.4(d). "Debt": means, as to any Person, all obligations for payment of principal, interest, penalties and collection costs thereof, with respect to money borrowed, whether incurred or assumed (including guarantees), and other similar obligations in the nature of a borrowing by which such Person will be obligated to pay. -46- "DGCL": means Delaware General Corporation Law. "Disbursement Letter": means the letter from the Company to the Purchaser setting forth the wire transfer instructions in respect of the Cash Funding. "Disposition": has the meaning set forth in Section 1.6(b). "DLJ": has the meaning set forth in Section 6.1(z). "DLJ Engagement Letter": has the meaning set forth in Section 6.1(z). "$" or "dollars": means lawful money of the United States of America. "Employee Benefit Plans": has the meaning set forth in Section 2.24(a). "Employment Agreements": has the meaning set forth in Section 3.6 of the Stockholders Agreement. "Encumbrance": means any mortgage, pledge, hypothecation, claim, security interest, burden, title defect, title retention agreement, voting agreement, preemptive right, option, lien, set-off right, right of first refusal, right of first offer, charge, bailment or other encumbrance. "Environmental Laws": has the meaning set forth in Section 2.12. "ERISA": means the Employee Retirement Income Security Act of 1974, as amended. "Exchange Act": has the meaning set forth in Section 2.6. "Existing Holders": has the meaning set forth in the head of the Stockholders Agreement. "Financial Statements": has the meaning set forth in Section 2.10(a). "Former Outside Directors": has the meaning set forth in Section 6.1(t). "Founder Options": has the meaning set forth in Section 4.3. "FTC": has the meaning set forth in Section 5.5. "Full Funding Date": has the meaning set forth in Section 1.1(c). "Fully Diluted Basis": means, when used with respect to outstanding shares of Common Stock at any time, all shares of Common Stock that would be outstanding at such time (i) after giving effect to the transactions contemplated by this Agreement and any other Transaction Documents (including Section 6.1(t)), (ii) after giving effect to the application of any anti-dilution or other similar provisions in any of the agreements or instruments representing, evidencing or relating to any Convertible Securities as a result of any of the transactions contemplated by this Agreement or any other Transaction Documents (including Section 3.4 of the Stockholders Agreement) unless such provisions are inapplicable or irrevocably and forever -47- waived, (iii) after giving effect to the issuance of 81,000 shares of Common Stock to Gerald Shulman or his nominee, and (iv) assuming the exercise, conversion or exchange of all Convertible Securities (it being understood and agreed that any unexercised or unconverted warrants to purchase Common Stock shall be deemed exercised or converted in the full face amounts thereof); provided, however, that, for purposes of calculating the outstanding shares of Common Stock on a Fully Diluted Basis at or any time after the Closing Date, there shall be excluded from any such calculation (A) any shares of Common Stock issuable or issued upon the exercise of any Future Options, and (B) the Additional Shares and Investment Bank Shares (to the extent that such Additional Shares and/or the Investment Bank Shares are not actually outstanding at such time). "Future Options": means (i) any Founder Options, (ii) any options granted under the Plan at or immediately prior to the Closing by the Company and listed on Schedule 4.2, (iii) any options granted under the Plan by the Company after the Closing Date other than those options referred to in Section 6.1(t), and (iv) the L-3 Stock Options. "GAAP": means United States generally accepted accounting principles, as in effect on the date hereof, consistently applied. "Governmental Approvals": means any action, order, authorization, Consent, approval, license, lease, waiver, franchise, concession, agreement, license, ruling, permit, certification, exemption of, filing or registration by or with, or report or notice to, any Governmental Authority. "Governmental Authority": means any nation or government or other political subdivision thereof, including any governmental department, commission, board, bureau, agency, regulatory authority, instrumentality, judicial or administrative body or any tribunal or arbitrator(s) having jurisdiction over the matter or matters in question, or any self-regulatory organization. "HSR Act": means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "include", "includes", "included" and "including": shall be construed as if followed by the phrase "without being limited to". "include", "includes", "included", and "including": shall be construed as if followed by the phrase "without being limited to". "Intellectual Property": means: (i) any and all trademarks, service marks, brand names, certification marks, trade dress, domain names, assumed names, trade names, logos and other indications of origin, sponsorship or affiliation, together with the goodwill associated therewith (whether the foregoing are registered or unregistered), registrations thereof in any jurisdiction and applications to register any of the foregoing in any jurisdiction, and any extension, modification or renewal of any such registration or application; (ii) any and all inventions, developments, improvements, discoveries, know how, concepts and ideas, whether patentable or not in any jurisdiction; (iii) any and all patents, revalidation's, industrial designs, industrial models and utility models, patent applications (including reissues, continuations, divisions, continuations-in-part and extensions) and patent disclosures; (iv) any and all mask works and other semiconductor chip rights and registrations thereof; (v) any and all non-public information, -48- trade secrets and proprietary or confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person; (vi) any and all writings and other works, whether copyrighted, copyrightable or not in any jurisdiction, such works including computer programs and software (including source code, object code, data and databases) and internet website pages; (vii) any and all copyrights, copyright registrations and applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; (viii) any and all other intellectual property or proprietary rights; (ix) any and all agreements, licenses, immunities, covenants not to sue and the like relating to any of the foregoing; and (x) any and all claims or causes of action arising out of or related to any infringement or misappropriation of any of the foregoing. "Inventories": means all inventories of raw materials, work in process, finished products, goods, spare parts, replacement and component parts, and office and other supplies (whether on hand, in transit or on order). "Investment Bank": has the meaning set forth in Section 5.1. "Investment Bank Shares": has the meaning set forth in Section 5.1. "ISRA": has the meaning set forth in Section 5.4. "L-3 Stock Options": has the meaning set forth in Section 1.8. "Leases": means the real property leases, subleases, financial leases, use agreements, licenses and occupancy agreements pursuant to which the Company is the lessee, sublessee, user, licensee or occupant. "Legacy Group I Loans": has the meaning set forth in the Acknowledgement, Consent and Waiver dated as of March 7, 2000, among the Company and the parties thereto. "Liability Amount": has the meaning set forth in Section 1.1(e). "Losses": has the meaning set forth in Section 7.2(a). "Material Adverse Effect": has the meaning set forth in Section 2.1(a). "Minority Stockholders": has the meaning set forth in Section 4.4(a). "Newbridge": has the meaning set forth in Section 2.36. "Non-Purchaser Directors": has the meaning set forth in Section 3.1(a)(iv) of the Stockholders Agreement. "Notice": has the meaning set forth in Section 8.1. "PBGC": has the meaning set forth in Section 2.24(c). "Pension Plan": has the meaning set forth in Section 2.24(g). "Permitted Encumbrances": has the meaning set forth in Section 2.19(d). -49- "Person" or "person": means any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business trust or other entity, or any Governmental Authority. "Plan": has the meaning set forth in Section 4.2. "Pledged Shares": has the meaning set forth in Section 1.1(d). "Preferred Stock": has the meaning set forth in Section 2.5(a). "Proceeds": has the meaning set forth in Section 2.16(a). "Projections": has the meaning set forth in Section 2.37. "Public Offering": means a consummated firmly underwritten public offering of the Common Stock of the Company pursuant to an effective registration statement filed with the Commission under the Securities Act, with respect to which (i) the Company's Common Stock is listed on the New York Stock Exchange or admitted for trading on the NASDAQ National Market (or any successor, exchange market or organization thereto), and (ii) the Company makes an offering for at least 20% of the outstanding Common Stock. "Purchase Price": has the meaning set forth in the recitals. "Purchaser": means L-3 Communications Corporation. "Purchaser Credit Support": has the meaning set forth in Section 1.5(a). "Purchaser Indemnified Party": has the meaning set forth in Section 7.2(a). "Purchaser Shares": has the meaning set forth in the recitals. "Report": has the meaning set forth in Section 5.5. "Registration Rights Agreement": has the meaning set forth in Section 6.1(g). "Registration Statement": has the meaning set forth in Section 5.2. "Regulated Substances": has the meaning set forth in Section 2.12. "Released Pledged Shares": has the meaning set forth in Section 1.1(d). "Required Prepayment Notice": has the meaning set forth in Section 1.1(c). "Reverse Stock Split": has the meaning set forth in Section 5.3. "Rule 144A": has the meaning set forth in Section 5.7(b). "Rule 14f-1 Materials": has the meaning set forth in Section 5.10(a). -50- "Secured Promissory Note": has the meaning set forth in Section 1.1(a). "Securities Act": has the meaning set forth in Section 2.4. "SEC Documents": has the meaning set forth in Section 2.6. "Stockholders Agreement": has the meaning set forth in Section 6.1(v). "Signal": has the meaning set forth in Section 2.20(a). "Signal Agreements": has the meaning set forth in Section 2.20(d). "Special Director Majority": has the meaning set forth in Section 4.4(a). "Special Stockholder Majority": has the meaning set forth in Section 4.4(a). "SpeedUSNY": has the meaning set forth in Section 1.1(b). "Stock Pledge Agreement": has the meaning set forth in Section 1.1(d). "Subsidiary": means each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing at least (i) 50% of the outstanding voting stock or other equity interests, or (ii) 50% of the outstanding capital stock or other equity interests. "Tangible Property": has the meaning set forth in Section 2.19(c). "Tax Return": means any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. "Taxes": means any federal, state, provincial, local or foreign income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the Code), real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers' compensation, payroll, health care, withholding, estimated or other similar tax, duty or other governmental charge or assessment or deficiencies thereof, and including any interest, penalties or additions to tax attributable to the foregoing. "Technology": has the meaning set forth in Section 1.6(a). "Technology Option": has the meaning set forth in Section 1.6(a). "Third Party Claim": has the meaning set forth in Section 7.2(d). -51- "Transfer", "Transferring" (or any correlative term): means a sale, assignment, pledge, hypothecation, gift, placement in trust (voting or otherwise) or transfer by operation of law of, creation of a security interest in, or other Encumbrance on, or any other encumbering or disposal (directly or indirectly and whether or not voluntary), and shall include any transfer by will or intestate succession. "Transfer Taxes": has the meaning set forth in Section 8.2(c). "Transaction Documents": means this Agreement, the Secured Promissory Note, the Stock Pledge Agreement, the Registration Rights Agreement, the Stockholders Agreement, the Employment Agreements and each document or instrument to be delivered to the Purchaser pursuant to this Agreement (including pursuant to Article VI). "Treasury Regulations": means the regulations prescribed pursuant to the Code. "WARN Act": means Worker Adjustment and Training Notification Act. Section 9.2. Construction. (a) All references herein to a Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or Schedule of or to this Agreement, unless otherwise indicated. (b) Unless the context of this Agreement clearly requires otherwise, references to any gender includes all genders. (c) The words "herein", "hereof", and "hereunder" and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. -52- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. LOGIMETRICS, INC. By: /s/ Norman M. Phipps _______________________________ Name: Norman M. Phipps Title: President L-3 COMMUNICATIONS CORPORATION By: /s/ Christopher C. Cambria _______________________________ Name: Christopher C. Cambria Title: Vice President EXHIBIT A SECURED PROMISSORY NOTE $6,500,000.00 July 10, 2000 FOR VALUE RECEIVED, L-3 COMMUNICATIONS CORPORATION, a Delaware corporation ("L-3"), hereby promises to pay to the order of LOGIMETRICS, INC., a Delaware corporation (the "Holder"), the principal amount of SIX MILLION FIVE HUNDRED THOUSAND DOLLARS and 00/100 ($6,500,000.00), such principal to be due and payable on earlier of (a) the consummation of the Public Offering (as defined in that certain Purchase Agreement, dated the date hereof, between the Holder and L-3 (as the same may be amended from time to time, the "Agreement")) and (b) January 2, 2001 (the "Maturity Date"). 1. PAYMENTS. All payments of principal and any Default Interest (as defined below) hereunder shall be made in United States Dollars and in immediately available funds. All payments made hereunder shall be credited (a) first, against any fees, costs or expenses due hereunder from L-3 to the Holder, (b) second, against any accrued and unpaid Default Interest on this Note, and (c) third, against principal outstanding under this Note. 2. SECURITY INTEREST. This Note will be initially secured by a pledge of 43.33% of the Purchaser Shares (as defined in the Agreement) pursuant to a Stock Pledge Agreement, dated the date hereof (as the same may be amended from time to time, the "Stock Pledge Agreement"). As provided in the Stock Pledge Agreement, for every prepayment, payment or set-off by L-3 of all or a portion of the principal amount of this Note (including pursuant to Section 1.1(c), 1.5 or 7.3 of the Agreement), a number of Purchaser Shares equal to the Released Pledged Shares (as defined in the Agreement) will be released from the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement and delivered to L-3. As provided in the Stock Pledge Agreement, upon L-3's payment of this Note in full, all Purchaser Shares then subject to the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement will be automatically released from the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement and delivered to L-3. 3. PREPAYMENT. From time to time, pursuant to Section 1.1(c) of the Agreement and subject to Section 1.1(b) of the Agreement, L-3 shall prepay all or a portion of the outstanding principal amount, such prepayment to be made within five (5) business days after receipt by L-3 of the Required Prepayment Notice (as defined in the Agreement). 4. SET-OFF. If the Holder is required to indemnify any indemnified party pursuant to Article VII of the Agreement (as determined by a court of competent jurisdiction or by an arbitration award), then L-3 shall be entitled, in addition to any other right or remedy it may have, to exercise rights of set-off against any amounts then due and payable or that may thereafter become due and payable to the Holder under this Note. 5. OTHER DEBT. If L-3 or any of its Affiliates (as defined in the Agreement) provides Purchaser Credit Support (as defined in the Agreement), in respect of all or any portion of the A-1 Company's Debt (as defined in the Agreement), then the amount of the Purchaser Credit Support shall constitute, to the extent of the amount of the Purchaser Credit Support, a Credit Support Payment (as defined in the Agreement); provided, however, (a) if the Company's Debt has been paid in full and none of the Purchaser Credit Support has been utilized or called upon, then the Credit Support Payment shall be deemed not to have been made, and (b) if, at any time, the amount of the Purchaser Credit Support shall have been permanently reduced by reason other than the payment by or on behalf of the Purchaser of any amount in respect of such Purchaser Credit Support, then the Credit Support Payment shall be deemed not to have been made, but only to the extent of such reduction. 6. CANCELLATION OF NOTE. L-3's obligations of payment under this Note may be cancelled pursuant to the provisions of Section 1.1(b) of the Agreement, which provisions are incorporated herein by reference in their entirety. 7. EVENTS OF DEFAULT; REMEDIES. (a) "Event of Default" means the occurrence of one or more of the following events: (i) the failure of L-3 to pay the principal amount of this Note on the Maturity Date for a period of two business days after written notice of such failure is given to L-3 by the Holder; (ii) the commencement of any proceeding instituted by or against L-3 under any laws relating to bankruptcy, insolvency, receivership or arrangements with creditors and such proceeding is not dismissed, stayed or vacated within 60 days; (iii) the dissolution, liquidation or winding up of the affairs of L-3; (iv) an assignment for the benefit of creditors by L-3; or (v) the insolvency or written admission of inability of L-3 to pay its debts as they mature. (b) Upon the occurrence and during the continuance of an Event of Default and the expiration of the applicable cure period (if any), interest shall accrue on the outstanding principal at an overdue rate equal to 10% per annum ("Default Interest"). (c) If an Event of Default shall have occurred and be continuing, the Holder shall have, in addition to all other rights given by law or by this Note, the right, at its option, by written notice to L-3 to declare all the indebtedness described herein or evidenced hereby and the collection fees thereof to be immediately due and payable, and upon such delivery or mailing of such notice, all such indebtedness and collection fees shall become immediately due and payable. A-2 8. NOTICES. All notices, consents, requests, waivers or other communications (each a "Notice") which, by provision of this Note, is required or permitted to be given or served to L-3 shall be given and served for all purposes (a) if hand delivered, (b) if sent by nationally recognized overnight courier, or (c) if sent by registered or certified mail, postage prepaid, return receipt requested to the following address: L-3 Communications Corporation Narda Microwave 435 Moreland Road Hauppauge, N Y 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: Mr. John Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel.: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq. Each Notice shall be deemed effective upon receipt (or refusal of receipt). 9. AMENDMENTS; WAIVERS; CONSENTS. This Note may not be waived, changed, modified or discharged orally, but only by an agreement in writing which is signed by both L-3 and the Holder. Except as otherwise provided in this Note, the Agreement or the Stock Pledge Agreement, L-3 hereby waives presentment, demand for payment, diligence, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. 10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles thereof. L-3 hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Note and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on L-3 anywhere in the world by the same methods as are specified for the giving of notices under this Note. L-3 hereby irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. L-3 hereby irrevocably waives any objection A-3 to the laying of venue of any such suit, action or proceeding brought in such court and irrevocably waives any claim that any such suit, and action or proceeding brought in any such court has been brought in an inconvenient forum. 11. SUCCESSORS. This Note shall inure to the benefit of the Holder and its successors and assigns. A-4 IN WITNESS WHEREOF, L-3 has duly executed this Note as of the date first above written. L-3 COMMUNICATIONS CORPORATION By: ------------------------------ Name: Christopher C. Cambria Title: Vice President A-5 EXHIBIT B STOCK PLEDGE AGREEMENT STOCK PLEDGE AGREEMENT dated as of July 10, 2000, made by L-3 Communications Corporation, a Delaware corporation ("Pledgor"), in favor of LogiMetrics, Inc., a Delaware corporation ("Pledgee"). WHEREAS, pursuant to the Purchase Agreement, dated July 10, 2000, (as the same may be amended from time to time, the "Purchase Agreement"), between Pledgor and Pledgee. Pledgee sold to Pledgor and Pledgor purchased from Pledgee, on the date hereof, 53.5% of the issued and outstanding shares of Pledgee's Common Stock on a Fully Diluted Basis (as such terms are defined in the Purchase Agreement) (the "Purchaser Shares"); WHEREAS, pursuant to the Purchase Agreement, Pledgor has agreed to pledge 43.33% of the Purchaser Shares (the "Pledged Stock") to Pledgee to secure the obligations of Pledgor under the Secured Promissory Note, dated the date hereof (the "Secured Promissory Note") (collectively, the "Secured Obligations"); and WHEREAS, it is a condition to Pledgee's willingness to enter into the Purchase Agreement that Pledgor shall have executed this Agreement; NOW, THEREFORE, in consideration of the premises and in order to induce Pledgee to enter in the Purchase Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Defined Terms. Unless otherwise defined herein, terms used herein shall have the same meanings of terms defined in the Purchase Agreement. 2. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers and delivers to Pledgee all the Pledged Stock and hereby grants to Pledgee a first lien on, and first priority security interest in, the Pledged Stock and in all Proceeds (as defined below) thereof as collateral security for the prompt and complete payment and performance when due of all the Secured Obligations. "Proceeds" means all "proceeds" as defined in Section 9-306(1) of the New York Uniform Commercial Code (the "Code") and shall, in any event, include, without limitation, all dividends, distributions or other income from the Pledged Stock, and any and all collections on the foregoing or distributions with respect to the foregoing. Pledgee hereby acknowledges receipt and possession of the Pledged Stock, to be held by Pledgee in accordance with this Agreement. 3. Stock Dividends, Distributions, etc. If, while this Agreement is in effect, Pledgor shall become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital, or issued in connection with any reorganization), option or rights, as an addition to, in substitution of, or in exchange for, any shares of any Pledged Stock, Pledgor agrees to accept the same as Pledgee's agent and to hold the same in trust on behalf of and for the benefit of Pledgee and to deliver the same forthwith to Pledgee in the exact form received, with the endorsement of Pledgor when necessary, and/or appropriate undated stock powers duly executed in blank, to be held by Pledgee, subject to the B-1 terms hereof, as additional collateral security for the Secured Obligations. All property so distributed in respect of the Pledged Stock which is received by Pledgor shall, until delivered to Pledgee, be held by Pledgor as Pledgee's agent (and in trust on its behalf and for its benefit) as additional collateral security for the Secured Obligations. 4. Collateral. The Pledged Stock and Proceeds thereof are referred to herein collectively as the "Collateral". Certificates or instruments representing or evidencing the Collateral shall be delivered to and held by Pledgee. For every prepayment, payment or set-off by Pledgor of all or a portion of the principal amount of the Secured Promissory Note (including pursuant to Section 1.1(c), 1.5 or 7.3 of the Purchase Agreement), a number of shares of Pledged Stock equal to the Released Pledged Shares shall be released from the Encumbrance of this Agreement and such Released Pledged Shares shall no longer constitute part of the Collateral. Upon payment of the Secured Obligations in full, all the Collateral shall automatically be released from the Encumbrance of this Agreement. Notwithstanding anything in this Agreement or any of the other Transaction Documents to the contrary, if the Purchaser pays the Liability Amount, then all Purchaser Shares then subject to the Encumbrance of this Agreement shall be automatically released from the Encumbrance of this Agreement and delivered to the Purchaser. 5. Cash Dividends; Voting Rights. Unless a Triggering Event (as defined below) shall have occurred, Pledgor shall be entitled to receive all cash dividends paid in respect of the Pledged Stock, to vote the Pledged Stock and to give consents, waivers and ratification in respect of the Pledged Stock; provided, however, that no vote shall be cast or consent, waiver or ratification given or action taken that would impair the Collateral or violate any provision of this Agreement. 6. Rights of Pledgee. If a Triggering Event shall have occurred, (a) any of or all the Pledged Stock included in the Collateral may, without notice, be registered in the name of Pledgee or its nominee and Pledgee shall have the right to exchange certificates or instruments representing or evidencing the Pledged Stock included in the Collateral for certificates or instruments of smaller or larger denominations, (b) Pledgee may collect and receive all cash dividends and other distributions made thereon, and (c) Pledgee or its nominee may thereafter, after notice to Pledgor, exercise all voting and corporate rights at any meeting of any corporation or other entity issuing any of the Pledged Stock and give consents, waivers and ratification in respect of the Pledged Stock, in each case as if it were the sole and absolute owner thereof. 7. Remedies. If any portion of the Secured Obligations shall at any time become, or shall be declared, due and payable (or if any stay or legal bar to such Secured Obligations becoming or being declared due and payable is in effect, if but for the operation of such stay or legal bar such obligations would have become, or could have been declared, due and payable by their terms) and remain unpaid for a period of 30 days from the date upon which such portion of the Secured Obligations have become, or shall have been declared (or would have so become, or could have so been declared), due and payable (a "Triggering Event"), Pledgee shall have the right to exercise all rights and remedies of a secured party under the Code. 8. Representations, Warranties and Covenants. Pledgor represents and warrants that: (a) Pledgor has full corporate power, authority and legal right to pledge, assign, transfer, deliver, deposit and set over all the Pledged Stock pursuant to this Agreement; (b) this Agreement has B-2 been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of the Pledgor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses; (c) (assuming the accuracy of Pledgee's representations and warranties contained in Sections 2.2 and 2.5 of the Purchase Agreement) the pledge, assignment and delivery of the Pledged Stock and the other Collateral pursuant to this Agreement creates a valid first lien on and, and a first priority security interest in, such shares of the Pledged Stock and the other Collateral, respectively, subject to no prior or pari passu Encumbrance or to any agreement granting to any third party a security interest in the property or assets of Pledgor which would include the Pledged Stock or the other Collateral; and (d) no consent, approval, authorization or other order of any person and no consent, authorization approval, or other action by, and no notice to or filing with, any Governmental Authority is required to be made or obtained by Pledgor either (i) for the pledge of the Collateral by Pledgor pursuant to this Agreement, or (ii) for the exercise by Pledgee of the voting or other rights provided for in this Agreement or the remedies in respect of the Collateral pursuant to this Agreement, except such as may be required in connection with such disposition by laws affecting the offering and sale of securities generally. Pledgor covenants and agrees that it will defend Pledgee's right and security interest in and to the Collateral against the claims and demands of all Persons whomsoever; and covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to Pledgee as Collateral hereunder and will likewise defend Pledgee's right thereto and security interest therein. 9. No Disposition, etc. Without the prior written consent of Pledgee, Pledgor will not sell or otherwise dispose of, grant any Encumbrance on or any option or right with respect to, or mortgage, hypothecate, assign, pledge, transfer, charge or otherwise encumber any of the Collateral, any interest therein or any proceeds thereof, except for the lien and security interest provided for by this Agreement. 10. Further Assurances. Pledgor agrees that any time and from time to time upon the written request of Pledgee, it will, at its expense, execute and deliver such further documents and do such further acts and things as Pledgee may reasonably request in order to effect the purposes of this Agreement. 11. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 12. Section Headings. The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. B-3 13. No Waiver; Cumulative Remedies. Pledgee shall not by any act (except by a written instrument executed by Pledgee pursuant to Section 14) be deemed to have waived any right or remedy hereunder. No failure to exercise, nor any delay in exercising, on the part of Pledgee any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power of privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Pledgee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Pledgee would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by Applicable Law. 14. Waivers and Amendments; Successors and Assigns; Governing Law. This Agreement may be amended, supplemented or waived by written instrument executed by Pledgor and Pledgee. This Agreement shall be binding upon the successors and assigns of Pledgor and shall inure to the benefit of Pledgee and its successors and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER ANY PRINCIPLES OF CONFLICTS OF LAWS). B-4 IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and delivered as of the day and year first above written. L-3 COMMUNICATIONS CORPORATION By: --------------------------- Name: Title: B-5 EXHIBIT C [LETTERHEAD OF LOWENSTEIN SANDLER PC] John D. Hogoboom Tel 973.597.2382 Fax 973.597.2383 Member of the Firm jhogoboom@lowenstein.com July 10, 2000 L-3 Communications Corporation 600 Third Avenue New York, New York 10016 Dear Sirs: We have acted as counsel to LogiMetrics, Inc., a Delaware corporation (the "Company"), in connection with the transactions contemplated by the Purchase Agreement, dated as of July 10, 2000 (the "Purchase Agreement"), by and between the Company and L-3 Communications Corporation ("L-3"). This opinion is being furnished to you pursuant to Section 6.1(e) of the Purchase Agreement. Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein. In connection with this opinion, we have examined copies of (i) the Purchase Agreement, (ii) the Registration Rights Agreement, dated July 10, 2000 (the "Registration Rights Agreement"), among the Company, L-3 and the Existing Holders, (iii) the Employment Agreements, each dated July 10, 2000, by and between the Company and each of Charles S. Brand and Norman M. Phipps, (iv) the Secured Promissory Note, made by L-3 in favor of the Company, (v) the Stock Pledge Agreement, dated July 10, 2000, made by L-3 in favor of the Company, and (vi) the Stockholders Agreement, dated July 10, 2000, among the Company, L-3 and the Existing Holders (collectively, the "Transaction Documents") and such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. With your approval, we have, without independent investigation or verification, relied as to certain factual matters material to the opinions contained herein (i) on information obtained from public officials, officers and representatives of the Company and other sources believed by us to be responsible, and (ii) upon the representations and warranties made by the parties in the Transaction Documents and certificates and other written statements of representatives of the parties to the Transaction Documents. Also, with your approval, we have assumed, without independent investigation or verification, that (i) the Transaction Documents have been duly authorized, executed and delivered by the parties to such Transaction Documents (other than the Company) and constitute valid and binding obligations C-1 L-3 Communications Corporation July 10, 2000 Page 2 of such parties (other than the Company), enforceable against such parties (other than the Company) in accordance with their respective terms, (ii) all documents submitted to us as originals are authentic, (iii) all documents submitted to us as certified, conformed or other copies of original documents conform to such authentic, original documents, and (iv) the signatures on all documents examined by us are genuine. We are not expressing any opinion as to the effect of the compliance or noncompliance of L-3 with any laws or regulations applicable to L-3 because of its legal or regulatory status or the nature of its business. Based upon the foregoing and subject to the qualifications and limitations stated herein, we hereby advise you that, in our opinion: 1. The Company is a corporation duly organized, validly existing and in good standing under the Delaware General Corporation Law (the "DGCL") and has the corporate power to own its properties and to conduct its business as presently conducted. 2. mmTech, Inc. is a corporation duly organized, validly existing and in good standing under the New Jersey Business Corporation Act and has the corporate power to own its properties and to conduct its business as presently conducted. 3. The Company has the corporate power to execute, deliver and perform each of the Transaction Documents to which the Company is a party. Each of the Transaction Documents to which the Company is a party has been duly and validly authorized by all necessary corporate action on the part of the Company. The Company has duly executed and delivered each of the Transaction Documents to which the Company is a party. 4. Each of the Transaction Documents to which the Company is a party constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, except that we are not expressing any opinion as to the validity or enforceability of the indemnification provisions of Section 2.8 of the Registration Rights Agreement. 5. The Certificate of Amendment has been duly authorized by all necessary corporate action, has been duly filed under the DGCL and has become effective. 6. The execution and delivery of the Transaction Documents to which the Company is a party and performance by the Company of its obligations thereunder will not: (i) violate (A) the Certificate of Incorporation or By-laws of the Company, (B) the DGCL or any federal or New Jersey statute or regulation known to us and applicable to the Company or its C-2 L-3 Communications Corporation July 10, 2000 Page 3 Subsidiaries or, (C) any order, judgment or decree of any court or governmental authority known to us and specifically binding on the Company, its Subsidiaries or their respective properties, other than, in the case of clause (C) only, such violations that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries; or (ii) based solely upon review of the material contracts, agreements and instruments identified in the officer's certificate attached hereto as Annex I ("Material Contracts") result in the breach of, constitute a default under or result in the creation or imposition of any Encumbrance pursuant to the terms of any Material Contract surviving the transactions contemplated by the Purchase Agreement, other than (i) as disclosed in the Agreement, (ii) those that have been waived in accordance with Section 6.1(s) of the Purchase Agreement, and (iii) such breaches, defaults or Encumbrances that would not, individually or in the aggregate, have a Material Adverse Effect with respect to the Company and its Subsidiaries. 7. To our knowledge, there are no preemptive or other subscription rights (legal, contractual or otherwise) with respect to the Purchaser Shares or the Additional Shares. The Purchaser Shares have been duly authorized and, upon payment of the purchase price specified in Purchase Agreement, will be validly issued, fully paid and non-assessable. The Additional Shares have been duly authorized and, when issued and delivered to L-3 in exchange for the payment by L-3 from time to time of the portion of the Additional Share Purchase Price attributable thereto as specified in the Purchase Agreement, the portion of the Additional Shares so issued and delivered will be validly issued, fully paid and non-assessable. The Additional Shares have been reserved for issuance by the Company. 8. To our knowledge, no authorization, consent, approval or order of, or filing, declaration or registration with, or notice to, any court or governmental agency or body of the United States of America, the State of New Jersey or the State of Delaware (insofar as the DGCL is concerned) is required for the execution and delivery of the Transaction Documents to which the Company is a party by the Company and the performance by the Company of its obligations thereunder, other than those required under (i) the New Jersey Industrial Site Recovery Act (which have been made), (ii) pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1977, as amended, and (iii) pursuant to applicable federal and state securities laws, as to which no opinion is expressed except as provided in paragraph 9 hereof. 9. Assuming the representations and warranties of L-3 contained in Article III of the Purchase Agreement are true and correct in all respects, the offer and sale of the Purchaser Shares and the Additional Shares as contemplated by the Purchase Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended, and from the "Blue Sky" laws of the State of New Jersey. C-3 L-3 Communications Corporation July 10, 2000 Page 4 In rendering the opinions set forth in paragraphs 6 and 7 above, we have assumed that the Company will have sufficient authorized and unissued shares of Common Stock so that, after giving effect to the issuance of the Additional Shares, the number of shares of Common Stock issued by the Company will not exceed the number of shares authorized. If such issuance were to occur today, the Company has sufficient authorized and unissued shares. Our opinions in paragraphs 6 and 8 are based upon and limited to a review of those laws which, in our experience, are normally applicable to transactions of the type contemplated by the Transaction Documents. In rendering the opinion set forth in paragraph 9 above, with your approval we have relied, without independent verification, on the officer's certificate attached hereto as Annex II. Whenever our opinion with respect to the existence or absence of facts is indicated to be based on our knowledge or awareness, we are referring to the actual knowledge of the Lowenstein Sandler PC attorneys who have represented the Company in connection with the transactions contemplated by the Transaction Documents. We have not undertaken any independent investigation to determine the existence or absence of any facts and no inference as to our knowledge concerning any facts should be drawn as a result of the limited representation undertaken by us. This opinion is limited to the laws of the State of New Jersey, applicable laws of the United States and the provisions of the Delaware General Corporation Law ("DGCL") and we are expressing no opinion as to the effect of the laws of any other jurisdiction or as to the laws that might be applied by any court outside the State of New Jersey or the State of Delaware (with respect to the DGCL only). By their terms, each of the Purchase Agreement and the Registration Rights Agreement purports to be governed by the internal laws of the State of New York. The opinion set forth above in paragraph 4 is the opinion which we would provide to you if New Jersey law governed the Transaction Documents and may be relied upon solely to the extent that the application of the laws of the State of New York to the matters set forth above would not have different consequences from those which would result from application of the laws of the State of New Jersey. We express no opinion as to the similarity of applicable laws of the State of New York to those of the State of New Jersey. In addition, we express no opinion in paragraph 4 above as to the enforceability of the choice of law provisions contained in the Transaction Documents. We disclaim any obligation to advise you of any developments or matters in areas covered by this opinion that occur or come to our attention after the date of this opinion. C-4 L-3 Communications Corporation July 10, 2000 Page 5 This opinion has been furnished by us to you in our capacity as counsel to the Company and may not be relied upon by any other person without our prior written consent. Very truly yours, C-5 EXHIBIT D REGISTRATION RIGHTS AGREEMENT AMONG LOGIMETRICS, INC. AND L-3 COMMUNICATIONS CORPORATION AND THE OTHER PARTIES LISTED ON THE SIGNATURE PAGES HEREOF DATED AS OF JULY 10, 2000 LOGIMETRICS, INC. REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement is made and entered into as of July 10, 2000, among LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3 Communications Corporation, a Delaware corporation ("L-3"), and the other signatories hereto (the "Existing Holders"). In consideration of the mutual agreements and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties to this Agreement agree as follows: 1. Definitions. 1.1 Definitions. For the purposes of this Section 1 and other Sections of this Agreement, the following words shall have the meanings set forth below: "Agreement" shall mean this Agreement, as the same may be amended, supplemented or modified from time to time in accordance with its terms. "Applicable Securities Laws" shall mean the securities laws or Blue Sky laws of any jurisdiction (U.S. or foreign) applicable under the relevant circumstances, including the United States or any subdivision thereof. "Commission" shall mean the Securities and Exchange Commission. "Common Stock" shall mean the shares of Common Stock of the Company, par value $.01 per share. "Company" shall have the meaning set forth in the first paragraph hereof. "Company's Notice" shall have the meaning set forth in Section 2.3. "Convertible Securities" shall mean (i) any rights, options or warrants to acquire Common Stock or any capital stock of the Company, and (ii) any notes, debentures, shares of preferred stock or other securities or rights, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company. "CRM Related Persons" shall have the meaning set forth in Section 3.1. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Existing Holders" shall have the meaning set forth in the first paragraph hereof. "Existing Holder Registrable Stock" shall mean: (i) the Common Stock held by the Existing Holders and listed on Schedule 1 hereto; (ii) any Common Stock issued or issuable D-1 upon conversion of any Convertible Security held by the Existing Holders and listed on Schedule 1 hereto; and (iii) any Common Stock issued or issuable, directly or indirectly, with respect to any of the securities referred to in clause (i) or clause (ii) above, by reason of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Each share of Existing Holder Registrable Stock shall cease to be Registrable Stock when transferred to any Person in accordance with a registered public offering. "Incidental Registration" shall have the meaning set forth in Section 2.3. "Initiating Holders" shall mean the Long-Form Initiating Holders or the Short-Form Initiating Holders, as applicable. "Investors' Notice" shall have the meaning set forth in Section 2.3. "L-3" shall have the meaning set forth in the first paragraph hereof. "L-3 Registrable Stock" shall mean: (i) any Common Stock now or hereafter held by L-3; (ii) any Common Stock issued or issuable upon conversion of any Convertible Security held by L-3; and (iii) any Common Stock issued or issuable, directly or indirectly, with respect to any of the securities referred to in clause (i) or clause (ii) above, by reason of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Each share of L-3 Registrable Stock shall cease to be Registrable Stock when transferred to any Person in accordance with a registered public offering. "Long-Form Initiating Holders" shall mean the Major Investor(s) referred to in either Section 2.1(a) or 2.1(b), as the case may be. "Long-Form Registration Statement" shall mean a registration statement on Form S-1 or Form S-2, or any similar form of registration statement adopted by the Commission from and after the date hereof. "Major Investor" shall mean, as of any date, with respect to any holder of Registrable Stock, such holder of Registrable Stock so long as it owns Registrable Stock as of such date that represents (i) in the case of a holder of L-3 Registrable Stock, not less than five percent (5%) of the outstanding L-3 Registrable Stock as of such date, and (ii) in the case of a holder of Existing Holder Registrable Stock, not less than five percent (5%) of the outstanding Existing Holder Registrable Stock as of such date. "Notice" shall have the meaning set forth in Section 3.1. "Person" or "person" shall mean any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business trust or other entity, or any governmental authority. "Prospective Sellers" shall have the meaning set forth in Section 2.6(a)(ii). D-2 "Public Offering" shall mean a consummated firmly underwritten public offering of the Common Stock of the Company pursuant to an effective registration statement filed with the Commission under the Securities Act, with respect to which (i) the Company's Common Stock is listed on the NASDAQ National Market (or any successor, exchange market or organization thereto), and (ii) the Company makes an offering for at least twenty percent (20%) of the outstanding Common Stock. "Purchase Agreement" shall have the meaning set forth in Section 2.13. The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act. "Registrable Stock" shall mean the Existing Holder Registrable Stock and/or the L-3 Registrable Stock, as the context requires. "Registration Expenses" shall have the meaning set forth in Section 2.7. "Requesting Holders" shall have the meaning set forth in Section 2.1(d). "Rule 144" shall mean Rule 144 promulgated by the Commission under the Securities Act. "Rule 144A" shall have the meaning set forth in Section 2.11(b). "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Short-Form Initiating Holders" shall have the meaning set forth in Section 2.1(c). "Short-Form Registration Statement" shall mean a registration statement on Form S-3 or any similar form of registration statement adopted by the Commission from and after the date hereof. 1.2 Rules of Construction. Words such as "herein", "hereinafter", "hereto", "hereby" and "hereunder", when used with reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise requires. The words "include", "includes", "included" and "including" shall be construed as if followed by the phrase "without being limited to". A reference to a particular gender means a reference to any gender. 2. Registration Provisions. 2.1 Required Registrations. (a) If, at any time after the date hereof, one or more Major Investor(s) that is a holder of L-3 Registrable Stock proposes to effect the registration of any shares of Registrable Stock, pursuant to a Long-Form Registration Statement, then such Major Investor(s) may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (i) the form of registration statement under the Applicable Securities Laws to be used, (ii) the D-3 number of shares of L-3 Registrable Stock to be disposed of, and (iii) the intended method of disposition of such shares; provided, however, that such Major Investor(s) include in such registration 5% of the L-3 Registrable Stock then outstanding. (b) If, at any time after the earlier to occur of (i) the consummation of the Public Offering, and (ii) March 31, 2001, one or more Major Investor(s) that is a holder of not less than 20% of the Existing Holder Registrable Stock proposes to effect the registration of any shares of Registrable Stock, pursuant to a Long-Form Registration Statement, then such Major Investor(s) may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (A) the form of registration statement under the Applicable Securities Laws to be used, (B) the number of shares of Existing Holder Registrable Stock to be disposed of, and (C) the intended method of disposition of such shares; provided, however, that such Major Investor(s) include in such registration 5% of the Existing Holder Registrable Stock then outstanding. (c) If at any time after the earlier of (i) January 2, 2001 and (ii) the consummation of a Public Offering, provided that the Company is entitled to file a registration statement on a Short-Form Registration Statement, any holder(s) of Registrable Stock proposes to effect the registration of, pursuant to a Short-Form Registration Statement, shares of Registrable Stock that are reasonably expected to have an aggregate offering price of at least $1,000,000 (the "Short-Form Initiating Holders"), then such holder(s) of Registrable Stock may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (i) the form of registration statement under the Applicable Securities Laws to be used, (ii) the number of shares of Registrable Stock to be disposed of, and (iii) the intended method of disposition of such shares. (d) Upon receipt of the request of the Long-Form Initiating Holders pursuant to Section 2.1(a) or 2.1(b) or the Short-Form Initiating Holders pursuant to Section 2.1(c), the Company shall give prompt written notice thereof to all other holders of Registrable Stock. Subject to the provisions of Section 2.2, the Company shall, subject to the terms of this Agreement, use its best efforts to effect the registration under the Applicable Securities Laws of all shares of Registrable Stock specified in the requests of the Long-Form Initiating Holders or the Short-Form Initiating Holders, as the case may be, and the requests (stating (i) the number of shares of Registrable Stock to be disposed of, and (ii) the intended method of disposition of such shares) of other holders of shares of Registrable Stock, as applicable ("Requesting Holders") given within 30 days after receipt of such notice from the Company. 2.2 Limitations on Required Registration. (a) The Company shall not be required to prepare and file more than four Long-Form Registration Statements pursuant to Section 2.1(a) requested by holders of L-3 Registrable Stock or more than two Long Form Registration Statements pursuant to Section 2.1(b) requested by holders of Existing Holder Registrable Stock, which actually become and are declared effective (it being understood and agreed that only a Long-Form Registration Statement that either (i) pursuant to which all the shares of Registrable Stock covered thereby have been sold or D-4 disposed of, or (ii) has been effective for at least 180 days, shall be deemed to have become or declared effective for purposes of being included in such four or two Long-Form Registration Statements, as the case may be). (b) Whenever a registration requested by the holders of Registrable Stock is for a firmly underwritten offering and the managing underwriter(s) determine that the number of shares of Common Stock so included which are to be sold by the holders of Registrable Stock is limited due to market conditions, the shares to be offered shall be allocated (i) first, to the Initiating Holders, pro rata, based upon the number of shares of Registrable Stock then held by such holders, respectively, and (ii) thereafter, the remaining available portion, if any, shall be allocated among all the Requesting Holders, pro rata, based upon the number of shares of Registrable Stock then held by such Requesting Holders, respectively. If any holder of Registrable Stock disapproves of the terms of the underwriting, such Person may elect to withdraw therefrom by written notice to the Company and the Initiating Holders. The Registrable Stock so withdrawn shall also be withdrawn from registration; provided, however, that, if by the withdrawal of such Registrable Stock a greater number of shares of Registrable Stock held by other holders of Registrable Stock may be included in such registration (up to the maximum of any limitation imposed by the managing underwriter(s)), then the Company shall offer to all holders of Registrable Stock who have included Registrable Stock in the registration the right to include additional Registrable Stock in the same priority and proportion used in determining the limitation imposed by the provisions of this Section 2.2(b). (c) The Company shall not be required to prepare and file a registration statement pursuant to Section 2.1(a) or 2.1(b) for a period of not more than 90 days following receipt by the Company of the Long-Form Initiating Holders' request for registration, if (i) the Company in good faith gives written notice within five days after such receipt by the Company of such request to all holders of Registrable Stock that the Company is commencing to prepare a Company-initiated registration statement, and (ii) the Company actively employs in good faith all reasonable efforts to cause such registration statement to become effective. (d) If the Company receives a Long-Form Initiating Holders' request within 90 days of the date on which a previous registration statement filed pursuant to Section 2.1(a) or 2.1(b) has become effective, the Company shall not be required to commence preparation of such Long-Form Registration Statement in accordance with such request until 90 days has elapsed since such effective date. (e) If the Company shall furnish to the Initiating Holders pursuant to this Section 2.2(e) a certificate signed by the chief executive or chief financial officer of the Company stating that the Company, in good faith, has determined that (i) there exists material non-public information about the Company which the Company has a bona fide business purpose for preserving as confidential, or (ii) is undertaking (or is about to undertake) a proposed acquisition or financing that would significantly impact the pricing of the contemplated public offering, and in each case the Company provides the Initiating Holders written notice thereof promptly after the Company makes such determination, then the Company shall have the right to defer the filing or the declaration of effectiveness of a registration statement required to be D-5 effected pursuant to Section 2.1, for a period of not more than (A) 90 days, in the case of a Long-Form Registration Statement, or (B) 60 days, in the case of a Short-Form Registration Statement, after receipt of the request of the Initiating Holders; provided, however, that in no event shall the Company be entitled to defer such filing or declaration of effectiveness pursuant to this Section 2.2(e) more than 120 days in any 12-month period. 2.3 Incidental Registration. If the Company at any time proposes to register any of its securities for sale for its own account or for the account of any other Person (other than a registration (a) requested pursuant to Section 2.1, or (b) relating solely to the sale of securities to participants in a Company stock plan or in a Rule 145 transaction) (an "Incidental Registration"), then the Company shall each such time give written notice (the "Company's Notice"), at its expense, to all holders of Registrable Stock of its intention to do so at least 20 days prior to the filing of a registration statement with respect to such Incidental Registration with the Commission. If any holder of Registrable Stock desires to dispose of all or part of its Registrable Stock, it may request registration thereof in connection with the Incidental Registration by delivering to the Company, within 10 days after receipt of the Company's Notice, written notice of such request (the "Investors' Notice") stating the number of shares of Registrable Stock to be disposed of and the intended method of disposition of such shares by such holder. The Company shall, subject to the terms of this Agreement, use commercially reasonable efforts to cause all shares of Registrable Stock specified in the Investors' Notice to be registered under the Securities Act so as to permit the sale or other disposition (in accordance with the intended methods thereof as aforesaid) by such holder or holders of the shares so registered, subject, however, to the limitations set forth in Section 2.4. 2.4 Limitations on Incidental Registration. (a) If the Incidental Registration of which the Company gives notice pursuant to Section 2.3 is for the purpose of permitting a disposition of securities by the Company pursuant to a firm commitment underwritten offering, the notice shall so state, and the Company shall have the right to limit the aggregate size of the offering or the number of shares to be included therein by stockholders of the Company if requested to do so in good faith by the managing underwriter(s) of the offering and only securities which are to be included in the underwriting may be included in the registration. (b) Whenever an Incidental Registration is initiated pursuant to Section 2.3 and the number of shares which may be registered pursuant to Section 2.3 is limited by the provisions of Section 2.4(a), the holders of Registrable Stock shall have priority (pro rata as between holders of L-3 Registrable Stock on the one hand and holders of Existing Holder Registrable Stock on the other hand based on the percentage of total Registrable Stock then held by the holders of L-3 Registrable Stock in the aggregate and the holders of Existing Holder Registrable Stock in the aggregate) as to sales over the other holders of the Company's securities exercising similar incidental registration rights and the Company shall cause such other holders to withdraw from such registration to the extent necessary to allow all requesting holders of Registrable Stock to include all of the shares so requested by them (pro rata in accordance with the preceding parenthetical) to be included within such registration. Whenever the number of shares which D-6 may be registered pursuant to Section 2.3 is still limited by the provisions of Sections 2.4(a) after the withdrawal of such other holders of the Company's securities, the Company shall have priority as to sales over the holders of Registrable Stock and each holder hereby agrees that it shall withdraw its securities from such registration to the extent necessary to allow the Company to include all the shares which the Company desires to sell for its own account to be included within such registration. The holders of Registrable Stock given rights by Section 2.3 shall share in the available portion of the registration in question, such sharing to be based upon the priority and proportion set forth, first, in the parenthetical above, and then, within each group comprising holders of L-3 Registrable Stock or Existing Holder Registrable Stock, as the case may be, based upon the numbers of shares of L-3 Registrable Stock or Existing Holder Registrable Stock, as the case may be, that the holders thereof wish to include in the Incidental Registration. 2.5 Designation of Underwriter. In the case of any registration initiated by the holders of Registrable Stock pursuant to the provisions of Section 2.1 which is proposed to be effected pursuant to a firm commitment underwriting, the Company, with the consent of the Initiating Holders (which consent will not be unreasonably withheld or delayed), shall designate the managing underwriter(s) (and all holders of Registrable Stock participating in the registration shall sell their shares only pursuant to such underwriting). 2.6 Registration Procedures. (a) If and when the Company is required by the provisions of this Agreement to effect the registration of shares of Registrable Stock, the Company shall, by notice to each holder of Registrable Stock included in such registration, keep such holder advised in writing as to the initiation, progress and effective date of each registration, qualification and compliance pursuant hereto, and, at the expense of the Company: (i) prepare and file with the Commission or other applicable securities authorities a registration statement with respect to such shares and use its best efforts to cause such registration statement to become and remain effective as provided herein; (ii) prepare and file with the Commission or other applicable securities authorities such amendments and supplements (pre-effective and post-effective) to such registration statement and the prospectuses used in connection therewith as may be necessary to keep such registration statement effective and current and to comply with the provisions of the Securities Act or other Applicable Securities Law with respect to the sale or other disposition of all shares covered by such registration statement, including such amendments and supplements as may be necessary to reflect the intended method of disposition from time to time of the holder or holders of Registrable Stock who have requested that any of their shares be sold or otherwise disposed of in connection with the registration (the "Prospective Sellers"), and as may be necessary to keep each registration, qualification or compliance effective until each Prospective Seller shall have D-7 completed the distribution described in the registration statement relating thereto; (iii) furnish to each Prospective Seller such number of copies of each prospectus, including preliminary prospectuses, in conformity with the requirements of the Securities Act or other Applicable Securities Law, and such other documents, as the Prospective Seller may reasonably request in order to facilitate the public sale or other disposition of the shares owned by it; (iv) use its best efforts to register or qualify the shares covered by such registration statement under such other securities or Blue Sky or other Applicable Securities Law of such jurisdictions as each Prospective Seller shall reasonably request to enable such Prospective Seller to consummate the public sale or other disposition of the shares owned by such Prospective Seller; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions; (v) furnish to each Prospective Seller a signed counterpart, addressed to the Prospective Sellers and the underwriters, if any, of: (A) an opinion of counsel for the Company, dated the effective date of the registration statement or the closing date of any underwritten public offering, in customary form, covering such matters as are customarily covered by opinions for an underwritten public offering in opinions of issuers' counsel delivered to underwriters and selling shareholders; and (B) "comfort" letters signed by the independent public accountants, within the meaning of Applicable Securities Laws, 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 with respect to the events subsequent to the date of the financial statements, as are customarily covered (at the time of such registration) in accountants' letters delivered to the underwriters in connection with underwritten public offerings of securities; (vi) cause all such Registrable Stock to be listed on each national securities exchange or be included for quotation on each national securities market on which similar securities issued by the Company are then listed; (vii) provide a transfer agent and registrar for all such Registrable Stock not later than the effective date of such registration statement; (viii) enter into such customary agreements (including an underwriting agreement) and take all such other customary actions as the holders of a majority of the Registrable Stock covered by such registration statement D-8 reasonably request in order to expedite or facilitate the disposition of such Registrable Stock; (ix) comply with the provisions of Applicable Securities Laws with respect to the disposition of all securities covered by such registration statement; (x) promptly notify each Prospective Seller (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to the registration statement or any post-effective amendment thereof, when the same has become effective, (ii) of any request by any applicable securities authority for amendments of or supplements to the registration statement or the prospectus or for additional information, (iii) of the issuance by any applicable securities authority of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the registrable securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose, and (v) of the happening of any event which makes any statement of a material fact made in the registration statement, the prospectus or any document incorporated therein by reference untrue or which requires the making of any changes in the registration statement, the prospectus or any document incorporated therein by reference in order to make the statement of a material fact therein not misleading; (xi) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement; (xii) upon the occurrence of any event contemplated by clause (x) above, promptly prepare a supplement or post-effective amendment to the registration statement or the prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Stock, the registration statement and the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (xiii) make generally available to each purchaser of Registrable Stock consolidated earnings statements satisfying the requirements of Applicable Securities Laws; and (xiv) make available for inspection by any Prospective Seller, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such Prospective Seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the D-9 Company's officers, directors and employees to supply all information reasonably requested by any such Prospective Seller, underwriter, attorney, accountant or agent in connection with the preparation of such registration statement. (b) Each Prospective Seller shall furnish to the Company such information as the Company may reasonably require from the Prospective Seller for inclusion in the registration statement (and the prospectus included therein). (c) The Prospective Sellers shall not (until further notice) effect sales of the shares covered by the registration statement after receipt of notice from the Company to suspend sales in order to permit the Company to correct or update a registration statement or prospectus. (d) In the case of an underwritten offering of Common Stock effected pursuant to this Agreement, the Company and each Prospective Seller shall enter into such customary agreements (including an underwriting agreement) and take all such other customary actions as the managing underwriter(s) reasonably request(s) in order to expedite or facilitate the disposition of such Registrable Stock. 2.7 Expenses of Registration. All expenses incurred in effecting any registration requested pursuant to Section 2.1 or 2.3, including all registration and filing fees, stock exchange or market listing or filing fees, fees and expenses of complying with Applicable Securities Laws, printing expenses, expenses of compliance with Blue Sky laws, fees and disbursements of counsel for the Company and its independent public accountants, reasonable expenses of any special audits required by any such registration, the fees and disbursements of any counsel and accountant retained by the holders of more than fifty percent (50%) of the Registrable Stock being registered, and expenses of all marketing and promotional efforts requested by the managing underwriter(s) and any fees and expenses disbursements of underwriters customarily paid by issuers ("Registration Expenses") shall be borne by the Company; provided, however, that the Prospective Sellers shall bear underwriting discounts or brokerage fees or commissions relating to the sale of their Registrable Stock and any legal fees or disbursements for their counsel (except as aforesaid); provided further, however, that the Company shall be required to bear the Registration Expenses for a maximum of six registrations upon the request of the holders of Registrable Stock pursuant to Section 2.1(c). 2.8 Indemnification. (a) In the event of any registration of any of its securities under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless each holder requesting or joining in a registration of such securities, its directors and officers, if any, each underwriter (as defined in the Securities Act), each other Person who participates or is to participate in the offering of such holder's securities and each controlling Person of any such holder or underwriter, if any (within the meaning of the Securities Act), from and against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which such holder, director, officer, underwriter, participating Person or controlling Person may be subject under the Securities Act or other Applicable Securities Laws, or under any other statute D-10 or at common law, insofar as such losses, claims, damages or liabilities (or actions, whether or not commenced, 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 such securities were registered under the Securities Act or other Applicable Securities Laws, or any preliminary prospectus or final prospectus contained therein, or any summary prospectus issued in connection with any securities being registered, or any amendment or supplement thereto, or any other document, 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 not misleading, or (iii) any violation by the Company of the Securities Act or other Applicable Securities Law, or any rule or regulation promulgated under the Securities Act or any other Applicable Securities Law, or any other law applicable to the Company in connection with any such registration, qualification or compliance, and shall reimburse each such holder, director, officer, underwriter, participating Person or controlling Person for any legal or other expenses reasonably incurred by such holder, director, officer, underwriter, participating Person or controlling Person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to any holder, director, officer, underwriter, participating Person or controlling Person in any such case to the extent that any such loss, claim, damage liability or action arises out of or is based upon any such untrue statement or omission made in such registration statement, preliminary prospectus, final prospectus, summary prospectus, or amendment or supplement thereto, or any other document in reliance upon and in conformity with written information furnished to the Company by such holder, underwriter, participating Person or controlling Person, respectively, specifically stating that it is for use therein. The indemnity provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of such holder, director, officer, underwriter, participating Person or controlling Person, and shall survive transfer of such securities by such holder. (b) If the indemnification provided for in Section 2.8(a) is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or actions referred to therein, then the Company 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, liabilities or actions, in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the indemnified parties on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or actions, as well as any other relevant equitable considerations. The relative fault of the Company 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 or alleged omission to state a material fact relates to information supplied by the Company 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 parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.8(b) 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 D-11 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 any legal fees and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.8(b), (i) no holder of Registrable Stock shall be required to contribute any amount in excess of the proceeds to it from the sale of Registrable Stock by it pursuant to the registration statement, (ii) no underwriter shall be required to contribute any amount in excess of the proceeds to it from the offering pursuant to the registration statement, and (iii) 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. (c) The provisions of this Section 2.8 shall be in addition to any other rights to indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise, and shall remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party. (d) Promptly after receipt by an indemnified party under Section 2.8(a) or 2.8(b) of notice of any claim or the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the Company under such Section, notify the Company in writing of the commencement thereof; but the omission so to notify the Company shall not relieve it from any liability which it may have to any indemnified party otherwise than under such Section or to the extent that it has not been prejudiced as a result of such failure. In case any such claim shall be brought against any indemnified party, it shall notify the Company of the commencement thereof, and the Company shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the Company and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the Company, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties). Upon the permitted assumption by the Company of the defense of such action, and approval by the indemnified party of counsel, the Company shall not be liable to such indemnified party under this Section 2.8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof (other than reasonable costs or investigation) unless (i) the indemnified party shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the Company shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time, (iii) the Company and its counsel do not actively and vigorously pursue the defense of such action, or (iv) the Company has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. The Company shall not, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement of any such claim (whether or not the indemnified party is an actual or potential party to such claim) unless such judgment or settlement (A) includes as an unconditional term thereof the giving by the claimant or plaintiff to D-12 such indemnified party of a release from all liability in respect of such claim or litigation, and (B) does not include a statement as to an admission of fault, culpability or a failure to act on behalf of any indemnified party. No indemnified party shall consent to entry of any judgment or enter into any settlement of such action the defense of which has been assumed by the Company without the consent of the Company, such consent not to be unreasonably withheld or delayed. 2.9 Information by Holders. Each holder of Registrable Stock shall furnish to the Company such information regarding such holder and the distribution proposed by such holder as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. 2.10 Waiver of Other Registration Rights. Each Existing Holder hereby forever and irrevocably (a) waives any rights heretofore granted by the Company with respect to the registration of any Registrable Stock under Applicable Securities Laws, and (b) releases the Company from any commitment, covenant, agreement or obligation to register any Registrable Stock under Applicable Securities Laws. Without limiting the effect of the foregoing, each of the Existing Holders and the Company agrees that the Registration Rights Agreement dated as of October 21, 1998, is terminated upon the execution and delivery of this Agreement by the parties hereto and shall be of no force and effect. 2.11 Rule 144 and Rule 144A. With a view to making available to each holder of Registrable Stock the benefits of certain rules and regulations of the Commission which may permit the sale of the Registrable Stock to the public without registration, the Company agrees that so long as a holder owns any Registrable Stock: (a) the Company shall, at any time after any of the Company's shares of capital stock are registered under the Securities Act or the Exchange Act: (i) make and keep available public information, as those terms are contemplated by Rule 144 under the Securities Act (or any successor or similar rule then in force); (ii) timely file with the Commission all reports and other documents required to be filed under the Securities Act and the Exchange Act; and (iii) furnish to each holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other information as such holder may reasonably request in order to avail itself of any rule or regulation of the Commission allowing such holder to sell any Registrable Stock without registration (it being understood and agreed that (A) the Company's covenants and agreements contained in this clause (a) shall not be operative until such time as the Company shall have filed with the Commission its Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999, and its Quarterly Reports on Form 10-QSB for the fiscal quarters ended September 30, 1999, December 31, 1999 and March 31, 2000, and (B) the Company agrees to make such filings as soon as practicable); and (b) each holder of Registrable Stock and each prospective holder of Registrable Stock who may consider acquiring Registrable Stock in reliance upon Rule 144A under the Securities Act (or any successor or similar rule then in force) ("Rule 144A") shall have D-13 the right to request from the Company, and the Company will provide upon such request, such information regarding the Company and its business, assets and properties, if any, as is at the time required to be made available by the Company under Rule 144A so as to enable such holder to transfer Registrable Stock to such prospective holder in reliance upon Rule 144A. 2.12 Holdback. (a) Each holder of Registrable Stock hereby agrees that it shall not, to the extent requested by the managing underwriter(s) of Common Stock (or other securities of the Company), sell or otherwise transfer or dispose of (other than to donees who agree in writing to be similarly bound) (or agree to do the same) any Common Stock or any Convertible Securities or any other equity securities or equity-linked securities of the Company, during a reasonable and customary period of time specified by the managing underwriter(s) (but in any event not to exceed 180 days), in connection with any registration statement effected pursuant to this Agreement (except to the extent such holder of Registrable Stock sells any Registrable Stock in such registration pursuant to and in accordance with this Agreement); provided, however, that the Company shall have the right to issue Common Stock upon the due exercise or conversion of Convertible Securities. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Stock of each holder until the end of such reasonable and customary period. (b) The Company hereby agrees that it shall not, to the extent requested by the managing underwriter(s) of Common Stock (or other securities of the Company), issue, sell or otherwise transfer or dispose of (or agree to do the same) any Common Stock or any Convertible Securities or any other equity securities or equity-linked securities of the Company, during a reasonable and customary period of time specified by the managing underwriter(s) (but in any event not to exceed 180 days), in connection with any registration statement effected pursuant to this Agreement; provided, however, that the Company shall have the right to issue Common Stock upon the due exercise or conversion of Convertible Securities. (c) No registration shall be requested to be effected pursuant to Section 2.1 during the period(s) of time in which the restrictions on transfer of equity securities or equity-linked securities of the Company specified in Section 2.12(a) or 2.12(b) are in effect. (d) Notwithstanding the foregoing, none of the provisions of this Section 2.12 shall apply to Cerberus Partners, L.P.; provided, however, that if Cerberus Partners, L.P. is a Prospective Seller, then the provisions of this Section 2.12 shall apply to it. 2.13 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities without the prior written consent of the holders of at least a majority of the then outstanding L-3 Registrable Stock and at least a majority of the then outstanding Existing Holder Registrable Stock. Notwithstanding the foregoing, the Company may enter into an agreement (the "New Agreement") granting registration rights no more favorable than the rights set forth herein to one or more investments banks or their Affiliates to whom Common Stock or Convertible Securities D-14 are issued or transferred in accordance with the terms of the Purchase Agreement, dated the date hereof, between the Company and L-3, as the same may be amended or supplemented from time to time (the "Purchase Agreement"); provided, however, that if L-3 is to be granted any registration or other rights pursuant to the New Agreement, then the Existing Holders shall be granted registration or other rights substantially similar to those registration or other rights granted to L-3 under the New Agreement. 3. Miscellaneous. 3.1 Notices. All notices, requests, claims, demands, approvals, consents, waivers and other communications hereunder (each a "Notice") shall be in writing and shall be (a) personally delivered, (b) transmitted by telecopy facsimile, provided that the original copy thereof also is sent by pre-paid, first class, registered or certified mail (return receipt requested), or by next-day or overnight mail (to any United States address) or by an internationally recognized express delivery service (to any foreign address), (c) sent by first class, registered or certified mail, return receipt requested or by next-day or overnight mail (to any United Stated address), postage and charges prepaid, or (d) delivered by an internationally recognized express delivery service (to any foreign address), postage and charges prepaid: (i) if to L-3, L-3 Communications Corporation Narda Microwave 435 Moreland Road Hauppauge, NY 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: Mr. John Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.; (ii) if to the Company, D-15 LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 Attention: Chief Executive Officer with copies to: Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068-1791 Tel: (973) 597-2500 Fax: (973) 597-2400 Attention: John D. Hogoboom, Esq.; L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.; If to Cramer Rosenthal McGlynn, Inc., or any of the Existing Holders listed on Schedule 3.1 (the "CRM Related Persons"): To such Person c/o Cramer Rosenthal McGlynn, Inc. 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 Attention: Eugene A. Trainor, III, Executive Vice President With copies to: D-16 Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 Tel: (212) 940-8800 Fax: (212) 940-8776 Attention: Dan Harris, Esq. if to any other Existing Holder, at the address set forth on the signature pages of this Agreement, or in each case, at such other address and numbers as may have been furnished in a Notice by such Person to the other parties. Any Notice shall be deemed effective or given upon receipt (or refusal of receipt). 3.2 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to the principles of conflicts of law thereof. Each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the State of New York and of the United States of America sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or proceeding shall be heard and determined in such a New York state or federal court. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party in the manner provided in Section 3.1 and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 3.3 Severability. Should any Section or any part of a Section within this Agreement be rendered void, invalid or unenforceable by any court of law for any reason, such invalidity or unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Agreement. 3.4 Section Headings. Section headings contained in this Agreement are inserted as a matter of convenience and for reference purposes only, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof. 3.5 Amendments and Waivers. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally or in writing, except that any term of this D-17 Agreement may be amended and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of (a) the Company, (b) the holders of at least a majority of the then outstanding L-3 Registrable Stock, and (c) the holders of at least a majority of the then outstanding Existing Holder Registrable Stock; provided, however, that no such waiver shall extend to or affect any other obligation not expressly waived or impair any right consequent therein. L-3 may waive any of its rights or the obligations of the Company owing to L-3 hereunder without obtaining the consent of any other Person. Each Existing Holder may waive any of its rights or the obligations of the Company owing to such Existing Holder hereunder without obtaining the consent of any other Person. 3.6 Successors and Assigns. All rights, covenants and agreements of the parties contained in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns. The Company may not assign this Agreement. 3.7 Specific Performance. The parties hereto recognize that the capital stock of the Company cannot be readily purchased or sold on the open market and that it is to the benefit of the Company, L-3 and the Existing Holders that this Agreement be carried out; and for those and other reasons, the parties hereto would be irreparably damaged if this Agreement is not specifically enforced in the event of a breach hereof. If any controversy concerning the rights or obligations to purchase or sell any capital stock of the Company arises, or if this Agreement is breached, the parties hereto hereby agree that remedies at law might be inadequate and that, therefore, such rights and obligations, and this Agreement, shall be enforceable by specific performance. The remedy of specific performance shall not be an exclusive remedy, but shall be cumulative of all other rights and remedies of the parties hereto at law, in equity or under this Agreement. 3.8 Entire Agreement. This Agreement contains the entire agreement and understanding of the parties and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof unless expressly referred to herein and supersedes all prior agreements and understandings relating to the subject matter hereof. 3.9 Fees and Expenses. Each party hereto shall pay its respective fees and expenses in connection with the negotiation, execution and delivery of this Agreement and the other documents and transactions contemplated hereby. 3.10 Further Assurances. Each party hereto shall cooperate and take such actions as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby. 3.11 Condition to Effectiveness. This Agreement shall become effective upon the closing of the Purchase Agreement. 3.12 Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in one or more counterparts, each of which D-18 shall be deemed an original but all of which together shall constitute one and the same instrument. 3.13 Recapitalization. This Agreement shall apply to (a) the Common Stock held by L-3 and the Existing Holders, as well as any Common Stock hereafter acquired by L-3 and/or the Existing Holders (including any Common Stock issued upon the exercise, conversion or exchange of any Convertible Securities), and (b) any and all shares of capital stock of the Company which may be issued in respect of, in exchange for or in substitution of Common Stock, by reason of any stock dividend, split, reverse split, combination, reclassification, merger, recapitalization, share exchange or other transaction. 3.14 Attorneys' Fees. If any party initiates any legal action arising out of or in connection with this Agreement, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable attorneys' fees, expert witness fees and expenses incurred by the prevailing party in connection therewith. [Signature Pages Follow] D-19 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. LOGIMETRICS, INC. By: --------------------------------- Name: Norman M. Phipps Title: President L-3 COMMUNICATIONS CORPORATION By: --------------------------------- Name: Christopher C. Cambria Title: Vice President ------------------------------------- Norman M. Phipps 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 D-20 ------------------------------------- Charles S. Brand 20 Meridian Way Eatontown, New Jersey 07724 Tel: (732) 935-7150 Fax: (732) 935-7151 LFH, LLC By: --------------------------------- Name: Charles Brand Title: 175 Boundary Road Colts Neck, NJ 07722 Tel: (732) 431-4175 Fax: (732) 431-4108 ------------------------------------- Gerald B. Cramer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRAMER ROSENTHAL McGLYNN LLC By: --------------------------------- Name: Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 D-21 L.A.D. EQUITY PARTNERS, L.P. By: Flint Investments, Inc. Its General Partner By: --------------------------------- Name: Arthur J. Pergament Title: Vice President 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ------------------------------------- Edward J. Rosenthal, Keogh 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM 1998 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc., Its Managing Member By: By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 D-22 CRM 1997 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc. Its Managing Member By: By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 D-23 CRM RETIREMENT PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM MADISON PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM U.S. VALUE FUND, LTD. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 D-24 EURYCLEIA PARTNERS, L.P. By: Marchessini & Company, Its General Partner By: --------------------------------- Name: Rona Trokie Title: Vice President 745 Fifth Avenue, Suite 1400 New York, New York 10151 Tel: (212) 752-4300 Fax: (212) 752-4309 A.C. ISRAEL ENTERPRISES, INC. By: --------------------------------- Name: Jay Howard Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM-EFO PARTNERS, L.P. By: CRM-EFO Investments, LLC Its General Partner By: CRM Management, Inc., Its Managing Member By: --------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 D-25 ------------------------------------- Gregory Manocherian New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 PAMELA EQUITIES CORP. By: --------------------------------- Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 WHITEHALL PROPERTIES, LLC By: --------------------------------- Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 D-26 KABUKI PARTNERS ADP, GP By: --------------------------------- Name: Gregory Manocherian Title: General Partner 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 McGLYNN FAMILY PARTNERSHIP L.P. By: --------------------------------- Name: Ronald H. McGlynn Title: General Partner 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ------------------------------------- Richard S. Fuld, Jr. By: Cramer Rosenthal McLynn, Inc. Attorney-in-Fact 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ------------------------------------- Fred M. Filoon 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 D-27 ------------------------------------- Eugene A. Trainor, III 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ------------------------------------- Mark B. Fisher 102 E. 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 MBF CAPITAL CORPORATION By: --------------------------------- Name: Mark B. Fisher Title: President MBF BROADBAND SYSTEMS, L.P. By: MBF Broadband Systems, Inc., Its General Partner By: --------------------------------- Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 D-28 PHINEAS BROADBAND SYSTEMS By: MBF Broadband Systems, Inc. Its General Partner By: --------------------------------- Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 CERBERUS PARTNERS, L.P. By: Cerberus Associates, LLC, Its General Partner By: --------------------------------- Name: Seth Plattus Title: Managing Director 450 Park Avenue 28th Floor New York, New York 10022 Tel: (212) 891-2100 Fax: (212) 421-2947 D-29 ------------------------------------- Steve Dinetz 1034 Skyland Drive Zephyr Cove, NV 89448 Tel: (702) 588-0343 Fax: (702) 588-1433 D-30 SCHEDULE 1: EXISTING HOLDER REGISTRABLE STOCK D-31 SCHEDULE 3.1: THE CRM RELATED PERSONS Cramer Rosenthal McGlynn LLC Edward J. Rosenthal, Keogh CRM 1997 Enterprise Fund, LLC CRM 1998 Enterprise Fund, LLC CRM Partners, L.P. CRM Retirement Partners, L.P. CRM Madison Partners, L.P. CRM U.S. Value Fund, LTD. CRM-EFO Partners, L.P. McGlynn Family Partnership L.P. Gerald B. Cramer Fred M. Filoon D-32 EXHIBIT E CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF LOGIMETRICS, INC. LogiMetrics, Inc. a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that: The following amendment to the Certificate of Incorporation of the Corporation approved by the Board of Directors and stockholders of the Corporation, was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware: "The first paragraph of Article FOURTH of the Certficate of Incorporation, as amended, of LogiMetrics, Inc., is hereby amended to read in its entirety as follows: FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 355,000,000 shares, of which 350,000,000 shares are designated as Common Stock, having a par value of $.01 per share ("Common Stock") and 5,000,000 shares are designated as Preferred Stock, $.01 per value per share ("Preferred Stock"). IN WITNESS WHEREOF, the Corporation has caused this Certifcate to be signed and attested by its duly authorized officers, this 20th day of April, 2000. LOGIMETRICS, INC. By: ----------------------- Norman M. Phipps President and Chief Operating Officer ATTEST: - ------------------------------ Erik S. Kruger, Secretary E-1 EXHIBIT F STOCKHOLDERS AGREEMENT dated July 10, 2000 among LogiMetrics, Inc. L-3 Communications Corporation and the Existing Holders named herein F-1 TABLE OF CONTENTS
Page ARTICLE I Representations and Warranties..............................................1 Section 1.1. Representations and Warranties of the Company.......................1 Section 1.2. Representations and Warranties of Existing Holders..................1 ARTICLE II Actions by Existing Holders.................................................2 Section 2.1. Amendment of Class A Debentures and Class B Debentures..............2 Section 2.2. Consent, Conversion of Securities and Waivers by Existing Holders..........................................................3 Section 2.3. Warrants Held by Existing Holders...................................4 ARTICLE III Management Covenants........................................................6 Section 3.1. Nomination and Election of Directors................................6 Section 3.2. Replacement of Directors............................................7 Section 3.3. Certain Covenants...................................................8 Section 3.4. Committees of the Board.............................................8 Section 3.5. Proxies.............................................................8 Section 3.7. SEA Section 14(f) and Rule 14f-1....................................8 ARTICLE IV Transfers..................................................................10 Section 4.1. Right of First Offer...............................................10 Section 4.2. Legend.............................................................11 ARTICLE V Miscellaneous..............................................................12 Section 5.1. Notices............................................................12 Section 5.2. Governing Law; Consent to Jurisdiction.............................14 Section 5.3. Assignment; Successors and Assigns; No Third Party Rights..........14 Section 5.4. Counterparts.......................................................14 Section 5.5. Titles and Headings................................................14 Section 5.6. Entire Agreement...................................................14 Section 5.7. Severability.......................................................15 Section 5.8. No Strict Construction.............................................15 Section 5.9. Acknowledgement....................................................15 Section 5.10. Effectiveness; Termination.........................................15 Section 5.11. Amendments.........................................................16 Section 5.12. Extension; Waiver..................................................16 Section 5.13. Enforcement........................................................16 Section 5.14. Technology Transfer Option.........................................17 Section 5.15. Legal Fees.........................................................17
F-2 LIST OF EXHIBITS EXHIBIT A Form of the Employment Agreement LIST OF SCHEDULES Schedule 1.2(a) Existing Holder Securities Schedule 2.3 Existing Holder Warrant Exchange Schedule 5.1 CRM Related Persons F-3 STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT, dated July 10, 2000 (this "Agreement"), among LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3 Communications Corporation, a Delaware corporation (the "Purchaser"), and the other signatories hereto (the "Existing Holders"). Capitalized and other defined terms used herein and not otherwise defined herein shall have the respective meanings specified the Purchase Agreement (defined below). W I T N E S S E T H: WHEREAS, the Purchaser has agreed to purchase shares of Common Stock of the Company, par value $.01 per share (the "Common Stock"), pursuant to the terms and conditions of the Purchase Agreement, dated as of even date herewith, between the Company and the Purchaser (the "Purchase Agreement"); WHEREAS, in connection with the Closing, and as a condition required by the Purchaser, the Existing Holders have or will have, immediately prior to the Closing, converted all of the their convertible debt into Common Stock and taken certain other actions as set forth herein which are required by the Purchase Agreement; WHEREAS, this Agreement is a condition (i) to the willingness of the Purchaser to effect the Closing under the Purchase Agreement and to consummate the transactions contemplated thereby, and (ii) to the willingness of the Existing Holders to give their consents to the Purchase Agreement and to the transactions contemplated thereby; NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I Representations and Warranties Section 1.1. Representations and Warranties of the Company. Each representation and warranty made by the Company in the Purchase Agreement and the other Transaction Documents, including, in any certificates delivered pursuant thereto, in each case, to the extent limited as therein set forth and by any schedules attached thereto, is herein incorporated by reference and made a part hereof, and hereby reaffirmed and restated to and for the benefit of each the other parties hereto, with the understanding that this Agreement is and shall be deemed a Transaction Document. Section 1.2. Representations and Warranties of Existing Holders. Each of the Existing Holders represents and warrants to each of the other parties hereto, as follows: (a) Such Existing Holder owns and, subject to this Agreement, has the complete and unrestricted power and the unqualified right to vote the Common Stock and/or Convertible Securities, listed by class and number of shares of Common Stock and/or Convertible Securities, F-4 set forth in Schedule 1.2(a) opposite such Existing Holder's name (the "Existing Holder Securities"). (b) Such Existing Holder has all requisite right, power and authority and full legal capacity to enter into this Agreement, to carry out such Existing Holder's respective obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by such Existing Holder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Existing Holder, and no other actions (corporate or otherwise) on the part of such Existing Holder or any other Person are necessary for such Existing Holder to enter into this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Existing Holder and constitutes a legal, valid and binding obligation of such Existing Holder enforceable against such Existing Holder in accordance with its terms. (c) The execution, delivery and performance of this Agreement by such Existing Holder, and the consummation of the transactions contemplated hereby, do not and will not (i) conflict with, or result in a breach of or default under, any terms or conditions of the organizational documents of any such Existing Holder that is an entity, (ii) violate any Applicable Law, (iii) result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a breach or a default) under, or give to any other Person any right of termination, amendment, acceleration or cancellation pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument to which such Existing Holder is a party or by which any of such Existing Holder's Common Stock or Convertible Securities or any of such Existing Holder's other assets may be bound, or (iv) result in the creation of any Encumbrance on such Existing Holder's Common Stock or Convertible Securities (other than the Encumbrances created by this Agreement). ARTICLE II Actions by Existing Holders Section 2.1. Amendment of Class A Debentures and Class B Debentures. (a) The Company represents and warrants to each of the other parties hereto that the Existing Holders collectively constitute the "Majority Holders" as defined in each of the Class A 13% Senior Subordinated Convertible Pay-in-Kind Debentures due July 29, 1999 and the Amended and Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due July 29, 1999 (respectively, the "Class A Debentures" and the "Class B Debentures" and, collectively, the "Debentures"). Each Existing Holder has the power and authority to vote and give its consent (as herein voted and given) to amend the Debentures pursuant to Section 9 of the Debentures. (b) Pursuant to Section 9 of the Class A Debentures, the Existing Holders and the Company hereby irrevocably and forever amend (and hereby vote and give their consent to such amendment) each of the Class A Debentures to delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the Class A Debentures, and (ii) any other provisions in respect of the Class F-5 A Debentures or any of the registration rights of each holder of the Class A Debentures and the registration obligations of the Company relating to the Common Stock issuable upon the conversion of any of the Class A Debentures. (c) Pursuant to Section 9 of the Class B Debentures, the Existing Holders and the Company hereby irrevocably and forever amend (and hereby vote and give their consent to such amendment) each of the Class B Debentures to delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the Class B Debentures, and (ii) any other provisions in respect of the Class B Debentures or any of the registration rights of each holder of the Class B Debentures and the registration obligations of the Company relating to the Common Stock issuable upon the conversion of any of the Class B Debentures. (d) The Existing Holders and the Company hereby irrevocably and forever amend the Acknowledgment, Consent and Waiver, dated as of March 7, 2000, among the Company and the other parties thereto (the "Acknowledgement, Consent and Waiver") to delete and terminate in their entirety (i) Section 3 of the Acknowledgment, Consent and Waiver and (ii) any other provision in respect of the registration obligations of the Company and the registration rights of the other parties thereunder. (e) The amendments pursuant to Section 2.1(b), 2.1(c) and 2.1(d) shall be effective immediately prior to the conversion of the Debentures held by the Existing Holders pursuant to Section 2.2. Section 2.2. Consent, Conversion of Securities and Waivers by Existing Holders. In order to induce the Purchaser to execute and deliver the Purchase Agreement and to consummate the transactions contemplated thereby, effective immediately prior to the Closing, each Existing Holder hereby irrevocably and forever: (a) consents to the execution and delivery by the Company of the Purchase Agreement and the other Transaction Documents, and to the consummation of the transactions contemplated thereunder solely upon the terms and conditions therein set forth; (b) except as provided in Section 2.3, converts all Existing Holder Securities consisting of Convertible Securities held by such holder into Common Stock upon the terms of such securities, except that the Class A Debentures shall be converted at the modified conversion price of $0.3451 per share (instead of the existing conversion price of approximately $0.4167); e.g., the holder of a Class A Debenture in the principal amount of $42,586 will receive 123,402 shares of Common Stock upon conversion (instead of 102,207 shares of Common Stock); (c) extends the maturity date of the outstanding principal amount of the Legacy Group I Loans (as defined in the Acknowledgement, Consent and Waiver) made by such holder, if any, to the earlier of (i) the fifth day following the consummation of a Public Offering and (ii) June 30, 2001, provided that (A) all accrued and unpaid interest and fees under and expenses related to the Legacy Group I Loans (as defined in the Acknowledgement, Consent and Waiver) shall have been paid in full at Closing with the Proceeds (it being understood and agreed by the parties hereto that execution and delivery of this Agreement by each Existing Holder constitutes acknowledgment by such Existing Holder that payment of the amounts set forth in the F-6 Disbursement Letter in accordance with the instructions set forth therein constitutes full payment of such accrued and unpaid interest, fees and expenses owing to such Existing Holder), and (B) all of the Legacy Group II Loans (as defined in the Acknowledgement, Consent and Waiver) shall have been paid in full, together with all accrued and unpaid interest and fees thereon and expenses related thereto, at Closing with the Proceeds (it being understood and agreed by the parties hereto that execution and delivery of this Agreement by each Existing Holder constitutes acknowledgment by such Existing Holder that payment of the amounts set forth in the Disbursement Letter in accordance with the instructions set forth therein constitutes full payment of such Legacy Group II Loans and full payment of such accrued and unpaid interest, fees and expenses owing to such Existing Holder); (d) waives any anti-dilution or similar rights to which such Existing Holder may be entitled in respect of any Existing Holder Securities owned by such Existing Holder, whether beneficially or of record, as a result of the Purchase Agreement or any Transaction Documents or any transaction contemplated by the Purchase Agreement or any of the Transaction Documents, including, without limitation, the purchase of Common Stock by the Purchaser pursuant to the Purchase Agreement or by an investment bank or banks as contemplated by Section 5.1 of the Purchase Agreement; (e) waives the right to exercise any anti-dilution or other similar right to which the Existing Holder may be entitled in respect of any securities owned by such holder, whether beneficially or of record, as a result of any previous transactions in which such a right may have arisen; (f) agrees that each of the Stockholder Agreement, dated as of July 29, 1997, by and among the Company and the other parties thereto and Section 5.1 of the Unit Purchase Agreement, dated as of March 7, 1996, by and between the Company and Cerberus Partners L.P. is terminated upon the execution and delivery of the Purchase Agreement by the respective parties thereto and shall be of no further force and effect thereafter (it being understood and agreed that the Company also hereby irrevocably and forever agrees that such Stockholder Agreement, dated as of July 29, 1997, is so terminated and shall be of no further force and effect thereafter); (g) waives application of any provision of any agreement or instrument to which the Company or any of its Subsidiaries (as defined in the Purchase Agreement) is a party or by which any of their respective assets is bound, that conflicts with any provision of any Transaction Document; (h) consents to the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby; and (i) waives any default, event of default or "Event of Default" of or under any agreement or instrument to which such Existing Holder and the Company or any of the Company's Subsidiaries is a party or by which any of their respective properties are bound. F-7 Section 2.3. Warrants Held by Existing Holders. (a) Effective immediately prior to the Closing, the Existing Holders have irrevocably and forever exchanged any and all Existing Holder Securities consisting of warrants for Common Stock held by such Existing Holder, if any ("Existing Holder Warrants") for shares of Common Stock of the Company on the terms set forth on Schedule 2.3 (the "Existing Holder Warrant Exchange"). (b) The Company represents and warrants to the other parties hereto that (i) the Existing Holder Warrant Exchange has been approved by all requisite corporate action on the part of the Company and hereby confirms, ratifies and agrees with the Existing Holder Warrant Exchange, and (ii) neither the Existing Holder Warrant Exchange nor any of the transactions contemplated thereby requires registration under the provisions of the Securities Act or any applicable state securities or "blue sky" laws. (c) Each Existing Holder that has participated in the Existing Holder Warrant Exchange hereby represents and warrants to the other parties hereto as follows: (i) Such Existing Holder hereby confirms, ratifies and agrees with the Existing Holder Warrant Exchange with respect to itself or himself. (ii) Such Existing Holder has received copies of the SEC Documents and has reviewed therein the discussion of risk factors relating to the Company. In addition, such Existing Holder has had an opportunity to ask questions of and receive answers from representatives of the Company concerning the business of the Company, its condition and prospects (financial and other) and the terms and conditions of the Existing Holder Warrant Exchange. (iii) Such Existing Holder is an "Accredited Investor" as such term is defined in Rule 501 of the rules and regulations of the Commission promulgated under the Securities Act. (iv) Such Existing Holder has acquired the Common Stock issued to it or him in connection with the Existing Holder Warrant Exchange (the "Exchange Shares") for its own account for investment only and not for or with a present view to resale or distribution other than in transactions that are in compliance with the Securities Act and applicable state securities laws. Such Existing Holder has not entered into any contract, undertaking, agreement or arrangement with any Person to sell, transfer or pledge to such Person or anyone else any of the Exchange Shares, and such Existing Holder has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. (v) Such Existing Holder has the financial ability to bear the economic risk of losing its entire investment in the Exchange Shares, is prepared to bear the economic risk of its investment therein for an indefinite time and can afford to sustain a complete loss of its investment therein. (vi) Such Existing Holder understands that the Exchange Shares constitute restricted securities within the meaning of Rule 144 promulgated under the Securities Act, and that none of the Exchange Shares or any interest therein may be sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act or in a transaction exempt from registration under the Securities Act, and understands the meaning and effect of such restriction. F-8 (vii) Such Existing Holder acknowledges that the Exchange Shares may not be transferred, and the Company shall not be required to register any transfer thereof on the books of the Company, unless such transfer is made pursuant to an effective registration statement, in compliance with Rule 144, or pursuant to another exemption under the Securities Act; provided, however, that the Company shall not be required to register any transfer if any securities are offered or sold otherwise than pursuant to an effective registration statement or pursuant to Rule 144 unless the Company shall have received an opinion of counsel to such Existing Holder, reasonably satisfactory to the Company, that such transfer does not require registration under the Securities Act or applicable state securities laws. (viii) No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from such Existing Holder in connection with the Existing Holder Warrant Exchange or any of the transactions contemplated hereby. ARTICLE III Management Covenants Section 3.1. Nomination and Election of Directors. (a) The Board has set the number of directors at three (to be increased to seven immediately after SEA Section 14(f) and Rule 14f-1 are complied with) and, the parties hereto agree to exercise their best efforts to ensure that the composition of the Board shall be determined as follows: (i) the Purchaser shall have the right to select and nominate, from time to time, a number of individuals equal to the excess of seven over the number of Non-Purchaser Directors that the Existing Holders are entitled to select and nominate pursuant to clause (ii) below (the "Purchaser Directors"), among whom shall include the Chairman of the Board, so long as the Purchaser continues to be the owner of at least 25% of the outstanding Common Stock on a Fully Diluted Basis; provided, however, that, until such time as Section 14(f) of the Securities Exchange Act of 1934, as amended ("SEA Section 14(f)") and Rule 14f-1 promulgated thereunder ("Rule 14f-1") are complied with by the Company, none of the Purchaser Directors shall take office; (ii) the Existing Holders shall have the right to select and nominate by a Majority Vote of the Existing Holders, from time to time, (A) three individuals, so long as the Existing Holders continue to be the beneficial owners of at least 15% of the outstanding Common Stock on a Fully Diluted Basis, or (B) two individuals, so long as the Existing Holders continue to be the owners of at least 10% of the outstanding Common Stock on a Fully Diluted Basis; (iii) upon selection and nomination of any Purchaser Directors pursuant to clause (i) above, the Purchaser shall provide each of the Company and the Existing Holders with a notice signed by the Purchaser indicating such selected and nominated Purchaser Directors; F-9 (iv) upon selection and nomination of the directors pursuant to clause (ii) above (the "Non-Purchaser Directors"), the designated representative of the Existing Holders shall provide each of the Company and the Purchaser with a notice signed by those Existing Holders who have provided the Majority Vote of the Existing Holders indicating such selected and nominated Non-Purchaser Directors; the initial designated representative of the Existing Holders shall be Eugene A. Trainor, III; the designated representative of the Existing Holders may be changed from time to time upon notice to the Company and the Purchaser signed by those Existing Holders who have provided the Majority Vote of the Existing Holders; (v) so long as the Purchaser is entitled to select and nominate Purchaser Directors pursuant to clause (i) above, the Purchaser shall at all times have the right, exercisable by the Purchaser in its sole discretion, to remove, with or without cause, one or more of the Purchaser Directors, and to replace such removed directors. If necessary to effect such removal, each of the Existing Holders shall vote for such removal at a meeting of the stockholders or shall execute a written consent to such effect without a meeting and consents to the prompt holding of a special meeting for that purpose; and (vi) so long as the Existing Holders are entitled to select and nominate the Non-Purchaser Directors pursuant to clause (ii) above, the Existing Holders shall at all times have the right, exercisable by a Majority Vote of the Existing Holders in their sole discretion, to remove, with or without cause, one or more of the Non-Purchaser Directors. If necessary to effect such removal, the Purchaser shall vote for such removal at a meeting of the stockholders or shall execute a written consent to such effect without a meeting and consents to the prompt holding of a special meeting for that purpose. (b) The Board has elected, effective upon the Closing having occurred, as the members of the Board the following three individuals as the initial Non-Purchaser Directors: Jean-Francois Carreras, John Langner and Norman Phipps. (c) Immediately after SEA Section 14(f) and Rule 14f-1 are complied with, the parties hereto will cause the following four individuals to be elected to the Board as the initial Purchaser Directors: Frank Lanza, Robert LaPenta, Christopher C. Cambria and John Mega. (d) The execution and delivery of this Agreement by the parties hereto shall be deemed to satisfy the notice requirements under Section 3.1(a)(iii) and Section 3.1(a)(iv). (e) As used herein, the "Majority Vote of Existing Holders", at any time, means the written action or approval of the Existing Holders that hold a majority of the Common Stock Equivalents then held by all Existing Holders. (f) As used herein, "Common Stock Equivalents" means, with respect to any holder of the Company's securities, the number of shares of Common Stock owned by such holder and the number of shares of Common Stock into or for which any Convertible Securities owned by such holder shall be convertible, exchangeable or exercisable as of the date of determination thereof. Section 3.2. Replacement of Directors. In the event of the death, resignation or removal of a Purchaser Director, the Company shall use its best efforts to, and the Existing F-10 Holders shall cause the Non-Purchaser Directors to, elect a person designated by the remaining Purchaser Directors as the successor to such Purchaser Director. In the event of the death, resignation or removal of a Non-Purchaser Director, the Company shall use its best efforts to, and the Purchaser shall cause the Purchaser Directors to, elect a person designated by the remaining Non-Purchaser Directors as the successor to such Non-Purchaser Director. Section 3.3. Certain Covenants. Each of the Purchaser and the Existing Holders shall vote, in person or by proxy, all shares of Common Stock over which such party may have or share voting power, at any annual or special meeting of stockholders of the Company called for the purpose of voting on the election of directors, or to execute written consents of stockholders without a meeting with respect to the election of directors, to vote in favor of the election of each director selected and nominated in accordance with Section 3.1 and against any other nominees and to take all other necessary and appropriate actions within such party's control to cause such events to occur. The Company shall use its best efforts to cause persons to be so nominated, elected or removed, as the case may be, in accordance with the applicable provisions of this Agreement. Each of the Purchaser and the Existing Holders shall vote all shares of Common Stock over which such party may have or share voting power and shall take all other actions within such party's control necessary and appropriate (including removing any director) to ensure that the Company's certificate of incorporation and by-laws do not at any time conflict with the provisions of this Agreement and shall not vote to approve (or consent to the approval of) any amendment to the Company's certificate of incorporation or by-laws which would be inconsistent with this Agreement. Section 3.4. Committees of the Board. If one or more committees of the Board are in existence, such committees shall be constituted to include at least one Non-Purchaser Director. Section 3.5. Proxies. Neither the Purchaser nor any Existing Holder shall give any proxy or power of attorney to any Person in respect of Common Stock Equivalents owned by the Purchaser or any Existing Holder that permits the holder thereof to vote in his discretion on any matter that may be submitted to the Company's stockholders for their consideration and approval, unless such proxy or power of attorney is made subject to and is exercised in conformity with the provisions of this Agreement. Section 3.6. Executive Officers. The Company shall have entered into an employment agreement in substantially the form of Exhibit A attached hereto with each of Norman Phipps and Charles Brand (collectively, the "Employment Agreements"). Subject to the terms and conditions of the Employment Agreements, each of Norman Phipps and Charles Brand shall serve at the pleasure of the Board, and the Board shall have the absolute right, in its sole discretion, to remove and appoint officers, with or without cause, subject to all Applicable Laws. Section 3.7. SEA Section 14(f) and Rule 14f-1. (a) The Company shall promptly comply with SEA Section 14(f) and Rule 14f-1 in connection with the Transaction Documents. (b) From and after the Closing, until such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents, the Company will operate (and F-11 will cause its Subsidiaries to operate) the business of the Company and its Subsidiaries in the ordinary course consistent with past practice. Without limiting the generality of the foregoing, except to the extent expressly permitted or contemplated by the Transaction Documents, the Company will not take (and will cause its Subsidiaries not to take) any of the following actions without the prior written consent of the Purchaser: (i) grant (or commit to grant) any increase in the compensation (including incentive or bonus compensation) of any employee of the Company or institute, adopt or amend (or commit to institute, adopt or amend) any compensation or benefit plan, policy, program or arrangement or collective bargaining agreement applicable to any employee of the Company; (ii) enter into any new employment agreement or collective bargaining agreement or commitment (including any commitment to pay retirement or other benefits) to or with any of the employees of the Company; (iii) except as contemplated by the Letter of Intent, dated February 17, 2000, between the Company and Signal Technology Corporation and the other agreements previously entered into in connection therewith, sell, assign, license, dispose of, or transfer any of the assets of the Company having a fair market value of at least $10,000 individually or $50,000 in the aggregate other than sales of Inventories in the ordinary course of business consistent (in kind and amount) with past practice, or incur any liabilities or obligations (including liabilities with respect to indebtedness, capital leases or guarantees thereof) in excess of $50,000 individually or in the aggregate; (iv) (A) enter into or terminate any lease of real estate, (B) create any Encumbrances on any of the assets of the Company except for Permitted Encumbrances, or (C) make any modifications of or changes in or terminate any existing Contract other than as may be required to consummate the transactions contemplated by the Transaction Documents; (v) make any capital expenditure or capital expenditure commitment (other than in an emergency) in excess of $50,000 in the aggregate; (vi) repay or prepay any liability or obligation prior to its stated maturity; (vii) make, give or grant any bid or proposal, or any customer option relating to any Contract (A) involving an amount in excess of $50,000 (or amend, supplement or terminate any existing bid or proposal, or any existing customer option relating to any Contract, involving an amount in excess of $50,000), (B) involving a loss to the Company, or (C) not in the ordinary course of business, consistent with past practice; (viii) declare, authorize, make or pay any dividend or distribution on any securities of the Company or any of its Subsidiaries; (ix) issue (or commit to issue) any capital stock or Convertible Securities of the Company or any of its Subsidiaries except for shares of Common Stock issuable upon (A) upon the conversion of Convertible Securities outstanding prior to the date hereof, F-12 (B) upon the exercise of unissued stock options under the Plan, or (C) as contemplated by Sections 4.2 and 4.3 of the Purchase Agreement; (x) amend the certificate of incorporation or by-laws of the Company or any of its Subsidiaries; (xi) take any action or omit to take any action that would cause any of the representations or warranties of the Company contained in any of the Transaction Documents not to be true and correct at any time between the date hereof and such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents; and (xii) agree to take any of the actions referred to in clauses (i) through (xi) above. (c) Notwithstanding any provisions in this Agreement or any other Transaction Document, until such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents and the Purchaser Directors have taken office as directors, none of the Proceeds in excess of $5,000 may be transferred from the Company to a third party without the prior written consent of the Purchaser. (d) Each of the Existing Holders will use such Existing Holder's reasonable best efforts to take all actions within such Existing Holder's control to cause the Company and its Subsidiaries to comply with Section 3.7(b). ARTICLE IV Transfers Section 4.1. Right of First Offer. (a) At such time as the Purchaser ceases to be the owner of at least 25% of the Common Stock on a Fully Diluted Basis, then the provisions of this Section 4.1 shall cease to have any further force and effect. (b) If at any time and from time to time after the Closing one or more of the Existing Holders holding or having the power to Transfer 10% or more of the Common Stock Equivalents (collectively, the "Major Selling Stockholder") wishes to Transfer in a single transaction or a series of related transactions all or any part of such Major Selling Stockholder's Convertible Securities or Common Stock (or any interest therein) (i) representing 10% or more of the Common Stock Equivalents to any Person (excluding normal market transactions where the Major Selling Stockholder does not know the identity of the purchaser in any such normal market transaction), or (ii) representing a percentage of the Common Stock Equivalents which (to the actual knowledge of Major Selling Stockholder), together with the holdings of Common Stock Equivalents by a Person to which the Transfer is proposed to be made, would result in such Person owning 10% or more of the Common Stock Equivalents after giving effect to the Transfer (in either case, the "Offered Stock"), then such Major Selling Stockholder shall, prior to consummating any such desired Transfer, give a written notice to the Purchaser (at the addresses for Offer Notices set forth in Section 5.1), which notice shall include the proposed offer price per F-13 Common Stock Equivalent being offered (the "Offer Price"), the payment terms and the telecopy number to which any Reply Notice is to be sent (an "Offer Notice"). (c) The Purchaser shall have the right to purchase, at the Offer Price and on all the other terms and conditions set forth in the Offer Notice, all (but not less than all) the Offered Stock pursuant to this Section 4.1. (d) The Purchaser shall be irrevocably deemed to have rejected the offer contained in the Offer Notice unless the Purchaser provides the Major Selling Stockholder with written notice of acceptance of such offer by telecopy to the person that sent the Offer Notice at the telecopy number specified in the Offer Notice to which any Reply Notice is to be sent (a "Reply Notice") within one business day after the Offer Notice is deemed to be given by the Major Selling Stockholder pursuant to the provisions hereof. A Reply Notice shall constitute an irrevocable agreement by the Purchaser to purchase all, but not less than all, of the Offered Stock on the terms specified in the Offer Notice. No later than one business day after the Reply Notice is given, the Purchaser shall deliver a certified check or checks in the amount of the aggregate Offer Price to the Major Selling Stockholder against delivery of duly endorsed certificates representing the Offered Stock to be purchased. Such Offered Stock shall be delivered free and clear of all Encumbrances other than those imposed by this Agreement and excluding any registration requirements imposed by the Securities Act and applicable state securities or blue sky laws. (e) If the Purchaser does not elect to purchase all the Offered Stock, the Major Selling Stockholder shall have the right to Transfer all or a portion of the Offered Stock within 90 days after the Offer Notice is received by the Major Selling Stockholder at a price not lower than 90% of the Offer Price, and on terms and conditions (with the exception of price) no more favorable to the transferee(s) than those contained in the Offer Notice; provided, however, if the Major Selling Stockholder does not Transfer all the Offered Stock within such 90-day period, the Purchaser's rights with respect to any of the remaining Offered Stock and the procedures under this Section 4.1 shall recommence in their entirety; provided further, however, nothing stated in this Section 4.1 or elsewhere in this Agreement shall limit in any way the right of such Major Selling Stockholder or any other Existing Holder to Transfer at any time any of such party's Common Stock or Common Stock Equivalents, including any Offered Stock to which this Section 4.1(e) applies in a transaction not subject to Section 4.1(b). Section 4.2. Legend. Each of the Purchaser and the Existing Holders acknowledges that all the certificates now or hereafter representing any Common Stock or Common Stock Equivalents held by such Person shall, to the extent required by applicable law or regulation, be stamped or otherwise imprinted with the following (or a substantially similar) legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION UNLESS AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. F-14 Any such legend shall be removed upon either (a) registration under the Securities Act of the securities represented by the certificate(s) in question, or (b) receipt of a legal opinion reasonably satisfactory to the Company to the effect that such legend is not required by the Securities Act to be placed on the certificate(s) in question. ARTICLE V Miscellaneous Section 5.1. Notices. (a) Subject to the provisions of Section 4.1 applicable to an Offer Notice and a Reply Notice, which provisions shall supersede any conflicting provision of this Article V, all notices, requests, claims, demands, approvals, consents, waivers and other communications hereunder (each a "Notice") shall be in writing and shall be delivered by hand, delivered by courier, deposited in the mail (registered or certified mail, postage prepaid, return receipt requested), or sent by facsimile transmission upon receipt of a confirmed transmission report, as follows: If to the Company: LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4130 Attention: President with copies to: Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068-1791 Tel: (973) 597-2500 Fax: (973) 597-2400 Attention: John D. Hogoboom, Esq.; L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.
F-15 If to the Purchaser (except, in the case of L-3 Communications Corporation any Offer Notice) Narda Microwave 435 Moreland Road Hauppage, NY 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: John S. Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq. If to the Purchaser (in the case of any Offer L-3 Communications Corporation Notice) 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5353 Attention: Robert V. LaPenta with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq. If to Cramer Rosenthal McGlynn, Inc., or any of the Existing Holders listed on Schedule 5.1 (the "CRM Related Persons"): To such Person c/o Cramer Rosenthal McGlynn, Inc. 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 Attention: Eugene A. Trainor, III, Executive Vice President With copies to:
F-16 Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 Tel: (212) 940-8800 Fax: (212) 940-8776 Attention: Dan Harris, Esq.
If to any other Existing Holder: at the address set forth on the signature pages of this Agreement. Any party hereto, by Notice given to the other party hereto in accordance with this Section 5.1, may change the address or facsimile transmission number to which such Notices are to be sent to such party. All Notices shall be deemed effective and given upon confirmed receipt or refusal of receipt. Section 5.2. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such court and irrevocably waives any claim that any such suit, and action or proceeding brought in any such court has been brought in an inconvenient forum. Section 5.3. Assignment; Successors and Assigns; No Third Party Rights. This Agreement may not be assigned by the Company, the Purchaser or any Existing Holder, except to any of its controlled Affiliates (provided that such controlled Affiliate continues to remain at all times thereafter a controlled Affiliate of the assigning party) or to any successor-in-interest to substantially all of its business. In the event of any permitted assignment of this Agreement, the assigning party shall not be released from such party's obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. This Agreement shall be for the sole benefit of the parties to this Agreement and their respective successors, permitted assigns and legal representatives and is not intended, nor shall be construed, to give any Person, other than the parties hereto and their respective successors, permitted assigns and legal representatives, any legal or equitable right, remedy or claim hereunder. Section 5.4. Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in multiple counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument. F-17 Section 5.5. Titles and Headings. The titles and headings in this Agreement are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. Section 5.6. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the matters covered hereby and supersedes all previous written, oral or implied agreements or understandings between them with respect to such matters. Section 5.7. Severability. The invalidity of any portion hereof shall not affect the validity, force or effect of the remaining portions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by law. Section 5.8. No Strict Construction. Each of the parties hereto acknowledges that this Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed against either party. Section 5.9. Acknowledgement. Each of the parties hereto acknowledges that the representations and warranties contained in this Agreement and in any document or instrument delivered to such party pursuant hereto or in connection herewith shall not be deemed waived or otherwise affected by any investigation by another party hereto, or such party's officers, directors, employees, counsel, accountants, advisors, representatives and agents. Section 5.10. Effectiveness; Termination. (a) This Agreement shall become effective only upon the Closing, and shall terminate upon the earliest to occur of (i) the consummation of the Public Offering, (ii) with respect to Purchaser or any Existing Holder, when such party shall have irrevocably Transferred all of such party's interests in the Common Stock and Convertible Securities of the Company to one or more Person(s) that are not Affiliates of the Purchaser or such Existing Holder, as the case may be, (iii) the consummation of a Company Sale, to the extent approved by a Special Director Majority or a Special Stockholder Majority in accordance with Section 4.4 of the Purchase Agreement, and (iv) the written mutual consent of the Purchaser and such of the Existing Holders as would then be collectively entitled to cast the Majority Vote of Existing Holders. (b) For purposes of this Section 5.10, the term "Company Sale" shall mean any of (i) a Transfer of all or substantially all of the assets of the Company to any Person, or group of related Persons, other than to a wholly owned Subsidiary of the Company, in one transaction or a series of related transactions, (ii) a merger, consolidation, recapitalization, share exchange or reorganization of the Company in which the holders of voting stock of the Company immediately prior thereto will not own at least 50% of the voting shares of the continuing or surviving entity (whether or not the Company) immediately thereafter, (iii) the sale or other disposition of voting stock of the Company representing 50% or more of the total voting power of the Company's outstanding capital stock (including Common Stock Equivalents) in one transaction or a series of related transactions to any Person, or group of related Persons, other than a Stockholder or any of its Affiliates, (iv) the issuance of additional shares of voting stock F-18 (including, but not limited to, the issuance of rights to purchase shares of voting stock), if, as a result thereof, any Person, or group of related Persons, other than the Purchaser and/ or any of its Affiliates, would beneficially own 50% or more of the total voting power of the Company's outstanding capital stock in one transaction or a series of related transactions, (v) the formation of any form of partnership, joint venture, association or other business organization or strategic alliance, in which the Company would participate if, as a result thereof, all or substantially all of the assets of the Company would be Transferred to any Person not wholly owned by the Company or one or more wholly owned Subsidiaries of the Company, and (vi) to the extent not otherwise referred to in clauses (i) through (v) of this Section 5.10, any event referred to in clauses (A) or (B) of Section 4.4(a) of the Purchase Agreement. Section 5.11. Amendments. This Agreement may not be amended or modified except by an instrument in writing signed on behalf of the Company, the Purchaser and such of the Existing Holders as would then be collectively entitled to cast the Majority Vote of Existing Holders. Section 5.12. Extension; Waiver. Subject to the limitations of Section 4.4 of the Purchase Agreement, any party hereto may (a) extend the time for performance of any of the obligations or other acts of any of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of any of the other parties hereto contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements of any of the other parties hereto or satisfaction of any of the conditions to such party's obligations contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of a party hereto to assert any of such party's rights hereunder shall not constitute a waiver of such rights. Section 5.13. Enforcement. (a) Each party hereto acknowledges that it would be impossible to determine the amount of damages that would result from any breach of any of the provisions of this Agreement, that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, each other party shall, in addition to any other rights or remedies which such party may have, be entitled to obtain such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of, or restrain any party from violating, any of such provisions. In connection with any action or proceeding for injunctive relief, each party hereto hereby waives the claim or defense that a remedy at law alone is adequate and, to the maximum extent permitted by law, consents to have each provision of this Agreement specifically enforced against such party, without the necessity of posting bond or other security against such party, and consents to the entry of injunctive relief against such party enjoining or restraining any breach or threatened breach of such provisions of this Agreement. (b) If any party hereto initiates any legal action arising out of or in connection with this Agreement, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable costs and expenses (including attorneys' fees and expert witness fees and expenses) incurred by the prevailing party in connection therewith. F-19 (c) The Non-Purchaser Directors shall have the right to enforce the covenants of the Purchaser contained in this Agreement and the other Transaction Documents on behalf of the Company. (d) Notwithstanding anything to the contrary contained in this Agreement or the Purchase Agreement or as otherwise elsewhere provided, the Existing Holders shall have the right to enforce Section 4.4 of the Purchase Agreement on behalf of the Company if the Non-Purchaser Directors fail so to enforce such Section 4.4; provided, however, this right to enforce such Section 4.4 under this Section 5.13(d) shall exist only so long as the Existing Holders continue to be the owners of at least 10% of the outstanding Common Stock on a Fully Diluted Basis. Section 5.14. Technology Transfer Option. Notwithstanding Section 1.6(a) of the Purchase Agreement, until the exercise of the Technology Option pursuant to Section 1.6(a) of the Purchase Agreement, the Company and the Existing Holders acknowledge and agree that the Purchaser may conduct its business and utilize the Technology in any manner as the Purchaser sees fit and at any time and from time to time may sell, transfer, license, lease, create Encumbrances on or otherwise dispose of any (each a "Disposition") of the Technology as it sees fit in the ordinary course of its business (it being understood and agreed that upon the occurrence of any Disposition, the Technology subject to such Disposition thereafter will no longer be subject to the Technology Option). Section 5.15. Legal Fees. Each party shall bear their own legal fees and expenses in connection with the negotiation, execution and delivery of this Agreement, any other Transaction Document and any ancillary documents thereto. Notwithstanding the foregoing, the Company agrees to pay the legal fees and expenses incurred by Cramer Rosenthal McGlynn, LLC ("CRM, LLC") not to exceed $115,000. Each Existing Holder hereby irrevocably and forever waives any right under any document that obligates the Company to pay any legal fees or expenses incurred by such Existing Holder (or to reimburse such Existing Holder for any such legal fees or expenses), except to the extent set forth in the next preceding sentence. [Signature Pages Follow] F-20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. LOGIMETRICS, INC. By:___________________________________________ Name: Norman M. Phipps Title: President L-3 COMMUNICATIONS CORPORATION By:___________________________________________ Name: Christopher C. Cambria Title: Vice-President ______________________________________ Norman M. Phipps 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 F-21 ______________________________________ Charles S. Brand 20 Meridian Way Eatontown, New Jersey 07724 Tel: (732) 935-7150 Fax: (732) 935-7151 LFH, LLC By:___________________________________________ Name: Charles Brand Title: 175 Boundary Road Colts Neck, NJ 07722 Tel: (732) 431-4175 Fax: (732) 431-4108 ______________________________________ Gerald B. Cramer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRAMER ROSENTHAL McGLYNN LLC By:___________________________________________ Name: Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 F-22 L.A.D. EQUITY PARTNERS, L.P. By: Flint Investments, Inc. Its General Partner By:___________________________________________ Name: Arthur J. Pergament Title: Vice President 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ______________________________________ Edward J. Rosenthal, Keogh 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM 1998 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc., Its Managing Member By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 F-23 CRM 1997 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc. Its Managing Member By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM RETIREMENT PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer F-24 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM MADISON PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM U.S. VALUE FUND, LTD. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 EURYCLEIA PARTNERS, L.P. By: Marchessini & Company, Its General Partner By:___________________________________________ Name: Rona Trokie Title: Vice President F-25 745 Fifth Avenue, Suite 1400 New York, New York 10151 Tel: (212) 752-4300 Fax: (212) 752-4309 A.C. ISRAEL ENTERPRISES, INC. By:___________________________________________ Name: Jay Howard Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM-EFO PARTNERS, L.P. By: CRM-EFO Investments, LLC Its General Partner By: CRM Management, Inc., Its Managing Member By:___________________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 F-26 ______________________________________ Gregory Manocherian New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 PAMELA EQUITIES CORP. By:___________________________________________ Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 WHITEHALL PROPERTIES, LLC By:___________________________________________ Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 F-27 KABUKI PARTNERS ADP, GP By:___________________________________________ Name: Gregory Manocherian Title: General Partner 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 McGLYNN FAMILY PARTNERSHIP L.P. By:___________________________________________ Name: Ronald H. McGlynn Title: General Partner 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ______________________________________ Richard S. Fuld, Jr. By: Cramer Rosenthal McLynn, Inc. Attorney-in-Fact 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ______________________________________ Fred M. Filoon 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 F-28 ______________________________________ Eugene A. Trainor, III 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 ______________________________________ Mark B. Fisher 102 E. 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 MBF CAPITAL CORPORATION By:___________________________________________ Name: Mark B. Fisher Title: President MBF BROADBAND SYSTEMS, L.P. By: MBF Broadband Systems, Inc., Its General Partner By:___________________________________________ Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 F-29 PHINEAS BROADBAND SYSTEMS By: MBF Broadband Systems, Inc. Its General Partner By:___________________________________________ Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 CERBERUS PARTNERS, L.P. By: Cerberus Associates, LLC, Its General Partner By:___________________________________________ Name: Seth Plattus Title: Managing Director 450 Park Avenue 28th Floor New York, New York 10022 Tel: (212) 891-2100 Fax: (212) 421-2947 F-30 ______________________________________ Steve Dinetz 1034 Skyland Drive Zephyr Cove, NV 89448 Tel: (702) 588-0343 Fax: (702) 588-1433 F-31 EXHIBIT A Form of the Employment Agreement F-32 Schedule 1.2(a) Existing Holder Securities F-33 Schedule 5.1 CRM Related Persons Cramer Rosenthal McGlynn, LLC Edward J. Rosenthal, Keogh CRM 1997 Enterprise Fund, LLC CRM 1998 Enterprise Fund, LLC CRM Partners, L.P. CRM Retirement Partners, L.P. CRM Madison Partners, L.P. CRM U.S. Value Fund, LTD. CRM-EFO Partners, L.P. McGlynn Family Partnership L.P. Gerald B. Cramer Fred M. Filoon F-34 EXHIBIT G [Letterhead of WHITMAN BREED ABOTT & MORGAN LLP] 212-351-3000 July 10, 2000 LogiMetrics, Inc. 50 Orville Drive Bohemia, NY 11716 Re: LogiMetrics, Inc. Ladies and Gentlemen: We have acted as special counsel to L-3 Communications Corporation, a Delaware corporation ("L-3"). This opinion is being delivered pursuant to Section 6.2(h) of the Purchase Agreement, dated July 10, 2000 (the "Agreement"), between L-3 and LogiMetrics, Inc., a Delaware corporation ("LogiMetrics"). All capitalized terms used herein and not defined herein shall have the respective meanings ascribed to them in the Agreement. The Agreement provides, among other things, for the issuance and sale by LogiMetrics to L-3 of the Purchaser Shares at the Closing, as well as the issuance and sale of additional shares of the Common Stock of LogiMetrics after the Closing, as described more particularly in the Agreement. We have examined (i) the Agreement, (ii) the Secured Promissory Note, dated the date hereof (the "Secured Promissory Note"), (iii) the Stock Pledge Agreement, dated the date hereof (the "Stock Pledge Agreement"), and (iv) the originals or certified, photostatic or facsimile copies of such records and other documents as we have deemed relevant and necessary as the basis of the opinions set forth below. The Agreement, the Secured Promissory Note and the Stock Pledge Agreement are herein sometimes referred to collectively as the "Transaction Documents". In such examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, photostatic or facsimile copies and the authenticity of the originals of such copies. As to various questions of fact material to the opinions rendered herein, we have relied upon the representations and warranties in the documents examined by us and upon certificates G-1 and oral statements and other information of public officers and officers of L-3. We have assumed the due execution and delivery, pursuant to due authorization, of the documents that we have examined by each party thereto (including L-3), that each such party (including L-3) has the full power, authority and legal right to enter into and perform its obligations under each such document to which it is a party, that each such document constitutes the valid and legally binding obligation of each party (other than, in the case of the Transaction Documents, L-3), enforceable against such party in accordance with its terms, and that all necessary consents, approvals, authorizations, registrations, declarations and filings (governmental or otherwise) and all other conditions precedent with respect to the legal and valid execution and delivery of, and performance under, the documents that we have examined by each party thereto (including L-3, except to the extent set forth below in Paragraph No. 1) have been made or satisfied or have occurred and are in full force and effect. The phrase "to our knowledge" (or words of similar import) is limited to the actual knowledge, without independent inquiry, of the lawyers presently at our firm who have performed substantive legal services in connection with the issuance of this opinion. No other inference as to our knowledge should be drawn from our representation of L-3. Based upon the foregoing, and subject to the limitations, qualifications and assumptions set forth herein, we are of the opinion that: 1. To our knowledge, neither the execution and delivery by L-3 of any of the Transaction Documents nor the performance by L-3 of its obligations thereunder requires any consent, approval or authorization of, or any registration, declaration or filing with, (a) the Secretary of State of the State of Delaware under the General Corporation Law of the State of Delaware (the "DGCL"), or (b) the State of New York or the United States of America or any of their respective agencies, other than (i) as have been obtained or made, and (ii) those required under or pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1977, as amended, or applicable Federal or state securities laws, in each case as to which no opinion is expressed. 2. The Transaction Documents constitute legal, valid and binding obligations of L-3, enforceable in accordance with their respective terms. The opinions set forth above are subject to the qualification that we express no opinion as to the validity, binding effect or enforceability of any provision of any of the Transaction Documents related to (1) forum selection or submission to jurisdiction (including, without limitation, any waiver of any objection to venue in any court or of any objection that a court is an inconvenient forum) to the extent that the validity, binding effect or enforceability of any such provision is to be determined by any court other than a court of the State of New York, or (2) choice of governing law to the extent that the validity, binding effect or enforceability of any such provision is to be determined by any court other than a court of the State of New York or a Federal district court sitting in the State of New York in each case, applying the choice of law principles of the State of New York. G-2 Without limitation, we express no opinion as to the availability of specific performance, injunctive relief or other equitable relief as a remedy for noncompliance with any of the terms of the Transaction Documents. Our opinions are subject to the qualification that indemnification provisions in any of the Transaction Documents may be unenforceable to the extent that such indemnification may be held to be in violation of or against public policy, including, without limitation, limitations under certain circumstances on enforceability of provisions indemnifying a party against loss attributable to or liability for its own negligent acts. In rendering this opinion, we have not performed any investigation or review of or examined any records of any court, regulatory body, administrative agency or other governmental body with regard to the existence of any actions, suits, proceedings, inquiries or investigations. Our opinions set forth in paragraph 1 above are based upon and limited to a review of those laws, rules and regulations that, in our experience, are normally applicable to transactions of the type contemplated by the Transaction Documents. We express no opinion as to (x) any provision of the Transaction Documents requiring written amendments or waivers of such document insofar as it suggests that oral or other modifications, amendments or waivers could not effectively be agreed upon by the parties, (y) the perfection or priority of any lien, security interest or other Encumbrance, or (z) any provision of the Transaction Documents providing for (or purporting to provide for) liquidated damages, including Sections 1.1 and 1.4 of the Agreement. Our opinions are subject to the effect of bankruptcy, insolvency, reorganization, fraudulent or preferential transfer, fraudulent conveyance, moratorium or similar laws from time to time in effect affecting creditors' rights generally and subject to the effect of general principles of equity (including, without limitation, standards of materiality, good faith, fair dealing, reasonableness, equitable defenses and limits as to the availability of equitable defenses), whether applied by a court of law or equity. The foregoing opinions are based upon and are limited to the Federal laws of the United States, the laws of the State of New York and the DGCL. We are members of the Bar of the State of New York. We are not admitted to practice in the State of Delaware. We render no opinion with respect to the laws of any other jurisdiction. We render no opinion with respect to (i) laws, rules or regulations relating to export licensing, (ii) the Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder, and (iii) any provision contained in the Transaction Documents purporting to waive or having the effect of waiving the right to trial by jury or any other rights under the constitution or laws of the United States of America or any state. The opinions expressed herein are subject to the effect of judicial decisions that may permit the introduction of parol evidence to modify the terms of the interpretation of agreements. Our opinions are based upon, and limited to, laws and regulations as in effect on the date hereof G-3 and our knowledge of the facts relevant to such opinion as of the date of this letter. We assume no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any facts that might change the opinions expressed herein after the date hereof. Our opinions are limited to the matters set forth in this letter, and no other opinions should be inferred beyond the matters expressly stated. The opinions expressed herein are solely for the benefit of LogiMetrics in connection with the Transaction Documents and may not be relied on in any manner or for any purpose by any other Person and may not be quoted in whole or in part without our prior written consent. Very truly yours, G-4 EXHIBIT H L-3 COMMUNICATIONS CORPORATION 600 Third Avenue New York, NY 10016 July 10, 2000 LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Re: LogiMetrics, Inc. Ladies and Gentlemen: I am the General Counsel of L-3 Communications Corporation ("L-3"), a Delaware corporation. This opinion is being delivered pursuant to Section 6.2(h) of the Purchase Agreement dated as of July 10, 2000 (the "Agreement"), between LogiMetrics, Inc., a Delaware corporation ("LogiMetrics"), L-3 and the other parties thereto. All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Agreement. I have examined (a) the Agreement, (b) the Secured Promissory Note dated the date hereof (the "Promissory Note"), (c) the Stock Pledge Agreement dated the date hereof (the "Stock Pledge Agreement"), and (d) the originals or certified, photostatic or facsimile copies of such records and other documents as we have deemed relevant and necessary as the basis of the opinion set forth below. The Agreement, the Promissory Note and the Stock Pledge Agreement are herein sometimes referred to as the "Transaction Documents". In rendering my opinions set forth below, I have assumed the authenticity of all documents submitted to me as originals, the genuineness of all signature and the conformity to authentic originals of all documents submitted to me as copies. I also have assumed, with respect to all parties to agreements or instruments relevant hereto other than L-3, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), and have been executed and delivered by such parties, and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. In all such examinations, I have assumed the legal capacity of all natural persons executing documents (other than the capacity of officers of L-3 executing documents in such capacity), the genuineness of all signatures on original or certified copies (other than those of such officers of L-3) and the conformity to original or certified documents of all copies submitted to me as conformed or reproduction copies. As to various questions of fact relevant to the opinion expressed herein, I have relied upon, and assumed the accuracy of, the representations and warranties contained in the H-1 Agreement and certificates and oral or written statements and other information of or from public officials, officers or other representatives of L-3 and other persons and assume compliance on the part of all parties to the Agreement their covenants and agreements contained therein. To the extent it may be relevant to the opinions expressed herein, I have assumed the due execution and delivery, pursuant to due authorization, of the documents that I have examined, by each party thereto other than L-3, that each such other party has the full power, authority and legal right to enter into and perform its obligations under each such document to which it is a party, that each such document constitutes the legal, valid and binding obligation of each such other party, enforceable against such party in accordance with its terms, and that all necessary consents, approvals, authorizations, registrations, declarations and filings (governmental or otherwise) have been made by each party thereto other than L-3 and are in full force and effect. Whenever my opinion is stated to be "to my knowledge", or "known to me" (or words of similar import), that phrase shall mean that I have no actual knowledge of the inaccuracy of such statement; however, except as expressly indicated, I have not undertaken any independent investigation to determine the accuracy of such statement and no inference should be drawn that I have any such knowledge solely from my position with L-3. Based upon the foregoing, and subject to the limitations, qualifications and assumptions set forth herein, I am of the opinion that: 1. L-3 is duly incorporated, validly existing and in good standing under the General Corporation Law of the State of Delaware (the "DGCL") and has all requisite corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as now being conducted. 2. L-3 has the requisite corporate power and authority to enter into the Transaction Documents and to carry out its obligations thereunder. The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly authorized by all requisite corporate action of L-3. 3. The Transaction Documents have been duly executed and delivered by L-3. 4. The execution, delivery and performance of the Transaction Documents by L-3 will not: (a) contravene any provision of the certificate of incorporation or by-laws of L-3; (b) to my knowledge, violate any statute, ordinance, rule, regulation, order, judgment or decree of any court or of any governmental or regulatory body, agency or authority specifically binding on L-3 or by which any of its properties or assets is bound; or (c) to my knowledge, result in a violation or breach by L-3 of, or constitute a default by L-3 under, any of the provisions of any agreement or other instrument to which L3 is a party, or by which it or any of its properties or assets specifically is bound, except, in the case of clauses (b) and (c), for such violations, breaches or defaults that would not have a material adverse effect on L-3. The foregoing opinions are based upon and are limited to the laws of the State of New York and the DGCL. I am admitted to practice law in the State of New York. I am not admitted to practice law in the State of Delaware. I render no opinion with respect to the laws of any other jurisdiction. My opinions are based upon, and limited to, laws and regulations as in effect H-2 on the date hereof and my knowledge of the facts relevant to such opinions as of the date of this letter. I assume no obligation to supplement this letter if any applicable laws change after the date hereof or if I become aware of any facts that might change the opinions expressed herein after the date hereof. My opinions are limited to the matters set forth in this letter, and no other opinions should be inferred beyond the matters expressly stated. The opinions expressed herein are solely for the benefit of LogiMetrics in connection with the Transaction Documents and may not be relied on in any manner or for any purpose by any other Person and may not be quoted in whole or in part without my prior written consent. Very truly yours, Christopher C. Cambria H-3 EX-99 4 0004.txt EXHIBIT 7.3 SECURED PROMISSORY NOTE $6,500,000.00 July 10, 2000 FOR VALUE RECEIVED, L-3 COMMUNICATIONS CORPORATION, a Delaware corporation ("L-3"), hereby promises to pay to the order of LOGIMETRICS, INC., a Delaware corporation (the "Holder"), the principal amount of SIX MILLION FIVE HUNDRED THOUSAND DOLLARS and 00/100 ($6,500,000.00), such principal to be due and payable on earlier of (a) the consummation of the Public Offering (as defined in that certain Purchase Agreement, dated the date hereof, between the Holder and L-3 (as the same may be amended from time to time, the "Agreement")) and (b) January 2, 2001 (the "Maturity Date"). 1. PAYMENTS. All payments of principal and any Default Interest (as defined below) hereunder shall be made in United States Dollars and in immediately available funds. All payments made hereunder shall be credited (a) first, against any fees, costs or expenses due hereunder from L-3 to the Holder, (b) second, against any accrued and unpaid Default Interest on this Note, and (c) third, against principal outstanding under this Note. 2. SECURITY INTEREST. This Note will be initially secured by a pledge of 43.33% of the Purchaser Shares (as defined in the Agreement) pursuant to a Stock Pledge Agreement, dated the date hereof (as the same may be amended from time to time, the "Stock Pledge Agreement"). As provided in the Stock Pledge Agreement, for every prepayment, payment or set-off by L-3 of all or a portion of the principal amount of this Note (including pursuant to Section 1.1(c), 1.5 or 7.3 of the Agreement), a number of Purchaser Shares equal to the Released Pledged Shares (as defined in the Agreement) will be released from the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement and delivered to L-3. As provided in the Stock Pledge Agreement, upon L-3's payment of this Note in full, all Purchaser Shares then subject to the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement will be automatically released from the Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement and delivered to L-3. 3. PREPAYMENT. From time to time, pursuant to Section 1.1(c) of the Agreement and subject to Section 1.1(b) of the Agreement, L-3 shall prepay all or a portion of the outstanding principal amount, such prepayment to be made within five (5) business days after receipt by L-3 of the Required Prepayment Notice (as defined in the Agreement). 4. SET-OFF. If the Holder is required to indemnify any indemnified party pursuant to Article VII of the Agreement (as determined by a court of competent jurisdiction or by an arbitration award), then L-3 shall be entitled, in addition to any other right or remedy it may have, to exercise rights of set-off against any amounts then due and payable or that may thereafter become due and payable to the Holder under this Note. 5. OTHER DEBT. If L-3 or any of its Affiliates (as defined in the Agreement) provides Purchaser Credit Support (as defined in the Agreement), in respect of all or any portion of the Company's Debt (as defined in the Agreement), then the amount of the Purchaser Credit Support shall constitute, to the extent of the amount of the Purchaser Credit Support, a Credit Support Payment (as defined in the Agreement); provided, however, (a) if the Company's Debt has been paid in full and none of the Purchaser Credit Support has been utilized or called upon, then the Credit Support Payment shall be deemed not to have been made, and (b) if, at any time, the amount of the Purchaser Credit Support shall have been permanently reduced by reason other than the payment by or on behalf of the Purchaser of any amount in respect of such Purchaser Credit Support, then the Credit Support Payment shall be deemed not to have been made, but only to the extent of such reduction. 6. CANCELLATION OF NOTE. L-3's obligations of payment under this Note may be cancelled pursuant to the provisions of Section 1.1(b) of the Agreement, which provisions are incorporated herein by reference in their entirety. 7. EVENTS OF DEFAULT; REMEDIES. (a) "Event of Default" means the occurrence of one or more of the following events: (i) the failure of L-3 to pay the principal amount of this Note on the Maturity Date for a period of two business days after written notice of such failure is given to L-3 by the Holder; (ii) the commencement of any proceeding instituted by or against L-3 under any laws relating to bankruptcy, insolvency, receivership or arrangements with creditors and such proceeding is not dismissed, stayed or vacated within 60 days; (iii) the dissolution, liquidation or winding up of the affairs of L-3; (iv) an assignment for the benefit of creditors by L-3; or (v) the insolvency or written admission of inability of L-3 to pay its debts as they mature. (b) Upon the occurrence and during the continuance of an Event of Default and the expiration of the applicable cure period (if any), interest shall accrue on the outstanding principal at an overdue rate equal to 10% per annum ("Default Interest"). (c) If an Event of Default shall have occurred and be continuing, the Holder shall have, in addition to all other rights given by law or by this Note, the right, at its option, by written notice to L-3 to declare all the indebtedness described herein or evidenced hereby and the collection fees thereof to be immediately due and payable, and upon such delivery or mailing of such notice, all such indebtedness and collection fees shall become immediately due and payable. -2- 8. NOTICES. All notices, consents, requests, waivers or other communications (each a "Notice") which, by provision of this Note, is required or permitted to be given or served to L-3 shall be given and served for all purposes (a) if hand delivered, (b) if sent by nationally recognized overnight courier, or (c) if sent by registered or certified mail, postage prepaid, return receipt requested to the following address: L-3 Communications Corporation Narda Microwave 435 Moreland Road Hauppauge, N Y 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: Mr. John Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel.: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq. Each Notice shall be deemed effective upon receipt (or refusal of receipt). 9. AMENDMENTS; WAIVERS; CONSENTS. This Note may not be waived, changed, modified or discharged orally, but only by an agreement in writing which is signed by both L-3 and the Holder. Except as otherwise provided in this Note, the Agreement or the Stock Pledge Agreement, L-3 hereby waives presentment, demand for payment, diligence, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. 10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles thereof. L-3 hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Note and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on L-3 anywhere in the world by the same methods as are specified for the giving of notices under this Note. L-3 hereby irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. L-3 hereby irrevocably waives any objection -3- to the laying of venue of any such suit, action or proceeding brought in such court and irrevocably waives any claim that any such suit, and action or proceeding brought in any such court has been brought in an inconvenient forum. 11. SUCCESSORS. This Note shall inure to the benefit of the Holder and its successors and assigns. -4- IN WITNESS WHEREOF, L-3 has duly executed this Note as of the date first above written. L-3 COMMUNICATIONS CORPORATION By: /s/ Christopher C. Cambria _________________________________ Name: Christopher C. Cambria Title: Vice President -5- EX-99 5 0005.txt EXHIBIT 7.4 STOCK PLEDGE AGREEMENT STOCK PLEDGE AGREEMENT dated as of July 10, 2000, made by L-3 Communications Corporation, a Delaware corporation ("Pledgor"), in favor of LogiMetrics, Inc., a Delaware corporation ("Pledgee"). WHEREAS, pursuant to the Purchase Agreement, dated July 10, 2000, (as the same may be amended from time to time, the "Purchase Agreement"), between Pledgor and Pledgee. Pledgee sold to Pledgor and Pledgor purchased from Pledgee, on the date hereof, 53.5% of the issued and outstanding shares of Pledgee's Common Stock on a Fully Diluted Basis (as such terms are defined in the Purchase Agreement) (the "Purchaser Shares"); WHEREAS, pursuant to the Purchase Agreement, Pledgor has agreed to pledge 43.33% of the Purchaser Shares (the "Pledged Stock") to Pledgee to secure the obligations of Pledgor under the Secured Promissory Note, dated the date hereof (the "Secured Promissory Note") (collectively, the "Secured Obligations"); and WHEREAS, it is a condition to Pledgee's willingness to enter into the Purchase Agreement that Pledgor shall have executed this Agreement; NOW, THEREFORE, in consideration of the premises and in order to induce Pledgee to enter in the Purchase Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Defined Terms. Unless otherwise defined herein, terms used herein shall have the same meanings of terms defined in the Purchase Agreement. 2. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers and delivers to Pledgee all the Pledged Stock and hereby grants to Pledgee a first lien on, and first priority security interest in, the Pledged Stock and in all Proceeds (as defined below) thereof as collateral security for the prompt and complete payment and performance when due of all the Secured Obligations. "Proceeds" means all "proceeds" as defined in Section 9-306(1) of the New York Uniform Commercial Code (the "Code") and shall, in any event, include, without limitation, all dividends, distributions or other income from the Pledged Stock, and any and all collections on the foregoing or distributions with respect to the foregoing. Pledgee hereby acknowledges receipt and possession of the Pledged Stock, to be held by Pledgee in accordance with this Agreement. 3. Stock Dividends, Distributions, etc. If, while this Agreement is in effect, Pledgor shall become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital, or issued in connection with any reorganization), option or rights, as an addition to, in substitution of, or in exchange for, any shares of any Pledged Stock, Pledgor agrees to accept the same as Pledgee's agent and to hold the same in trust on behalf of and for the benefit of Pledgee and to deliver the same forthwith to Pledgee in the exact form received, with the endorsement of Pledgor when necessary, and/or appropriate undated stock powers duly executed in blank, to be held by Pledgee, subject to the terms hereof, as additional collateral security for the Secured Obligations. All property so distributed in respect of the Pledged Stock which is received by Pledgor shall, until delivered to Pledgee, be held by Pledgor as Pledgee's agent (and in trust on its behalf and for its benefit) as additional collateral security for the Secured Obligations. 4. Collateral. The Pledged Stock and Proceeds thereof are referred to herein collectively as the "Collateral". Certificates or instruments representing or evidencing the Collateral shall be delivered to and held by Pledgee. For every prepayment, payment or set-off by Pledgor of all or a portion of the principal amount of the Secured Promissory Note (including pursuant to Section 1.1(c), 1.5 or 7.3 of the Purchase Agreement), a number of shares of Pledged Stock equal to the Released shall be released from the Encumbrance of this Agreement and such Released Pledged Shares shall no longer constitute part of the Collateral. Upon payment of the Secured Obligations in full, all the Collateral shall automatically be released from the Encumbrance of this Agreement. Notwithstanding anything in this Agreement or any of the other Transaction Documents to the contrary, if the Purchaser pays the Liability Amount, then all Purchaser Shares then subject to the Encumbrance of this Agreement shall be automatically released from the Encumbrance of this Agreement and delivered to the Purchaser. 5. Cash Dividends; Voting Rights. Unless a Triggering Event (as defined below) shall have occurred, Pledgor shall be entitled to receive all cash dividends paid in respect of the Pledged Stock, to vote the Pledged Stock and to give consents, waivers and ratification in respect of the Pledged Stock; provided, however, that no vote shall be cast or consent, waiver or ratification given or action taken that would impair the Collateral or violate any provision of this Agreement. 6. Rights of Pledgee. If a Triggering Event shall have occurred, (a) any of or all the Pledged Stock included in the Collateral may, without notice, be registered in the name of Pledgee or its nominee and Pledgee shall have the right to exchange certificates or instruments representing or evidencing the Pledged Stock included in the Collateral for certificates or instruments of smaller or larger denominations, (b) Pledgee may collect and receive all cash dividends and other distributions made thereon, and (c) Pledgee or its nominee may thereafter, after notice to Pledgor, exercise all voting and corporate rights at any meeting of any corporation or other entity issuing any of the Pledged Stock and give consents, waivers and ratification in respect of the Pledged Stock, in each case as if it were the sole and absolute owner thereof. 7. Remedies. If any portion of the Secured Obligations shall at any time become, or shall be declared, due and payable (or if any stay or legal bar to such Secured Obligations becoming or being declared due and payable is in effect, if but for the operation of such stay or legal bar such obligations would have become, or could have been declared, due and payable by their terms) and remain unpaid for a period of 30 days from the date upon which such portion of the Secured Obligations have become, or shall have been declared (or would have so become, or could have so been declared), due and payable (a "Triggering Event"), Pledgee shall have the right to exercise all rights and remedies of a secured party under the Code. 8. Representations, Warranties and Covenants. Pledgor represents and warrants that: (a) Pledgor has full corporate power, authority and legal right to pledge, assign, transfer, deliver, deposit and set over all the Pledged Stock pursuant to this Agreement; (b) this Agreement has -2- been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of the Pledgor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses; (c) (assuming the accuracy of Pledgee's representations and warranties contained in Sections 2.2 and 2.5 of the Purchase Agreement) the pledge, assignment and delivery of the Pledged Stock and the other Collateral pursuant to this Agreement creates a valid first lien on and, and a first priority security interest in, such shares of the Pledged Stock and the other Collateral, respectively, subject to no prior or pari passu Encumbrance or to any agreement granting to any third party a security interest in the property or assets of Pledgor which would include the Pledged Stock or the other Collateral; and (d) no consent, approval, authorization or other order of any person and no consent, authorization approval, or other action by, and no notice to or filing with, any Governmental Authority is required to be made or obtained by Pledgor either (i) for the pledge of the Collateral by Pledgor pursuant to this Agreement, or (ii) for the exercise by Pledgee of the voting or other rights provided for in this Agreement or the remedies in respect of the Collateral pursuant to this Agreement, except such as may be required in connection with such disposition by laws affecting the offering and sale of securities generally. Pledgor covenants and agrees that it will defend Pledgee's right and security interest in and to the Collateral against the claims and demands of all Persons whomsoever; and covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to Pledgee as Collateral hereunder and will likewise defend Pledgee's right thereto and security interest therein. 9. No Disposition, etc. Without the prior written consent of Pledgee, Pledgor will not sell or otherwise dispose of, grant any Encumbrance on or any option or right with respect to, or mortgage, hypothecate, assign, pledge, transfer, charge or otherwise encumber any of the Collateral, any interest therein or any proceeds thereof, except for the lien and security interest provided for by this Agreement. 10. Further Assurances. Pledgor agrees that any time and from time to time upon the written request of Pledgee, it will, at its expense, execute and deliver such further documents and do such further acts and things as Pledgee may reasonably request in order to effect the purposes of this Agreement. 11. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 12. Section Headings. The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. -3- 13. No Waiver; Cumulative Remedies. Pledgee shall not by any act (except by a written instrument executed by Pledgee pursuant to Section 14) be deemed to have waived any right or remedy hereunder. No failure to exercise, nor any delay in exercising, on the part of Pledgee any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power of privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Pledgee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Pledgee would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by Applicable Law. 14. Waivers and Amendments; Successors and Assigns; Governing Law. This Agreement may be amended, supplemented or waived by written instrument executed by Pledgor and Pledgee. This Agreement shall be binding upon the successors and assigns of Pledgor and shall inure to the benefit of Pledgee and its successors and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER ANY PRINCIPLES OF CONFLICTS OF LAWS). -4- IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and delivered as of the day and year first above written. L-3 COMMUNICATIONS CORPORATION By: /s/ Christopher C. Cambria ________________________________ Name: Christopher C. Cambria Title: Vice President -5- EX-99 6 0006.txt EXHIBIT 7.5 STOCKHOLDERS AGREEMENT dated July 10, 2000 among LogiMetrics, Inc. L-3 Communications Corporation and the Existing Holders named herein TABLE OF CONTENTS
PAGE ARTICLE I REPRESENTATIONS AND WARRANTIES.............................................................1 Section 1.1. Representations and Warranties of the Company.....................................1 Section 1.2. Representations and Warranties of Existing Holders................................1 ARTICLE II ACTIONS BY EXISTING HOLDERS................................................................2 Section 2.1. Amendment of Class A Debentures and Class B Debentures............................2 Section 2.2. Consent, Conversion of Securities and Waivers by Existing Holders.................3 Section 2.3. Warrants Held by Existing Holders.................................................5 ARTICLE III MANAGEMENT COVENANTS.......................................................................6 Section 3.1. Nomination and Election of Directors..............................................6 Section 3.2. Replacement of Directors..........................................................7 Section 3.3. Certain Covenants.................................................................8 Section 3.4. Committees of the Board...........................................................8 Section 3.5. Proxies...........................................................................8 Section 3.7. SEA Section 14(f) and Rule 14f-1..................................................8 ARTICLE IV TRANSFERS.................................................................................10 Section 4.1. Right of First Offer.............................................................10 Section 4.2. Legend...........................................................................11 ARTICLE V MISCELLANEOUS.............................................................................12 Section 5.1. Notices..........................................................................12 Section 5.2. Governing Law; Consent to Jurisdiction...........................................14 Section 5.3. Assignment; Successors and Assigns; No Third Party Rights........................14 Section 5.4. Counterparts.....................................................................14 Section 5.5. Titles and Headings..............................................................15 Section 5.6. Entire Agreement.................................................................15 Section 5.7. Severability.....................................................................15 Section 5.8. No Strict Construction...........................................................15 Section 5.9. Acknowledgement..................................................................15 Section 5.10. Effectiveness; Termination.......................................................15 Section 5.11. Amendments.......................................................................16 Section 5.12. Extension; Waiver................................................................16 Section 5.13. Enforcement......................................................................16 Section 5.14. Technology Transfer Option.......................................................17 Section 5.15. Legal Fees.......................................................................17
-i- LIST OF EXHIBITS EXHIBIT A Form of the Employment Agreement LIST OF SCHEDULES Schedule 1.2(a) Existing Holder Securities Schedule 2.3 Existing Holder Warrant Exchange Schedule 5.1 CRM Related Persons -ii- STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT, dated July 10, 2000 (this "Agreement"), among LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3 Communications Corporation, a Delaware corporation (the "Purchaser"), and the other signatories hereto (the "Existing Holders"). Capitalized and other defined terms used herein and not otherwise defined herein shall have the respective meanings specified the Purchase Agreement (defined below). W I T N E S S E T H: WHEREAS, the Purchaser has agreed to purchase shares of Common Stock of the Company, par value $.01 per share (the "Common Stock"), pursuant to the terms and conditions of the Purchase Agreement, dated as of even date herewith, between the Company and the Purchaser (the "Purchase Agreement"); WHEREAS, in connection with the Closing, and as a condition required by the Purchaser, the Existing Holders have or will have, immediately prior to the Closing, converted all of the their convertible debt into Common Stock and taken certain other actions as set forth herein which are required by the Purchase Agreement; WHEREAS, this Agreement is a condition (i) to the willingness of the Purchaser to effect the Closing under the Purchase Agreement and to consummate the transactions contemplated thereby, and (ii) to the willingness of the Existing Holders to give their consents to the Purchase Agreement and to the transactions contemplated thereby; NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I REPRESENTATIONS AND WARRANTIES Section 1.1. Representations and Warranties of the Company. Each representation and warranty made by the Company in the Purchase Agreement and the other Transaction Documents, including, in any certificates delivered pursuant thereto, in each case, to the extent limited as therein set forth and by any schedules attached thereto, is herein incorporated by reference and made a part hereof, and hereby reaffirmed and restated to and for the benefit of each the other parties hereto, with the understanding that this Agreement is and shall be deemed a Transaction Document. Section 1.2. Representations and Warranties of Existing Holders. Each of the Existing Holders represents and warrants to each of the other parties hereto, as follows: (a) Such Existing Holder owns and, subject to this Agreement, has the complete and unrestricted power and the unqualified right to vote the Common Stock and/or Convertible Securities, listed by class and number of shares of Common Stock and/or Convertible Securities, set forth in Schedule 1.2(a) opposite such Existing Holder's name (the "Existing Holder Securities"). (b) Such Existing Holder has all requisite right, power and authority and full legal capacity to enter into this Agreement, to carry out such Existing Holder's respective obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by such Existing Holder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Existing Holder, and no other actions (corporate or otherwise) on the part of such Existing Holder or any other Person are necessary for such Existing Holder to enter into this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Existing Holder and constitutes a legal, valid and binding obligation of such Existing Holder enforceable against such Existing Holder in accordance with its terms. (c) The execution, delivery and performance of this Agreement by such Existing Holder, and the consummation of the transactions contemplated hereby, do not and will not (i) conflict with, or result in a breach of or default under, any terms or conditions of the organizational documents of any such Existing Holder that is an entity, (ii) violate any Applicable Law, (iii) result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a breach or a default) under, or give to any other Person any right of termination, amendment, acceleration or cancellation pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument to which such Existing Holder is a party or by which any of such Existing Holder's Common Stock or Convertible Securities or any of such Existing Holder's other assets may be bound, or (iv) result in the creation of any Encumbrance on such Existing Holder's Common Stock or Convertible Securities (other than the Encumbrances created by this Agreement). ARTICLE II ACTIONS BY EXISTING HOLDERS Section 2.1. Amendment of Class A Debentures and Class B Debentures. (a) The Company represents and warrants to each of the other parties hereto that the Existing Holders collectively constitute the "Majority Holders" as defined in each of the Class A 13% Senior Subordinated Convertible Pay-in-Kind Debentures due July 29, 1999 and the Amended and Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due July 29, 1999 (respectively, the "Class A Debentures" and the "Class B Debentures" and, collectively, the "Debentures"). Each Existing Holder has the power and authority to vote and give its consent (as herein voted and given) to amend the Debentures pursuant to Section 9 of the Debentures. (b) Pursuant to Section 9 of the Class A Debentures, the Existing Holders and the Company hereby irrevocably and forever amend (and hereby vote and give their consent to such amendment) each of the Class A Debentures to delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the Class A Debentures, and (ii) any other provisions in respect of the Class 2 A Debentures or any of the registration rights of each holder of the Class A Debentures and the registration obligations of the Company relating to the Common Stock issuable upon the conversion of any of the Class A Debentures. (c) Pursuant to Section 9 of the Class B Debentures, the Existing Holders and the Company hereby irrevocably and forever amend (and hereby vote and give their consent to such amendment) each of the Class B Debentures to delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the Class B Debentures, and (ii) any other provisions in respect of the Class B Debentures or any of the registration rights of each holder of the Class B Debentures and the registration obligations of the Company relating to the Common Stock issuable upon the conversion of any of the Class B Debentures. (d) The Existing Holders and the Company hereby irrevocably and forever amend the Acknowledgment, Consent and Waiver, dated as of March 7, 2000, among the Company and the other parties thereto (the "Acknowledgement, Consent and Waiver") to delete and terminate in their entirety (i) Section 3 of the Acknowledgment, Consent and Waiver and (ii) any other provision in respect of the registration obligations of the Company and the registration rights of the other parties thereunder. (e) The amendments pursuant to Section 2.1(b), 2.1(c) and 2.1(d) shall be effective immediately prior to the conversion of the Debentures held by the Existing Holders pursuant to Section 2.2. Section 2.2. Consent, Conversion of Securities and Waivers by Existing Holders. In order to induce the Purchaser to execute and deliver the Purchase Agreement and to consummate the transactions contemplated thereby, effective immediately prior to the Closing, each Existing Holder hereby irrevocably and forever: (a) consents to the execution and delivery by the Company of the Purchase Agreement and the other Transaction Documents, and to the consummation of the transactions contemplated thereunder solely upon the terms and conditions therein set forth; (b) except as provided in Section 2.3, converts all Existing Holder Securities consisting of Convertible Securities held by such holder into Common Stock upon the terms of such securities, except that the Class A Debentures shall be converted at the modified conversion price of $0.3451 per share (instead of the existing conversion price of approximately $0.4167); e.g., the holder of a Class A Debenture in the principal amount of $42,586 will receive 123,402 shares of Common Stock upon conversion (instead of 102,207 shares of Common Stock); (c) extends the maturity date of the outstanding principal amount of the Legacy Group I Loans (as defined in the Acknowledgement, Consent and Waiver) made by such holder, if any, to the earlier of (i) the fifth day following the consummation of a Public Offering and (ii) June 30, 2001, provided that (A) all accrued and unpaid interest and fees under and expenses related to the Legacy Group I Loans (as defined in the Acknowledgement, Consent and Waiver) shall have been paid in full at Closing with the Proceeds (it being understood and agreed by the parties hereto that execution and delivery of this Agreement by each Existing Holder constitutes acknowledgment by such Existing Holder that payment of the amounts set forth in the 3 Disbursement Letter in accordance with the instructions set forth therein constitutes full payment of such accrued and unpaid interest, fees and expenses owing to such Existing Holder), and (B) all of the Legacy Group II Loans (as defined in the Acknowledgement, Consent and Waiver) shall have been paid in full, together with all accrued and unpaid interest and fees thereon and expenses related thereto, at Closing with the Proceeds (it being understood and agreed by the parties hereto that execution and delivery of this Agreement by each Existing Holder constitutes acknowledgment by such Existing Holder that payment of the amounts set forth in the Disbursement Letter in accordance with the instructions set forth therein constitutes full payment of such Legacy Group II Loans and full payment of such accrued and unpaid interest, fees and expenses owing to such Existing Holder); (d) waives any anti-dilution or similar rights to which such Existing Holder may be entitled in respect of any Existing Holder Securities owned by such Existing Holder, whether beneficially or of record, as a result of the Purchase Agreement or any Transaction Documents or any transaction contemplated by the Purchase Agreement or any of the Transaction Documents, including, without limitation, the purchase of Common Stock by the Purchaser pursuant to the Purchase Agreement or by an investment bank or banks as contemplated by Section 5.1 of the Purchase Agreement; (e) waives the right to exercise any anti-dilution or other similar right to which the Existing Holder may be entitled in respect of any securities owned by such holder, whether beneficially or of record, as a result of any previous transactions in which such a right may have arisen; (f) agrees that each of the Stockholder Agreement, dated as of July 29, 1997, by and among the Company and the other parties thereto and Section 5.1 of the Unit Purchase Agreement, dated as of March 7, 1996, by and between the Company and Cerberus Partners L.P. is terminated upon the execution and delivery of the Purchase Agreement by the respective parties thereto and shall be of no further force and effect thereafter (it being understood and agreed that the Company also hereby irrevocably and forever agrees that such Stockholder Agreement, dated as of July 29, 1997, is so terminated and shall be of no further force and effect thereafter); (g) waives application of any provision of any agreement or instrument to which the Company or any of its Subsidiaries (as defined in the Purchase Agreement) is a party or by which any of their respective assets is bound, that conflicts with any provision of any Transaction Document; (h) consents to the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby; and (i) waives any default, event of default or "Event of Default" of or under any agreement or instrument to which such Existing Holder and the Company or any of the Company's Subsidiaries is a party or by which any of their respective properties are bound. 4 Section 2.3. Warrants Held by Existing Holders. (a) Effective immediately prior to the Closing, the Existing Holders have irrevocably and forever exchanged any and all Existing Holder Securities consisting of warrants for Common Stock held by such Existing Holder, if any ("Existing Holder Warrants") for shares of Common Stock of the Company on the terms set forth on Schedule 2.3 (the "Existing Holder Warrant Exchange"). (b) The Company represents and warrants to the other parties hereto that (i) the Existing Holder Warrant Exchange has been approved by all requisite corporate action on the part of the Company and hereby confirms, ratifies and agrees with the Existing Holder Warrant Exchange, and (ii) neither the Existing Holder Warrant Exchange nor any of the transactions contemplated thereby requires registration under the provisions of the Securities Act or any applicable state securities or "blue sky" laws. (c) Each Existing Holder that has participated in the Existing Holder Warrant Exchange hereby represents and warrants to the other parties hereto as follows: (i) Such Existing Holder hereby confirms, ratifies and agrees with the Existing Holder Warrant Exchange with respect to itself or himself. (ii) Such Existing Holder has received copies of the SEC Documents and has reviewed therein the discussion of risk factors relating to the Company. In addition, such Existing Holder has had an opportunity to ask questions of and receive answers from representatives of the Company concerning the business of the Company, its condition and prospects (financial and other) and the terms and conditions of the Existing Holder Warrant Exchange. (iii) Such Existing Holder is an "Accredited Investor" as such term is defined in Rule 501 of the rules and regulations of the Commission promulgated under the Securities Act. (iv) Such Existing Holder has acquired the Common Stock issued to it or him in connection with the Existing Holder Warrant Exchange (the "Exchange Shares") for its own account for investment only and not for or with a present view to resale or distribution other than in transactions that are in compliance with the Securities Act and applicable state securities laws. Such Existing Holder has not entered into any contract, undertaking, agreement or arrangement with any Person to sell, transfer or pledge to such Person or anyone else any of the Exchange Shares, and such Existing Holder has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. (v) Such Existing Holder has the financial ability to bear the economic risk of losing its entire investment in the Exchange Shares, is prepared to bear the economic risk of its investment therein for an indefinite time and can afford to sustain a complete loss of its investment therein. (vi) Such Existing Holder understands that the Exchange Shares constitute restricted securities within the meaning of Rule 144 promulgated under the Securities Act, and that none of the Exchange Shares or any interest therein may be sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act or in a transaction exempt from registration under the Securities Act, and understands the meaning and effect of such restriction. 5 (vii) Such Existing Holder acknowledges that the Exchange Shares may not be transferred, and the Company shall not be required to register any transfer thereof on the books of the Company, unless such transfer is made pursuant to an effective registration statement, in compliance with Rule 144, or pursuant to another exemption under the Securities Act; provided, however, that the Company shall not be required to register any transfer if any securities are offered or sold otherwise than pursuant to an effective registration statement or pursuant to Rule 144 unless the Company shall have received an opinion of counsel to such Existing Holder, reasonably satisfactory to the Company, that such transfer does not require registration under the Securities Act or applicable state securities laws. (viii) No Person is or will be entitled to a broker's, finder's, investment banker's, financial adviser's or similar fee from such Existing Holder in connection with the Existing Holder Warrant Exchange or any of the transactions contemplated hereby. ARTICLE III MANAGEMENT COVENANTS Section 3.1. Nomination and Election of Directors. (a) The Board has set the number of directors at three (to be increased to seven immediately after SEA Section 14(f) and Rule 14f-1 are complied with) and, the parties hereto agree to exercise their best efforts to ensure that the composition of the Board shall be determined as follows: (i) the Purchaser shall have the right to select and nominate, from time to time, a number of individuals equal to the excess of seven over the number of Non-Purchaser Directors that the Existing Holders are entitled to select and nominate pursuant to clause (ii) below (the "Purchaser Directors"), among whom shall include the Chairman of the Board, so long as the Purchaser continues to be the owner of at least 25% of the outstanding Common Stock on a Fully Diluted Basis; provided, however, that, until such time as Section 14(f) of the Securities Exchange Act of 1934, as amended ("SEA Section 14(f)") and Rule 14f-1 promulgated thereunder ("Rule 14f-1") are complied with by the Company, none of the Purchaser Directors shall take office; (ii) the Existing Holders shall have the right to select and nominate by a Majority Vote of the Existing Holders, from time to time, (A) three individuals, so long as the Existing Holders continue to be the beneficial owners of at least 15% of the outstanding Common Stock on a Fully Diluted Basis, or (B) two individuals, so long as the Existing Holders continue to be the owners of at least 10% of the outstanding Common Stock on a Fully Diluted Basis; (iii) upon selection and nomination of any Purchaser Directors pursuant to clause (i) above, the Purchaser shall provide each of the Company and the Existing Holders with a notice signed by the Purchaser indicating such selected and nominated Purchaser Directors; 6 (iv) upon selection and nomination of the directors pursuant to clause (ii) above (the "Non-Purchaser Directors"), the designated representative of the Existing Holders shall provide each of the Company and the Purchaser with a notice signed by those Existing Holders who have provided the Majority Vote of the Existing Holders indicating such selected and nominated Non-Purchaser Directors; the initial designated representative of the Existing Holders shall be Eugene A. Trainor, III; the designated representative of the Existing Holders may be changed from time to time upon notice to the Company and the Purchaser signed by those Existing Holders who have provided the Majority Vote of the Existing Holders; (v) so long as the Purchaser is entitled to select and nominate Purchaser Directors pursuant to clause (i) above, the Purchaser shall at all times have the right, exercisable by the Purchaser in its sole discretion, to remove, with or without cause, one or more of the Purchaser Directors, and to replace such removed directors. If necessary to effect such removal, each of the Existing Holders shall vote for such removal at a meeting of the stockholders or shall execute a written consent to such effect without a meeting and consents to the prompt holding of a special meeting for that purpose; and (vi) so long as the Existing Holders are entitled to select and nominate the Non-Purchaser Directors pursuant to clause (ii) above, the Existing Holders shall at all times have the right, exercisable by a Majority Vote of the Existing Holders in their sole discretion, to remove, with or without cause, one or more of the Non-Purchaser Directors. If necessary to effect such removal, the Purchaser shall vote for such removal at a meeting of the stockholders or shall execute a written consent to such effect without a meeting and consents to the prompt holding of a special meeting for that purpose. (b) The Board has elected, effective upon the Closing having occurred, as the members of the Board the following three individuals as the initial Non-Purchaser Directors: Jean-Francois Carreras, John Langner and Norman Phipps. (c) Immediately after SEA Section 14(f) and Rule 14f-1 are complied with, the parties hereto will cause the following four individuals to be elected to the Board as the initial Purchaser Directors: Frank Lanza, Robert LaPenta, Christopher C. Cambria and John Mega. (d) The execution and delivery of this Agreement by the parties hereto shall be deemed to satisfy the notice requirements under Section 3.1(a)(iii) and Section 3.1(a)(iv). (e) As used herein, the "Majority Vote of Existing Holders", at any time, means the written action or approval of the Existing Holders that hold a majority of the Common Stock Equivalents then held by all Existing Holders. (f) As used herein, "Common Stock Equivalents" means, with respect to any holder of the Company's securities, the number of shares of Common Stock owned by such holder and the number of shares of Common Stock into or for which any Convertible Securities owned by such holder shall be convertible, exchangeable or exercisable as of the date of determination thereof. Section 3.2. Replacement of Directors. In the event of the death, resignation or removal of a Purchaser Director, the Company shall use its best efforts to, and the Existing 7 Holders shall cause the Non-Purchaser Directors to, elect a person designated by the remaining Purchaser Directors as the successor to such Purchaser Director. In the event of the death, resignation or removal of a Non-Purchaser Director, the Company shall use its best efforts to, and the Purchaser shall cause the Purchaser Directors to, elect a person designated by the remaining Non-Purchaser Directors as the successor to such Non-Purchaser Director. Section 3.3. Certain Covenants. Each of the Purchaser and the Existing Holders shall vote, in person or by proxy, all shares of Common Stock over which such party may have or share voting power, at any annual or special meeting of stockholders of the Company called for the purpose of voting on the election of directors, or to execute written consents of stockholders without a meeting with respect to the election of directors, to vote in favor of the election of each director selected and nominated in accordance with Section 3.1 and against any other nominees and to take all other necessary and appropriate actions within such party's control to cause such events to occur. The Company shall use its best efforts to cause persons to be so nominated, elected or removed, as the case may be, in accordance with the applicable provisions of this Agreement. Each of the Purchaser and the Existing Holders shall vote all shares of Common Stock over which such party may have or share voting power and shall take all other actions within such party's control necessary and appropriate (including removing any director) to ensure that the Company's certificate of incorporation and by-laws do not at any time conflict with the provisions of this Agreement and shall not vote to approve (or consent to the approval of) any amendment to the Company's certificate of incorporation or by-laws which would be inconsistent with this Agreement. Section 3.4. Committees of the Board. If one or more committees of the Board are in existence, such committees shall be constituted to include at least one Non-Purchaser Director. Section 3.5. Proxies. Neither the Purchaser nor any Existing Holder shall give any proxy or power of attorney to any Person in respect of Common Stock Equivalents owned by the Purchaser or any Existing Holder that permits the holder thereof to vote in his discretion on any matter that may be submitted to the Company's stockholders for their consideration and approval, unless such proxy or power of attorney is made subject to and is exercised in conformity with the provisions of this Agreement. Section 3.6. Executive Officers. The Company shall have entered into an employment agreement in substantially the form of Exhibit A attached hereto with each of Norman Phipps and Charles Brand (collectively, the "Employment Agreements"). Subject to the terms and conditions of the Employment Agreements, each of Norman Phipps and Charles Brand shall serve at the pleasure of the Board, and the Board shall have the absolute right, in its sole discretion, to remove and appoint officers, with or without cause, subject to all Applicable Laws. Section 3.7. SEA Section 14(f) and Rule 14f-1. (a) The Company shall promptly comply with SEA Section 14(f) and Rule 14f-1 in connection with the Transaction Documents. (b) From and after the Closing, until such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents, the Company will operate (and 8 will cause its Subsidiaries to operate) the business of the Company and its Subsidiaries in the ordinary course consistent with past practice. Without limiting the generality of the foregoing, except to the extent expressly permitted or contemplated by the Transaction Documents, the Company will not take (and will cause its Subsidiaries not to take) any of the following actions without the prior written consent of the Purchaser: (i) grant (or commit to grant) any increase in the compensation (including incentive or bonus compensation) of any employee of the Company or institute, adopt or amend (or commit to institute, adopt or amend) any compensation or benefit plan, policy, program or arrangement or collective bargaining agreement applicable to any employee of the Company; (ii) enter into any new employment agreement or collective bargaining agreement or commitment (including any commitment to pay retirement or other benefits) to or with any of the employees of the Company; (iii) except as contemplated by the Letter of Intent, dated February 17, 2000, between the Company and Signal Technology Corporation and the other agreements previously entered into in connection therewith, sell, assign, license, dispose of, or transfer any of the assets of the Company having a fair market value of at least $10,000 individually or $50,000 in the aggregate other than sales of Inventories in the ordinary course of business consistent (in kind and amount) with past practice, or incur any liabilities or obligations (including liabilities with respect to indebtedness, capital leases or guarantees thereof) in excess of $50,000 individually or in the aggregate; (iv) (A) enter into or terminate any lease of real estate, (B) create any Encumbrances on any of the assets of the Company except for Permitted Encumbrances, or (C) make any modifications of or changes in or terminate any existing Contract other than as may be required to consummate the transactions contemplated by the Transaction Documents; (v) make any capital expenditure or capital expenditure commitment (other than in an emergency) in excess of $50,000 in the aggregate; (vi) repay or prepay any liability or obligation prior to its stated maturity; (vii) make, give or grant any bid or proposal, or any customer option relating to any Contract (A) involving an amount in excess of $50,000 (or amend, supplement or terminate any existing bid or proposal, or any existing customer option relating to any Contract, involving an amount in excess of $50,000), (B) involving a loss to the Company, or (C) not in the ordinary course of business, consistent with past practice; (viii) declare, authorize, make or pay any dividend or distribution on any securities of the Company or any of its Subsidiaries; (ix) issue (or commit to issue) any capital stock or Convertible Securities of the Company or any of its Subsidiaries except for shares of Common Stock issuable upon (A) upon the conversion of Convertible Securities outstanding prior to the date hereof, 9 (B) upon the exercise of unissued stock options under the Plan, or (C) as contemplated by Sections 4.2 and 4.3 of the Purchase Agreement; (x) amend the certificate of incorporation or by-laws of the Company or any of its Subsidiaries; (xi) take any action or omit to take any action that would cause any of the representations or warranties of the Company contained in any of the Transaction Documents not to be true and correct at any time between the date hereof and such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents; and (xii) agree to take any of the actions referred to in clauses (i) through (xi) above. (c) Notwithstanding any provisions in this Agreement or any other Transaction Document, until such time as SEA Section 14(f) and Rule 14f-1 are complied with in connection with the Transaction Documents and the Purchaser Directors have taken office as directors, none of the Proceeds in excess of $5,000 may be transferred from the Company to a third party without the prior written consent of the Purchaser. (d) Each of the Existing Holders will use such Existing Holder's reasonable best efforts to take all actions within such Existing Holder's control to cause the Company and its Subsidiaries to comply with Section 3.7(b). ARTICLE IV TRANSFERS Section 4.1. Right of First Offer. (a) At such time as the Purchaser ceases to be the owner of at least 25% of the Common Stock on a Fully Diluted Basis, then the provisions of this Section 4.1 shall cease to have any further force and effect. (b) If at any time and from time to time after the Closing one or more of the Existing Holders holding or having the power to Transfer 10% or more of the Common Stock Equivalents (collectively, the "Major Selling Stockholder") wishes to Transfer in a single transaction or a series of related transactions all or any part of such Major Selling Stockholder's Convertible Securities or Common Stock (or any interest therein) (i) representing 10% or more of the Common Stock Equivalents to any Person (excluding normal market transactions where the Major Selling Stockholder does not know the identity of the purchaser in any such normal market transaction), or (ii) representing a percentage of the Common Stock Equivalents which (to the actual knowledge of Major Selling Stockholder), together with the holdings of Common Stock Equivalents by a Person to which the Transfer is proposed to be made, would result in such Person owning 10% or more of the Common Stock Equivalents after giving effect to the Transfer (in either case, the "Offered Stock"), then such Major Selling Stockholder shall, prior to consummating any such desired Transfer, give a written notice to the Purchaser (at the addresses for Offer Notices set forth in Section 5.1), which notice shall include the proposed offer price per 10 Common Stock Equivalent being offered (the "Offer Price"), the payment terms and the telecopy number to which any Reply Notice is to be sent (an "Offer Notice"). (c) The Purchaser shall have the right to purchase, at the Offer Price and on all the other terms and conditions set forth in the Offer Notice, all (but not less than all) the Offered Stock pursuant to this Section 4.1. (d) The Purchaser shall be irrevocably deemed to have rejected the offer contained in the Offer Notice unless the Purchaser provides the Major Selling Stockholder with written notice of acceptance of such offer by telecopy to the person that sent the Offer Notice at the telecopy number specified in the Offer Notice to which any Reply Notice is to be sent (a "Reply Notice") within one business day after the Offer Notice is deemed to be given by the Major Selling Stockholder pursuant to the provisions hereof. A Reply Notice shall constitute an irrevocable agreement by the Purchaser to purchase all, but not less than all, of the Offered Stock on the terms specified in the Offer Notice. No later than one business day after the Reply Notice is given, the Purchaser shall deliver a certified check or checks in the amount of the aggregate Offer Price to the Major Selling Stockholder against delivery of duly endorsed certificates representing the Offered Stock to be purchased. Such Offered Stock shall be delivered free and clear of all Encumbrances other than those imposed by this Agreement and excluding any registration requirements imposed by the Securities Act and applicable state securities or blue sky laws. (e) If the Purchaser does not elect to purchase all the Offered Stock, the Major Selling Stockholder shall have the right to Transfer all or a portion of the Offered Stock within 90 days after the Offer Notice is received by the Major Selling Stockholder at a price not lower than 90% of the Offer Price, and on terms and conditions (with the exception of price) no more favorable to the transferee(s) than those contained in the Offer Notice; provided, however, if the Major Selling Stockholder does not Transfer all the Offered Stock within such 90-day period, the Purchaser's rights with respect to any of the remaining Offered Stock and the procedures under this Section 4.1 shall recommence in their entirety; provided further, however, nothing stated in this Section 4.1 or elsewhere in this Agreement shall limit in any way the right of such Major Selling Stockholder or any other Existing Holder to Transfer at any time any of such party's Common Stock or Common Stock Equivalents, including any Offered Stock to which this Section 4.1(e) applies in a transaction not subject to Section 4.1(b). Section 4.2. Legend. Each of the Purchaser and the Existing Holders acknowledges that all the certificates now or hereafter representing any Common Stock or Common Stock Equivalents held by such Person shall, to the extent required by applicable law or regulation, be stamped or otherwise imprinted with the following (or a substantially similar) legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION UNLESS AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. 11 Any such legend shall be removed upon either (a) registration under the Securities Act of the securities represented by the certificate(s) in question, or (b) receipt of a legal opinion reasonably satisfactory to the Company to the effect that such legend is not required by the Securities Act to be placed on the certificate(s) in question. ARTICLE V MISCELLANEOUS Section 5.1. Notices. (a) Subject to the provisions of Section 4.1 applicable to an Offer Notice and a Reply Notice, which provisions shall supersede any conflicting provision of this Article V, all notices, requests, claims, demands, approvals, consents, waivers and other communications hereunder (each a "Notice") shall be in writing and shall be delivered by hand, delivered by courier, deposited in the mail (registered or certified mail, postage prepaid, return receipt requested), or sent by facsimile transmission upon receipt of a confirmed transmission report, as follows: If to the Company: LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4130 Attention: President with copies to: Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068-1791 Tel: (973) 597-2500 Fax: (973) 597-2400 Attention: John D. Hogoboom, Esq.; L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.
12 If to the Purchaser (except, in the case of L-3 Communications Corporation any Offer Notice) Narda Microwave 435 Moreland Road Hauppage, NY 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: John S. Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq. If to the Purchaser (in the case of any Offer L-3 Communications Corporation Notice) 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5353 Attention: Robert V. LaPenta with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq. If to Cramer Rosenthal McGlynn, Inc., or any of the Existing Holders listed on Schedule 5.1 (the "CRM Related Persons"): To such Person c/o Cramer Rosenthal McGlynn, Inc. 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 Attention: Eugene A. Trainor, III, Executive Vice President With copies to:
13 Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 Tel: (212) 940-8800 Fax: (212) 940-8776 Attention: Dan Harris, Esq.
If to any other Existing Holder: at the address set forth on the signature pages of this Agreement. Any party hereto, by Notice given to the other party hereto in accordance with this Section 5.1, may change the address or facsimile transmission number to which such Notices are to be sent to such party. All Notices shall be deemed effective and given upon confirmed receipt or refusal of receipt. Section 5.2. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such court and irrevocably waives any claim that any such suit, and action or proceeding brought in any such court has been brought in an inconvenient forum. Section 5.3. Assignment; Successors and Assigns; No Third Party Rights. This Agreement may not be assigned by the Company, the Purchaser or any Existing Holder, except to any of its controlled Affiliates (provided that such controlled Affiliate continues to remain at all times thereafter a controlled Affiliate of the assigning party) or to any successor-in-interest to substantially all of its business. In the event of any permitted assignment of this Agreement, the assigning party shall not be released from such party's obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. This Agreement shall be for the sole benefit of the parties to this Agreement and their respective successors, permitted assigns and legal representatives and is not intended, nor shall be construed, to give any Person, other than the parties hereto and their respective successors, permitted assigns and legal representatives, any legal or equitable right, remedy or claim hereunder. Section 5.4. Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in multiple counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument. 14 Section 5.5. Titles and Headings. The titles and headings in this Agreement are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. Section 5.6. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the matters covered hereby and supersedes all previous written, oral or implied agreements or understandings between them with respect to such matters. Section 5.7. Severability. The invalidity of any portion hereof shall not affect the validity, force or effect of the remaining portions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by law. Section 5.8. No Strict Construction. Each of the parties hereto acknowledges that this Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed against either party. Section 5.9. Acknowledgement. Each of the parties hereto acknowledges that the representations and warranties contained in this Agreement and in any document or instrument delivered to such party pursuant hereto or in connection herewith shall not be deemed waived or otherwise affected by any investigation by another party hereto, or such party's officers, directors, employees, counsel, accountants, advisors, representatives and agents. Section 5.10. Effectiveness; Termination. (a) This Agreement shall become effective only upon the Closing, and shall terminate upon the earliest to occur of (i) the consummation of the Public Offering, (ii) with respect to Purchaser or any Existing Holder, when such party shall have irrevocably Transferred all of such party's interests in the Common Stock and Convertible Securities of the Company to one or more Person(s) that are not Affiliates of the Purchaser or such Existing Holder, as the case may be, (iii) the consummation of a Company Sale, to the extent approved by a Special Director Majority or a Special Stockholder Majority in accordance with Section 4.4 of the Purchase Agreement, and (iv) the written mutual consent of the Purchaser and such of the Existing Holders as would then be collectively entitled to cast the Majority Vote of Existing Holders. (b) For purposes of this Section 5.10, the term "Company Sale" shall mean any of (i) a Transfer of all or substantially all of the assets of the Company to any Person, or group of related Persons, other than to a wholly owned Subsidiary of the Company, in one transaction or a series of related transactions, (ii) a merger, consolidation, recapitalization, share exchange or reorganization of the Company in which the holders of voting stock of the Company immediately prior thereto will not own at least 50% of the voting shares of the continuing or surviving entity (whether or not the Company) immediately thereafter, (iii) the sale or other disposition of voting stock of the Company representing 50% or more of the total voting power of the Company's outstanding capital stock (including Common Stock Equivalents) in one transaction or a series of related transactions to any Person, or group of related Persons, other than a Stockholder or any of its Affiliates, (iv) the issuance of additional shares of voting stock 15 (including, but not limited to, the issuance of rights to purchase shares of voting stock), if, as a result thereof, any Person, or group of related Persons, other than the Purchaser and/ or any of its Affiliates, would beneficially own 50% or more of the total voting power of the Company's outstanding capital stock in one transaction or a series of related transactions, (v) the formation of any form of partnership, joint venture, association or other business organization or strategic alliance, in which the Company would participate if, as a result thereof, all or substantially all of the assets of the Company would be Transferred to any Person not wholly owned by the Company or one or more wholly owned Subsidiaries of the Company, and (vi) to the extent not otherwise referred to in clauses (i) through (v) of this Section 5.10, any event referred to in clauses (A) or (B) of Section 4.4(a) of the Purchase Agreement. Section 5.11. Amendments. This Agreement may not be amended or modified except by an instrument in writing signed on behalf of the Company, the Purchaser and such of the Existing Holders as would then be collectively entitled to cast the Majority Vote of Existing Holders. Section 5.12. Extension; Waiver. Subject to the limitations of Section 4.4 of the Purchase Agreement, any party hereto may (a) extend the time for performance of any of the obligations or other acts of any of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of any of the other parties hereto contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements of any of the other parties hereto or satisfaction of any of the conditions to such party's obligations contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of a party hereto to assert any of such party's rights hereunder shall not constitute a waiver of such rights. Section 5.13. Enforcement. (a) Each party hereto acknowledges that it would be impossible to determine the amount of damages that would result from any breach of any of the provisions of this Agreement, that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, each other party shall, in addition to any other rights or remedies which such party may have, be entitled to obtain such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of, or restrain any party from violating, any of such provisions. In connection with any action or proceeding for injunctive relief, each party hereto hereby waives the claim or defense that a remedy at law alone is adequate and, to the maximum extent permitted by law, consents to have each provision of this Agreement specifically enforced against such party, without the necessity of posting bond or other security against such party, and consents to the entry of injunctive relief against such party enjoining or restraining any breach or threatened breach of such provisions of this Agreement. (b) If any party hereto initiates any legal action arising out of or in connection with this Agreement, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable costs and expenses (including attorneys' fees and expert witness fees and expenses) incurred by the prevailing party in connection therewith. 16 (c) The Non-Purchaser Directors shall have the right to enforce the covenants of the Purchaser contained in this Agreement and the other Transaction Documents on behalf of the Company. (d) Notwithstanding anything to the contrary contained in this Agreement or the Purchase Agreement or as otherwise elsewhere provided, the Existing Holders shall have the right to enforce Section 4.4 of the Purchase Agreement on behalf of the Company if the Non-Purchaser Directors fail so to enforce such Section 4.4; provided, however, this right to enforce such Section 4.4 under this Section 5.13(d) shall exist only so long as the Existing Holders continue to be the owners of at least 10% of the outstanding Common Stock on a Fully Diluted Basis. Section 5.14. Technology Transfer Option. Notwithstanding Section 1.6(a) of the Purchase Agreement, until the exercise of the Technology Option pursuant to Section 1.6(a) of the Purchase Agreement, the Company and the Existing Holders acknowledge and agree that the Purchaser may conduct its business and utilize the Technology in any manner as the Purchaser sees fit and at any time and from time to time may sell, transfer, license, lease, create Encumbrances on or otherwise dispose of any (each a "Disposition") of the Technology as it sees fit in the ordinary course of its business (it being understood and agreed that upon the occurrence of any Disposition, the Technology subject to such Disposition thereafter will no longer be subject to the Technology Option). Section 5.15. Legal Fees. Each party shall bear their own legal fees and expenses in connection with the negotiation, execution and delivery of this Agreement, any other Transaction Document and any ancillary documents thereto. Notwithstanding the foregoing, the Company agrees to pay the legal fees and expenses incurred by Cramer Rosenthal McGlynn, LLC ("CRM, LLC") not to exceed $115,000. Each Existing Holder hereby irrevocably and forever waives any right under any document that obligates the Company to pay any legal fees or expenses incurred by such Existing Holder (or to reimburse such Existing Holder for any such legal fees or expenses), except to the extent set forth in the next preceding sentence. [Signature Pages Follow] 17 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. LOGIMETRICS, INC. By:/s/ Norman M. Phipps ------------------------------------- Name: Norman M. Phipps Title: President L-3 COMMUNICATIONS CORPORATION By:/s/ Christopher C. Cambria ------------------------------------- Name: Christopher C. Cambria Title: Vice-President /s/ Norman M. Phipps ---------------------------------------- Norman M. Phipps 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 S-1 /s/ Charles S. Brand ---------------------------------------- Charles S. Brand 20 Meridian Way Eatontown, New Jersey 07724 Tel: (732) 935-7150 Fax: (732) 935-7151 LFH, LLC By:/s/ Charles Brand ------------------------------------- Name: Charles Brand Title: Director 175 Boundary Road Colts Neck, NJ 07722 Tel: (732) 431-4175 Fax: (732) 431-4108 /s/ Gerald B. Cramer ---------------------------------------- Gerald B. Cramer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRAMER ROSENTHAL McGLYNN LLC By:/s/ Eugene A. Trainor ------------------------------------- Name: Eugene A. Trainor Title: Executive Vice President Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-2 L.A.D. EQUITY PARTNERS, L.P. By: Flint Investments, Inc. Its General Partner By:/s/ Arthur J. Pergament ------------------------------------- Name: Arthur J. Pergament Title: Vice President 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Edward J. Rosenthal, Keogh ---------------------------------------- Edward J. Rosenthal, Keogh 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM 1998 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc., Its Managing Member By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-3 CRM 1997 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc. Its Managing Member By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM RETIREMENT PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer S-4 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM MADISON PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM U.S. VALUE FUND, LTD. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 EURYCLEIA PARTNERS, L.P. By: Marchessini & Company, Its General Partner By:/s/ Rona Trokie ------------------------------------- Name: Rona Trokie Title: Vice President S-5 745 Fifth Avenue, Suite 1400 New York, New York 10151 Tel: (212) 752-4300 Fax: (212) 752-4309 A.C. ISRAEL ENTERPRISES, INC. By:/s/ Jay Howard ------------------------------------- Name: Jay Howard Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM-EFO PARTNERS, L.P. By: CRM-EFO Investments, LLC Its General Partner By: CRM Management, Inc., Its Managing Member By:/s/ Eugene A. Trainor, III ------------------------------------- Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 S-6 /s/ Gregory Manocherian ---------------------------------------- Gregory Manocherian New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 PAMELA EQUITIES CORP. By:/s/ Gregory Manocherian ------------------------------------- Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 WHITEHALL PROPERTIES, LLC By:/s/ Gregory Manocherian ------------------------------------- Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 S-7 KABUKI PARTNERS ADP, GP By:/s/ Gregory Manocherian ------------------------------------- Name: Gregory Manocherian Title: General Partner 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 McGLYNN FAMILY PARTNERSHIP L.P. By:/s/ Ronald H. McGlynn ------------------------------------- Name: Ronald H. McGlynn Title: General Partner 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Richard S. Fuld, Jr. ---------------------------------------- Richard S. Fuld, Jr. By: Cramer Rosenthal McLynn, Inc. Attorney-in-Fact 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Fred M. Filoon ---------------------------------------- Fred M. Filoon 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-8 /s/ Eugene A. Trainor, III ---------------------------------------- Eugene A. Trainor, III 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Mark B. Fisher ---------------------------------------- Mark B. Fisher 102 E. 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 MBF CAPITAL CORPORATION By:/s/ Mark B. Fisher ------------------------------------- Name: Mark B. Fisher Title: President MBF BROADBAND SYSTEMS, L.P. By: MBF Broadband Systems, Inc., Its General Partner By:/s/ Mark B. Fisher ------------------------------------- Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 S-9 PHINEAS BROADBAND SYSTEMS By: MBF Broadband Systems, Inc. Its General Partner By:/s/ Mark B. Fisher ------------------------------------- Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 CERBERUS PARTNERS, L.P. By: Cerberus Associates, LLC, Its General Partner By:/s/ Seth Plattus ------------------------------------- Name: Seth Plattus Title: Managing Director 450 Park Avenue 28th Floor New York, New York 10022 Tel: (212) 891-2100 Fax: (212) 421-2947 S-10 /s/ Steve Dinetz ---------------------------------------- Steve Dinetz 1034 Skyland Drive Zephyr Cove, NV 89448 Tel: (702) 588-0343 Fax: (702) 588-1433 S-11 EXHIBIT A FORM OF THE EMPLOYMENT AGREEMENT SCHEDULE 1.2(a) EXISTING HOLDER SECURITIES SCHEDULE 5.1 CRM RELATED PERSONS Cramer Rosenthal McGlynn, LLC Edward J. Rosenthal, Keogh CRM 1997 Enterprise Fund, LLC CRM 1998 Enterprise Fund, LLC CRM Partners, L.P. CRM Retirement Partners, L.P. CRM Madison Partners, L.P. CRM U.S. Value Fund, LTD. CRM-EFO Partners, L.P. McGlynn Family Partnership L.P. Gerald B. Cramer Fred M. Filoon EX-99 7 0007.txt EXHIBIT 7.6 REGISTRATION RIGHTS AGREEMENT AMONG LOGIMETRICS, INC. AND L-3 COMMUNICATIONS CORPORATION AND THE OTHER PARTIES LISTED ON THE SIGNATURE PAGES HEREOF DATED AS OF JULY 10, 2000 LOGIMETRICS, INC. REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement is made and entered into as of July 10, 2000, among LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3 Communications Corporation, a Delaware corporation ("L-3"), and the other signatories hereto (the "Existing Holders"). In consideration of the mutual agreements and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties to this Agreement agree as follows: 1. Definitions. 1.1 Definitions. For the purposes of this Section 1 and other Sections of this Agreement, the following words shall have the meanings set forth below: "Agreement" shall mean this Agreement, as the same may be amended, supplemented or modified from time to time in accordance with its terms. "Applicable Securities Laws" shall mean the securities laws or Blue Sky laws of any jurisdiction (U.S. or foreign) applicable under the relevant circumstances, including the United States or any subdivision thereof. "Commission" shall mean the Securities and Exchange Commission. "Common Stock" shall mean the shares of Common Stock of the Company, par value $.01 per share. "Company" shall have the meaning set forth in the first paragraph hereof. "Company's Notice" shall have the meaning set forth in Section 2.3. "Convertible Securities" shall mean (i) any rights, options or warrants to acquire Common Stock or any capital stock of the Company, and (ii) any notes, debentures, shares of preferred stock or other securities or rights, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company. "CRM Related Persons" shall have the meaning set forth in Section 3.1. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Existing Holders" shall have the meaning set forth in the first paragraph hereof. "Existing Holder Registrable Stock" shall mean: (i) the Common Stock held by the Existing Holders and listed on Schedule 1 hereto; (ii) any Common Stock issued or issuable upon conversion of any Convertible Security held by the Existing Holders and listed on Schedule 1 hereto; and (iii) any Common Stock issued or issuable, directly or indirectly, with respect to any of the securities referred to in clause (i) or clause (ii) above, by reason of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Each share of Existing Holder Registrable Stock shall cease to be Registrable Stock when transferred to any Person in accordance with a registered public offering. "Incidental Registration" shall have the meaning set forth in Section 2.3. "Initiating Holders" shall mean the Long-Form Initiating Holders or the Short-Form Initiating Holders, as applicable. "Investors' Notice" shall have the meaning set forth in Section 2.3. "L-3" shall have the meaning set forth in the first paragraph hereof. "L-3 Registrable Stock" shall mean: (i) any Common Stock now or hereafter held by L-3; (ii) any Common Stock issued or issuable upon conversion of any Convertible Security held by L-3; and (iii) any Common Stock issued or issuable, directly or indirectly, with respect to any of the securities referred to in clause (i) or clause (ii) above, by reason of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Each share of L-3 Registrable Stock shall cease to be Registrable Stock when transferred to any Person in accordance with a registered public offering. "Long-Form Initiating Holders" shall mean the Major Investor(s) referred to in either Section 2.1(a) or 2.1(b), as the case may be. "Long-Form Registration Statement" shall mean a registration statement on Form S-1 or Form S-2, or any similar form of registration statement adopted by the Commission from and after the date hereof. "Major Investor" shall mean, as of any date, with respect to any holder of Registrable Stock, such holder of Registrable Stock so long as it owns Registrable Stock as of such date that represents (i) in the case of a holder of L-3 Registrable Stock, not less than five percent (5%) of the outstanding L-3 Registrable Stock as of such date, and (ii) in the case of a holder of Existing Holder Registrable Stock, not less than five percent (5%) of the outstanding Existing Holder Registrable Stock as of such date. "Notice" shall have the meaning set forth in Section 3.1. "Person" or "person" shall mean any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business trust or other entity, or any governmental authority. "Prospective Sellers" shall have the meaning set forth in Section 2.6(a)(ii). 2 "Public Offering" shall mean a consummated firmly underwritten public offering of the Common Stock of the Company pursuant to an effective registration statement filed with the Commission under the Securities Act, with respect to which (i) the Company's Common Stock is listed on the NASDAQ National Market (or any successor, exchange market or organization thereto), and (ii) the Company makes an offering for at least twenty percent (20%) of the outstanding Common Stock. "Purchase Agreement" shall have the meaning set forth in Section 2.13. The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act. "Registrable Stock" shall mean the Existing Holder Registrable Stock and/or the L-3 Registrable Stock, as the context requires. "Registration Expenses" shall have the meaning set forth in Section 2.7. "Requesting Holders" shall have the meaning set forth in Section 2.1(d). "Rule 144" shall mean Rule 144 promulgated by the Commission under the Securities Act. "Rule 144A" shall have the meaning set forth in Section 2.11(b). "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Short-Form Initiating Holders" shall have the meaning set forth in Section 2.1(c). "Short-Form Registration Statement" shall mean a registration statement on Form S-3 or any similar form of registration statement adopted by the Commission from and after the date hereof. 1.2 Rules of Construction. Words such as "herein", "hereinafter", "hereto", "hereby" and "hereunder", when used with reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise requires. The words "include", "includes", "included" and "including" shall be construed as if followed by the phrase "without being limited to". A reference to a particular gender means a reference to any gender. 2. Registration Provisions. 2.1 Required Registrations. (a) If, at any time after the date hereof, one or more Major Investor(s) that is a holder of L-3 Registrable Stock proposes to effect the registration of any shares of Registrable Stock, pursuant to a Long-Form Registration Statement, then such Major Investor(s) may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (i) the form of registration statement under the Applicable Securities Laws to be used, (ii) the 3 number of shares of L-3 Registrable Stock to be disposed of, and (iii) the intended method of disposition of such shares; provided, however, that such Major Investor(s) include in such registration 5% of the L-3 Registrable Stock then outstanding. (b) If, at any time after the earlier to occur of (i) the consummation of the Public Offering, and (ii) March 31, 2001, one or more Major Investor(s) that is a holder of not less than 20% of the Existing Holder Registrable Stock proposes to effect the registration of any shares of Registrable Stock, pursuant to a Long-Form Registration Statement, then such Major Investor(s) may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (A) the form of registration statement under the Applicable Securities Laws to be used, (B) the number of shares of Existing Holder Registrable Stock to be disposed of, and (C) the intended method of disposition of such shares; provided, however, that such Major Investor(s) include in such registration 5% of the Existing Holder Registrable Stock then outstanding. (c) If at any time after the earlier of (i) January 2, 2001 and (ii) the consummation of a Public Offering, provided that the Company is entitled to file a registration statement on a Short-Form Registration Statement, any holder(s) of Registrable Stock proposes to effect the registration of, pursuant to a Short-Form Registration Statement, shares of Registrable Stock that are reasonably expected to have an aggregate offering price of at least $1,000,000 (the "Short-Form Initiating Holders"), then such holder(s) of Registrable Stock may request the Company in writing to effect such registration under the Applicable Securities Laws, stating (i) the form of registration statement under the Applicable Securities Laws to be used, (ii) the number of shares of Registrable Stock to be disposed of, and (iii) the intended method of disposition of such shares. (d) Upon receipt of the request of the Long-Form Initiating Holders pursuant to Section 2.1(a) or 2.1(b) or the Short-Form Initiating Holders pursuant to Section 2.1(c), the Company shall give prompt written notice thereof to all other holders of Registrable Stock. Subject to the provisions of Section 2.2, the Company shall, subject to the terms of this Agreement, use its best efforts to effect the registration under the Applicable Securities Laws of all shares of Registrable Stock specified in the requests of the Long-Form Initiating Holders or the Short-Form Initiating Holders, as the case may be, and the requests (stating (i) the number of shares of Registrable Stock to be disposed of, and (ii) the intended method of disposition of such shares) of other holders of shares of Registrable Stock, as applicable ("Requesting Holders") given within 30 days after receipt of such notice from the Company. 2.2 Limitations on Required Registration. (a) The Company shall not be required to prepare and file more than four Long-Form Registration Statements pursuant to Section 2.1(a) requested by holders of L-3 Registrable Stock or more than two Long Form Registration Statements pursuant to Section 2.1(b) requested by holders of Existing Holder Registrable Stock, which actually become and are declared effective (it being understood and agreed that only a Long-Form Registration Statement that either (i) pursuant to which all the shares of Registrable Stock covered thereby have been sold or 4 disposed of, or (ii) has been effective for at least 180 days, shall be deemed to have become or declared effective for purposes of being included in such four or two Long-Form Registration Statements, as the case may be). (b) Whenever a registration requested by the holders of Registrable Stock is for a firmly underwritten offering and the managing underwriter(s) determine that the number of shares of Common Stock so included which are to be sold by the holders of Registrable Stock is limited due to market conditions, the shares to be offered shall be allocated (i) first, to the Initiating Holders, pro rata, based upon the number of shares of Registrable Stock then held by such holders, respectively, and (ii) thereafter, the remaining available portion, if any, shall be allocated among all the Requesting Holders, pro rata, based upon the number of shares of Registrable Stock then held by such Requesting Holders, respectively. If any holder of Registrable Stock disapproves of the terms of the underwriting, such Person may elect to withdraw therefrom by written notice to the Company and the Initiating Holders. The Registrable Stock so withdrawn shall also be withdrawn from registration; provided, however, that, if by the withdrawal of such Registrable Stock a greater number of shares of Registrable Stock held by other holders of Registrable Stock may be included in such registration (up to the maximum of any limitation imposed by the managing underwriter(s)), then the Company shall offer to all holders of Registrable Stock who have included Registrable Stock in the registration the right to include additional Registrable Stock in the same priority and proportion used in determining the limitation imposed by the provisions of this Section 2.2(b). (c) The Company shall not be required to prepare and file a registration statement pursuant to Section 2.1(a) or 2.1(b) for a period of not more than 90 days following receipt by the Company of the Long-Form Initiating Holders' request for registration, if (i) the Company in good faith gives written notice within five days after such receipt by the Company of such request to all holders of Registrable Stock that the Company is commencing to prepare a Company-initiated registration statement, and (ii) the Company actively employs in good faith all reasonable efforts to cause such registration statement to become effective. (d) If the Company receives a Long-Form Initiating Holders' request within 90 days of the date on which a previous registration statement filed pursuant to Section 2.1(a) or 2.1(b) has become effective, the Company shall not be required to commence preparation of such Long-Form Registration Statement in accordance with such request until 90 days has elapsed since such effective date. (e) If the Company shall furnish to the Initiating Holders pursuant to this Section 2.2(e) a certificate signed by the chief executive or chief financial officer of the Company stating that the Company, in good faith, has determined that (i) there exists material non-public information about the Company which the Company has a bona fide business purpose for preserving as confidential, or (ii) is undertaking (or is about to undertake) a proposed acquisition or financing that would significantly impact the pricing of the contemplated public offering, and in each case the Company provides the Initiating Holders written notice thereof promptly after the Company makes such determination, then the Company shall have the right to defer the filing or the declaration of effectiveness of a registration statement required to be 5 effected pursuant to Section 2.1, for a period of not more than (A) 90 days, in the case of a Long-Form Registration Statement, or (B) 60 days, in the case of a Short-Form Registration Statement, after receipt of the request of the Initiating Holders; provided, however, that in no event shall the Company be entitled to defer such filing or declaration of effectiveness pursuant to this Section 2.2(e) more than 120 days in any 12-month period. 2.3 Incidental Registration. If the Company at any time proposes to register any of its securities for sale for its own account or for the account of any other Person (other than a registration (a) requested pursuant to Section 2.1, or (b) relating solely to the sale of securities to participants in a Company stock plan or in a Rule 145 transaction) (an "Incidental Registration"), then the Company shall each such time give written notice (the "Company's Notice"), at its expense, to all holders of Registrable Stock of its intention to do so at least 20 days prior to the filing of a registration statement with respect to such Incidental Registration with the Commission. If any holder of Registrable Stock desires to dispose of all or part of its Registrable Stock, it may request registration thereof in connection with the Incidental Registration by delivering to the Company, within 10 days after receipt of the Company's Notice, written notice of such request (the "Investors' Notice") stating the number of shares of Registrable Stock to be disposed of and the intended method of disposition of such shares by such holder. The Company shall, subject to the terms of this Agreement, use commercially reasonable efforts to cause all shares of Registrable Stock specified in the Investors' Notice to be registered under the Securities Act so as to permit the sale or other disposition (in accordance with the intended methods thereof as aforesaid) by such holder or holders of the shares so registered, subject, however, to the limitations set forth in Section 2.4. 2.4 Limitations on Incidental Registration. (a) If the Incidental Registration of which the Company gives notice pursuant to Section 2.3 is for the purpose of permitting a disposition of securities by the Company pursuant to a firm commitment underwritten offering, the notice shall so state, and the Company shall have the right to limit the aggregate size of the offering or the number of shares to be included therein by stockholders of the Company if requested to do so in good faith by the managing underwriter(s) of the offering and only securities which are to be included in the underwriting may be included in the registration. (b) Whenever an Incidental Registration is initiated pursuant to Section 2.3 and the number of shares which may be registered pursuant to Section 2.3 is limited by the provisions of Section 2.4(a), the holders of Registrable Stock shall have priority (pro rata as between holders of L-3 Registrable Stock on the one hand and holders of Existing Holder Registrable Stock on the other hand based on the percentage of total Registrable Stock then held by the holders of L-3 Registrable Stock in the aggregate and the holders of Existing Holder Registrable Stock in the aggregate) as to sales over the other holders of the Company's securities exercising similar incidental registration rights and the Company shall cause such other holders to withdraw from such registration to the extent necessary to allow all requesting holders of Registrable Stock to include all of the shares so requested by them (pro rata in accordance with the preceding parenthetical) to be included within such registration. Whenever the number of shares which 6 may be registered pursuant to Section 2.3 is still limited by the provisions of Sections 2.4(a) after the withdrawal of such other holders of the Company's securities, the Company shall have priority as to sales over the holders of Registrable Stock and each holder hereby agrees that it shall withdraw its securities from such registration to the extent necessary to allow the Company to include all the shares which the Company desires to sell for its own account to be included within such registration. The holders of Registrable Stock given rights by Section 2.3 shall share in the available portion of the registration in question, such sharing to be based upon the priority and proportion set forth, first, in the parenthetical above, and then, within each group comprising holders of L-3 Registrable Stock or Existing Holder Registrable Stock, as the case may be, based upon the numbers of shares of L-3 Registrable Stock or Existing Holder Registrable Stock, as the case may be, that the holders thereof wish to include in the Incidental Registration. 2.5 Designation of Underwriter. In the case of any registration initiated by the holders of Registrable Stock pursuant to the provisions of Section 2.1 which is proposed to be effected pursuant to a firm commitment underwriting, the Company, with the consent of the Initiating Holders (which consent will not be unreasonably withheld or delayed), shall designate the managing underwriter(s) (and all holders of Registrable Stock participating in the registration shall sell their shares only pursuant to such underwriting). 2.6 Registration Procedures. (a) If and when the Company is required by the provisions of this Agreement to effect the registration of shares of Registrable Stock, the Company shall, by notice to each holder of Registrable Stock included in such registration, keep such holder advised in writing as to the initiation, progress and effective date of each registration, qualification and compliance pursuant hereto, and, at the expense of the Company: (i) prepare and file with the Commission or other applicable securities authorities a registration statement with respect to such shares and use its best efforts to cause such registration statement to become and remain effective as provided herein; (ii) prepare and file with the Commission or other applicable securities authorities such amendments and supplements (pre-effective and post-effective) to such registration statement and the prospectuses used in connection therewith as may be necessary to keep such registration statement effective and current and to comply with the provisions of the Securities Act or other Applicable Securities Law with respect to the sale or other disposition of all shares covered by such registration statement, including such amendments and supplements as may be necessary to reflect the intended method of disposition from time to time of the holder or holders of Registrable Stock who have requested that any of their shares be sold or otherwise disposed of in connection with the registration (the "Prospective Sellers"), and as may be necessary to keep each registration, qualification or compliance effective until each Prospective Seller shall have 7 completed the distribution described in the registration statement relating thereto; (iii) furnish to each Prospective Seller such number of copies of each prospectus, including preliminary prospectuses, in conformity with the requirements of the Securities Act or other Applicable Securities Law, and such other documents, as the Prospective Seller may reasonably request in order to facilitate the public sale or other disposition of the shares owned by it; (iv) use its best efforts to register or qualify the shares covered by such registration statement under such other securities or Blue Sky or other Applicable Securities Law of such jurisdictions as each Prospective Seller shall reasonably request to enable such Prospective Seller to consummate the public sale or other disposition of the shares owned by such Prospective Seller; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions; (v) furnish to each Prospective Seller a signed counterpart, addressed to the Prospective Sellers and the underwriters, if any, of: (A) an opinion of counsel for the Company, dated the effective date of the registration statement or the closing date of any underwritten public offering, in customary form, covering such matters as are customarily covered by opinions for an underwritten public offering in opinions of issuers' counsel delivered to underwriters and selling shareholders; and (B) "comfort" letters signed by the independent public accountants, within the meaning of Applicable Securities Laws, 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 with respect to the events subsequent to the date of the financial statements, as are customarily covered (at the time of such registration) in accountants' letters delivered to the underwriters in connection with underwritten public offerings of securities; (vi) cause all such Registrable Stock to be listed on each national securities exchange or be included for quotation on each national securities market on which similar securities issued by the Company are then listed; (vii) provide a transfer agent and registrar for all such Registrable Stock not later than the effective date of such registration statement; (viii) enter into such customary agreements (including an underwriting agreement) and take all such other customary actions as the holders of a majority of the Registrable Stock covered by such registration statement 8 reasonably request in order to expedite or facilitate the disposition of such Registrable Stock; (ix) comply with the provisions of Applicable Securities Laws with respect to the disposition of all securities covered by such registration statement; (x) promptly notify each Prospective Seller (i) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to the registration statement or any post-effective amendment thereof, when the same has become effective, (ii) of any request by any applicable securities authority for amendments of or supplements to the registration statement or the prospectus or for additional information, (iii) of the issuance by any applicable securities authority of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the registrable securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose, and (v) of the happening of any event which makes any statement of a material fact made in the registration statement, the prospectus or any document incorporated therein by reference untrue or which requires the making of any changes in the registration statement, the prospectus or any document incorporated therein by reference in order to make the statement of a material fact therein not misleading; (xi) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement; (xii) upon the occurrence of any event contemplated by clause (x) above, promptly prepare a supplement or post-effective amendment to the registration statement or the prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Stock, the registration statement and the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (xiii) make generally available to each purchaser of Registrable Stock consolidated earnings statements satisfying the requirements of Applicable Securities Laws; and (xiv) make available for inspection by any Prospective Seller, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such Prospective Seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the 9 Company's officers, directors and employees to supply all information reasonably requested by any such Prospective Seller, underwriter, attorney, accountant or agent in connection with the preparation of such registration statement. (b) Each Prospective Seller shall furnish to the Company such information as the Company may reasonably require from the Prospective Seller for inclusion in the registration statement (and the prospectus included therein). (c) The Prospective Sellers shall not (until further notice) effect sales of the shares covered by the registration statement after receipt of notice from the Company to suspend sales in order to permit the Company to correct or update a registration statement or prospectus. (d) In the case of an underwritten offering of Common Stock effected pursuant to this Agreement, the Company and each Prospective Seller shall enter into such customary agreements (including an underwriting agreement) and take all such other customary actions as the managing underwriter(s) reasonably request(s) in order to expedite or facilitate the disposition of such Registrable Stock. 2.7 Expenses of Registration. All expenses incurred in effecting any registration requested pursuant to Section 2.1 or 2.3, including all registration and filing fees, stock exchange or market listing or filing fees, fees and expenses of complying with Applicable Securities Laws, printing expenses, expenses of compliance with Blue Sky laws, fees and disbursements of counsel for the Company and its independent public accountants, reasonable expenses of any special audits required by any such registration, the fees and disbursements of any counsel and accountant retained by the holders of more than fifty percent (50%) of the Registrable Stock being registered, and expenses of all marketing and promotional efforts requested by the managing underwriter(s) and any fees and expenses disbursements of underwriters customarily paid by issuers ("Registration Expenses") shall be borne by the Company; provided, however, that the Prospective Sellers shall bear underwriting discounts or brokerage fees or commissions relating to the sale of their Registrable Stock and any legal fees or disbursements for their counsel (except as aforesaid); provided further, however, that the Company shall be required to bear the Registration Expenses for a maximum of six registrations upon the request of the holders of Registrable Stock pursuant to Section 2.1(c). 2.8 Indemnification. (a) In the event of any registration of any of its securities under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless each holder requesting or joining in a registration of such securities, its directors and officers, if any, each underwriter (as defined in the Securities Act), each other Person who participates or is to participate in the offering of such holder's securities and each controlling Person of any such holder or underwriter, if any (within the meaning of the Securities Act), from and against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which such holder, director, officer, underwriter, participating Person or controlling Person may be subject under the Securities Act or other Applicable Securities Laws, or under any other statute 10 or at common law, insofar as such losses, claims, damages or liabilities (or actions, whether or not commenced, 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 such securities were registered under the Securities Act or other Applicable Securities Laws, or any preliminary prospectus or final prospectus contained therein, or any summary prospectus issued in connection with any securities being registered, or any amendment or supplement thereto, or any other document, 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 not misleading, or (iii) any violation by the Company of the Securities Act or other Applicable Securities Law, or any rule or regulation promulgated under the Securities Act or any other Applicable Securities Law, or any other law applicable to the Company in connection with any such registration, qualification or compliance, and shall reimburse each such holder, director, officer, underwriter, participating Person or controlling Person for any legal or other expenses reasonably incurred by such holder, director, officer, underwriter, participating Person or controlling Person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to any holder, director, officer, underwriter, participating Person or controlling Person in any such case to the extent that any such loss, claim, damage liability or action arises out of or is based upon any such untrue statement or omission made in such registration statement, preliminary prospectus, final prospectus, summary prospectus, or amendment or supplement thereto, or any other document in reliance upon and in conformity with written information furnished to the Company by such holder, underwriter, participating Person or controlling Person, respectively, specifically stating that it is for use therein. The indemnity provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of such holder, director, officer, underwriter, participating Person or controlling Person, and shall survive transfer of such securities by such holder. (b) If the indemnification provided for in Section 2.8(a) is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or actions referred to therein, then the Company 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, liabilities or actions, in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the indemnified parties on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or actions, as well as any other relevant equitable considerations. The relative fault of the Company 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 or alleged omission to state a material fact relates to information supplied by the Company 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 parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.8(b) 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 11 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 any legal fees and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.8(b), (i) no holder of Registrable Stock shall be required to contribute any amount in excess of the proceeds to it from the sale of Registrable Stock by it pursuant to the registration statement, (ii) no underwriter shall be required to contribute any amount in excess of the proceeds to it from the offering pursuant to the registration statement, and (iii) 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. (c) The provisions of this Section 2.8 shall be in addition to any other rights to indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise, and shall remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party. (d) Promptly after receipt by an indemnified party under Section 2.8(a) or 2.8(b) of notice of any claim or the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the Company under such Section, notify the Company in writing of the commencement thereof; but the omission so to notify the Company shall not relieve it from any liability which it may have to any indemnified party otherwise than under such Section or to the extent that it has not been prejudiced as a result of such failure. In case any such claim shall be brought against any indemnified party, it shall notify the Company of the commencement thereof, and the Company shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the Company and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the Company, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties). Upon the permitted assumption by the Company of the defense of such action, and approval by the indemnified party of counsel, the Company shall not be liable to such indemnified party under this Section 2.8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof (other than reasonable costs or investigation) unless (i) the indemnified party shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the Company shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time, (iii) the Company and its counsel do not actively and vigorously pursue the defense of such action, or (iv) the Company has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. The Company shall not, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement of any such claim (whether or not the indemnified party is an actual or potential party to such claim) unless such judgment or settlement (A) includes as an unconditional term thereof the giving by the claimant or plaintiff to 12 such indemnified party of a release from all liability in respect of such claim or litigation, and (B) does not include a statement as to an admission of fault, culpability or a failure to act on behalf of any indemnified party. No indemnified party shall consent to entry of any judgment or enter into any settlement of such action the defense of which has been assumed by the Company without the consent of the Company, such consent not to be unreasonably withheld or delayed. 2.9 Information by Holders. Each holder of Registrable Stock shall furnish to the Company such information regarding such holder and the distribution proposed by such holder as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. 2.10 Waiver of Other Registration Rights. Each Existing Holder hereby forever and irrevocably (a) waives any rights heretofore granted by the Company with respect to the registration of any Registrable Stock under Applicable Securities Laws, and (b) releases the Company from any commitment, covenant, agreement or obligation to register any Registrable Stock under Applicable Securities Laws. Without limiting the effect of the foregoing, each of the Existing Holders and the Company agrees that the Registration Rights Agreement dated as of October 21, 1998, is terminated upon the execution and delivery of this Agreement by the parties hereto and shall be of no force and effect. 2.11 Rule 144 and Rule 144A. With a view to making available to each holder of Registrable Stock the benefits of certain rules and regulations of the Commission which may permit the sale of the Registrable Stock to the public without registration, the Company agrees that so long as a holder owns any Registrable Stock: (a) the Company shall, at any time after any of the Company's shares of capital stock are registered under the Securities Act or the Exchange Act: (i) make and keep available public information, as those terms are contemplated by Rule 144 under the Securities Act (or any successor or similar rule then in force); (ii) timely file with the Commission all reports and other documents required to be filed under the Securities Act and the Exchange Act; and (iii) furnish to each holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other information as such holder may reasonably request in order to avail itself of any rule or regulation of the Commission allowing such holder to sell any Registrable Stock without registration (it being understood and agreed that (A) the Company's covenants and agreements contained in this clause (a) shall not be operative until such time as the Company shall have filed with the Commission its Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999, and its Quarterly Reports on Form 10-QSB for the fiscal quarters ended September 30, 1999, December 31, 1999 and March 31, 2000, and (B) the Company agrees to make such filings as soon as practicable); and (b) each holder of Registrable Stock and each prospective holder of Registrable Stock who may consider acquiring Registrable Stock in reliance upon Rule 144A under the Securities Act (or any successor or similar rule then in force) ("Rule 144A") shall have 13 the right to request from the Company, and the Company will provide upon such request, such information regarding the Company and its business, assets and properties, if any, as is at the time required to be made available by the Company under Rule 144A so as to enable such holder to transfer Registrable Stock to such prospective holder in reliance upon Rule 144A. 2.12 Holdback. (a) Each holder of Registrable Stock hereby agrees that it shall not, to the extent requested by the managing underwriter(s) of Common Stock (or other securities of the Company), sell or otherwise transfer or dispose of (other than to donees who agree in writing to be similarly bound) (or agree to do the same) any Common Stock or any Convertible Securities or any other equity securities or equity-linked securities of the Company, during a reasonable and customary period of time specified by the managing underwriter(s) (but in any event not to exceed 180 days), in connection with any registration statement effected pursuant to this Agreement (except to the extent such holder of Registrable Stock sells any Registrable Stock in such registration pursuant to and in accordance with this Agreement); provided, however, that the Company shall have the right to issue Common Stock upon the due exercise or conversion of Convertible Securities. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Stock of each holder until the end of such reasonable and customary period. (b) The Company hereby agrees that it shall not, to the extent requested by the managing underwriter(s) of Common Stock (or other securities of the Company), issue, sell or otherwise transfer or dispose of (or agree to do the same) any Common Stock or any Convertible Securities or any other equity securities or equity-linked securities of the Company, during a reasonable and customary period of time specified by the managing underwriter(s) (but in any event not to exceed 180 days), in connection with any registration statement effected pursuant to this Agreement; provided, however, that the Company shall have the right to issue Common Stock upon the due exercise or conversion of Convertible Securities. (c) No registration shall be requested to be effected pursuant to Section 2.1 during the period(s) of time in which the restrictions on transfer of equity securities or equity-linked securities of the Company specified in Section 2.12(a) or 2.12(b) are in effect. (d) Notwithstanding the foregoing, none of the provisions of this Section 2.12 shall apply to Cerberus Partners, L.P.; provided, however, that if Cerberus Partners, L.P. is a Prospective Seller, then the provisions of this Section 2.12 shall apply to it. 2.13 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities without the prior written consent of the holders of at least a majority of the then outstanding L-3 Registrable Stock and at least a majority of the then outstanding Existing Holder Registrable Stock. Notwithstanding the foregoing, the Company may enter into an agreement (the "New Agreement") granting registration rights no more favorable than the rights set forth herein to one or more investments banks or their Affiliates to whom Common Stock or Convertible Securities 14 are issued or transferred in accordance with the terms of the Purchase Agreement, dated the date hereof, between the Company and L-3, as the same may be amended or supplemented from time to time (the "Purchase Agreement"); provided, however, that if L-3 is to be granted any registration or other rights pursuant to the New Agreement, then the Existing Holders shall be granted registration or other rights substantially similar to those registration or other rights granted to L-3 under the New Agreement. 3. Miscellaneous. 3.1 Notices. All notices, requests, claims, demands, approvals, consents, waivers and other communications hereunder (each a "Notice") shall be in writing and shall be (a) personally delivered, (b) transmitted by telecopy facsimile, provided that the original copy thereof also is sent by pre-paid, first class, registered or certified mail (return receipt requested), or by next-day or overnight mail (to any United States address) or by an internationally recognized express delivery service (to any foreign address), (c) sent by first class, registered or certified mail, return receipt requested or by next-day or overnight mail (to any United Stated address), postage and charges prepaid, or (d) delivered by an internationally recognized express delivery service (to any foreign address), postage and charges prepaid: (i) if to L-3, L-3 Communications Corporation Narda Microwave 435 Moreland Road Hauppauge, N Y 11788 Tel: (631) 231-1700 Fax: (631) 725-8039 Attention: Mr. John Mega with copies to: L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.; (ii) if to the Company, 15 LogiMetrics, Inc. 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 Attention: Chief Executive Officer with copies to: Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068-1791 Tel: (973) 597-2500 Fax: (973) 597-2400 Attention: John D. Hogoboom, Esq.; L-3 Communications Corporation 600 Third Avenue New York, NY 10016 Tel: (212) 697-1111 Fax: (212) 805-5494 Attention: Christopher C. Cambria, Esq.; and Whitman Breed Abbott & Morgan LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-3000 Fax: (212) 351-3131 Attention: James P. Gerkis, Esq.; If to Cramer Rosenthal McGlynn, Inc., or any of the Existing Holders listed on Schedule 3.1 (the "CRM Related Persons"): To such Person c/o Cramer Rosenthal McGlynn, Inc. 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 Attention: Eugene A. Trainor, III, Executive Vice President With copies to: 16 Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 Tel: (212) 940-8800 Fax: (212) 940-8776 Attention: Dan Harris, Esq. if to any other Existing Holder, at the address set forth on the signature pages of this Agreement, or in each case, at such other address and numbers as may have been furnished in a Notice by such Person to the other parties. Any Notice shall be deemed effective or given upon receipt (or refusal of receipt). 3.2 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to the principles of conflicts of law thereof. Each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the State of New York and of the United States of America sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or proceeding shall be heard and determined in such a New York state or federal court. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party in the manner provided in Section 3.1 and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 3.3 Severability. Should any Section or any part of a Section within this Agreement be rendered void, invalid or unenforceable by any court of law for any reason, such invalidity or unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Agreement. 3.4 Section Headings. Section headings contained in this Agreement are inserted as a matter of convenience and for reference purposes only, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof. 3.5 Amendments and Waivers. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally or in writing, except that any term of this 17 Agreement may be amended and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of (a) the Company, (b) the holders of at least a majority of the then outstanding L-3 Registrable Stock, and (c) the holders of at least a majority of the then outstanding Existing Holder Registrable Stock; provided, however, that no such waiver shall extend to or affect any other obligation not expressly waived or impair any right consequent therein. L-3 may waive any of its rights or the obligations of the Company owing to L-3 hereunder without obtaining the consent of any other Person. Each Existing Holder may waive any of its rights or the obligations of the Company owing to such Existing Holder hereunder without obtaining the consent of any other Person. 3.6 Successors and Assigns. All rights, covenants and agreements of the parties contained in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns. The Company may not assign this Agreement. 3.7 Specific Performance. The parties hereto recognize that the capital stock of the Company cannot be readily purchased or sold on the open market and that it is to the benefit of the Company, L-3 and the Existing Holders that this Agreement be carried out; and for those and other reasons, the parties hereto would be irreparably damaged if this Agreement is not specifically enforced in the event of a breach hereof. If any controversy concerning the rights or obligations to purchase or sell any capital stock of the Company arises, or if this Agreement is breached, the parties hereto hereby agree that remedies at law might be inadequate and that, therefore, such rights and obligations, and this Agreement, shall be enforceable by specific performance. The remedy of specific performance shall not be an exclusive remedy, but shall be cumulative of all other rights and remedies of the parties hereto at law, in equity or under this Agreement. 3.8 Entire Agreement. This Agreement contains the entire agreement and understanding of the parties and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof unless expressly referred to herein and supersedes all prior agreements and understandings relating to the subject matter hereof. 3.9 Fees and Expenses. Each party hereto shall pay its respective fees and expenses in connection with the negotiation, execution and delivery of this Agreement and the other documents and transactions contemplated hereby. 3.10 Further Assurances. Each party hereto shall cooperate and take such actions as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby. 3.11 Condition to Effectiveness. This Agreement shall become effective upon the closing of the Purchase Agreement. 3.12 Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in one or more counterparts, each of which 18 shall be deemed an original but all of which together shall constitute one and the same instrument. 3.13 Recapitalization. This Agreement shall apply to (a) the Common Stock held by L-3 and the Existing Holders, as well as any Common Stock hereafter acquired by L-3 and/or the Existing Holders (including any Common Stock issued upon the exercise, conversion or exchange of any Convertible Securities), and (b) any and all shares of capital stock of the Company which may be issued in respect of, in exchange for or in substitution of Common Stock, by reason of any stock dividend, split, reverse split, combination, reclassification, merger, recapitalization, share exchange or other transaction. 3.14 Attorneys' Fees. If any party initiates any legal action arising out of or in connection with this Agreement, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable attorneys' fees, expert witness fees and expenses incurred by the prevailing party in connection therewith. [Signature Pages Follow] 19 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. LOGIMETRICS, INC. By: /s/ Norman M. Phipps _____________________________________ Name: Norman M. Phipps Title: President L-3 COMMUNICATIONS CORPORATION By: /s/ Christopher C. Cambria _____________________________________ Name: Christopher C. Cambria Title: Vice President /s/ Norman M. Phipps _________________________________________ Norman M. Phipps 50 Orville Drive Bohemia, New York 11716 Tel: (631) 784-4110 Fax: (631) 784-4132 S-1 /s/ Charles S. Brand _________________________________________ Charles S. Brand 20 Meridian Way Eatontown, New Jersey 07724 Tel: (732) 935-7150 Fax: (732) 935-7151 LFH, LLC By: /s/ Charles Brand _____________________________________ Name: Charles Brand Title: 175 Boundary Road Colts Neck, NJ 07722 Tel: (732) 431-4175 Fax: (732) 431-4108 /s/ Gerald B. Cramer _________________________________________ Gerald B. Cramer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRAMER ROSENTHAL McGLYNN LLC By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Executive Vice President Chief Operating Offier 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-2 L.A.D. EQUITY PARTNERS, L.P. By: Flint Investments, Inc. Its General Partner By: /s/ Arthur J. Pergament _____________________________________ Name: Arthur J. Pergament Title: Vice President 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Edward J. Rosenthal, Keogh _________________________________________ Edward J. Rosenthal, Keogh 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM 1998 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc., Its Managing Member By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-3 CRM 1997 ENTERPRISE FUND, LLC By: Cramer Rosenthal McGlynn, Inc. Its Managing Member By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Operating Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 CRM PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 S-4 CRM RETIREMENT PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM MADISON PARTNERS, L.P. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM U.S. VALUE FUND, LTD. By: Cramer Rosenthal McGlynn, Inc. Its General Partner By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 S-5 EURYCLEIA PARTNERS, L.P. By: Marchessini & Company, Its General Partner By: /s/ Rona Trokie _____________________________________ Name: Rona Trokie Title: Vice President 745 Fifth Avenue, Suite 1400 New York, New York 10151 Tel: (212) 752-4300 Fax: (212) 752-4309 A.C. ISRAEL ENTERPRISES, INC. By: /s/ Jay Howard _____________________________________ Name: Jay Howard Title: 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 CRM-EFO PARTNERS, L.P. By: CRM-EFO Investments, LLC Its General Partner By: CRM Management, Inc., Its Managing Member By: /s/ Eugene A. Trainor, III _____________________________________ Name: Eugene A. Trainor, III Title: Chief Financial Officer 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 664-8291 S-6 /s/ Gregory Manocherian _________________________________________ Gregory Manocherian New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 PAMELA EQUITIES CORP. By: /s/ Gregory Manocherian _____________________________________ Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 WHITEHALL PROPERTIES, LLC By: /s/ Gregory Manocherian _____________________________________ Name: Gregory Manocherian Title: President 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 S-7 KABUKI PARTNERS ADP, GP By: /s/ Gregory Manocherian _____________________________________ Name: Gregory Manocherian Title: General Partner 3 New York Plaza 18th Floor New York, New York 10004 Tel: (212) 837-4829 Fax: (212) 837-4938 McGLYNN FAMILY PARTNERSHIP L.P. By: /s/ Ronald H. McGlynn _____________________________________ Name: Ronald H. McGlynn Title: General Partner 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Richard S. Fuld, Jr. _________________________________________ Richard S. Fuld, Jr. By: Cramer Rosenthal McLynn, Inc. Attorney-in-Fact 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Fred M. Filoon _________________________________________ Fred M. Filoon 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 S-8 /s/ Eugene A. Trainor, III _________________________________________ Eugene A. Trainor, III 520 Madison Avenue New York, New York 10022 Tel: (212) 838-3830 Fax: (212) 644-8291 /s/ Mark B. Fisher _________________________________________ Mark B. Fisher 102 E. 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 MBF CAPITAL CORPORATION By: /s/ Mark B. Fisher _____________________________________ Name: Mark B. Fisher Title: President MBF BROADBAND SYSTEMS, L.P. By: MBF Broadband Systems, Inc., Its General Partner By: /s/ Mark B. Fisher _____________________________________ Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 S-9 PHINEAS BROADBAND SYSTEMS By: MBF Broadband Systems, Inc. Its General Partner By: /s/ Mark B. Fisher _____________________________________ Name: Mark B. Fisher Title: President 102 East 49th Street 35th Floor New York, New York 10017 Tel: (212) 339-2861 Fax: (212) 339-2834 CERBERUS PARTNERS, L.P. By: Cerberus Associates, LLC, Its General Partner By: /s/ Seth Plattus _____________________________________ Name: Seth Plattus Title: Managing Director 450 Park Avenue 28th Floor New York, New York 10022 Tel: (212) 891-2100 Fax: (212) 421-2947 S-10 /s/ Steve Dinetz _________________________________________ Steve Dinetz 1034 Skyland Drive Zephyr Cove, NV 89448 Tel: (702) 588-0343 Fax: (702) 588-1433 S-11 SCHEDULE 1: EXISTING HOLDER REGISTRABLE STOCK SCHEDULE 3.1: THE CRM RELATED PERSONS Cramer Rosenthal McGlynn LLC Edward J. Rosenthal, Keogh CRM 1997 Enterprise Fund, LLC CRM 1998 Enterprise Fund, LLC CRM Partners, L.P. CRM Retirement Partners, L.P. CRM Madison Partners, L.P. CRM U.S. Value Fund, LTD. CRM-EFO Partners, L.P. McGlynn Family Partnership L.P. Gerald B. Cramer Fred M. Filoon EX-99 8 0008.txt EXHIBIT 7.7 =============================================================================== SECOND AMENDED AND RESTATED CREDIT AGREEMENT AMONG L-3 COMMUNICATIONS CORPORATION, A DELAWARE CORPORATION, AS BORROWER, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, THE CERTAIN FINANCIAL INSTITUTIONS NAMED AS CO-AGENTS HEREIN, BANC OF AMERICA SECURITIES LLC AND LEHMAN COMMERCIAL PAPER INC., AS ARRANGERS, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND LEHMAN COMMERCIAL PAPER INC., AS DOCUMENTATION AGENT AND SYNDICATION AGENT DATED AS OF APRIL 24, 2000 =============================================================================== TABLE OF CONTENTS
Page ---- SECTION 1. DEFINITIONS...........................................................................................1 1.1. Defined Terms.......................................................................................1 1.2. Other Definitional Provisions......................................................................24 1.3. Interrelationship with Original Credit Agreement...................................................24 1.4. Confirmation of Existing Obligations...............................................................25 SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS.............................................................25 2.1. Commitments........................................................................................25 2.2. Procedure for Borrowing............................................................................27 2.3. Commitment Fee.....................................................................................28 2.4. Termination or Reduction of Revolving Credit Commitments...........................................28 2.5. Repayment of Loans; Evidence of Debt...............................................................28 2.6. Optional Prepayments; Mandatory Prepayments and Reduction of Commitments...........................30 2.7. Conversion and Continuation Options................................................................32 2.8. Minimum Amounts and Maximum Number of Tranches.....................................................33 2.9. Interest Rates and Payment Dates...................................................................33 2.10. Computation of Interest and Fees..................................................................34 2.11. Inability to Determine Interest Rate..............................................................34 2.12. Pro Rata Treatment and Payments...................................................................34 2.13. Illegality........................................................................................36 2.14. Requirements of Law...............................................................................36 2.15. Taxes.............................................................................................38 2.16. Indemnity.........................................................................................41 2.17. Replacement of Lenders............................................................................41 2.18. Certain Fees......................................................................................42 2.19. Certain Rules Relating to the Payment of Additional Amounts.......................................42 SECTION 3. LETTERS OF CREDIT.....................................................................................43 3.1. L/C Commitment.....................................................................................43 3.2. Procedure for Issuance of Letters of Credit........................................................43 3.3. Fees, Commissions and Other Charges................................................................44 3.4. L/C Participation..................................................................................44 3.5. Reimbursement Obligation of the Borrower...........................................................46
i 3.6. Obligations Absolute...............................................................................46 3.7. Letter of Credit Payments..........................................................................47 3.8. Application........................................................................................47 3.9. Determination of Exchange Rate.....................................................................47 SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................47 4.1. Financial Condition................................................................................48 4.2. No Change..........................................................................................48 4.3. Corporate Existence; Compliance with Law...........................................................48 4.4. Corporate Power; Authorization; Enforceable Obligations............................................48 4.5. No Legal Bar.......................................................................................49 4.6. No Material Litigation.............................................................................49 4.7. No Default.........................................................................................49 4.8. Ownership of Property; Liens.......................................................................49 4.9. Intellectual Property..............................................................................49 4.10. Taxes.............................................................................................50 4.11. Federal Regulations...............................................................................50 4.12. ERISA.............................................................................................50 4.13. Investment Company Act; Other Regulations.........................................................51 4.14. Subsidiaries......................................................................................51 4.15. Purpose of Loans..................................................................................51 4.16. Environmental Matters.............................................................................51 4.17. Collateral Documents..............................................................................52 4.18. Accuracy and Completeness of Information..........................................................52 4.19. Labor Matters.....................................................................................53 SECTION 5. CONDITIONS PRECEDENT..................................................................................53 5.1. Conditions to Initial Loans........................................................................53 5.2. Conditions to Each Extension of Credit.............................................................56 SECTION 6. AFFIRMATIVE COVENANTS.................................................................................56 6.1. SEC Filings........................................................................................56 6.2. Certificates; Other Information....................................................................57 6.3. Payment of Obligations.............................................................................58 6.4. Conduct of Business; Maintenance of Existence and Property; Compliance with Law....................58 6.5. Insurance..........................................................................................58 6.6. Inspection of Property; Books and Records; Discussions.............................................58 6.7. Notices............................................................................................58 6.8. Environmental Laws.................................................................................59
ii 6.9. Further Assurances.................................................................................60 6.10. Additional Collateral.............................................................................60 6.11. [Intentionally Omitted.]..........................................................................61 6.12. Foreign Jurisdictions.............................................................................61 6.13. Government Contracts..............................................................................61 6.14. Lien Searches.....................................................................................61 SECTION 7. NEGATIVE COVENANTS....................................................................................61 7.1. Financial Condition Covenants......................................................................61 7.2. Limitation on Indebtedness.........................................................................62 7.3. Limitation on Liens................................................................................63 7.4. Limitation on Guarantee Obligations................................................................65 7.5. Limitation on Fundamental Changes..................................................................66 7.6. Limitation on Sale of Assets.......................................................................66 7.7. Limitation on Dividends............................................................................67 7.8. Limitation on Capital Expenditures.................................................................67 7.9. Limitation on Investments, Loans and Advances......................................................67 7.10. Limitation on Optional Payments and Modifications of Instruments and Agreements...................69 7.11. Limitation on Transactions with Affiliates........................................................69 7.12. Limitation on Sales and Leasebacks................................................................70 7.13. Limitation on Changes in Fiscal Year..............................................................70 7.14. Limitation on Negative Pledge Clauses.............................................................70 7.15. Limitation on Lines of Business...................................................................70 7.16. Designated Senior Debt............................................................................70 SECTION 8. EVENTS OF DEFAULT.....................................................................................71 SECTION 9. THE AGENTS; THE ARRANGERS.............................................................................74 9.1. Appointment........................................................................................74 9.2. Delegation of Duties...............................................................................74 9.3. Exculpatory Provisions.............................................................................74 9.4. Reliance by Agents.................................................................................75 9.5. Notice of Default..................................................................................75 9.6. Non-Reliance on Agents and Other Lenders...........................................................75 9.7. Indemnification....................................................................................76 9.8. Agents, in Their Individual Capacities.............................................................76 9.9. Successor Administrative Agent, Syndication Agent and Documentation Agent..........................76 9.10. The Arrangers and the Co-Agents...................................................................77
iii SECTION 10. MISCELLANEOUS........................................................................................77 10.1. Amendments and Waivers............................................................................77 10.2. Notices...........................................................................................78 10.3. No Waiver; Cumulative Remedies....................................................................81 10.4. Survival of Representations and Warranties........................................................82 10.5. Payment of Expenses and Taxes.....................................................................82 10.6. Successors and Assigns; Participation and Assignments.............................................83 10.7. Adjustments; Set-off..............................................................................86 10.8. Counterparts......................................................................................87 10.9. Severability......................................................................................87 10.10. Integration......................................................................................87 10.11. GOVERNING LAW....................................................................................87 10.12. SUBMISSION TO JURISDICTION; WAIVERS..............................................................87 10.13. Acknowledgments..................................................................................88 10.14. WAIVERS OF JURY TRIAL............................................................................88 10.15. Confidentiality..................................................................................89 10.16. Conversion of Currencies.........................................................................89 10.17. Year 2000........................................................................................89 10.18. Existing Agreements Superseded...................................................................90
iv
EXHIBITS Exhibit A-1 Form of Revolving Credit Note Exhibit A-2 Form of Swing Line Note Exhibit B-1 Form of Parent Guarantee Exhibit B-2 Form of Subsidiary Guarantee Exhibit B-3 Form of Parent Pledge Agreement Exhibit B-4A Form of Borrower Pledge Agreement Exhibit B-4B Form of Charge Over Shares Exhibit B-5 Form of Subsidiary Pledge Agreement Exhibit C-1 Form of Legal Opinion of Simpson Thacher and Bartlett Exhibit C-2 Form of Internal Counsel Opinion Exhibit D Form of Borrowing Certificate Exhibit E Form of Certificate of Non-U.S. Lender Exhibit F Form of Assignment and Acceptance SCHEDULES Schedule I Lenders and Commitments Schedule II Pricing Grid Schedule III Transaction Documents Schedule 4.4 Required Consents Schedule 4.5 No Legal Bar Schedule 4.6 Material Litigation Schedule 4.9 Intellectual Property Claims Schedule 4.10 Taxes Schedule 4.14 Subsidiaries Schedule 7.2(f) Existing Indebtedness Schedule 7.3(f) Existing Liens Schedule 7.4 Existing Guarantee Obligations Schedule 7.9(c) Officers Schedule 7.9(g) Existing Investments Schedule 7.9(k) Approved Investments
v THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 24, 2000, among L-3 Communications Corporation, a Delaware corporation (the "Borrower") which is wholly owned by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), the several banks and other financial institutions or entities from time to time parties hereto (the "Lenders"), Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and Lehman Commercial Paper Inc. ("LCPI"), as arrangers (each, in such capacity, an "Arranger" and together, the "Arrangers"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Agents (as defined below) and the Lenders (in such capacity, the "Administrative Agent"), LCPI, as syndication agent and documentation agent (in such capacity, the "Syndication Agent" and the "Documentation Agent"), and certain financial institutions named as co-agents, AMENDS AND RESTATES IN FULL the Amended and Restated Credit Agreement, dated as of August 13, 1998 (as amended, supplemented and/or modified from time to time prior to the date hereof, the "Original Credit Agreement"), among the Borrower, the lenders party thereto from time to time (the "Original Lenders"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as arrangers (each, in such capacity, an Original Arranger and together, the "Original Arrangers"), the Syndication Agent, the Documentation Agent and the Administrative Agent; this amendment and restatement of the Original Credit Agreement, as amended, supplemented, restated or otherwise modified from time to time, is hereinafter referred to as this "Agreement" or the "Credit Agreement". WHEREAS, the Borrower has requested that the Original Credit Agreement be amended and restated in full as set forth herein. NOW, THEREFORE, the parties hereto hereby agree to amend and restate the Original Credit Agreement as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Acquired Business": a company or business unit acquired by the Borrower or any of its Subsidiaries, provided that the Borrower has delivered to the Administrative Agent historical financial statements of such company or business unit prepared in accordance with GAAP. "Adjustment Date": the fifth day following the receipt by the Administrative Agent of the financial statements for the most recently completed fiscal period furnished pursuant to subsection 6.1 and the compliance certificate with respect to such financial statements furnished pursuant to subsection 6.2(c). "Administrative Agent": BOA, or following the resignation of BOA as Administrative Agent, any other Lender which may be appointed as Administrative Agent pursuant to subsection 9.9. "Affected Class": as defined in subsection 10.1. "Affected Lender": as defined in subsection 10.7. "Affiliate": as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agents": the collective reference to the Syndication Agent, the Documentation Agent and the Administrative Agent. "Aggregate Outstanding Extensions of Credit": as to any Lender with respect to any Type of Loan at any time, an amount equal to the sum of (a) the aggregate principal amount of all Loans of such Type made by such Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C Obligations then outstanding. "Agreement": this Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time. "Agreement Currency": as defined in subsection 10.16(b). "Alternative Currency": any currency which as of the time of any issuance or renewal, as applicable, of a Foreign L/C is freely tradeable and convertible into Dollars and has been approved as an "Alternative Currency" for the purposes of this Agreement by the Issuing Lender. "Applicable Creditor": as defined in subsection 10.16(b). "Applicable Holdback": as defined in subsection 2.6(b)(ii). "Applicable Issuing Lender": an Issuing Lender as to which any proposed Assignee under subsection 10.6 shall become an L/C Participant upon giving effect to the relevant Assignment and Acceptance. "Applicable Margin": at any time, the percentages set forth on Schedule II under the relevant column heading opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Applicable Margins determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to subsections 6.1 and 6.2, the Applicable Margins shall be (i) for the first 35 days subsequent to such due date, the Applicable Margin in effect prior to such due date and (ii) thereafter, those set forth opposite a Debt Ratio 2 captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Application": an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit. "Asset Contribution": as defined in the recitals to the Initial 1997 Credit Agreement. "Asset Sale": any sale, sale-leaseback, or other disposition by any Person or any Subsidiary thereof of any of its property or assets, including the stock of any Subsidiary of such Person, except sales and dispositions permitted by subsection 7.6 other than subsection 7.6(b) or (e). "Assignee": as defined in subsection 10.6(c). "Attributable Debt": in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Available Commitment": as to any Lender and any Type of Loan, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment with respect to such Type of Loan over (b) such Lender's Aggregate Outstanding Extensions of Credit with respect to such Type of Loan. "Base Rate": for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; and (b) the rate of interest in effect for such day as publicly announced from time to time by BOA in San Francisco, California, as its "reference rate." (The "reference rate" is a rate set by BOA based upon various factors including BOA'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.) "Base Rate Loans": Loans the rate of interest applicable to which is based upon the Base Rate. "BOA": as defined in the recitals to this Agreement. "Borrower Pledge Agreement": the Second Amended and Restated Borrower Pledge Agreement substantially in the form of Exhibit B-4A, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. 3 "Borrowing Date": any Business Day specified in a notice pursuant to subsection 2.2 as a date on which the Borrower requests the Lenders to make Loans hereunder. "Business": as defined in subsection 4.16. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco, California are authorized or required by law to close and, if the applicable Business Day relates to Eurodollar Loans or Foreign L/Cs, any day on which dealings are carried on in the applicable London interbank market. "Calculation Date": with respect to each Foreign L/C, during the period that such Foreign L/C is outstanding (or the Reimbursement Obligation in connection therewith has not been fully satisfied) (i) the last Business Day of a fiscal month, (ii) the date on which such Letter of Credit is to be issued or renewed by the Issuing Lender, (iii) the date on which any draft presented under such Letter of Credit is paid by the Issuing Lender, (iv) such other dates as the Borrower may reasonably request from time to time, and (v) such other dates as the Issuing Lender or the Administrative Agent may select from time to time, provided that the Borrower receives prompt notice thereof. "Capital Expenditures" for any fiscal period, the aggregate of all expenditures that, in conformity with GAAP (but excluding capitalized interest), are or are required to be included as additions during such period to property, plant or equipment reflected on the consolidated balance sheet of the Borrower and its Subsidiaries, excluding the expenditures relating to the Transaction. "Capital Lease Obligations": of any Person as of the date of determination, the aggregate liability of such Person under Financing Leases reflected on a balance sheet of such Person under GAAP. "Capital Partners": Lehman Brothers Capital Partners III, L.P. "Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing. "Cash Equivalents": (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 90 days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-2 by Standard 4 and Poor's Ratings Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a nationally recognized rating agency if both of S&P and Moody's cease publishing ratings of investments, (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody's, (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. "Change of Control": the occurrence of any of the following events: (i) the Principals and their Related Parties, as a whole, shall at any time cease to own, directly or indirectly, 51% of the Voting Stock of Holdings (measured by voting power rather than number of shares), determined on a fully diluted basis, and any "person" (as such term is defined in Section 13(d)(3) of the Exchange Act) other than the Principals and their Related Parties shall become the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 25% of the Voting Stock of Holdings (measured by voting power rather than number of shares); (ii) a majority of the members of the Board of Directors of Holdings fail to be (a) members of the Board of Directors incumbent as of the Closing Date, or (b) members nominated by the members of the Board of Directors incumbent on the Closing Date, or (c) members appointed by members of the Board nominated under clause (a) or (b); (iii) Holdings shall, at any time, cease to own 100% of the Capital Stock of the Borrower; or (iv) a "Change of Control" shall have occurred under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture. "Charge Over Shares": the Amended and Restated Charge Over Shares substantially in the form of Exhibit B-4B, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. "Class": (i) Lenders having Loan Exposure (taken together as a single class)(ii) Facility B Lenders having Facility B Loan Exposure (taken together as a single class) and (iii) Facility C Lenders having Facility C Loan Exposure (taken together as a single class). 5 "Closing Date": the date on which the conditions precedent set forth in subsection 5.1 are satisfied. "Co-Agents": collectively, Fleet National Bank, The Bank of New York, The Bank of Nova Scotia, Credit Lyonnais, Bank One, N.A., First Union Commercial Corporation, HSBC Bank, and Societe Generale. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Collateral": all assets of the Credit Parties, now owned or hereinafter acquired, upon which a Lien is purported to be created by any Pledge Agreement. "Commitment": as to any Lender, such Lender's Revolving Credit Commitment. "Commitment Fee Rate": at any time, the applicable rates per annum on Schedule II under the relevant column heading for the Revolving Credit Facility set forth opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Commitment Fee Rate determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to subsections 6.1 and 6.2, the Commitment Fee Rate shall be (i) for the first 35 days subsequent to such due date, the Commitment Fee Rate in effect prior to such due date and (ii) thereafter, that set forth opposite a Debt Ratio captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Commitment Percentage": as to the Commitment of any Lender with respect to any Type of Loan at any time, the percentage which the Commitment of such Lender with respect to such Type of Loan then constitutes of the aggregate Commitments with respect to such Type of Loan (or, at any time after such Commitments shall have expired or terminated, the percentage which the aggregate amount of the Aggregate Outstanding Extensions of Credit of such Lender with respect to such Type of Loan constitutes of the aggregate amount of the Aggregate Outstanding Extensions of Credit of all Lenders with respect to such Type of Loan). "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 (b) or (c) of the Code. "Consolidated EBITDA": as of the last day of any fiscal quarter, Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses (excluding, without duplication, (x) extraordinary gains and losses in accordance with GAAP, (y) gains and losses in connection with asset dispositions whether or not constituting extraordinary gains and losses and (z) gains or losses on 6 discontinued operations) for the four fiscal quarters ended on such date, plus (i) Consolidated Interest Expense of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses for such period, plus (ii) to the extent deducted in computing such Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses, the sum of income taxes, depreciation and amortization for such period. "Consolidated Cash Interest Expense": as of the last day of any fiscal quarter, the amount of interest expense, paid in cash, of the Borrower and its Subsidiaries for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Interest Expense": for any Person, as of the last day of any fiscal quarter, the amount of interest expense of such Person for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Net Income": for any Person and for any fiscal period, net income of such Person, determined on a consolidated basis in accordance with GAAP. "Consolidated Total Assets": at any date, all assets of the Borrower and its Subsidiaries as determined according to the consolidated balance sheet contained in the SEC filing most recently delivered pursuant to subsection 6.1 or, if no such SEC filing has yet been delivered, the balance sheet referred to in subsection 4.1(a)(ii). "Consolidated Total Debt": at any date, all Indebtedness of the Borrower and its Subsidiaries outstanding on such date for borrowed money or the deferred purchase price of property, including, without limitation, in respect of Financing Leases but excluding Indebtedness permitted pursuant to subsection 7.2(g). "Consolidated Working Capital": at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in accordance with GAAP, be set forth opposite the caption "total current assets" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date over (b) the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption "total current liabilities" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries on such date (excluding, to the extent it would otherwise be included under current liabilities, any short-term Consolidated Total Debt and the current portion of any long-term Consolidated Total Debt). "Constitutional Documents": as to any Person, the articles or certificate of incorporation and by-laws, partnership agreement or other organizational documents of such Person. 7 "Contractual Obligation": 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. "Credit Documents": this Agreement, the Notes, the Applications, the Guarantees and the Pledge Agreements. "Credit Parties": the Borrower, Holdings, and each Subsidiary of the Borrower which is a party to a Credit Document. "Debt Ratio": as at the last day of any fiscal quarter, the ratio of (a) Consolidated Total Debt minus Designated Cash Balances on such date to (b) Consolidated EBITDA. "December 1998 Subordinated Debt Documents": the December 1998 Subordinated Notes, the December 1998 Subordinated Notes Indenture, the Underwriting Agreement related thereto among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "December 1998 Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the December 1998 Subordinated Notes were issued. "December 1998 Subordinated Notes": the Borrower's Senior Subordinated Notes, due December 1, 2008 ("Initial December 1998 Subordinated Notes") issued on or about the December 8, 1998 and any notes, having the same terms as the Initial December 1998 Subordinated Notes, issued in exchange for the Initial December 1998 Subordinated Notes as contemplated by the documents governing the issuance of the Initial December 1998 Subordinated Notes. "Default": any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Designated Cash Balances": at any time, the lesser of (a) actual unrestricted cash balances on hand of Borrower and its Subsidiaries which are not subject to any Liens in favor of any Person (other than those described in subsection 7.3(o) hereof) and (b) $50,000,000. "Dollar Equivalent": at any time, (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any amount denominated in an Alternative Currency, the equivalent amount in Dollars as determined on the basis of the Exchange Rate for the purchase of Dollars with such Alternative Currency as of the most recent Calculation Date. "Dollars" and "$": dollars in lawful currency of the United States of America. 8 "Domestic L/C": a Letter of Credit denominated in Dollars. "Dow Jones Page 3750": the display designated as page "3750" on the Dow Jones Market Service (formerly known as the Telerate Service) or such other page as may replace the "3750" page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for Dollar deposits. "Environmental Laws": any and all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or other legally enforceable requirement (including, without limitation, common law) of any foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health as affected by the environment as has been, is now, or may at any time hereafter be, in effect, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.'SS'SS' 9601 et seq.; the Toxic Substance Control Act, 15 U.S.C.'SS''SS'9601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.'SS''SS' 1802 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.'SS''SS'.6901 et seq.; the Clean Water Act; 33 U.S.C.'SS''SS'1251 et seq.; the Clean Air Act, 42 U.S.C.'SS''SS'7401 et seq.; or other similar federal and/or state environmental laws. "Environmental Permits": any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any applicable Environmental Law. "Equity Documents": the Stockholders Agreement, the Subscription Agreements and the Option Agreements. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurocurrency Reserve Requirements": means for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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"). "Eurodollar Business Day": means any Business Day on which commercial banks are open in London for the transaction of international business, including dealings in Dollar deposits in the international interbank markets. "Eurodollar Loans": Loans the rate of interest applicable to which is based upon the Eurodollar Rate. 9 "Eurodollar Rate": means, for any Interest Period, with respect to Eurodollar Loans comprising part of the same borrowing, the rate of interest per annum (rounded upward to the next 1/100th of 1%) determined by the Administrative Agent as follows: Eurodollar Rate = LIBOR ------------------------------------ 1.00 - Eurodollar Reserve Percentage "Eurodollar Reserve Percentage": for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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"). "Event of Default": any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Excess Cash Flow": for any fiscal year of the Borrower, the excess of (a) the sum, without duplication, of (i) Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (ii) the net decrease, if any, in Consolidated Working Capital during such fiscal year, (iii) to the extent deducted in computing such Consolidated Net Income for the Borrower and its Subsidiaries, non-cash interest expense, depreciation and amortization for such fiscal year, (iv) extraordinary non-cash losses during such fiscal year subtracted in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (v) change in deferred tax liability of the Borrower for such fiscal year, (vi) non-cash losses in connection with asset dispositions whether or not constituting extraordinary losses and (vii) non-cash ordinary losses less (b) the sum, without duplication, of (i) the aggregate amount of permitted cash Capital Expenditures made by the Borrower and its Subsidiaries during such fiscal year, (ii) the net increase, if any, in Consolidated Working Capital during such fiscal year, (iii) the aggregate amount of payments of principal in respect of any Indebtedness not prohibited hereunder during such fiscal year (other than prepayments of (x) Revolving Credit Loans not accompanied by reductions of the Commitments hereunder, (y) Facility B Loans not accompanied by reductions of Facility B Commitments and/or (z) Facility C Loans and accompanied by reductions of Facility C Commitments), (iv) deferred income tax credit of the Borrower for such fiscal year, (v) extraordinary non-cash gains during such fiscal year added in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (vi) non-cash gains in connection with asset dispositions whether or not constituting extraordinary gains and (vii) non-cash ordinary gains. "Exchange Act": the Securities Exchange Act of 1934, as amended. 10 "Exchange Rate": on any day, with respect to any Alternative Currency, the spot rate at which Dollars are offered on such day by the Issuing Lender in San Francisco, California (or such other location selected by the Issuing Lender) for such Alternative Currency. "Facility B Administrative Agent": the "Administrative Agent" as defined in the Facility B Credit Agreement. "Facility B Agents": the "Agents" as defined in the Facility B Credit Agreement. "Facility B Commitments": the "Commitments" as defined in the Facility B Credit Agreement. "Facility B Credit Agreement": that certain Amended and Restated 364 Day Credit Agreement of even date herewith among the Borrower, the Facility B Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers and certain other financial institutions named therein as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility B Credit Documents": the "Credit Documents" as defined in the Facility B Credit Agreement. "Facility B Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility B Credit Agreement. "Facility B L/C Obligations": the "L/C Obligations" as defined in the Facility B Credit Agreement. "Facility B Lenders": the "Lenders" as defined in the Facility B Credit Agreement. "Facility B Loan Exposure": the "Loan Exposure" as defined in the Facility B Credit Agreement. "Facility B Loans": the "Loans" as defined in the Facility B Credit Agreement. "Facility B Notes": the "Notes" as defined in the Facility B Credit Agreement. "Facility B Reimbursement Obligations": the "Reimbursement Obligations" as defined in the Facility B Credit Agreement. "Facility C Administrative Agent": the "Administrative Agent" as defined in the Facility C Credit Agreement. "Facility C Agents": the "Agents" as defined in the Facility C Credit Agreement. 11 "Facility C Commitments": the "Commitments" as defined in the Facility C Credit Agreement. "Facility C Credit Agreement": that certain New 364 Day Credit Agreement of even date herewith among the Borrower, the Facility C Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities, LLC as arrangers and certain financial institutions named as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility C Credit Documents": the "Credit Documents" as defined in the Facility C Credit Agreement. "Facility C Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility C Credit Agreement. "Facility C Lenders": the "Lenders" as defined in the Facility C Credit Agreement. "Facility C Loan Exposure": the "Loan Exposure" as defined in the Facility C Credit Agreement. "Facility C Loans": the "Loans" as defined in the Facility C Credit Agreement. "Facility C Notes": the "Notes" as defined in the Facility C Credit Agreement. "Federal Funds Effective Rate": for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the FRB (including any such successor, "H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If on any relevant day the appropriate rate for such previous day is not yet published in H.15(519), the rate for such day will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Administrative Agent. "Financial L/C": a standby Letter of Credit not constituting a Performance L/C. "Financing Lease": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "Foreign L/C": a Letter of Credit denominated in an Alternative Currency. "Foreign L/C Obligations": at any time, an amount equal to the sum of (i) the Dollar Equivalent of the aggregate then undrawn and unexpired face amount of all then outstanding Foreign L/Cs and (ii) the Dollar Equivalent of the aggregate amount of all drawings under Foreign L/Cs which have not then been reimbursed pursuant to subsection 3.5. 12 "Foreign Subsidiary": any Subsidiary which is organized under the laws of any jurisdiction outside the United States or under the laws of the U.S. Virgin Islands. "FRB": means the Board of Governors of the Federal Reserve System, and any governmental authority succeeding to any of its principal functions. "GAAP": generally accepted accounting principles in the United States of America in effect on the Closing Date. "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, reimbursement obligations under letters of credit and any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. "Guarantees": the Parent Guarantee and the Subsidiary Guarantees. "Immaterial Subsidiary": any Subsidiary of the Borrower having assets not exceeding five percent (5%) of the Consolidated Total Assets. 13 "Indebtedness": of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices and accrued expenses incurred in the ordinary course of business), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under Financing Leases, (d) all obligations of such Person in respect of acceptances issued or created for the account of such Person and all reimbursement and other obligations with respect to any letters of credit and surety bonds, whether or not matured or drawn, (e) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and (f) all Attributable Debt of such Person with respect to sale and leaseback transactions of such Person. "Indenture": the Indenture between the Borrower and The Bank of New York, as trustee, pursuant to which the Subordinated Notes are issued. "Initial 1997 Credit Agreement": the Credit Agreement, dated as of April 30, 1997 among the Borrower, the lenders party thereto from time to time, Lehman Brothers Inc. as arranger, LCPI as syndication agent and documentation agent and BOA as administrative agent. "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. "Interest Payment Date": (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last Business Day of such Interest Period, and (c) as to any Eurodollar Loan having an interest period longer than three months, (i) each Business Day which is three months or a whole multiple thereof after the first day of such Interest Period and (ii) the last Business Day of such Interest Period. "Interest Period": with respect to any Eurodollar Loan: (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three, six or, if made available by the Administrative Agent and the Lenders, nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or, if made available by the Administrative Agent and Lenders, nine 14 or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto. provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (v) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day; (vi) any Interest Period for any Loan that would otherwise extend beyond the applicable Termination Date shall end on the applicable Termination Date; and (vii) any Interest Period pertaining to a Eurodollar Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month in which such Interest Period would otherwise be scheduled to end) shall end on the last Business Day of the appropriate calendar month. "Interest Rate Agreement": any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement. "Interest Rate Agreement Obligations": the obligations of the Borrower or any of its Subsidiaries to make payments to counterparties under Interest Rate Agreements in the event of the occurrence of a termination event thereunder. "Issuing Lender": BOA, in its capacity as issuer of any Letter of Credit or, at the election of BOA, such other Lender or Lenders that agrees to act as Issuing Lender at the request of the Borrower, or upon resignation by BOA as an Issuing Lender at any time upon notice to the other parties to this Agreement, such other Lender or Lenders that agree to act as Issuing Lender at the request of the Borrower and to whom the Required Lenders consent in writing. "Judgment Currency": as defined in subsection 10.16 (b). "LCPI": as defined in the recitals to this Agreement. "L/C Fee Payment Date": the last Business Day of each March, June, September and December. "L/C Obligations": at any time, an amount equal to the sum of (a) the Dollar Equivalent of the aggregate then undrawn and unexpired amount of the then outstanding 15 Letters of Credit and (b) the Dollar Equivalent of the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to subsection 3.5. "L/C Participants": a collective reference to all the Revolving Credit Lenders other than the Applicable Issuing Lender. "Lender" and "Lenders": the persons identified as Lenders and listed on the signature pages of this Agreement (including the Issuing Lender and the Swing Line Lender), together with their successors and permitted assigns pursuant to subsection 10.6. "Letters of Credit": as defined in subsection 3.1(a). "LIBOR": as to any Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period quoted on the second Eurodollar Business Day prior to the first day of such Interest Period, as such rate appears on the Dow Jones Page 3750 as of 11:00 A.M. (London time) on such date, as determined by the Administrative Agent and notified to the Lenders and the Borrower on such second prior Eurodollar Business Day. If LIBOR cannot be determined based on the Dow Jones Page 3750, LIBOR means the rate per annum, as supplied to the Administrative Agent, quoted by BOA's London Branch to prime banks in the London interbank market for deposits in Dollars at approximately 11:00 A.M. (London time) two Eurodollar Business Days prior to the first day of such Interest Period in an amount approximately equal to the principal amount of the Loans to which such Interest Period is to apply and for a period of time comparable to such Interest Period. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "Loan": any loan made by any Lender pursuant to this Agreement. "Loan Account": as defined in subsection 2.5(d). "Loan Exposure": with respect to any Lender as of any date of determination, (i) if there are no outstanding Letters of Credit or Revolving Credit Loans, that Lender's Revolving Credit Commitment, and (ii) otherwise, the sum of (a) the aggregate outstanding principal amount of the Revolving Credit Loans of that Lender plus (b) in the event that Lender is an Issuing Lender, the Dollar Equivalent of the aggregate stated or face amount in respect of all Letters of Credit issued by that Lender and outstanding (in each case net of any participations purchased by other Lenders in such Letters of Credit or any unreimbursed drawings thereunder) plus (c) in the event that such Lender is the Swing Line Lender, the aggregate principal amount of Swing Line Loans made by such 16 Lender then outstanding (net of any participations purchased by other Lenders in such Swing Line Loans) plus (d) the Dollar Equivalent of the aggregate amount of all participations purchased by that Lender in any outstanding Swing Line Loans or Letters of Credit or any unreimbursed drawings under any Letters of Credit. "Material Adverse Effect": a material adverse effect on (a) the business, assets, operations, property or condition (financial or otherwise) of Holdings and its Subsidiaries taken as a whole or (b) the validity or enforceability of this or any of the other Credit Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder. "Materials of Environmental Concern": any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under, or that could give rise to liability under, any applicable Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products. "Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Proceeds": the aggregate cash proceeds (including Cash Equivalents) received by Holdings or any of its Subsidiaries in respect of: (a) any issuance by Holdings or any of its Subsidiaries of Indebtedness after the Closing Date; (b) any Asset Sale; and (c) any cash payments received in respect of promissory notes or other evidences of indebtedness delivered to Holdings or such Subsidiary in respect of an Asset Sale; in each case net of (without duplication) (i), (A) in the case of an Asset Sale, the amount required to repay any Indebtedness (other than the Loans) secured by a Lien on any assets of Holdings or a Subsidiary of Holdings that are sold or otherwise disposed of in connection with such Asset Sale and (B) reasonable and appropriate amounts established by Holdings or such Subsidiary, as the case may be, as a reserve against liabilities associated with such Asset Sale and retained by Holdings or such Subsidiary, (ii) the reasonable expenses (including legal fees and brokers' and underwriters' commissions, lenders fees, credit enhancement fees, accountants' fees, investment banking fees, survey costs, title insurance premiums and other customary fees, in any case, paid to third parties or, to the extent permitted hereby, Affiliates) incurred in effecting such issuance or sale and (iii) any taxes reasonably attributable to such sale and reasonably estimated by Holdings or such Subsidiary to be actually payable. 17 "New Investment Sublimit" shall mean, as of any date of determination thereof, an amount equal to (a) $650,000,000 plus (b) (i) Net Proceeds derived from Asset Sales during the immediately preceding twelve (12) month period and (ii) Net Proceeds from any Asset Sale that were reinvested within the twelve (12) month period following such Asset Sale for the purposes permitted in subsection 7.9(k) to the extent not included in subclause (i) of this clause (b) plus (c) net cash proceeds derived from the issuance of any equity securities of Holdings which are contributed to the Borrower as additional equity capital minus the amount of any Capital Expenditures funded in any fiscal year of the Borrower and its Subsidiaries which exceeds the amounts permitted during such fiscal year pursuant to subsection 7.8 hereof (without giving effect to the second proviso thereto referring to subsection 7.9(k)). "New Subordinated Debt Documents": the New Subordinated Notes, the New Subordinated Notes Indenture, the Underwriting Agreement dated as of May 18, 1998 among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "New Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the New Subordinated Notes were issued. "New Subordinated Notes": the Borrower's 8 1/2% Senior Subordinated Notes, due 2008 ("Initial New Subordinated Notes") issued on or about May 22, 1998 and any notes, having the same terms as the Initial New Subordinated Notes, issued in exchange for the Initial New Subordinated Notes as contemplated by the documents governing the issuance of the Initial New Subordinated Notes. "Non-Excluded Taxes": as defined in subsection 2.15. "Non-U.S. Lender": as defined in subsection 2.15(b). "Nonconsenting Lenders": as defined in subsection 2.17. "Notes": The Revolving Credit Notes and the Swing Line Note (or any of them). "Obligations": as defined in the Guarantees and the Pledge Agreements. "Option Agreements": the Option Agreements between Holdings and each of Frank C. Lanza and Robert V. LaPenta, each dated as of the April 30, 1997. "Original Agents": the "Agents" under and as defined in the Original Credit Agreement. "Original Closing Date": August 13, 1998. "Original Credit Agreement": as defined in the preamble to this Agreement. 18 "Original Lenders": as defined in the preamble to this Agreement. "Parent Distributions": as defined in the Parent Guarantee. "Parent Guarantee": the Second Amended and Restated Parent Guarantee substantially in the form of Exhibit B-1, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Parent Pledge Agreement": the Second Amended and Restated Parent Pledge Agreement substantially in the form of Exhibit B-3, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Participant": as defined in subsection 10.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any successor thereto. "Performance L/C": a standby Letter of Credit issued to ensure the performance of services and/or delivery of goods by or on behalf of the Borrower. "Permitted Liens": Liens permitted to exist under subsection 7.3. "Permitted Stock Payments": (A) dividends by the Borrower to Holdings in amounts equal to the amounts required for Holdings to (i) pay franchise taxes and other fees required to maintain its legal existence and (ii) provide for other operating costs of up to $1,000,000 per fiscal year, (B) dividends by the Borrower to Holdings in amounts equal to amounts required for Holdings to pay federal, state and local income taxes to the extent such income taxes are actually due and owing; provided that the aggregate amount paid under this clause (B) does not exceed the amount that the Borrower would be required to pay in respect of the income of the Borrower and its Subsidiaries if the Borrower were a stand alone entity that was not owned by Holdings, and (C) from and after May 1, 1999, dividends by the Borrower to Holdings payable solely out of Excess Cash Flow, provided that, with respect to this clause (C), (i) as of the last day of the most recently completed fiscal quarter the Debt Ratio is less than or equal to 3.5 to 1, and (ii) the aggregate amount of dividends paid by the Borrower to Holdings under this clause (C) since the Original Closing Date does not exceed $5,000,000. "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan covered by ERISA and in respect of which the Borrower or any Commonly Controlled Entity maintains, administers, contributes to or is required to contribute to, or under which the Borrower or any Commonly Controlled Entity may incur any liability. 19 "Pledge Agreements": the collective reference to the Parent Pledge Agreement, the Borrower Pledge Agreement, the Charge Over Shares, the Subsidiary Pledge Agreement, and any other security documents hereafter delivered to the Administrative Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Borrower hereunder and under any of the other Credit Documents or to secure any guarantee of any such obligations and liabilities. "Principals": each of Lehman Brothers Holdings, Inc., Capital Partners, the Seller, Frank C. Lanza and Robert V. LaPenta. "Properties": as defined in subsection 4.16. "Purchase Agreement": the Purchase Agreement, dated as of April 25, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Refunded Swing Line Loan": as defined in subsection 2.1(b)(iii). "Register": as defined in subsection 10.6(d). "Registration Rights Agreement": the Registration Rights Agreement, dated as of April 30, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. "Reimbursement Amount": as defined in subsection 3.5(a). "Reimbursement Obligation": the obligation of the Borrower to reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn under Letters of Credit. "Related Party": with respect to the Principals, (a) any controlling stockholder, 51% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (b) a trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 51% or more controlling interest of which consist of the Principals and/or such other Persons referred to in the immediately preceding clause (a). "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Reportable Event": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under the regulations of the PBGC. "Required Lenders": at any time, Lenders the Loan Exposure for all Types of Loans of which aggregate more than 50%. 20 "Requirement of Law": as to any Person, the Constitutional Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Requisite Class Lenders": at any time, (a) for the Class of Lenders having Loan Exposure, Lenders having or holding 66 2/3% of the aggregate Loan Exposure of all Lenders (b) for the Class of Facility B Lenders having Facility B Loan Exposure, Facility B Lenders having or holding 66 2/3% of the aggregate Facility B Loan Exposure of all Facility B Lenders and (c) for the Class of Facility C Lenders having Facility C Loan Exposure, Facility C Lenders having or holding 66 2/3% of the aggregate Facility C Loan Exposure of all Facility C Lenders. "Responsible Officer": the chief executive officer, the president or vice president of the Borrower or, with respect to financial matters, the chief financial officer, vice president-finance or treasurer of the Borrower. "Restricted Government Contracts": as defined in the Pledge Agreements. "Revolving Credit Commitment": the commitment of a Lender, initially as set forth on Schedule I hereto, to make Revolving Credit Loans to the Borrower pursuant to subsection 2.1(a) and to issue and/or purchase participations in Letters of Credit pursuant to Section 3; and "Revolving Credit Commitments" means such commitments of all Lenders in the aggregate, which shall be $200,000,000. "Revolving Credit Commitment Period": the period from and including the Closing Date to but not including the Termination Date or such earlier date on which the Revolving Credit Commitments shall terminate as provided herein. "Revolving Credit Lender": any Lender or Lenders having a Revolving Credit Commitment or a Revolving Credit Loan outstanding. "Revolving Credit Loans": the Loans made by Revolving Credit Lenders to the Borrower pursuant to Subsection 2.1(a). "Revolving Credit Notes": (i) the promissory notes of the Borrower, if any, issued pursuant to subsection 2.5(f) of the Original Credit Agreement prior to the Closing Date and/or pursuant to subsection 2.5(i) of this Agreement on or after the Closing Date, in each case, to evidence the Revolving Credit Loans of any Lender and (ii) any promissory notes issued by the Borrower pursuant to subsection 10.6(d) in connection with assignments of the Revolving Credit Commitments and Revolving Credit Loans of any Lenders, in each case substantially in the form of Exhibit A-1 annexed hereto, as they may be amended, supplemented or otherwise modified from time to time. "Revolving 364 Day Commitment": as defined in the Facility B Credit Agreement. 21 "SPD Technologies": SPD Technologies Inc., a Delaware corporation. "SPD Technologies Acquisition Agreement": the Agreement and Plan of Merger, dated as of July 2, 1998, among L-3 Communications Corporation, SPD Merger Co., SPD Technologies, Inc. and Midmark Capital L.P. "SEC": the Securities and Exchange Commission. "Securities Act": Securities Act of 1933, as amended. "Seller": Lockheed Martin Corporation, a Maryland corporation. "Similar Business": a business, at least a majority of whose revenues in the most recently ended calendar year were derived from (i) the sale of defense products, electronics, communications systems, aerospace products, avionics products and/or communications products, (ii) any services related thereto, (iii) any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto or any business of the Borrower and/or its Subsidiaries existing as of the Closing Date, and (iv) any combination of any of the foregoing. "Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Stockholders Agreement": the Stockholders Agreement, dated as of April 30, 1997, by and among the Borrower, Holdings, the Seller, the Principals and any other party that may from time to time become a party thereto as provided therein, as the same may be amended, supplemented or otherwise modified from time to time. "Subordinated Debt": indebtedness outstanding under the Subordinated Notes, the New Subordinated Notes and/or the December 1998 Subordinated Notes. "Subordinated Debt Documents": the Indenture, the Registration Rights Agreement, the Purchase Agreement and the Subordinated Notes. "Subordinated Notes": the Borrower's 10 3/8% Senior Subordinated Notes, due 2007 (the "Initial Subordinated Notes"), issued on the April 30, 1997, and any subordinated notes of the Borrower, having the same terms as the Initial Subordinated Notes, issued in exchange for the Initial Subordinated Notes as contemplated by the Subordinated Debt Documents. "Subscription Agreements": the Common Stock Subscription Agreements between Holdings and each of Frank C. Lanza, Robert V. LaPenta, Capital Partners and the Seller, each dated as of the April 30, 1997. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than 22 stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Subsidiary Guarantee": the Second Amended and Restated Subsidiary Guarantee substantially in the form of Exhibit B-2, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Subsidiary Pledge Agreement": the Second Amended and Restated Subsidiary Pledge Agreement substantially in the form of Exhibit B-5, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Swing Line Lender": means BOA, or, following the resignation of BOA as Swing Line Lender at any time upon notice to the other parties to this Agreement, any other Lender which is appointed as Swing Line Lender by the Required Lenders and reasonably acceptable to Borrower. "Swing Line Loans": as defined in subsection 2.1(b). "Swing Line Note": as defined in subsection 2.5(f). "Term Loans": as defined in the Facility B Credit Agreement. "Termination Date": March 31, 2003. "Tranche": the collective reference to Eurodollar Loans with then-current Interest Periods which all begin on the same date and end on the same date (whether or not such Loans shall originally have been made on the same day); Tranches may be identified as "Eurodollar Tranches". "Transaction": the transactions contemplated by the Transaction Documents. "Transaction Agreement": that certain Transaction Agreement, dated as of March 28, 1997 by and among Lockheed Martin Corporation, a Maryland corporation, Holdings, Capital Partners and its Affiliates, Frank C. Lanza and Robert V. LaPenta. "Transaction Documents": (i) the Transaction Agreement, the Schedules thereto and the documents set forth on Schedule III hereto, (ii) the Equity Documents, (iii) the Subordinated Debt Documents and (iv) the New Subordinated Debt Documents. "Transferee": as defined in subsection 10.6(f). 23 "Type": a Revolving Credit Loan or a Swing Line Loan, as applicable. "Uniform Customs": the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as the same may be amended from time to time. "U.S. Taxes": any tax, assessment, or other charge or levy and any liabilities with respect thereto, including any penalties, additions to tax, fines or interest thereon, imposed by or on behalf of the United States or any taxing authority thereof. "Voting Stock": of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Year 2000 Problem": any significant risk that computer hardware, software or equipment containing embedded microchips essential to the business or operations of the Borrower or any of its Subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively and reliably as in the case of dates or time periods occurring before January 1, 2000, including the making of accurate leap year calculations. 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any Credit Document or any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any Credit Document, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Interrelationship with Original Credit Agreement. (a) As stated in the preamble hereof, this Credit Agreement is intended to amend and restate the provisions of the Original Credit Agreement and, notwithstanding any substitution of Notes as of the Closing Date, except as expressly modified herein, (x) all of the terms and provisions of the Original Credit Agreement shall continue to apply for the period 24 prior to the Closing Date, including any determinations of payment dates, interest rates, Events of Default or any amount that may be payable to the Original Agents or the Original Lenders (or their assignees or replacements hereunder), and (y) the obligations under the Original Credit Agreement shall continue to be paid or prepaid on or prior to the Closing Date, and shall from and after the Closing Date continue to be owing and be subject to the terms of this Credit Agreement. All references in the Notes and the other Credit Documents to (i) the Original Credit Agreement or the "Credit Agreement" shall be deemed to include references to this Credit Agreement and (ii) the "Lenders" or a "Lender" or to the "Agents" or any "Agent" shall mean such terms as defined in this Credit Agreement. As to all periods occurring on or after the Closing Date, all of the covenants set forth in the Original Credit Agreement shall be of no further force and effect, it being understood that all obligations of the Borrower under the Original Credit Agreement shall be governed by this Credit Agreement from and after the Closing Date. (b) The Borrower, the Agents and the Lenders acknowledge and agree that all outstanding Loans (including all outstanding L/C Obligations) are hereby converted into Revolving Credit Loans (and, as applicable, L/C Obligations) outstanding hereunder effective as of the Closing Date. The Borrower, the Agents and the Lenders acknowledge and agree that all interest, fees, costs and reimbursable expenses accruing or arising under the Original Credit Agreement which remain unpaid and outstanding as of the Closing Date shall be and remain outstanding and payable as an obligation under this Agreement and the other Credit Documents. 1.4 Confirmation of Existing Obligations. The Borrower hereby agrees and admits that, as of the date hereof, it has no defenses to, or offsets or counterclaim against, any of its obligations to the Agents or any Lender under the Credit Documents of any kind whatsoever. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS 2.1 Commitments. (a) Revolving Credit Loans. Subject to the terms and conditions hereof, each Revolving Credit Lender severally agrees to make revolving credit loans to the Borrower, from time to time during the Revolving Credit Commitment Period, in an aggregate principal amount at any one time outstanding which, when added to the aggregate principal amount of outstanding Swing Line Loans in which such Lender has purchased a participation (or, in the case of the Swing Line Lender, the Swing Line Loans made by such Swing Line Lender less the participations purchased in such Swing Line Loans by any other Lender) and such Lender's Commitment Percentage of the then outstanding L/C Obligations, does not exceed the amount of such Lender's Revolving Credit Commitment. During the Revolving Credit Commitment Period, the Borrower may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans, in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. (b) Swing Line Loans. 25 (i) Subject to the terms and conditions hereof, the Swing Line Lender agrees to make $10,000,000 of the credit otherwise available to the Borrower under the Revolving Credit Commitments by making swing line loans (individually, a "Swing Line Loan"; collectively, the "Swing Line Loans") to the Borrower from time to time during the Revolving Credit Commitment Period; provided, that no Swing Line Loan shall be made if, after giving effect thereto, the aggregate principal amount of Revolving Credit Loans then outstanding plus the aggregate principal amount of Swing Line Loans then outstanding, plus the aggregate amount of L/C Obligations would exceed the Revolving Credit Commitments of the Revolving Credit Lenders. Amounts borrowed by the Borrower under this subsection 2.1(b) may be repaid and, through but excluding the Termination Date, reborrowed. All Swing Line Loans shall be made as Base Rate Loans and may not be converted into Eurodollar Loans. In order to borrow a Swing Line Loan, the Borrower shall give the Swing Line Lender, with a copy to the Administrative Agent, irrevocable notice (which notice must be received by the Swing Line Lender prior to 12:00 Noon, New York City time) on the requested Borrowing Date specifying the amount of the requested Swing Line Loan which shall be in a minimum amount of $500,000 or whole multiples of $100,000 in excess thereof. The proceeds of the Swing Line Loan will be made available by the Swing Line Lender to the Borrower at the office of the Swing Line Lender by crediting the account of the Borrower at such office with such proceeds. (ii) The Swing Line Loans shall be evidenced by a Loan Account and, if requested by the Swing Line Lender, a promissory note of the Borrower, substantially in the form of Exhibit A-2 (the "Swing Line Note"), with appropriate insertions, payable to the order of the Swing Line Lender and representing the obligation of the Borrower to pay the unpaid principal amount of the Swing Line Loans, with interest thereon as prescribed in subsection 2.9. The Swing Line Note, if any, shall (i) be dated the Closing Date, (ii) be stated to mature on the Termination Date and (iii) bear interest, payable on the dates specified in 2.9, for the period from the date thereof to the Termination Date on the unpaid principal amount thereof from time to time outstanding at the applicable interest rate per annum specified in subsection 2.9. (iii) The Swing Line Lender, at any time in its sole and absolute discretion, may on behalf of the Borrower (which hereby irrevocably directs the Swing Line Lender to act on its behalf) request each Lender, including the Swing Line Lender, to make a Revolving Credit Loan (which shall be a Base Rate Loan) in an amount equal to such Lender's Commitment Percentage of such Swing Line Loan (the "Refunded Swing Line Loans") outstanding on the date such notice is given. Unless any of the events described in clause (f) of Section 8 shall have occurred (in which event the procedures of subsection 2.1(b)(iv) shall apply) each Lender shall, not later than 12:00 P.M., New York City time, on the Business Day next succeeding the date on which such notice is given, make available to the Swing Line Lender in immediately available funds the amount equal to the Revolving Credit Loan to be made by such Lender. The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Refunded Swing Line Loans. Upon any request by the Swing Line Lender to the Lenders pursuant 26 to this subsection 2.1(b)(iii), the Administrative Agent shall promptly give notice to the Borrower of such request. (iv) If prior to the making of a Revolving Credit Loan pursuant to subsection 2.1(b)(iii) one of the events described in clause (f) of Section 8 shall have occurred, each Lender will, on the date such Loan was to have been made, purchase an undivided participating interest in the Swing Line Loans in an amount equal to its Commitment Percentage. Each Lender will immediately transfer to the Swing Line Lender, in immediately available funds, the amount of its participation. (v) Whenever, at any time after the Swing Line Lender has received from any Lender such Lender's participating interest in a Swing Line Loan, the Swing Line Lender receives any payment on account thereof, the Swing Line Lender will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded); provided, however, that in the event that such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously distributed to it. (vi) Each Lender's obligation to purchase participating interests pursuant to subsection 2.1(b)(iv) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which such Lender or the Borrower may have against the Swing Line Lender, any other Lender or anyone else for any reason whatsoever, (b) the occurrence or continuance of any Default or Event of Default; (c) any adverse change in the condition (financial or otherwise) of the Borrower; (d) any breach of this Agreement by the Borrower or any other Lender; or (e) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (c) Except for Swing Line Loans, which shall be Base Rate Loans, the Loans may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 2.7, provided that, no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Termination Date. 2.2 Procedure for Borrowing. The Borrower may borrow under the Revolving Credit Commitments during the Revolving Credit Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to (a) 11:00 A.M., New York City time, three Business Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially Eurodollar Loans, (b) 11:00 A.M., New York City time, on the requested Borrowing Date in the case of a Base Rate Loan other than a Swing Line Loan), specifying (i) the amount to be borrowed of each Type of Loan, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof 27 and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the respective lengths of the initial Interest Periods therefor. Each borrowing under the Commitments shall be in an amount equal to (x) in the case of Base Rate Loans (other than Swing Line Loans or Refunded Swing Line Loans), $2,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then Available Commitments are less than $2,000,000, such lesser amount), (y) in the case of Swing Line Loans, as provided in subsection 2.1(b)(i) and (z) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in subsection 10.2 prior to 11:00 A.M., New York City time (in the case of Eurodollar Loans) or 2:30 P.M., New York City time (in the case of Base Rate Loans), on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent in accordance with the Borrower's payment instructions with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. All notices given by the Borrower under this subsection 2.2 may be made by telephonic notice promptly confirmed in writing. 2.3 Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Credit Lender a commitment fee for the period from and including the first day of the Revolving Credit Commitment Period to and including the Termination Date, computed at the Commitment Fee Rate on the daily amount of the Available Commitment of such Revolving Credit Lender during the period for which payment is made, payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Termination Date, commencing on the first of such dates to occur after the date hereof. 2.4 Termination or Reduction of Revolving Credit Commitments. The Borrower shall have the right, upon not less than three Business Days' written notice to the Administrative Agent, to terminate the Revolving Credit Commitments or, from time to time, to reduce the amount of the Revolving Credit Commitments ratably among the Revolving Credit Lenders; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the aggregate principal amount of the Revolving Credit Loans then outstanding, when added to the then outstanding L/C Obligations and the outstanding Swing Line Loans, would exceed the Revolving Credit Commitments then in effect. Any such reduction shall be in an amount equal to $2,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce permanently the Revolving Credit Commitments then in effect. 2.5 Repayment of Loans; Evidence of Debt. (a) Payments on Revolving Credit Loans and Swing Line Loans. The Borrower hereby unconditionally promises to pay to the Administrative Agent on the Termination Date (or such earlier date on which the Loans become due and payable pursuant to 28 Section 8) (x) for the account of each Revolving Credit Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender and (y) for the account of the Swing Line Lender (and each other Revolving Credit Lender that has purchased a participation in then outstanding Swing Line Loans) the then unpaid principal amount of Swing Line Loans. (b) Interest. The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date such Loans are made until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.9. (c) Recording. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (d) Loan Accounts and Register; Notes (i) The Loans made by, and the Commitments of, each Lender shall be evidenced by one or more loan accounts ("Loan Accounts") maintained by such Lender and by the Register maintained by the Administrative Agent in the ordinary course of business. The Register maintained by the Administrative Agent shall, in the event of a discrepancy between the entries in the Administrative Agent's books and any Lender's books relating to such matters, be controlling and, absent manifest error, shall be conclusive as to the amount of the Loans made by the Lender to the Borrower, the interest and payments thereon and any other amounts owing in respect of this Agreement. The Borrower hereby designates the Administrative Agent to serve as the Borrower's agent, solely for purposes of this subsection 2.5(d) and subsection 10.6, to maintain the Register on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this subsection 2.5(d) and subsection 10.6 (other than any losses, claims, damages and liabilities to the extent incurred by reason of the gross negligence or willful misconduct of the Administrative Agent). (ii) If requested by any Lender, the Borrower shall execute and deliver to such Lender (and deliver a copy thereof to the Administrative Agent) one or more promissory notes evidencing the Loans owing to such Lender pursuant to this Agreement in accordance with subsection 2.5(f). (e) Prima Facie Evidence. The entries made in the Register and the Loan Accounts of each Lender maintained pursuant to subsection 2.5(d) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such Loan Account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) 29 the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement. For the avoidance of doubt, the existence or non-existence of any Note representing any Obligations owing to any Lender hereunder shall not affect the existence, amount, validity or enforceability of such Obligations, which in all events shall be absolute and unconditional. (f) Notes. The Borrower agrees that the Borrower will execute and deliver to each Lender that requests any such Note pursuant to subsection 2.5(d)(ii), a promissory note of the Borrower evidencing the Revolving Credit Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate insertions as to date and principal amount (a "Revolving Credit Note"). The Borrower also agrees that, if requested by the Swing Line Lender, the Borrower will execute and deliver to the Swing Line Lender a promissory note of the Borrower evidencing the Swing Line Loans of the Swing Line Lender, substantially in the form of Exhibit A-2 with appropriate insertions as to date and principal amount. 2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments. (a) Subject to subsections 2.12 and 2.16, the Borrower may at any time and from time to time prepay any Loans, in whole or in part, without premium or penalty, upon irrevocable notice to the Administrative Agent prior to 11:00 A.M., New York City time, three Business Days prior to the date of prepayment in the case of Eurodollar Loans or on any Business Day in the case of Base Rate Loans, specifying the date and amount of prepayment, the Type of Loan to be prepaid (which Loans shall be prepaid on a pro rata basis among the applicable Lenders) and whether the prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of any such notice, the Administrative Agent shall promptly notify each applicable Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to subsection 2.16. Partial prepayments shall be in an aggregate principal amount of $2,000,000 or a whole multiple of $100,000 in excess thereof. (b) (i) If, subsequent to the Closing Date, Holdings or any of its Subsidiaries shall incur or permit the incurrence of any Indebtedness (other than Indebtedness permitted pursuant to subsection 7.2), 100% of the Net Proceeds thereof shall be promptly ratably applied toward the prepayment of the Loans, the Facility B Loans and the Facility C Loans and permanent reduction of the Commitments, the Facility B Commitments and the Facility C Commitments as set forth in clause (iv) of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to permit any Indebtedness not permitted by subsection 7.2. (ii) If, subsequent to the Original Closing Date, Holdings or any of its Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net Proceeds, subject to the Applicable Holdback (defined below) shall be promptly and ratably applied toward the prepayment of the Loans and the Facility B Loans and Facility C Loans and permanent reduction of the Commitments and the Facility B Commitments and the Facility C Commitments as set forth in clause (iv) of this subsection 2.6(b); provided that Net Proceeds from any Asset Sales shall not be required to be so applied to the extent that 30 such Net Proceeds are used by the Borrower or such Subsidiary to acquire assets to be employed in the business of the Borrower or its Subsidiaries within 365 days of receipt thereof, but if such Net Proceeds, subject to the Applicable Holdback (as defined below), are not so used, 100% of the amount of such Net Proceeds not so used shall be applied toward the prepayment of the Loans and the permanent reduction of the Commitments as set forth in clause (iv) of this subsection 2.6(b) on the earlier of (x) the 366th day after receipt of such Net Proceeds and (y) the date on which the Borrower has determined that such Net Proceeds shall not be so used. As used herein, "Applicable Holdback" shall mean an amount of Net Proceeds not in excess of $20,000,000 derived from any Asset Sales occurring since the Original Closing Date that has not been applied toward the prepayment of Loans and the permanent reduction of the Commitments as set forth in clause (iv) of subsection 2.6(b) which Borrower and/or its applicable Subsidiary may retain and not apply as a mandatory prepayment without the requirement of utilizing the same to acquire assets to be employed in the business of the Borrower or such applicable Subsidiary; provided, that if any Event of Default shall have occurred and be continuing, the Applicable Holdback amount shall be automatically reduced to zero unless and until such Event of Default is acknowledged in writing by the Required Lenders (or all the Lenders in cases where the unanimous consent of the Lenders is required) as cured or waived. (iii) [Intentionally Omitted] (iv) Except during any period in which an Event of Default has occurred and is continuing, any mandatory prepayments required by this subsection 2.6 shall be applied ratably to the outstanding principal amount of Loans, Facility B Loans and Facility C Loans with a corresponding ratable permanent reduction of the Revolving Credit Commitments, the Facility C Commitments and the Revolving 364 Day Commitments (or, if applicable, the Term Loans on a pro rata basis to reduce the unpaid scheduled installments of principal of the Term Loans in inverse order of maturity). Revolving Credit Commitment, Facility C Commitments and Revolving 364 Day Commitment reductions made pursuant to subsections 2.6(b)(i) and (ii) hereof (and the corresponding subsections of the Facility B Credit Agreement and Facility C Credit Agreement) shall be applied to each Lender's respective Revolving Credit Commitment, each Facility C Lender's Facility C Commitments and/or each Facility B Lender's Revolving 364 Day Commitments, as applicable, on a pro rata basis and shall reduce permanently such Commitments, Revolving 364 Day Commitments and Facility C Commitments. At any time that an Event of Default has occurred and is continuing, all mandatory prepayments shall be applied in accordance with the terms of subsection 2.12 hereof (and the corresponding subsection of the Facility B Credit Agreement and/or the Facility C Credit Agreement). Mandatory prepayments shall not be subject to any minimum amount requirement. (v) In addition, if after giving effect to (i) any reduction of the Revolving Credit Commitments under subsection 2.4, 2.5 or 2.6 or (ii) any recalculation of the Exchange Rate pursuant to subsection 3.9, the aggregate outstanding principal 31 amount of Swing Line Loans plus the aggregate outstanding principal amount of Revolving Credit Loans plus the aggregate outstanding amount of L/C Obligations shall exceed the aggregate amount of the Revolving Credit Commitments, such reduction or recalculation shall be accompanied by prepayment in the amount of such excess to be applied (x) first, to the outstanding Swing Line Loans and (y) second, to outstanding Revolving Credit Loans (in each case, together with any amounts payable under subsection 2.16)); provided that if the aggregate principal amount of Swing Line Loans and Revolving Credit Loans then outstanding is less than the amount of such excess (because Letters of Credit constitute a portion of such excess), the Borrower shall immediately, without notice or demand, to the extent of the balance of such excess, replace outstanding Letters of Credit and/or deposit an amount (but in no event greater than such balance) in a cash collateral account opened by the Administrative Agent for the benefit of the Revolving Credit Lenders (such deposit to be in Dollars with respect to Domestic L/Cs and the applicable Alternative Currency with respect to Foreign L/Cs). The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the L/C Participants in such Letters of Credit, a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement and the other Credit Documents. Any amounts deposited in such accounts shall be released to the Borrower on any Calculation Date on which the aggregate outstanding principal amount of Swing Line Loans plus the aggregate outstanding principal amount of Revolving Credit Loans plus the aggregate outstanding amount of L/C Obligations equals or is less than the aggregate amount of the Revolving Credit Commitments, provided that no Default or Event of Default has occurred and is continuing. 2.7 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans, by giving the Administrative Agent prior irrevocable notice of such election at or before 11:00 A.M. New York City time, on the Business Day immediately preceding the date of the proposed conversion and of the amount and Type of Loan to be converted, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans (other than Swing Line Loans) to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election at or before 11:00 A.M., New York City time, on the third Business Day immediately preceding the date of the proposed conversion and of the amount and Type of Loan to be converted. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each applicable Lender thereof. All or any part of outstanding Eurodollar Loans and Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and is then continuing and (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Termination Date. (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the 32 Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans and of the amount and Type of Loan to be converted, provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is then continuing or (ii) after the date that is one month prior to the Termination Date and provided, further, that if the Borrower shall fail to give such notice or if such continuation is not permitted such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. (c) All notices given by Borrower under this subsection 2.7 may be made by telephonic notice promptly confirmed in writing. 2.8 Minimum Amounts and Maximum Number of Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000 in excess thereof. All Loans hereunder may be converted or continued into Base Rate Loans without reference to the minimum principal amount requirements for new Base Rate borrowings set forth in subsection 2.2 above. In no event shall the number of outstanding Eurodollar Tranches plus outstanding Facility B Eurodollar Tranches and Facility C Eurodollar Tranches exceed 20 at any time. 2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin. (b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin. (c) If all or a portion of (i) any principal of any Loan, (ii) any interest payable thereon, (iii) any commitment fee or (iv) any other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), the principal of the Loans and any such overdue interest, commitment fee or other amount shall bear interest at a rate per annum which is (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of any such overdue interest, commitment fee or other amount, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such overdue principal, interest, commitment fee or other amount is paid in full (as well after as before judgment). (d) Interest shall be payable with respect to each Loan in arrears on each Interest Payment Date and on the Termination Date, provided that interest accruing pursuant to paragraph (c) of this subsection shall be payable from time to time on demand. 33 2.10 Computation of Interest and Fees. (a) Interest on Base Rate Loans and fees shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed; all other interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.9(a) or (c). 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the eurodollar market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be converted to or continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the first day of such Interest Period, to Base Rate Loans. Until such notice has been withdrawn in writing by the Administrative Agent (which the Administrative Agent agrees to do when the Administrative Agent has determined, or has been instructed by the Required Lenders that, the circumstances that prompted the delivery of such notice no longer exist), no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans. 2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Revolving Credit Lenders hereunder, each payment by the Borrower on account of any commitment fee hereunder and any reduction of the Revolving Credit Commitments of Revolving Credit Lenders shall be made pro 34 rata according to the respective Commitment Percentages of the Revolving Credit Lenders. Except during any period in which an Event of Default has occurred and is continuing, each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Credit Loans, and any application by the Administrative Agent of the proceeds of any Collateral, shall be made pro rata according to the respective outstanding principal amounts of such Loans then held by the Lenders. All payments (including prepayments) to be made by the Borrower hereunder in respect of any Loan, whether on account of principal, interest, Reimbursement Obligations (whether in respect of Domestic L/Cs or Foreign L/Cs), fees, expenses or otherwise, shall be made without set off or counterclaim and shall be made prior to 11:00 A.M., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders with respect to such Loans, at the Administrative Agent's office specified in subsection 10.2, in Dollars and in immediately available funds; provided, that, with respect to any Reimbursement Obligations of the Borrower arising from the presentment to the Issuing Lender of a draft under a Foreign L/C, the Borrower may make payment in the applicable Alternative Currency if such payment is received by the Issuing Lender on the date such draft is paid by the Issuing Lender. At any time that an Event of Default has occurred and is continuing, all payments (including prepayments) made by Borrower hereunder and any application by the Administrative Agent of the proceeds of any Collateral and/or payment under any Guarantee shall be applied in the following order: (1) to the ratable payment of all amounts due and owing by the Borrower pursuant to subsection 10.5 of this Agreement, subsection 10.5 of the Facility B Credit Agreement or subsection 10.5 of the Facility C Credit Agreement to the Agents, the Facility B Agents and/or the Facility C Agents, and after payment in full thereof, to any other Lender, Facility B Lender or Facility C Lender; (2) to the ratable payment of all interest, fees and commissions due and owing under this Agreement, the Facility B Credit Agreement or the Facility C Credit Agreement to the Agents, the Facility B Agents, the Facility C Agents, the Swing Line Lender, any Lender, any Facility B Lender or any Facility C Lender; (3) to the ratable payment (or cash collateralization) of the aggregate outstanding principal amount of Loans, Facility B Loans, Facility C Loans and the aggregate L/C Obligations and Facility B L/C Obligations; and (4) to the ratable payment of all other obligations of the Borrower to the Agents, the Facility B Agents, the Facility C Agents, the Swing Line Lender, any Lender, any Facility B Lender, or any Facility C Lender under any Credit Document, Facility B Credit Document or Facility C Credit Document. For purposes of applying payments and proceeds distributed under clause 3 above, each Lender will first apply such amounts to all outstanding Loans of such Lender before such amounts will be held as cash collateral for L/C Obligations in which such Lender is a L/C Participant. The Administrative Agent, the Facility B Administrative Agent and the Facility C Administrative Agent shall ratably distribute such payments to the applicable Lenders, the Facility B Lenders and the Facility C Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its Commitment Percentage of such borrowing available to the Administrative Agent, the 35 Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Borrower. The failure of any Lender to make any Loan to be made by it shall not relieve any other Lender of its obligation hereunder to make its Loan on such Borrowing Date. 2.13 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 2.16. If circumstances subsequently change so that any affected Lender shall determine that it is no longer so affected, such Lender will promptly notify the Borrower and the Administrative Agent, and upon receipt of such notice, the obligations of such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans shall be reinstated. 2.14 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Note, any Letter of Credit, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by subsection 2.15 and changes in the rate of net income taxes (including branch profits taxes and minimum taxes) or franchise taxes (imposed in lieu of net income taxes) of such Lender); 36 (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or issuing or participating in Letters of Credit or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender upon written demand such additional amount or amounts as will compensate such Lender for such increased cost or reduced amount receivable; provided that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, in its reasonable discretion, in any legal, economic or regulatory manner) to designate a different Eurodollar lending office if the making of such designation would allow the Lender or its Eurodollar lending office to continue to perform its obligations to make Eurodollar Loans or to continue to fund or maintain Eurodollar Loans and avoid the need for, or reduce the amount of, such increased cost. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower, through the Administrative Agent, of the event by reason of which it has become so entitled. If the Borrower so notifies the Administrative Agent within five Business Days after any Lender notifies the Borrower of any increased cost pursuant to the foregoing provisions of this Section, the Borrower may convert all Eurodollar Loans of such Lender then outstanding into Base Rate Loans in accordance with the terms hereof. Each Lender shall notify the Borrower within 120 days after it becomes aware of the imposition of such costs; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder or under any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a prompt written request therefor, the Borrower shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each Lender shall notify the Borrower within 37 120 days after it becomes aware of the imposition of such additional amount or amounts; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amount or amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (c) If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection, showing the calculation thereof in reasonable detail, submitted by such Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.15 Taxes. (a) Except as provided in this subsection 2.15, all payments made by the Borrower under this Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority ("Taxes"), excluding Taxes on net income (including, without limitation, branch profits taxes and minimum taxes) and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender as a result of a present or former connection between any Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to any Agent or any Lender hereunder or under any Note, the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof with respect to any Taxes that are imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement or that are attributable to such Lender's failure to comply with the requirements of paragraph (b) of this subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter, the Borrower shall send to the relevant Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt, if any, received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the relevant Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the Lenders for any incremental taxes, interest or penalties that may 38 become payable by any Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender, Assignee and Participant that is not a citizen or resident of the United States of America, a corporation, partnership created or organized in or under the laws of the United States of America, any estate that is subject to U.S. federal income taxation regardless of the source of its income or any trust which is subject to the supervision of a court within the United States and the control of a United States fiduciary as described in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) on or before the date on which it becomes a party to this Agreement (or, in the case of a Participant, on or before the date on which such Participant purchases the related participation) either: (A) two duly completed and signed copies of either Internal Revenue Service Form W-8 ECI (relating to such Non-U.S. Lender and entitling it to a complete exemption from withholding of U.S. Taxes on all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents) or Form W-8 BEN (relating to all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents), or successor and related applicable forms, as the case may be; or (B) in the case of a Non-U.S. Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and that does not comply with the requirements of clause (A) hereof, (x) a statement in the form of Exhibit E (or such other form of statement as shall be reasonably requested by the Borrower from time to time) to the effect that such Non-U.S. Lender is eligible for a complete exemption from withholding of U.S. Taxes under Code Section 871(h) or 881(c), and (y) two duly completed and signed copies of Internal Revenue Service Form W-8 or successor and related applicable form (it being understood and agreed that no Participant and, without the prior written consent of the Borrower described in clause (B) of the proviso to the first sentence of subsection 10.6(c), no Assignee shall be entitled to deliver any forms or statements pursuant to this clause (B), but rather shall be required to deliver forms pursuant to clause (A) of this subsection 2.15(b)). Further, each Non-U.S. Lender agrees (i) to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two further duly completed and signed copies of such Forms W-8 ECI or W-8 BEN, as the case may be, or successor and related applicable forms, on or before the date that any such form expires or becomes obsolete and promptly after the occurrence of any event requiring a change from the most recent form(s) previously delivered by it to the Borrower (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) in accordance with applicable U.S. laws and regulations and (ii) in the case of a Non-U.S. Lender that delivers a statement in the 39 form of Exhibit E (or such other form of statement as shall have been requested by the Borrower), to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such statement on an annual basis on the anniversary of the date on which such Non-U.S. Lender became a party to this Agreement and to deliver promptly to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such additional statements and forms as shall be reasonably requested by the Borrower from time to time unless, in any such case, any change in law or regulation has occurred subsequent to the date such Lender became a party to this Agreement (or in the case of a Participant, the date on which such Participant purchased the related participation) which renders all such forms inapplicable or which would prevent such Lender (or Participant) from properly completing and executing any such form with respect to it and such Lender promptly notifies the Borrower and the Administrative Agent (or, in the case of a Participant, the Lender from which the related participation shall have been purchased) if it is no longer able to deliver, or if it is required to withdraw or cancel, any form or statement previously delivered by it pursuant to this subsection 2.15(b). Each Non-U.S. Lender agrees to indemnify and hold harmless the Borrower from and against any taxes, penalties, interest or other costs or losses (including, without limitation, reasonable attorneys' fees and expenses) incurred or payable by the Borrower as a result of the failure of the Borrower to comply with its obligations to deduct or withhold any U.S. Taxes from any payments made pursuant to this Agreement to such Non-U.S. Lender or the Administrative Agent which failure resulted from the Borrower's reliance on any form, statement, certificate or other information provided to it by such Non-U.S. Lender pursuant to clause (B) or clause (ii) of this subsection 2.15(b). The Borrower hereby agrees that for so long as a Non-U.S. Lender complies with this subsection 2.15(b), the Borrower shall not withhold any amounts from any payments made pursuant to this Agreement to such Non-U.S. Lender, unless the Borrower reasonably determines that it is required by law to withhold or deduct any amounts from any payments made to such Non-U.S. Lender pursuant to this Agreement. A Non-U.S. Lender shall not be required to deliver any form or statement pursuant to the immediately preceding sentences in this subsection 2.15(b) that such Non-U.S. Lender is not legally able to deliver (it being understood and agreed that the Borrower shall withhold or deduct such amounts from any payments made to such Non-U.S. Lender that the Borrower reasonably determines are required by law and that payments resulting from a failure to comply with this paragraph (b) shall not be subject to payment or indemnity by the Borrower pursuant to subsection 2.15(a)). If any Credit Party other than the Borrower makes any payment to any Non-U.S. Lender under any Credit Document, the foregoing provisions of this subsection 2.15 shall apply to such Non-U.S. Lender and such Credit Party as if such Credit Party were the Borrower (but a Non-U.S. Lender shall not be required to provide any form or make any statement to any such Credit Party unless such Non-U.S. Lender has received a request to do so from such Credit Party and has a reasonable time to comply with such request). (c) If a Lender shall become aware that it is entitled to receive a refund (whether by way of a direct payment or by offset) in respect of a Non-Excluded Tax paid by the Borrower, which refund, in the good faith judgment of such Lender, is allocable to such payment made pursuant to this Section, it shall promptly notify the Borrower of the availability of such refund and shall, within 30 days after the receipt of a request from the Borrower, apply for such refund at the Borrower's sole expense. If any Lender receives such refund (as described in the 40 preceding sentence), it shall repay the amount of such refund (together with any interest received thereon) to the Borrower if all the payments due under this Section has been paid in full. 2.16 Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto (but excluding loss of margin). Such indemnification under this subsection 2.16 may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (but excluding loss of margin) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Each Lender claiming any payment pursuant to this subsection 2.16 shall do so by giving notice thereof to the Borrower and the Administrative Agent (showing calculation of the amount claimed in reasonable detail) within 60 Business Days after a failure to borrow, convert or continue Eurodollar Loans, or to prepay, after notice or after a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period therefor. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.17 Replacement of Lenders. If at any time (a) the Borrower becomes obligated to pay additional amounts described in subsections 2.13, 2.14 or 2.15 as a result of any condition described in such subsections, (b) any Lender ceases to make Eurodollar Loans pursuant to subsection 2.13, (c) any Lender becomes insolvent and its assets become subject to a receiver, liquidator, trustee, custodian or other Person having similar powers or (d) any Lender becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may, on five (5) Business Days' prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall) assign pursuant to subsection 10.6 all of its rights and obligations under this Agreement to a Lender or other entity selected by the Borrower and acceptable to the Administrative Agent for a purchase price equal to the outstanding principal amount of such Lender's Loans and all accrued interest and fees and other amounts payable hereunder (including amounts payable under subsection 2.16 as though such Loans were being paid instead of being purchased); provided that (i) the Borrower shall have no right to replace the Administrative Agent, (ii) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender, (iii) in the event of a replacement of a Nonconsenting Lender or a Lender to which the Borrower becomes obligated to pay additional amounts under one of the subsections described in clause (a) above, in order for the Borrower to 41 be entitled to replace such a Lender, such replacement must take place no later than 180 days after (A) the date the Nonconsenting Lender shall have notified the Borrower and the Administrative Agent of its failure to agree to any requested consent, waiver or amendment or (B) the Lender shall have demanded payment of additional amounts under one of the subsections described in clause (a) above, as the case may be, and (iv) in no event shall the Lender hereby replaced be required to pay or surrender to its replacement Lender or other entity any of the fees received by such Lender hereby replaced pursuant to this Agreement. In the case of a replacement of a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to this subsection 2.17, the Borrower shall pay such additional amounts to such Lender prior to such Lender being replaced and the payment of such additional amounts shall be a condition to the replacement of such Lender. In the event that (x) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Credit Documents or to agree to any amendment thereto, (y) the consent, waiver or amendment in question requires the agreement of all Lenders in accordance with the terms of subsection 10.1 and (z) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender." 2.18 Certain Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the non-refundable fees at the times and in the amounts as set forth in that certain fee letter between the Administrative Agent and the Borrower dated on or about August 11, 1998. 2.19 Certain Rules Relating to the Payment of Additional Amounts. (a) Upon the request, and at the expense, of the Borrower, each Lender to which the Borrower is required to pay any additional amount pursuant to subsection 2.14 or 2.15 shall reasonably afford the Borrower the opportunity to contest, and reasonably cooperate with the Borrower in contesting, the imposition of any Non-Excluded Taxes or other amounts giving rise to such payment; provided that (i) such Lender shall not be required to afford the Borrower the opportunity to so contest unless the Borrower shall have confirmed in writing to such Lender its obligation to pay such amounts pursuant to this Agreement and (ii) the Borrower shall reimburse such Lender for its reasonable attorneys' and accountants' fees and disbursements incurred in so cooperating with the Borrower in contesting the imposition of such Non-Excluded Taxes. (b) Each Lender agrees that if it makes any demand for payment under subsection 2.14 or 2.15(a), or if any adoption or change of the type described in subsection 2.13 shall occur with respect to it, it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its reasonable discretion) to designate a different lending office if the making of such a designation would allow the Lender to continue to make and maintain Eurodollar Loans and would reduce or obviate the need for the Borrower to make payments under subsection 2.14 or 2.15(a), or would eliminate or reduce the effect of any adoption or change described in subsection 2.13. 42 SECTION 3. LETTERS OF CREDIT 3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the Revolving Credit Lenders set forth in subsection 3.4(a), agrees to issue letters of credit ("Letters of Credit") for the account of the Borrower on any Business Day during the Revolving Credit Commitment Period in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (x) the L/C Obligations would exceed the Revolving Credit Commitment or (y) the Available Commitment with respect to Revolving Credit Loans of all Revolving Credit Lenders less the aggregate principal amount of the Swing Line Loans then outstanding would be less than zero. (b) Each Domestic L/C shall (i) be denominated in Dollars, (ii) be a Performance L/C or a Financial L/C issued to support obligations of the Borrower or any of its Subsidiaries, contingent or otherwise, or be a commercial letter of credit for the purchase of goods and (iii) expire no later than the fifth Business Day prior to the Termination Date. (c) Each Foreign L/C shall (i) be denominated in an Alternative Currency, (ii) be a Performance L/C or a Financial L/C issued to support obligations of the Borrower or any of its Subsidiaries, contingent or otherwise, or be a commercial letter of credit for the purchase of goods, and (iii) expire no later than the fifth Business Day prior to the Termination Date. For purposes of this Agreement, the amount deemed outstanding under each Foreign L/C at any time, and the amount of the Borrower's Reimbursement Obligations under subsection 3.5 for any amounts paid by the Issuing Lender in connection with any Foreign L/C, shall be the Dollar Equivalent, as determined on the most recent Calculation Date, of (x) such Letter of Credit or (y) the Reimbursement Amount (as defined in Subsection 3.5(a)), as applicable. (d) Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, Domestic L/Cs shall also be subject to the laws of the State of New York. (e) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if (i) such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law or any policies of the Issuing Lender or (ii) in the case of any Foreign L/C, it has determined that it cannot provide such Letter of Credit in the applicable Alternative Currency. 3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit at any time prior to the fifth Business Day prior to the Termination Date by delivering to the Issuing Lender with a copy to the Administrative Agent at its address for notices specified herein an Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents 43 and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower and the Administrative Agent (with copies for each Lender) promptly following the issuance thereof. 3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay to the Administrative Agent, for the account of the Issuing Lender and the L/C Participants, a letter of credit fee with respect to each Letter of Credit, computed for the period from and including the date of issuance of such Letter of Credit to the expiration date of such Letter of Credit at a rate per annum equal to (i) in the case of any such Letter of Credit issued as a Performance L/C, one-half (1/2) of the Applicable Margin then in effect for Eurodollar Loans, of the Dollar Equivalent of the aggregate face amount of such Letters of Credit outstanding and (ii) in the case of any other Letter of Credit (except for the type described in clause (i) above), the Applicable Margin then in effect for Eurodollar Loans, of the Dollar Equivalent of the aggregate face amount of such Letters of Credit outstanding, payable, in each such case, in arrears on each L/C Fee Payment Date and on the Termination Date; provided, that, with respect to any Foreign L/C, the Dollar Equivalent of the face amount of such Letter of Credit shall be recalculated on each Calculation Date during the period that such Letter of Credit is outstanding. Such fees shall be payable to the Administrative Agent to be shared ratably among the Revolving Credit Lenders in accordance with their respective Commitment Percentages. In addition, the Borrower shall pay to the Issuing Lender, for its sole account, a fee equal to 0.125% per annum of the Dollar Equivalent of the aggregate face amount of all outstanding Letters of Credit payable quarterly in arrears on each L/C Fee Payment Date and on the Termination Date; provided, that, with respect to any Foreign L/C, the Dollar Equivalent of the face amount of such Letter of Credit shall be recalculated on each Calculation Date during the period that such Letter of Credit is outstanding. (b) In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit. (c) The Administrative Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and the relevant L/C Participants all fees and commissions received by the Administrative Agent for their respective accounts pursuant to this subsection. 3.4 L/C Participation. (a) The Issuing Lender irrevocably agrees to sell and hereby sells to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the 44 Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage from time to time in effect in the Issuing Lender's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement or any such reimbursement payment received by the Issuing Lender is avoided or required to be returned in accordance with applicable law, such L/C Participant shall pay to the Issuing Lender upon demand in Dollars at the Issuing Lender's address for notices specified herein an amount equal to such L/C Participant's then Commitment Percentage of the Dollar Equivalent of the amount of such draft (determined on the date such draft is paid), or any part thereof, which is not so indefeasibly reimbursed; provided that, if such demand is made prior to 11:00 A.M., New York City time, on a Business Day, such L/C Participant shall make such payment to the Issuing Lender prior to the end of such Business Day and otherwise such L/C Participant shall make such payment on the next succeeding Business Day. (b) If any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to subsection 3.4(a) in respect of any portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate, as quoted by the Issuing Lender, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to subsection 3.4(a) is not in fact made available to the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans hereunder. A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with subsection 3.4(a), the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender will, if such payment is received prior to 11:00 A.M., New York City time, on a Business Day, distribute to such L/C Participant its pro rata share thereof prior to the end of such Business Day and otherwise the Issuing Lender will distribute such payment on the next succeeding Business Day; provided, however, that in the event that any such payment received by the Issuing Lender and distributed to the L/C Participants shall be required to be returned by 45 the Issuing Lender, each such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it. 3.5 Reimbursement Obligation of the Borrower. (a) The Borrower agrees to reimburse the Issuing Lender on the same Business Day on which the Issuing Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender provided such notice is received by 1:00 P.M., New York City time, on such Business Day, and the next Business Day if such notice is received after such time. The Issuing Lender shall provide notice to the Borrower on each Business Day on which a draft is presented indicating the Dollar Equivalent of the amount of (i) such draft so paid (and, in the case of a Foreign L/C, the amount of such draft so paid stated in the applicable Alternative Currency) and (ii) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment ((i) and (ii) collectively with any interest accruing pursuant to paragraph (b) below, the "Reimbursement Amount"). Each such payment shall be made to the Issuing Lender at its address for notices specified herein in lawful money of the United States of America and in immediately available funds; provided, that, with respect to any Reimbursement Obligations of the Borrower arising from the presentment to the Issuing Lender of a draft under a Foreign L/C, the Borrower may make payment in the applicable Alternative Currency if such payment is received by the Issuing Lender on the date such draft is paid by the Issuing Lender. (b) Interest shall be payable on the Dollar Equivalent of any and all amounts remaining unpaid by the Borrower under this subsection from the date a draft presented under any Letter of Credit is paid by the Issuing Lender until payment in full (i) at the rate which would be payable on any Loans that are Base Rate Loans at such time until such payment is required to be made pursuant to subsection 3.5(a), and (ii) thereafter, at the rate which would be payable on any Loans that are Base Rate Loans at such time which were then overdue. (c) For the avoidance of doubt, subject to the provisos in the third sentence of subsection 2.12(a) and the last sentence of subsection 3.5(a) of this Agreement, all payments due from the Borrower hereunder in respect of Foreign L/Cs (and Reimbursement Obligations in connection therewith) shall be made in Dollars as provided in subsection 2.12 of this Agreement. 3.6 Obligations Absolute. (a) The Borrower's obligations under subsection 3.5(a) shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrower may have or have had against the Issuing Lender, any L/C Participant or any beneficiary of a Letter of Credit. (b) The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower's Reimbursement Obligations under subsection 3.5(a) shall not be affected by, among other things, (i) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged (unless the Issuing Lender has knowledge of such invalidity, fraud or 46 forgery), (ii) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred, or (iii) any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. (c) Neither the Issuing Lender nor any L/C Participant shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Lender's gross negligence or willful misconduct. (d) The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender or any L/C Participant to the Borrower. 3.7 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower and the Administrative Agent of the date and the Dollar Equivalent of the amount thereof (and, in the case of a Foreign L/C, the amount thereof stated in the applicable Alternative Currency). If any draft shall be presented for payment under any Letter of Credit, the responsibility of the Issuing Lender to the Borrower in connection with such draft shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment appear on their face to be in conformity with such Letter of Credit. 3.8 Application. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall govern and control. 3.9 Determination of Exchange Rate. On each Calculation Date with respect to each outstanding Foreign L/C, the Issuing Lender shall determine the Exchange Rate as of such Calculation Date with respect to the applicable Alternative Currency and shall promptly notify the Administrative Agent and the Borrower thereof and of the Dollar Equivalent of all Foreign L/Cs outstanding on such Calculation Date. The Exchange Rate so determined shall become effective on such Calculation Date and shall remain effective until the next succeeding Calculation Date. SECTION 4. REPRESENTATIONS AND WARRANTIES To induce the Agents, the Issuing Lender, the Swing Line Lender and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and warrants to the Agents, the Issuing Lender, the Swing Line Lender and each Lender that: 47 4.1 Financial Condition. (a) The following financial statements concerning Borrower and its Subsidiaries have been delivered to the Agents and the Lenders and have been prepared in accordance with GAAP consistently applied throughout the periods covered (except as disclosed therein and except, with respect to unaudited financial statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended: (i) The audited consolidated balance sheets at December 31, 1998 and the related statements of income and cash flows of Borrower and its Subsidiaries for the fiscal year then ended, certified by PricewaterhouseCoopers L.L.P. (ii) The unaudited condensed consolidated balance sheet(s) at September 30, 1999 and the related statement(s) of income and cash flows of Borrower and its Subsidiaries for the fiscal quarter then ended. (b) The unaudited pro forma consolidated balance sheet of the Borrower and its consolidated Subsidiaries which has been delivered pursuant to subsection 5.1(o) has been prepared based on the best information available to the Borrower as of the date of delivery thereof and presents fairly on a pro forma basis the estimated financial position of the Borrower and its consolidated Subsidiaries, as December 31, 1999, adjusted to give effect to the acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc., and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. 4.2 No Change. Since September 30, 1999 there has been no development, event or circumstance which has had or could reasonably be expected to have a Material Adverse Effect. 4.3 Corporate Existence; Compliance with Law. Each of Holdings, the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is, or will be on or before the date set forth in subsection 6.12, duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 4.4 Corporate Power; Authorization; Enforceable Obligations. Each of Holdings, the Borrower and its Subsidiaries has the corporate power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party and, in the case of the Borrower, to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on 48 the terms and conditions of this Agreement and to authorize the execution, delivery and performance of such Credit Documents. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents to which the Borrower and each other Credit Party is a party, except those referred to in subsections 4.17 and 6.13 and those set forth on Schedule 4.4. This Agreement has been, and each other Credit Document will be, duly executed and delivered on behalf of the Borrower and each other Credit Party. This Agreement constitutes, and each other Credit Document to which it is a party when executed and delivered will constitute, a legal, valid and binding obligation of each Credit Party thereto enforceable against each such Credit Party, as the case may be, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 4.5 No Legal Bar. Except as set forth on Schedule 4.5 or as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution, delivery and performance of each Credit Document, the borrowing and use of the proceeds of the Loans and the consummation of the transactions contemplated by the Credit Documents: (a) will not violate any Requirement of Law or any Contractual Obligation applicable to or binding upon Holdings, the Borrower or any Subsidiary of the Borrower or any of their respective properties or assets and (b) will not result in the creation or imposition of any Lien on any of its properties or assets pursuant to any Requirement of Law applicable to it or any of its Contractual Obligations, except for the Liens arising under the Pledge Agreements. 4.6 No Material Litigation. Except as set forth on Schedule 4.6, no litigation by, investigation by, or proceeding of or before any arbitrator or any Governmental Authority is pending or, to the knowledge of the Borrower, overtly threatened by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues with respect to any Credit Document or any of the transactions contemplated hereby or thereby or which could reasonably be expected to have a Material Adverse Effect. 4.7 No Default. Neither Holdings, the Borrower nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and its Subsidiaries (i) has good record and insurable title in fee simple to, or a valid leasehold interest in, all its material real property, (ii) has good title to, or a valid leasehold interest in, all its other material property and (iii) none of such property in clauses (i) and (ii) is or shall be subject to any Lien except as permitted by subsection 7.3. 4.9 Intellectual Property. Holdings, the Borrower and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, technology, know-how and 49 processes necessary for the conduct of its business as currently conducted except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect (the "Intellectual Property"). To the best of the Borrower's knowledge, and except as set forth on Schedule 4.9, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any valid basis for any such claim which could reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by Holdings, the Borrower and its Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 4.10 Taxes. Except as set forth on Schedule 4.10, each of Holdings, the Borrower and its Subsidiaries has filed or caused to be filed all material tax returns which, to the knowledge of the Borrower, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 4.11 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. 4.12 ERISA. The Borrower has provided to the Agents a true and correct copy of all agreements, arrangements and understandings relating to the transfer of Plans from the Seller to the Borrower (the "Transfer Agreements"). The Transfer Agreements are in full force and effect and have not been waived or modified without the consent of the Agents (which shall not be unreasonably withheld) except to the extent any such waiver or modification, singly or in the aggregate, could not be reasonably expected to have a Material Adverse Effect. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Reportable Event has occurred with respect to any Single Employer Plan, all contributions required to be made with respect to a Plan have been timely made; none of the Borrower or any of its Subsidiaries nor any Commonly Controlled Entity has incurred any material liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any liability (including any indirect, contingent or secondary liability) under any of the foregoing Sections with respect to any Plan; no termination or, or institution of proceedings to terminate or appoint a trustee to administer, a Single Employer Plan has occurred; and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code (except that with respect to any Multiemployer Plan, such representation is deemed made only to the knowledge of the Borrower). No "accumulated funding deficiency" (within the meaning of 50 Section 412 of the Code or Section 302 of ERISA), extension of any amortization period (within the meaning of Section 412 of the Code) or Lien in favor of the PBGC or a Plan has arisen or has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan. As of the last annual valuation date prior to the date on which this representation is made or deemed made, the fair market value of the assets available for benefits under each Single Employer Plan did not exceed the actuarial present value of all accumulated benefit obligations under such Plan by more than $20,000,000, all as determined in accordance with Statement of Financial Accounting Standards No. 87. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan for which there is any outstanding liability, and neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made in an amount which would be reasonably likely to have a Material Adverse Effect. To the best knowledge of the Borrower, no such Multiemployer Plan is in Reorganization or Insolvent. 4.13 Investment Company Act; Other Regulations. None of the Borrower or any of its Subsidiaries is an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. None of the Borrower or any of its subsidiaries is not subject to regulation under any Federal or State statute or regulation (other than Regulation X of the Board of Governors of the Federal Reserve System) which limits its ability to incur Indebtedness. 4.14 Subsidiaries. The Subsidiaries of the Borrower and their respective jurisdictions of incorporation shall be as set forth on Schedule 4.14. 4.15 Purpose of Loans. The proceeds of the Loans shall be used by the Borrower (i) to pay fees and expenses related to the preparation and negotiation of this Agreement and the other Credit Documents and (ii) for general corporate and working capital purposes in the ordinary course of business of the Borrower and its Subsidiaries, including, without limitation, the making of Investments permitted under subsection 7.9. 4.16 Environmental Matters. Except insofar as any exception to any of the following, or any aggregation of such exceptions, is not reasonably likely to result in a Material Adverse Effect: (a) The facilities and properties owned, leased or operated Holdings, by the Borrower or any of its Subsidiaries (the "Properties") do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could reasonably be expected to give rise to liability under, any applicable Environmental Law. (b) None of Holdings, the Borrower nor any of its Subsidiaries has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of 51 the Properties or the Business, nor does the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened. (c) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, any applicable Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability under, any applicable Environmental Law. (d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Borrower, threatened, under any Environmental Law to which Holdings, the Borrower or any Subsidiary is or, to the knowledge of the Borrower, will be named as a party or with respect to the Properties or the Business, 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 Properties or the Business. (e) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of Holdings, the Borrower or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably give rise to liability under any applicable Environmental Laws. (f) The Properties and all operations at the Properties are in compliance, and have in the last 3 years been in compliance, in all material respects with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any applicable Environmental Law with respect to the Properties or the business operated by Holdings, the Borrower or any of its Subsidiaries (the "Business") which could materially interfere with the continued operation of the Properties or materially impair the fair saleable value thereof. (g) Holdings, the Borrower and its Subsidiaries hold and are in compliance with all Environmental Permits necessary for their operations. 4.17 Collateral Documents. Upon execution and delivery thereof by the parties thereto, each Pledge Agreement will be effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the pledged stock described therein and, when stock certificates representing or constituting the pledged stock described therein are delivered to the Administrative Agent, together with undated stock powers executed in blank therefor, such security interest shall, subject to the existence of Permitted Liens, constitute a perfected first lien on, and security interest in, all right, title and interest of the pledgor party thereto in the pledged stock described therein. 4.18 Accuracy and Completeness of Information. No fact is known to Holdings, the Borrower or any of its Subsidiaries which has had or could reasonably be expected to have a 52 Material Adverse Effect, which has not been disclosed to the Lenders by Holdings, the Borrower or its Subsidiaries in writing prior to the date hereof. Neither Holdings, the Borrower nor any Subsidiary of the Borrower is aware of any material liability of the Borrower or any of its Subsidiaries which is not fully disclosed in the most recent financial statements delivered to the Agents and Lenders pursuant to subsections 4.1 and 6.1 hereto. 4.19 Labor Matters. There are no strikes pending or, to the Borrower's knowledge, overtly threatened against Holdings, the Borrower or any of its Subsidiaries which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The hours worked and payments made to employees of Holdings, the Borrower and each of its Subsidiaries (and their predecessors) have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law, except to the extent such violations could not, or in the aggregate, be reasonably expected to have a Material Adverse Effect. SECTION 5. CONDITIONS PRECEDENT 5.1 Conditions to Effectiveness. This Agreement shall not be effective until the following conditions precedent have been satisfied or waived in writing by the Administrative Agent and the Requisite Class Lenders: (a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, (ii) the Guarantees and (iii) the Pledge Agreements, in each case executed, duly acknowledged and delivered by duly authorized officers of each party thereto, with a counterpart or a conformed copy for each Lender. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the capital stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. (b) Fees and Expenses. The Agents, the Arrangers and the Lenders shall have received all fees, expenses and other consideration required to be paid on or before the Closing Date and all attorneys fees and disbursements incurred by the Agents in connection with this Agreement shall have been paid on or before the Closing Date. (c) Good Standing Certificates. The Administrative Agent shall have received certificates of good standing for each Credit Party issued by the Secretary of State (or other relevant governmental officers) of the jurisdiction of incorporation of each Credit Party. (d) Consents, Authorizations and Filings, Etc. All consents, authorizations and filings, if any, required in connection with the execution, delivery and performance by the Credit Parties, and the validity and enforceability against the Credit Parties, of the Credit Documents to which any of them is a party, shall have been obtained or made, and such consents, authorizations and filings shall be in full force and effect, except such consents, authorizations and filings, the failure to obtain which would not have a Material Adverse Effect. 53 (e) Insurance. The Lenders shall have received (i) a reasonably satisfactory schedule describing all insurance maintained by the Borrower and its Subsidiaries pursuant to subsection 6.5, and (ii) binders (or other customary evidence as to the obtaining and maintenance by the Borrower and its Subsidiaries of such insurance) for each policy set forth on such schedule insuring against casualty and other usual and customary risks. (f) Litigation. On the Closing Date, there shall be no actions, suits or proceedings pending or threatened against any Credit Party (a) with respect to this Agreement or any other Credit Document or any Transaction Document or the transactions contemplated hereby or thereby or (b) which the Agents or the Required Lenders shall determine could reasonably be expected to have a Material Adverse Effect. (g) Borrowing Certificate. If any Loan is to be requested on the Closing Date, the Administrative Agent shall have received, with a counterpart for each Lender, a certificate of the Borrower, dated the Closing Date, substantially in the form of Exhibit D, with appropriate insertions and attachments, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (h) Corporate Proceedings of the Borrower. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of the Borrower authorizing (i) the execution, delivery and performance of the Credit Documents to which it is a party, (ii) the borrowings contemplated hereunder, and (iii) the stock pledges pursuant to the Borrower Pledge Agreement, certified by the Secretary or an Assistant Secretary of the Borrower as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (i) Borrower Incumbency Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a Certificate of the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of the Borrower executing any Credit Document reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (j) Corporate Proceedings of Other Credit Parties. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of each Credit Party (other than the Borrower) authorizing (i) the execution, delivery and performance of the Credit Documents to which it is a party, and (ii) the granting by it of the Liens created pursuant to the Pledge Agreements to which it is a party, certified by the Secretary or an Assistant Secretary of each such Credit Party as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. 54 (k) Credit Party Incumbency Certificates. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of each Credit Party (other than the Borrower), dated the Closing Date, as to the incumbency and signature of the officers of such Credit Party executing any Credit Document, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of each such Credit Party. (l) Corporate Documents. The Administrative Agent shall have received, with a counterpart for each Lender, true and complete copies of the certificate of incorporation and by-laws of each Credit Party, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the such Credit Party. (m) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender the executed legal opinion of each of Simpson Thacher and Bartlett, special counsel to the Credit Parties, and Christopher C. Cambria, Vice President - General Counsel and Secretary of the Borrower and counsel to the other Credit Parties, substantially in the form of Exhibits C-1 and C-2, respectively. Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Agents may reasonably require. (n) Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificates representing the shares pledged pursuant to each of the Pledge Agreements together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof. (o) Pro Forma Financials. The Lenders shall have received a reasonably satisfactory unaudited pro forma consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 1999 which shall present fairly, in all material respects, on a pro forma basis, the estimated financial condition of the Borrower and its Subsidiaries as of such date, as adjusted to give effect to acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc., and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. (p) Projections. Each Lender shall have received financial projections of the Borrower in form and substance reasonably satisfactory to the Agents prepared by the Borrower. (q) No Default. No Default or Event of Default shall have occurred and be continuing. (r) Facility B Credit Agreement. All conditions set forth in clauses (a) through (q) of subsection 5.1 of the Facility B Credit Agreement shall have been satisfied or waived in writing by the Facility B Lenders required to affect a waiver of such condition. (s) Facility C Credit Agreement. All conditions set forth in clauses (a) through (q) and (t) through (w) of subsection 5.1 of the Facility C Credit Agreement shall have 55 been satisfied or waived in writing by the Facility C Lenders required to affect a waiver of such condition. 5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit (including the issuance of any Letter of Credit) requested to be provided by it on any date (including, without limitation, its initial Loan and Letter(s) of Credit but excluding Revolving Credit Loans made to repay Refunded Swing Line Loans) is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by any Credit Party in or pursuant to the Credit Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except for any representation and warranty which is expressly made as of an earlier date, which representation and warranty shall have been true and correct in all material respects as of such earlier date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or will occur or exist after giving effect to the extensions of credit requested to be made on such date. Borrower shall not be in violation of Section 4.09 (Incurrence of Indebtedness and Issuance of Preferred Stock) of any of the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture on such date nor will such a violation occur or exist after giving effect to the extensions of credit requested to be made on such date. (c) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be satisfactory in form and substance to the Agents, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. Each borrowing by, and each Letter of Credit issued on behalf of, the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date thereof that the conditions contained in this subsection have been satisfied. SECTION 6. AFFIRMATIVE COVENANTS The Borrower hereby agrees that, so long as the Commitments remain in effect or any amount is owing to any Lender or any Agent hereunder or under any other Credit Document, the Borrower shall and (except in the case of delivery of financial information, reports and notices) shall cause each of its Subsidiaries to: 6.1 SEC Filings. The Borrower will file on a timely basis with the SEC, to the extent such filings are accepted by the SEC and whether or not the Borrower has a class of securities registered under the Exchange Act, the annual reports, quarterly reports (including with respect to the fourth quarter of each fiscal year) and other documents that the Borrower would be 56 required to file if the Borrower were subject to section 13(a) or 15(d) of the Exchange Act. The Borrower will also be required (i) to deliver to the Administrative Agent and each Lender, copies of such reports and documents within five days after the date on which the Borrower files such reports and documents with the SEC or the date on which the Borrower would be required to file such reports and documents if the Borrower were so required and (ii) if filing such reports and documents with the SEC is not accepted by the SEC or is prohibited under the Exchange Act, to promptly notify the Administrative Agent in writing of the occurrence of any such event and to supply at the Borrower's cost copies of such reports and documents to the Administrative Agent and any Lender upon request. All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 6.2 Certificates; Other Information. Furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of the independent certified public accountants reporting on such financial statements stating that, in performing their audit, nothing came to their attention that caused them to believe that the Borrower failed to comply with the provisions of subsection 7.1, except as specified in such certificate; (b) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of a Responsible Officer stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary has been formed or acquired, the Borrower has complied with the requirements of subsection 6.10 with respect thereto) and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; (c) concurrently with the delivery of financial statements pursuant to subsection 6.1, a certificate of a Responsible Officer of the Borrower setting forth, in reasonable detail, the computations, as applicable, of (i) the Debt Ratio and (ii) the financial covenants set forth in subsection 7.1, as of such last day or for the fiscal period then ended, as the case may be; (d) not later than 60 days after the end of each fiscal year of the Borrower, a copy of the projections by the Borrower of the operating budget and cash flow budget of the Borrower and its Subsidiaries for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer to the effect that such projections have been prepared on the basis of sound financial planning practice and that such Officer has no reason to believe they are incorrect or misleading in any material respect; (e) within five days after the same are sent, copies of all financial statements and reports which the Borrower or Holdings sends to its stockholders; and 57 (f) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be. 6.4 Conduct of Business; Maintenance of Existence and Property; Compliance with Law. Except as permitted by subsection 7.5 and subsection 7.6, (a) continue to engage in business of the same general type as now conducted by it; (b) preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business; (c) keep all property useful and necessary in its business in good working order and condition (ordinary wear and tear and damage by fire and/or other casualty or taking by condemnation excepted) except if (i) in the reasonable business judgment of the Borrower or such Subsidiary, as the case may be, it is in its best economic interest not to preserve and maintain such rights, privileges or franchises, and (ii) such failure to preserve and maintain such privileges, rights or franchises would not materially adversely affect the rights of the Lenders hereunder or the value of the Collateral, and except as otherwise permitted pursuant to subsection 7.5; and (d) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, be reasonably expected to have a Material Adverse Effect. 6.5 Insurance. The Borrower will, and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies of similar stature engaged in the same or similar businesses operating in the same or similar locations. 6.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records (except to the extent any such access is restricted by a Requirement of Law) at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify the Borrower prior to any contact with such accountants and give the Borrower the opportunity to participate in such discussions; provided, further, that the Borrower shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 6.7 Notices. Promptly give notice to the Administrative Agent and each Lender of: (a) the occurrence of any Default or Event of Default; 58 (b) any (i) default or event of default under any Contractual Obligation of the Borrower or any of its Subsidiaries, (ii) litigation, investigation or proceeding which may exist at any time between the Borrower or any of its Subsidiaries and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect or (iii) any material asset sale (describing in reasonable detail the assets sold, the consideration received therefor and the proposed use of the proceeds thereof); (c) any other litigation or proceeding affecting the Borrower or any of its Subsidiaries in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; and (d) the following events, as soon as possible and in any event within 45 days after the Borrower knows or has reason to know thereof: (i) the incurrence of an accumulated funding deficiency or the filing of an application to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, the creation of any Lien in favor of the PBGC or a Plan, the occurrence of any "Trigger Event" (as defined in the Transfer Agreements) and the reassumption by the Seller of sponsorship of any Single Employer Plan, (ii) except where such event or liability could not reasonably be expected to have a Material Adverse Effect, the occurrence or expected occurrence of any Reportable Event with respect to any Plan (other than a Multiple Employer Plan), or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan, or a failure to make any required contribution to a Plan, (iii) the institution of proceedings by the PBGC with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan or (iv) except as could not reasonably be expected to have a Material Adverse Effect, the institution of proceedings or the taking of any other action with respect to the withdrawal from or termination of any Single Employer Plan; Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto. 6.8 Environmental Laws. (a) (i) Comply in all material respects with all Environmental Laws applicable to it, and obtain, comply in all material respects with and maintain any and all material Environmental Permits necessary for its operations as conducted and as planned; and (ii) take all reasonable efforts to ensure that all of its tenants, subtenants, contractors, subcontractors, and invitees comply in all material respects with all applicable Environmental Laws, and obtain, comply in all material respects with and maintain any and all material Environmental Permits, applicable to any of them. Notwithstanding the foregoing, upon learning of any actual or suspected noncompliance, the Borrower or one or more of its Subsidiaries, as appropriate, shall promptly undertake all reasonable efforts to achieve material compliance. 59 (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions in each case required under applicable Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding applicable Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not be reasonably expected to have a Material Adverse Effect. 6.9 Further Assurances. Upon the reasonable request of the Administrative Agent, promptly perform or cause to be performed any and all acts and execute or cause to be executed and delivered any and all documents which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 6.10 Additional Collateral. (a) With respect to any Capital Stock of any newly created or acquired Subsidiary or any newly issued Capital Stock of any existing Subsidiary acquired after the Original Closing Date by the Borrower or any of its Subsidiaries that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject, promptly (and in any event within 30 days after the acquisition thereof): (i) execute and deliver to the Administrative Agent such amendments to the relevant Pledge Agreements or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such Capital Stock, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, including delivering all such original certificates evidencing such Capital Stock to the Administrative Agent together with undated stock powers executed in blank therefor, and (iii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, the Borrower shall not be required to grant to the Administrative Agent a Lien upon the Capital Stock of any Immaterial Subsidiary. (b) With respect to any Person that, subsequent to the Original Closing Date, becomes a direct or indirect Subsidiary of the Borrower, promptly (and in any event within 30 days after such Person becomes a Subsidiary): (i) cause such new Subsidiary to become a party to the Subsidiary Pledge Agreement and the Subsidiary Guarantee and (ii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clause (i) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the Capital Stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are 60 securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. 6.11 [Intentionally Omitted.] 6.12 Foreign Jurisdictions. Maintain due qualification as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 6.13 Government Contracts. The Borrower and its Subsidiaries shall apply for and maintain all material facility security clearances and personnel security clearances required of the Borrower under all Requirements of Law to perform and deliver under any and all Government Contracts and as otherwise may be necessary to continue to perform the business of the Borrower and its Subsidiaries. 6.14 Lien Searches. Not later than 45 days following the Closing Date, the Borrower shall deliver to the Administrative Agent the results of a search of Uniform Commercial Code, tax and judgment filings made with respect to each of the Borrower and its Subsidiaries (other than any Immaterial Subsidiaries) in each jurisdiction in which the Borrower or such applicable Subsidiary maintains its principal place of business or any material assets and a certificate of a Responsible Officer certifying that such lien search results do not disclose any Liens, except for Liens permitted hereunder. SECTION 7. NEGATIVE COVENANTS The Borrower hereby agrees that, so long as any portion of the Commitments remain in effect or any amount is owing to any Lender or any of the Agents hereunder or under any other Credit Document, the Borrower shall not, and (except with respect to subsection 7.1), shall not permit any of its Subsidiaries to, directly or indirectly: 7.1 Financial Condition Covenants. (a) Debt Ratio. Permit the Debt Ratio at the last day of any fiscal quarter to be greater than the ratio set forth below opposite the fiscal quarter during which such fiscal quarter occurs:
Fiscal Quarter Ending Ratio --------------------- ----- December 31, 1999 4.75 March 31, 2000 4.75 June 30, 2000 4.75 September 30, 2000 4.50 December 31, 2000 4.50
61 March 31, 2001 4.50 June 30, 2001 4.50 September 30, 2001 3.75 December 31, 2001 3.75 March 31, 2002 3.75 June 30, 2002 3.75 September 30, 2002 3.25 and thereafter
(b) Interest Coverage. Permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense during any Test Period to be less than the ratio set forth opposite such period below (such ratio, the "Interest Coverage Ratio"):
Test Period Interest Coverage Ratio ----------- ----------------------- 10/1/99 - 12/31/99 2.25 1/1/00 - 3/31/00 2.25 4/1/00 - 6/30/00 2.25 7/1/00 - 9/30/00 2.50 10/1/00 - 12/31/00 2.50 1/1/01 - 3/31/01 2.50 4/1/01 - 6/30/01 2.50 7/1/01 - 9/30/01 2.75 10/1/01 - 12/31/01 2.75 1/1/02 - 3/31/02 2.75 4/1/02 - 6/30/02 2.75 7/1/02 - 9/30/02 3.00 10/1/02 - and thereafter 3.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness (including in respect of Interest Rate Agreements), except: (a) Indebtedness of the Borrower under this Agreement and the Facility B Credit Agreement and the Facility C Credit Agreement; (b) Indebtedness of the Borrower incurred to finance the acquisition of fixed or capital assets (whether pursuant to a loan, a Financing Lease or otherwise) in an aggregate principal amount not exceeding $25,000,000 at any time outstanding; (c) Indebtedness assumed in connection with any Investment permitted pursuant to subsection 7.9(k) hereof; 62 (d) additional Indebtedness of the Borrower not exceeding $50,000,000 in aggregate principal amount at any one time outstanding (of which up to $35,000,000 may be secured by Liens permitted pursuant to subsection 7.3(i) hereof); (e) Indebtedness of the Borrower in respect of not more than (i) $225,000,000 principal amount of Subordinated Notes issued on the April 30, 1997 and (ii) $180,000,000 principal amount of New Subordinated Notes issued on May 22, 1998 and (iii) $200,000,000 principal amount of December 1998 Subordinated Notes issued on or about December 8, 1998; (f) the Indebtedness of the Borrower and its Subsidiaries outstanding on the Original Closing Date and reflected on Schedule 7.2(f), and refundings or refinancings thereof, provided that no such refunding or refinancing shall shorten the maturity or increase the principal amount of the original Indebtedness; (g) Guarantee Obligations permitted by subsection 7.4; (h) the incurrence by any Credit Party of intercompany Indebtedness between or among the Credit Parties; provided, however, that if the Borrower is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations; (i) Indebtedness secured by Permitted Liens; (j) Indebtedness of the Borrower or any of its Subsidiaries (other than as described under subsection 7.2(a) above) incurred in connection with the issuance of any surety bonds, performance letters of credit or other similar performance bonds required pursuant to any Contractual Obligation or Requirement of Law to which Borrower or any of its Subsidiaries are subject in an aggregate principal amount not exceeding $100,000,000 at any time outstanding, less, without duplication, the aggregate amount of then existing Guarantee Obligations permitted under 7.4(g); and (k) Up to $30,000,000 of purchase money Indebtedness the proceeds of which are utilized to acquire the real property (including improvements thereon) and related assets currently utilized by the Borrower's communications systems - west division in Salt Lake City, Utah, on terms reasonably satisfactory to the Agents. 7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for: (a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; 63 (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements; (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) easements, rights-of-way, zoning restrictions, other restrictions and other similar encumbrances previously or hereafter incurred in the ordinary course of business 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 Borrower or such Subsidiary; (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by subsection 7.2(f), provided that no such Lien is expanded to cover any additional property (other than after-acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) after the Closing Date and that the amount of Indebtedness secured thereby is not increased and extensions, renewals or replacements thereof provided that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the original Indebtedness; and provided, further, that the assets of the Borrower and its Subsidiaries encumbered by such Liens are existing equipment and other existing tangible assets; (g) Liens securing Indebtedness of the Borrower and its Subsidiaries permitted by subsections 7.2(b) and 7.2(k) incurred to finance the acquisition of fixed or capital assets, provided that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) and (iii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the original purchase price of such property of such property at the time it was acquired; (h) Liens on the property or assets of a corporation which becomes a Subsidiary after the date hereof securing Indebtedness permitted by subsection 7.2(c), provided that (i) such Liens existed at the time such corporation became a Subsidiary and were not created in anticipation thereof, (ii) any such Lien is not expanded to cover any property or assets of such corporation after the time such corporation becomes a Subsidiary (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), and (iii) the amount of Indebtedness secured thereby is not increased; (i) Liens (not otherwise permitted hereunder) which secure obligations not exceeding (as to the Borrower and all Subsidiaries) $35,000,000 in aggregate amount at any time outstanding; 64 (j) Liens created pursuant to the Pledge Agreements; (k) Liens on the property of the Borrower or any of its Subsidiaries in favor of landlords securing licenses, subleases or leases entered into in the ordinary course of business; (l) licenses, leases or subleases permitted hereunder granted to other Persons not interfering in any material respect in the business of the Borrower or any of its Subsidiaries; (m) so long as no Default or Event of Default shall have occurred and be continuing under clause (f) of Section 8, attachment or judgment Liens in an aggregate amount outstanding at any one time not in excess of $7,500,000; (n) Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements entered into by the Borrower, or any of its subsidiaries in the ordinary course of business; and (o) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business and which are within the general parameters customary in the banking industry. 7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any Guarantee Obligation except: (a) Guarantee Obligations in existence on the date hereof and listed on Schedule 7.4 and extensions, renewals and replacements thereof, provided, however, that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the Indebtedness guaranteed by the original guarantee; (b) Guarantee Obligations incurred after the date hereof in an aggregate amount not to exceed $30,000,000 at any one time outstanding for the Borrower and its Subsidiaries; (c) guarantees made by the Subsidiaries of the Borrower pursuant to the Subordinated Debt Documents and the New Subordinated Debt Documents and the December 1998 Subordinated Debt Documents; (d) Guarantee Obligations under the Credit Documents and the Facility B Credit Documents and the Facility C Credit Document; (e) L/C Obligations and the Facility B L/C Obligations; (f) Guarantee Obligations of the Borrower or any Subsidiary in respect of obligations of a Subsidiary permitted to be incurred by such Subsidiary by this Agreement; and 65 (g) Guarantee Obligations in respect of surety bonds and/or performance letters of credit which shall not exceed $100,000,000 at any time less, without duplication, the amount of outstanding Indebtedness permitted under subsection 7.2(j). 7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, or make any material change in its present method of conducting business, except: (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any one or more wholly owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or Subsidiaries shall be the continuing or surviving corporations); and (b) any wholly owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other wholly owned Subsidiary of the Borrower that is a Credit Party. 7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any Person other than the Borrower or any wholly owned Subsidiary, except: (a) the sale or other disposition of obsolete or worn out property in the ordinary course of business; (b) the sale of any property or assets not otherwise permitted by this subsection 7.6; provided that the Net Proceeds thereof shall be applied pursuant to subsection 2.6(b)(ii); (c) as permitted pursuant to subsection 7.5(b); (d) the sale, lease, transfer or exchange of inventory in the ordinary course of business; (e) transfers resulting from any casualty or condemnation of property or assets; (f) intercompany sales or transfers of assets made in the ordinary course of business; (g) licenses, leases or subleases of tangible property in the ordinary course of business; 66 (h) any consignment arrangements or similar arrangements for the sale of assets in the ordinary course of business; (i) the sale or discount of overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; and (j) the conveyance, sale, assignment or contribution to any new Subsidiary of the Borrower or any existing Subsidiary of the Borrower assets of the Borrower or any Subsidiary of the Borrower not exceeding five percent (5%) of the Consolidated Total Assets. 7.7 Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Borrower or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Subsidiary other than Permitted Stock Payments. 7.8 Limitation on Capital Expenditures. Make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (excluding any such asset acquired in connection with normal replacement and maintenance programs properly charged to current operations) except for capital expenditures in the ordinary course of business not exceeding $45,000,000 in the aggregate for the Borrower and its Subsidiaries during any fiscal year of the Borrower; provided, that up to 50% of any such amount not so expended in the fiscal year for which it is permitted above may be carried over for expenditure in the next following fiscal year; provided, further, that Borrower and/or its Subsidiaries may exceed the annual limit on capital expenditures set forth above by utilizing any amounts available for Investments permitted under subsection 7.9(k) hereto to fund such additional Capital Expenditures. 7.9 Limitation on Investments, Loans and Advances. Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in, any Person ("Investments"), except: (a) extensions of trade credit in the ordinary course of business; (b) investments in Cash Equivalents; (c) loans to officers of the Borrower listed on Schedule 7.9(c) in aggregate principal amounts outstanding not to exceed the respective amounts set forth for such officers on said Schedule; (d) loans and advances to employees of the Borrower or its Subsidiaries for travel, entertainment and relocation expenses in the ordinary course of business in an aggregate 67 amount for the Borrower and its Subsidiaries not to exceed $1,000,000 at any one time outstanding; (e) investments by the Borrower in its Subsidiaries that are Credit Parties and investments by such Subsidiaries in the Borrower and in other Subsidiaries that are Credit Parties; (f) so long as no Event of Default has occurred and is continuing, loans by the Borrower to its employees (other than any Principals or their Related Parties) in connection with (i) management incentive plans, (ii) management stock purchase plans, and (iii) obligations of employee option-holders of Storm Control Systems, Inc. to fund the exercise of such options, which loans in (i), (ii) and (iii) in the aggregate do not exceed $5,000,000; (g) Investments in existence on the Original Closing Date set forth on Schedule 7.9(g) and extensions, renewals, modifications or restatements or replacements thereof; provided that no such extension, renewal, modification or restatement shall increase the amount of the original loan, advance or investment; (h) promissory notes and other similar non-cash consideration received by the Borrower and its Subsidiaries in connection with the dispositions permitted by subsection 7.6(b); (i) Investments permitted by subsection 7.6(b) and subsection 7.6(j); (j) Investments (including debt obligations and Capital Stock) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (k) Investments made at any time from and after the Original Closing Date to acquire (i) all or any portion of the Capital Stock, or all or any portion of the assets, of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business, or (ii) all or substantially all of the assets of any division of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business; provided, that, (a) if such Investment is an acquisition of a majority of the Voting Stock of any Person, such Person's board of directors or similar governing body shall have approved such acquisition and (b) at the time of each such Investment described above in clauses (i) and (ii) (both before and after giving effect to such Investment), there shall exist no Default or Event of Default and the aggregate consideration paid (regardless of form, including in the case of an acquisition of assets, any assumed obligations) in connection with all Investments made pursuant to this subsection 7.9(k) shall not exceed the New Investment Sublimit (without deducting therefrom (w) the portion of any purchase price for any Investment funded with Capital Stock of Holdings, (x) consideration paid by the Borrower in connection with the acquisition of SPD Technologies pursuant to the SPD Technologies Acquisition Agreement, (y) consideration not exceeding $92 million paid by Borrower in connection with the acquisition of Microdyne Corporation and (z) any consideration paid prior to December 8, 1998 by the Borrower in connection with any Investment which is listed on Schedule 7.9(k) hereto); provided, further, that in connection with each individual, or 68 series of related, Investments made pursuant to this subsection 7.9(k), Borrower shall deliver to the Administrative Agent, on or prior to the date which is one Business Day prior to the consummation of such Investment or Investments, a certificate of a Responsible Officer that certifies that no Default or Event of Default has occurred and is continuing or will be caused as a result of consummating such proposed Investment. 7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements. (a) Make any optional payment or prepayment on or redemption or purchase of, or deliver any funds to any trustee for the prepayment, redemption or defeasance of, any Subordinated Debt or amend, modify or change, or consent or agree to any amendment, modification or change to any of the material terms of any such Subordinated Debt Documents, New Subordinated Debt Documents or December 1998 Subordinated Debt Documents (other than any such amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon). (b) Amend its Constitutional Documents in any manner which could adversely affect the rights of the Lenders under the Credit Documents or their ability to enforce the same. (c) Modify or amend, or waive any provision or condition contained in, any of the Transaction Documents in any manner that could reasonably be expected to be adverse to the Lenders. 7.11 Limitation on Transactions with Affiliates. (a) Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (i) otherwise permitted under this Agreement, (ii) in the ordinary course of the Borrower's or such Subsidiary's business and (iii) upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate. (b) In addition, notwithstanding the foregoing, the Borrower and its Subsidiaries shall be entitled to make the following payments and/or to enter into the following transactions: (i) the payment of reasonable and customary fees and reimbursement of expenses payable to directors of the Borrower and Holdings; (ii) the employment arrangements with respect to the procurement of services of directors, officers and employees in the ordinary course of business and the payment of reasonable fees in connection therewith; 69 (iii) payments to directors and officers of the Borrower and its Subsidiaries in respect of the indemnification of such Persons in such respective capacities from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, as the case may be, pursuant to the Constitutional Documents or other corporate action of the Borrower or its Subsidiaries, respectively, or pursuant to applicable law; and (iv) transactions described in the Transaction Documents. 7.12 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by the Borrower or any Subsidiary of real or personal property which has been or is to be sold or transferred by the Borrower or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Subsidiary; provided that the Borrower may enter into a sale and leaseback transaction if the Borrower could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction and (b) incurred a Lien to secure such Indebtedness, in each case in accordance with the restrictions contained in this Agreement and the other Credit Documents. 7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the Borrower to end on a day other than December 31. 7.14 Limitation on Negative Pledge Clauses. Enter into with any Person any agreement, other than (a) this Agreement, the Facility B Credit Agreement and the Facility C Credit Agreement, (b) the Subordinated Debt Documents, the New Subordinated Debt Documents or the December 1998 Subordinated Debt Documents, and (c) any industrial revenue bonds, purchase money mortgages or Financing Leases permitted by this Agreement (in which cases, any prohibition or limitation shall only be effective against the assets financed thereby other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired. 7.15 Limitation on Lines of Business. Enter into any business, either directly or through any Subsidiary (other than an Immaterial Subsidiary), except for Similar Businesses. 7.16 Designated Senior Debt. Designate any Indebtedness or other obligation, other than Indebtedness under the Credit Documents, as "Designated Senior Debt," as such term is defined in the Indenture as in effect on the April 30, 1997, the New Subordinated Debt Indenture as in effect on May 22, 1998 or the December 1998 Subordinated Debt Indenture as in effect on the December 8, 1998, or any comparable designation that confers upon the holders of such Indebtedness or other obligation (or any Person acting on their behalf) the right to initiate blockage periods under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture or any other Indebtedness or other obligation of the Borrower and its Subsidiaries (other than as a result of a payment default). 70 SECTION 8. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation when due in accordance with the terms thereof or hereof; or the Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; (b) Any representation or warranty made or deemed made by the Borrower or any other Credit Party herein or in any other Credit Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Credit Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; (c) The Borrower or any other Credit Party shall default in the observance or performance of any agreement contained in Section 7 or subsection 6.7(a) of this Agreement, Section 4 of the Parent Guarantee, Section 4 of the Subsidiary Guarantee, Section 4 of the Parent Pledge Agreement, Section 4 of the Borrower Pledge Agreement, or Section 4 of the Subsidiary Pledge Agreement; (d) The Borrower or any other Credit Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Credit Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days; (e) The Borrower or any of its Subsidiaries shall (i) default (x) in any payment of principal of or interest of any Indebtedness (other than the Loans, the L/C Obligations and any intercompany debt) or Interest Rate Agreement Obligations or (y) in the payment of any Guarantee Obligation (excluding any guaranties of the Obligations), beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (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 become due prior to its stated maturity or such Guarantee Obligation to become payable; provided, however, that no Default or Event of Default shall exist under this paragraph unless (i) the aggregate amount of Indebtedness, Interest Rate Agreement Obligations and/or Guarantee Obligations in respect of which any default or other event or condition referred to in this paragraph shall have occurred shall be equal to at least $7,500,000 and (ii) such default continues for a period in excess of 10 days; 71 (f) (i) Holdings, the Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings, the Borrower or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings, the Borrower or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Holdings, Borrower or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings, the Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan that is not in the ordinary course; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; (h) One or more judgments or decrees shall be entered against Holdings, the Borrower or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance (which coverage has been acknowledged by the appropriate insurers)) of $7,500,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; 72 (i) (i) Any of the Pledge Agreements shall cease, for any reason, to be in full force and effect (unless released by the Administrative Agent at the direction of the requisite Lenders or as otherwise permitted under this Agreement or the other Credit Documents), or the Borrower or any other Credit Party which is a party to any of the Pledge Agreements shall so assert or (ii) the Lien created by any of the Pledge Agreements shall cease to be enforceable and of the same effect and priority purported to be created thereby (and, if such invalidity is such so as to be amenable to cure without materially disadvantaging the position of the Administrative Agent and the Lenders, as the case may be, as secured parties thereunder, the Credit Party shall have failed to cure such invalidity within 30 days after notice from the Administrative Agent); (j) The Guarantee Obligation of any Credit Party under the Credit Documents shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Credit Party or any Person acting on behalf of any Credit Party, shall deny or disaffirm its obligations under such Guarantee Obligation; (k) There shall have occurred a Change in Control; or (l) An "Event of Default" as defined in the Facility B Credit Agreement and/or the Facility C Credit Agreement shall have occurred and be continuing; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) of this Section above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice of default to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the Dollar Equivalent of the aggregate then undrawn and unexpired amount of such Letters of Credit. The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the L/C Participants (and the benefit of each such "Issuing 73 Lender" and the "L/C Participants" as defined in the Facility B Credit Agreement), a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement, the Facility B Credit Agreement, the other Credit Documents and the other Facility B Credit Documents. Amounts held in such cash collateral account shall be applied by the Administrative Agent in accordance with subsection 2.12 hereof. The Borrower shall execute and deliver to the Administrative Agent, for the account of the Issuing Lender and the L/C Participants (and each applicable "Issuing Lender" and the "L/C Participants" as defined in the Facility B Credit Agreement), such further documents and instruments as the Administrative Agent may request to evidence the creation and perfection of the within security interest in such cash collateral account. EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION, PRESENTMENT, DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY EXPRESSLY WAIVED. SECTION 9. THE AGENTS; THE ARRANGERS 9.1 Appointment. Each Lender hereby irrevocably designates and appoints each of the Agents as the agent of such Lender under this Agreement and the other Credit Documents, and each such Lender irrevocably authorizes each of the Agents, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against any of the Agents. 9.2 Delegation of Duties. The Agents may execute any of their duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. None of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 9.3 Exculpatory Provisions. Neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by such Agent under or in connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for 74 any failure of the Borrower to perform its obligations hereunder or thereunder. None of the Agents shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of the Borrower. 9.4 Reliance by Agents. The Agents shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by such Agent. The Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with such Agent. Except as expressly provided in this Agreement, the Agents shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that any Agent receives such a notice, such Agent shall give notice thereof to the Lenders. Each Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until such Agent shall have received such directions, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by any of the Agents hereafter taken, including any review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty by any of the Agents to any Lender. Each Lender represents to each of the Agents that it has, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and credit worthiness of the Borrower and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any of the Agents or any 75 other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any of the Agents hereunder (or copies of which have been provided to the Administrative Agent pursuant to this Agreement), none of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Credit Party which may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 9.7 Indemnification. The Lenders agree to indemnify each of the Agents in their respective capacities as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitment Percentages with respect to all Types of Loans in effect on the date on which indemnification is sought, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against any of the Agents in any way relating to or arising out of, the Commitments, this Agreement, any of the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any of the Agents under or in connection with any of the foregoing provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 9.8 Agents, in Their Individual Capacities. The Agents and their respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower as though the Agents were not acting in such capacities hereunder and under the other Credit Documents. With respect to the Loans made or renewed by it and any Note issued to it or Loan Account maintained by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include the Agents in their individual capacities. 9.9 Successor Administrative Agent, Syndication Agent and Documentation Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. 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, unless a Default or Event of Default shall have occurred and be continuing, be approved by the Borrower. If no successor administrative agent 76 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, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Section 9 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 which is 30 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 administrative agent as provided for above. Similarly, the Syndication Agent and/or the Documentation Agent may resign as Syndication Agent and/or Documentation Agent, as the case may be, upon 30 days' notice to the Lenders. The procedure for replacement and effective date of resignation for the Syndication Agent and the Documentation Agent shall be identical to that provided above for the Administrative Agent. 9.10 The Arrangers and the Co-Agents. Except as expressly set forth herein, each of the Arrangers and the Co-Agents, in their respective capacities as such, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement or the other Credit Documents. SECTION 10. MISCELLANEOUS 10.1 Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this subsection. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend any scheduled date of maturity of any Loan, extend the expiration of any Letter of Credit beyond the Termination Date, or reduce the stated rate or amount of any interest or fee payable hereunder or extend the scheduled date of any payment thereof, in each case without the consent of each Lender affected thereby, or increase the commitment of any Lender or extend the expiry of the commitment of any Lender without the consent of such Lender, (ii) amend, modify or waive the definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of its rights and 77 obligations under this Agreement and the other Credit Documents, in each case without the written consent of all the Lenders, (iii) release all or substantially all of the Collateral or release all or substantially all of the Credit Parties from their Guarantee Obligations under the Credit Documents without the consent of all Lenders, (iv) amend, modify or waive any provision of Section 9 without the written consent of the then Agents, (v) amend, modify or waive any provision of subsection 2.1(b), any other provision of this Agreement relating to the Swing Line Loans or the Swing Line Note, if any, without the written consent of the Swing Line Lender, or (vi) amend, modify or waive any provision of this Agreement or any other Credit Document which would directly and adversely affect the Arrangers or the Agents or the Issuing Lender or the Swing Line Lender without the written consent of the Arrangers, the Agents or the Issuing Lender or the Swing Line Lender, as the case may be. In addition to the foregoing, (A) no amendment, modification, termination or waiver of any provision of subsection 2.5, subsection 2.6 or subsection 2.12 which has the effect of changing any interim scheduled payments, voluntary or mandatory prepayments, the application of any scheduled payment or voluntary or mandatory prepayment, the application of proceeds of any Collateral or any Commitment reductions applicable to any Class (an "Affected Class") in a manner that disproportionately disadvantages such Class relative to the other Class shall be effective without the written concurrence of the Requisite Class Lenders of the Affected Class (it being understood and agreed that any amendment, modification, termination or waiver of any provision which only postpones or reduces any interim scheduled payment, voluntary or mandatory prepayment or Commitment reduction from those set forth in subsection 2.6 with respect to only one Class shall be deemed to not disproportionately disadvantage the other Class and, therefore, shall not require the consent of Requisite Class Lenders of such other Class), (B) no amendment, modification, termination or waiver of any provision of any Guarantee or Pledge Agreement shall be effective without the written concurrence of the Requisite Class Lenders for each Class and (C) no amendment, modification or waiver with respect to any provision of this subsection 10.1 or to the definition of "Requisite Class Lenders" shall be effective without the written concurrence of all Lenders, all Facility B Lenders and all Facility C Lenders. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agents and the Issuing Lender and all future holders of the Loans. Any extension of a Letter of Credit by the Issuing Lender shall be treated hereunder as issuance of a new Letter of Credit. In the case of any waiver, the Borrower, the Lenders and the Agents and the Issuing Lender shall be restored to their former positions and rights hereunder and under the other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. 10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when delivered, (b) in the case of delivery by mail, three days after being deposited in the mails, postage prepaid, or (c) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows in the case of the Borrower, the Administrative Agent, Swing Line Lender, Issuing Lender, the Syndication Agent 78 and the Documentation Agent, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto: Holdings, the Borrower or any of its Subsidiaries: L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: Robert LaPenta Fax: (212) 805-5470 with a copy to Attention: Christopher C. Cambria Fax: (212) 805-5494 79 The Administrative Agent: Addresses for notices of borrowing, prepayments and other administrative matters: Bank of America, N.A. 1850 Gateway Boulevard, 5th Floor Concord, CA 94520 Attention: Agency Administrative Services #5596 Josephine T. Flores, Vice President Fax: (925) 675-8500 Tel: (925) 675-8374 Addresses for all other notices (including with respect to amendments and waivers): Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, CA 94103 Attention: Agency Management #10831 Dietmar Schiel, Vice President Fax: (415) 436-3425 Tel: (415) 436-2769 with a copy to: Bank of America, N.A. 335 Madison Avenue New York, NY 10017 Attention: Lisa Choi Fax: (212) 503-7066 Tel: (212) 503-7950 80 The Swing Line Lender: Bank of America, N.A. 231 South LaSalle Street Chicago, IL 60697 Attention: Renee Waller Fax: (312) 974-9626 Tel: (312) 828-3874 The Issuing Lender: Bank of America, N.A. 333 S. Beaudry Avenue, 19th Floor Los Angeles CA 90017-1486 Attention: Trade Operations Center - Standby Letters of Credit #22621 Sandra M. Leon, Vice President Fax: (213) 345-6694 Tel: (213) 345-5231 The Documentation Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michelle Swanson Fax: (212) 528-0819 The Syndication Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michele Swanson Fax: (212) 528-0819 provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not be effective until received. 10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other 81 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. 10.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse each of the Agents for all of their respective reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees, charges and disbursements of a single counsel for the Lenders (in addition to any local counsel), (b) to pay or reimburse each Lender and each Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit Documents and any such other documents, including, without limitation, the fees and disbursements of counsel to each Lender and of counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each Agent and each Issuing Lender harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and each Arranger, each Agent and each Issuing Lender harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or the other Credit Documents or the use of the proceeds of the Loans in connection with the Transaction, including, without limitation, any of the foregoing relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower, any of its Subsidiaries or any of the Properties (all the foregoing in this clause (d), collectively, the "indemnified liabilities"), it being understood that the Borrower shall have an obligation hereunder to the Lender or any Agent with respect to any indemnified liabilities incurred by any Agents, Arranger or the Issuing Lender or any Lender as a result of any Materials of Environmental Concern that are first manufactured, emitted, generated, treated, released, spilled, stored or disposed of on, at or from any Property or any violation of any Environmental Law, which in any case first occurs on or with respect to such Property (i) after the Property is transferred to any Agent, Arranger, Issuing Lender or any Lender or their successors or assigns by foreclosure sale, deed in lieu of foreclosure, or similar transfer or, following such transfer, (ii) in connection with, but prior to, the sale, leasing or other transfer of such Property by such Agent, Arranger, Issuing Lender, or any Lender or their successors or assigns to one or more 82 third parties; provided, however, that the Borrower shall have no obligation hereunder to any Agent or the Issuing Lender or any Lender with respect to otherwise indemnified liabilities arising from the gross negligence or willful misconduct of such Agent or the Issuing Lender or any such Lender, or with respect to otherwise indemnified liabilities following the sale, leasing or other transfer of such Property to one or more third parties. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 10.6 Successors and Assigns; Participation and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Agents and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender or any other interest of such Lender hereunder and under the other Credit Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Credit Documents, and the Borrower and the Agents shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Credit Documents. No Lender shall be entitled to create in favor of any Participant, in the participation agreement pursuant to which such Participant's participating interest shall be created or otherwise, any right to vote on, consent to or approve any matter relating to this Agreement or any other Credit Document except for those specified in clauses (i), (ii) and (iii) of the proviso to subsection 10.1. The Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in subsection 10.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to its participation in the Letters of Credit, the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that in the case of subsection 2.15, such Participant shall have complied with the requirements of said subsection; provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. 83 (c) Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time and from time to time assign to any Lender, any affiliate thereof or, in the case of Lender that is an investment fund which is regularly engaged in making, purchasing or investing in loans or securities (an "Investment Fund"), any other such Investment Fund which is under common management with such Lender, or, with the consent of the Borrower, the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender (which in each case shall not be unreasonably withheld), to an additional bank, Investment Fund or financial institution (an "Assignee") all or any part of its rights and obligations under this Agreement and the other Credit Documents pursuant to an Assignment and Acceptance, substantially in the form of Exhibit F, executed by such Assignee, such assigning Lender (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower, the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender) and delivered to the Administrative Agent for its acceptance and recording in the Register with a copy to the Syndication Agent, provided that, in the case of any such assignment to an additional bank or financial institution, (A) either (x) such assignment is of all the rights and obligations of the assigning Lender or (y) the sum of the aggregate principal amount of the Loans, the aggregate amount of the L/C Obligations and the aggregate amount of the unused Commitments being assigned and, if such assignment is of less than all of the rights and obligations of the assigning Lender, the sum of the aggregate principal amount of the Loans, the aggregate amount of the L/C Obligations and the aggregate amount of the unused Commitments remaining with the assigning Lender are each not less than $5,000,000 (or such lesser amount as may be agreed to by the Borrower and the Administrative Agent) and (B) each Assignee which is a Non-U.S. Lender shall comply with the provisions of clause (A) of subsection 2.15(b) hereof, or, with the prior written consent of the Borrower, which shall not be unreasonably withheld, the provisions of clause (B) of subsection 2.15(b) hereof (and, in either case, with all of the other provisions of subsection 2.15(b) hereof). Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto). Notwithstanding any provision of this paragraph (c) and paragraph (f) of this subsection, the consent of the Borrower shall not be required for any assignment which occurs at any time when any of the events described in clause (f) of Section 8 shall have occurred and be continuing. (d) The Administrative Agent, on behalf of the Borrower, shall maintain at the address of the Administrative Agent referred to in subsection 10.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and Commitments of and principal amounts of the Loans of each Type owing to each Lender from time to time and the registered owners of the Obligations evidenced by the Notes and the Loan Accounts. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders 84 shall treat each Person whose name is recorded in the Register as the owner of a Loan, a Note or other Obligation hereunder as the owner thereof for all purposes of this Agreement and the other Credit Documents, notwithstanding any notice to the contrary. Any assignment of any Loan, Commitment or other obligation evidenced by a Note or a Loan Account shall be effective only upon appropriate entries with respect thereto being made in the Register, and prior to such recordation, all amounts owing to the assignor with respect thereto shall remain owing to the assignor. Any assignment or transfer of all or part of an Obligation evidenced by a Note shall be registered in the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Obligation, duly endorsed by (or accompanied by a written instrument of assignment or transfer duly executed by) the holder thereof, and thereupon one or more new Notes shall be issued to the designated Assignee, if requested, and the old Note shall be returned by the Administrative Agent to the Borrower marked "canceled." (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender) together with payment to the Administrative Agent of a registration and processing fee of $3,000 (provided that no such payment shall be required whenever LCPI or BOA is the assigning Lender), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower. Following the effective date of any such Assignment and Acceptance, the Administrative Agent shall be entitled to update Schedule I hereto to reflect the then outstanding Commitments of each Lender whereupon such amended Schedule I shall be substituted for the pre-existing Schedule I and be deemed a part of this Agreement without any further action or consent of any party and the Administrative Agent shall promptly deliver a copy of such amended Schedule I to each Lender and the Borrower. (f) The Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee, subject to the provisions of subsection 10.15, any and all financial information in such Lender's possession concerning the Borrower and its Affiliates which has been delivered to such Lender by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf of the Borrower in connection with such Lender's credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement. (g) If, pursuant to this subsection 10.6, any interest in this Agreement or any Loan is transferred to any Transferee which would be a Non-U.S. Lender upon the effectiveness of such transfer, the assigning Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the assigning Lender (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) that under applicable law and treaties no U.S. Taxes will be required to be withheld by the Administrative Agent, the Borrower or the assigning Lender with respect to any payments to be made to such Transferee in respect of the Loans, (ii) to furnish to the assigning Lender (and, in the case of any Assignee registered in the Register, the Administrative Agent and the Borrower such Internal Revenue Service Forms 85 required to be furnished pursuant to subsection 2.15(b) and (iii) to agree (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) to be bound by the provisions of subsection 2.15(b). (h) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this subsection concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. (i) Notwithstanding any other provision contained in this Agreement or any other Credit Document to the contrary, (x) any Lender may assign all or any portion of the Loans held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned Loans made by the Borrower to or for the account of the assigning or pledging Lender in accordance with the terms of this Agreement shall satisfy the Borrower's obligations hereunder in respect to such assigned Loans to the extent of such payments and (y) with the consent of the Administrative Agent (not to be unreasonably withheld), any Lender which is an Investment Fund may pledge all or any portion of its Loans to its trustee in support of its obligations to its trustee. No such assignment shall release the assigning Lender from its obligations hereunder. 10.7 Adjustments; Set-off. (a) At any time that an Event of Default has occurred and is continuing, if any Lender (a "benefited Lender") shall at any time receive any payment of all or part of its Loans or the Reimbursement Obligations owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in clause (f) of Section 8, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, Facility B Lender or Facility C Lender (any such affected Lender, Facility B Lender or Facility C Lender hereinafter, an "Affected Lender"), if any, in respect of the Borrower's obligations owing to such other Affected Lender, whether under this Agreement, the Facility B Credit Agreement or Facility C Credit Agreement, including any interest thereon, such benefited Lender shall purchase for cash from each other Affected Lender a participating interest in such portion of each such other Affected Lender's Loans or the Reimbursement Obligations owing to it, Facility B Loans or Facility B Reimbursement Obligations and/or Facility C Loans owing to it, or shall provide such other Affected Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Affected Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest unless the benefited Lender is required by court order to pay interest thereon, in which case each Lender returning funds to such benefited Lender shall pay its pro rata share of such interest. 86 (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender and Borrower also agree that all proceeds of any such set-off shall be subject to the ratable sharing provisions of subsections 2.12 and 10.7(a) hereof to the same extent as if an Event of Default had occurred and was continuing. 10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 10.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 10.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE 87 OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 10.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents; (b) none of the Arrangers, the Agents nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between any of the Agents and the Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders. 10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE ARRANGERS, THE LENDERS AND THE OTHER PARTIES HERETO HEREBY 88 IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 10.15 Confidentiality. Each Lender agrees to keep confidential all non-public information provided to it by the Borrower pursuant to this Agreement that is designated by the Borrower in writing as confidential (excluding any such information already in the possession of such Lender or provided to such Lender by a third party not in violation of this Agreement which, in either case, is not, to the knowledge of such Lender, subject to a confidentiality agreement); provided that nothing herein shall prevent any Lender from disclosing any such information (i) to any Agent or any other Lender or any of its Affiliates, (ii) to any Transferee or prospective Transferee or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors which receives such information and agrees to be bound by the confidentiality provisions hereof, (iii) to its employees, directors, agents, attorneys, accountants and other professional advisors, (iv) upon the request or demand of any Governmental Authority having jurisdiction over such Lender, (v) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (vi) which has been publicly disclosed other than in breach of this Agreement, or (vii) in connection with the exercise of any remedy hereunder. 10.16 Conversion of Currencies. (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the date on which final judgment is given. (b) The obligations of the Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the "Applicable Creditor") shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than the currency in which such sum is stated to be due hereunder (the "Agreement Currency"), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Borrower contained in this subsection 10.16 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder. 10.17 Year 2000. The Borrower has reviewed, or will expeditiously review, its operations and those of its Subsidiaries with a view to assessing whether its businesses, or the 89 businesses of any of its Subsidiaries, are experiencing any Year 2000 Problem. The Borrower shall take all actions necessary and commit adequate resources to assure that its computer-based and other systems (and those of all of its Subsidiaries) are able to effectively process data, including dates after January 1, 2000, without experiencing any Year 2000 Problem that could reasonably be expected to cause a Material Adverse Effect. At the request of the Required Lenders, the Borrower will provide the Administrative Agent with assurances and substantiations (including, but not limited to, the results of internal or external audit reports prepared in the ordinary course of business) reasonably acceptable to the Administrative Agent as to the capability of the Borrower and its Subsidiaries to conduct its and their businesses and operations after January 1, 2000 without experiencing a Year 2000 Problem causing a Material Adverse Effect. The Borrower represents and warrants that it has a reasonable basis to believe that no Year 2000 Problem will cause a Material Adverse Effect. 10.18 Existing Agreements Superseded. As set forth in subsection 1.3 hereof, the Original Credit Agreement is superseded by this Credit Agreement, which has been executed in renewal, amendment, restatement and modification, but not in novation or extinguishment of, the obligations under the Original Credit Agreement. [SIGNATURE PAGES FOLLOW] 90 SIGNATURE PAGES TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. L-3 COMMUNICATIONS CORPORATION By: /s/ Lawrence W. O'Brien Title: Vice President and Treasurer BANK OF AMERICA, N.A. as Administrative Agent By: /s/ Liliana Claar Title: Vice President BANK OF AMERICA, N.A. as a Lender and Swing Line Lender By: /s/ Lisa Choi Title: Vice President LEHMAN COMMERCIAL PAPER INC., as Documentation Agent, Syndication Agent, and as a Lender By: /s/ Michele Swanson Title: Authorized Signatory THE BANK OF NEW YORK By: /s/ Ken Sneider Title: Vice President THE BANK OF NOVA SCOTIA By: /s/ John Hopmans Title: Managing Director BANK ONE, N.A. By: /s/ Andrea S. Kantor Title: Vice President FLEET NATIONAL BANK By: /s/ Roger C. Boucher Title: Senior Vice President CREDIT LYONNAIS By: /s/ Scott Chappelka Title: Vice President FIRST UNION COMMERCIAL CORPORATION By: /s/ Michael Landini Title: Vice President THE FUJI BANK, LIMITED By: /s/ John D. Doyle Title: Vice President & Manager HSBC BANK USA By: /s/ Desmond English Title: Associate Director SOCIETE GENERALE By: /s/ Jose A. Moreno Title: Director Exhibit A-1 to Credit Agreement FORM OF REVOLVING CREDIT NOTE THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT. $ New York, New York ----------------- , FOR VALUE RECEIVED, the undersigned, L-3 Communications Corporation, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of (the "Lender") at the office of Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as administrative agent (in such capacity, the "Administrative Agent"), located at 1850 Gateway Boulevard, Concord, California, 94520, in lawful money of the United States of America and in immediately available funds, on the Termination Date the principal amount of (a) Dollars ($ ), or, if less, (b) the aggregate unpaid principal amount of all Revolving Credit Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.9 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type, and amount of each Revolving Credit Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Revolving Credit Loan. This Note (a) is one of the Revolving Credit Notes referred to in the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions or entities from time to time parties thereto, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and Lehman Commercial Paper Inc. ("LCPI") as the Arrangers, Bank of America, N.A. as the Administrative Agent, LCPI as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Co-Agents, which amends and restates in full the Original Credit Agreement, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment, in whole or in part, as provided in the Credit Agreement. This Note 1 is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, 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. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. [This Note merely re-evidences the Note issued to Lender pursuant to the Original Credit Agreement (the "Prior Note"), is given in substitution therefor, and not in satisfaction thereof, and is in no way intended to constitute a novation or payment and refunding of the Prior Note. All interest and principal outstanding under the Prior Note shall continue in all respects to be outstanding hereunder.](1) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. L-3 COMMUNICATIONS CORPORATION By: ---------------------------------- Name: Title: (1) To be added if Lender requesting a Note holds a Prior Note issued under the Original Credit Agreement. 2 Schedule A to Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ------ ----------------- --------------------- ------------------- -------------------- ----------------- ------------------ Amount of Principal Amount of Base Rate Unpaid Principal Amount of Base Amount Converted to of Base Rate Loans Converted to Balance of Date Rate Loans Base Rate Loans Loans Repaid Eurodollar Loans Base Rate Loans Notation Made By - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ - ------ ----------------- --------------------- ------------------- -------------------- ------------------ ------------------ ====== ================= ===================== =================== ==================== =================== =================
Schedule B to Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ------ ---------- ------------------- ------------------- -------------------- -------------------- ---------------- -------- Amount of Interested Period Amount of Principal Amount of Eurodollar Unpaid Principal Eurodollar Amount Converted to and Eurodollar Rate of Eurodollar Loans Loans Converted to Balance of Notation Date Loans Eurodollar Loans with Respect Thereto Repaid Base Rate Loans Eurodollar Loans Made By - ------ ---------- ------------------- ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- - ------ ---------- ------------------ ------------------- ------------------- --------------------- ---------------- -------- ====== ========== ================== =================== =================== ===================== ================ ========
Exhibit A-2 to Credit Agreement FORM OF SWING LINE NOTE THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT. $ New York, New York --------------- , FOR VALUE RECEIVED, the undersigned, L-3 Communications Corporation, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of (the "Lender") at the office of Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as administrative agent (in such capacity, the "Administrative Agent"), located at 1850 Gateway Boulevard, Concord, California, 94520, in lawful money of the United States of America and in immediately available funds, on the Termination Date the principal amount of (a) DOLLARS ($ ), or, if less, (b) the aggregate unpaid principal amount of all Swing Line Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.9 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type, and amount of each Swing Line Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Swing Line Loan. This Note (a) is one of the Swing Line Notes referred to in the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions or entities from time to time parties thereto, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and Lehman Commercial Paper Inc. ("LCPI") as the Arrangers, Bank of America, N.A. as the Administrative Agent, LCPI as the Syndication Agent and the Documentation Agent and the financial institutions named therein as Co-Agents, which amends and restates in full the Original Credit Agreement, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional 1 and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, 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. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note merely re-evidences the Note issued to Lender pursuant to the Original Credit Agreement (the "Prior Note"), is given in substitution therefor, and not in satisfaction thereof, and is in no way intended to constitute a novation or payment and refunding of the Prior Note. All interest and principal outstanding under the Prior Note shall continue in all respects to be outstanding hereunder. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. L-3 COMMUNICATIONS CORPORATION By: --------------------------------------- Name: Title: 2 Schedule A to Note LOANS AND REPAYMENTS OF BASE RATE LOANS
- ----------------- -------------------------- ------------------------- ------------------------- ------------------- Unpaid Principal Amount of Principal of Balance of Base Rate Date Amount of Loans Loans Repaid Loans Notation Made By - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- - ----------------- -------------------------- ------------------------- ------------------------- ------------------- ================= ========================== ========================= ========================= ===================
EXHIBIT B-1 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================
TABLE OF CONTENTS Page ---- SECTION 1. DEFINED TERMS.........................................................2 1.1. Definitions..................................................................2 1.2. Other Definitional Provisions................................................4 1.3. Effect of Restatement........................................................4 SECTION 2. GUARANTEE..............................................................4 2.1. Guarantee....................................................................4 2.2. No Subrogation...............................................................5 2.3. Amendments, etc. with respect to the Guaranteed Obligations..................6 2.4. Guarantee Absolute and Unconditional.........................................6 2.5. Reinstatement................................................................7 2.6. Payments.....................................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES.........................................7 3.1. Representations in Credit Agreements.........................................7 SECTION 4. COVENANTS..............................................................8 4.1. Covenants in Credit Agreements...............................................8 4.2. Issuance of Indebtedness.....................................................8 4.3. Investments..................................................................8 4.4. Activity.....................................................................8 4.5. Distributions................................................................8 4.6. Notices......................................................................8 4.7. Foreign Jurisdictions........................................................8 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS.........................................8 4A.1 Reports......................................................................8 4A.2 Certificates; Other Information..............................................9 4A.3 Inspection of Property, Books and Records; Discussions.......................9 4A.4 Notices......................................................................9 4A.5 Further Assurance...........................................................10 4A.6 Additional Collateral.......................................................10 4A.7 Payment of Obligations......................................................10 SECTION 5. MISCELLANEOUS.........................................................11 5.1. Amendments in Writing.......................................................11 5.2. Notices.....................................................................11 5.3. No Waiver by Course of Conduct; Cumulative Remedies.........................11 5.4. Enforcement Expenses; Indemnification.......................................11 5.5. Successors and Assigns......................................................12 5.6. Counterparts................................................................12
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TABLE OF CONTENTS Page ---- 5.7. Severability...............................................................12 5.8. Section Headings...........................................................12 5.9. Integration................................................................12 5.10. GOVERNING LAW..............................................................12 5.11. SUBMISSION TO JURISDICTION; WAIVERS........................................12 5.12. Acknowledgments............................................................13 5.13. WAIVER OF JURY TRIAL.......................................................13 5.14. Releases...................................................................14
ii SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. (f/k/a Bank of America NT & SA) as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent, the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, Holdings has executed and delivered to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents, the Amended and Parent Guarantee Agreement (the "Prior Guarantee"), dated as of August 13, 1998 in respect of the obligations of the Borrower to the Administrative Agent for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreement; WHEREAS, Holdings, the Agents, the Arrangers and the Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that Holdings shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. 2 (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower or any other Credit Party with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). "Parent Distributions": the collective reference to any of the following, whether direct or indirect: (i) the declaration or payment of any dividend or other distribution on or in respect of any shares of any class of any Capital Stock of Holdings, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other retirement for value of any such shares of Capital Stock of Holdings, now or hereafter outstanding, (iii) any other payment by Holdings to the holder 3 of any shares of any class of the Capital Stock of Holdings in their capacity as such and (iv) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of Holdings now or hereafter outstanding; provided, however, that the term "Parent Distribution" shall not include payments of salaries or bonuses to employees of Holdings in their capacities as such. "Permitted Parent Distributions": (a) the issuance by Holdings of options or other equity securities of Holdings to outside directors, members of management or employees of Holdings in the ordinary course of business, (b) cash payments made in lieu of issuing fractional shares of Holdings' common stock or preferred stock, (c) cash payments to repurchase Capital Stock of Holdings solely with the proceeds of dividends received from the Borrower pursuant to clause (C) of the definition of Permitted Stock Payments in the Credit Agreements; provided, however, that such payments do not exceed $5,000,000, and (d) the application of up to $2,000,000 of the proceeds of the sale of common stock of Holdings to the repurchase of common stock of Holdings from management of Holdings or the Borrower. "Subscription Agreements": (a) that certain common stock agreement dated April 30, 1997, by and between Frank C. Lanza and Holdings and (b) that certain common stock agreement dated April 30, 1997, by and between Robert V. LaPenta and Holdings, in each case, as in effect on the date hereof. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Holdings hereby unconditionally and irrevocably guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective 4 successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of Holdings hereunder shall be joint and several with the Obligations of the other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of Holdings hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by Holdings under applicable federal and state laws relating to the insolvency of debtors without rending the guarantee of Holdings hereunder unenforceable. (c) Holdings agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of Holdings hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders, hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of Holdings under this Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated (notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding). (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of Holdings hereunder, and Holdings shall, notwithstanding any such payment (other than any payment made by Holdings in respect of the Guaranteed Obligations or any payment received or collected from Holdings in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of Holdings hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 No Subrogation. Notwithstanding any payment made by Holdings hereunder or any set-off or application of funds of Holdings by any of the Agents or Lenders, Holdings shall not be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall Holdings seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by Holdings hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of the Guaranteed Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to Holdings on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by Holdings in trust for the Agents and the Lenders, segregated 5 from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly indorsed by Holdings to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.3 Amendments, etc. with respect to the Guaranteed Obligations. Holdings shall remain obligated hereunder notwithstanding that, without any reservation of rights against Holdings and without notice to or further assent by Holdings, any demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such Agent or Lender and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.4 Guarantee Absolute and Unconditional. Holdings waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Credit Parties, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Holdings waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Holdings understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or the Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the other Credit Parties for the 6 Guaranteed Obligations, or of Holdings under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Holdings, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve Holdings of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against Holdings. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.5 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the any of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.6 Payments. Holdings hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 7 SECTION 4. COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. Holdings shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by Holdings or any of its Subsidiaries. 4.2 Issuance of Indebtedness. Holdings shall not issue, incur or assume any Indebtedness or any Guarantee Obligations other than Indebtedness and Guarantee Obligations under the Credit Documents to which it is a party. 4.3 Investments. Holdings shall not have outstanding or acquire any Investment in any Person other than Investments in Capital Stock of the Borrower and Cash Equivalents. 4.4 Activity. Holdings shall not engage in any business activity other than its ownership and voting of the Capital Stock of the Borrower and the performance of its obligations under the Credit Documents to which it is a party and the Transaction Documents to which it is a party. 4.5 Distributions. Holdings shall not make any Parent Distributions other than Parent Distributions payable solely in common stock of Holdings and Permitted Parent Distributions. 4.6 Notices. Holdings shall promptly give notice to the Administrative Agent of the occurrence of any Default or Event of Default. 4.7 Foreign Jurisdictions. No later than the Closing Date, Holdings shall be duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Reports. Holdings will deliver to the Administrative Agent promptly upon their becoming available, copies of all consolidated or consolidating financial statements, reports, notices and proxy statements sent or made available generally by Holdings to its security holders, 8 of all regular and periodic reports and all registrations statements and prospectuses, if any, filed by Holdings with any securities exchange or with the Securities and Exchange Commission and of all press releases and other statements made available generally by Holdings to the public concerning Holdings. 4A.2 Certificates; Other Information. Holdings shall furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery by the Borrower of the financial statements referred to in subsection 6.1 of each of the Credit Agreements, a certificate of a Responsible Officer of Holdings stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; and (b) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 4A.3 Inspection of Property, Books and Records; Discussions. Holdings shall keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of Holdings and its Subsidiaries with officers and employees of Holdings and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify Holdings prior to any contact with such accountants and give Holdings the opportunity to participate in such discussion; provided, further, that Holdings shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 4A.4 Notices. Holdings shall promptly give written notice to the Administrative Agent of: (a) any (i) default or event of default under any Contractual Obligation of Holdings or (ii) litigation, investigation or proceeding which may exist at any time between Holdings and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect; (b) any litigation or proceeding affecting Holdings in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; (c) the following events, as soon as possible and in any event within 45 days after Holdings knows or has reason to know thereof: (i) the occurrence or 9 expected occurrence of any Reportable Event with respect to any plan (other than a Multiple Employer Plan), a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or Holdings or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan; and Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action Holdings proposes to take with respect thereto. 4A.5 Further Assurance. Upon the request of the Administrative Agent, Holdings shall promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including, without limitation, financing, statements and continuation statements) for filing under the provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Agents and the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 4A.6 Additional Collateral. With respect to any Capital Stock acquired after the Closing Date by Holdings that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject promptly (and in any event within 30 days after the acquisition thereof): Holdings shall (i) execute and deliver to the Administrative Agent such amendments to the Parent Pledge Agreement or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. 4A.7 Payment of Obligations. Holdings shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings or its Subsidiaries, as the case may be; provided that, notwithstanding the foregoing, Holdings and each of its Subsidiaries shall have the right to pay any such obligation and in good faith contest, by proper legal actions or proceedings, the invalidity or amount of such claims. 10 SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon Holdings shall be addressed to Holdings at its notice address set forth below its signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against Holdings under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. 11 (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE 12 SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 13 5.14 Releases. At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to Holdings, and the Administrative Agent shall execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. [Signature page follows] 14 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: ------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ---------------------------------- Name: --------------------------- Title: --------------------------- S-1 EXHIBIT B-2 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS
Page SECTION 1. DEFINED TERMS..................................................3 1.1. Definitions..........................................................3 1.2. Other Definitional Provisions........................................4 1.3. Effect of Restatement................................................4 SECTION 2. GUARANTEE......................................................4 2.1. Guarantee............................................................4 2.2. Right of Contribution................................................5 2.3. No Subrogation.......................................................5 2.4. Amendments, etc. with respect to the Guaranteed Obligations..........5 2.5. Guarantee Absolute and Unconditional.................................6 2.6. Reinstatement........................................................7 2.7. Payments.............................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES.................................7 3.1. Representations in Credit Agreements.................................7 SECTION 4. COVENANTS......................................................7 4.1. Covenants in Credit Agreements.......................................7 SECTION 5. MISCELLANEOUS..................................................8 5.1. Amendments in Writing................................................8 5.2. Notices..............................................................8 5.3. No Waiver by Course of Conduct; Cumulative Remedies..................8 5.4. Enforcement Expenses; Indemnification................................8 5.5. Successors and Assigns...............................................9 5.6. Counterparts.........................................................9 5.7. Severability.........................................................9 5.8. Section Headings.....................................................9 5.9. Integration..........................................................9 5.10. GOVERNING LAW.......................................................9 5.11. SUBMISSION TO JURISDICTION; WAIVERS.................................9 5.12. Acknowledgments....................................................10 5.13. WAIVER OF JURY TRIAL...............................................10 5.14. Additional Guarantors..............................................11 5.15. Releases...........................................................11
i SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Guarantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Guarantors are parties to an Amended and Restated Subsidiary Guarantee Agreement dated as of August 13, 1998 (the "Prior Guarantee"), in respect of the obligations of the Borrower to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreements; WHEREAS, the Guarantors, Agents, Arrangers and Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Guarantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Guarantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that the Guarantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower 2 thereunder, each Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guarantors": the collective reference to each Guarantor. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the 3 Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of each of the Guarantors hereunder shall be joint and several with the Obligations of all other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors without rendering the guarantee of such Guarantor hereunder unenforceable. (c) Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of each Guarantor under this 4 Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding. (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of any Guarantor hereunder, and each Guarantor shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Agents and the Lenders, and each Guarantor shall remain jointly and severally liable to the Agents and the Lenders for the full amount guaranteed by such Guarantor hereunder. 2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by any of the Agents or Lenders, no Guarantor shall be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by such Guarantor hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of any of the Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Agents and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.4 Amendments, etc. with respect to the Guaranteed Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any 5 demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such party and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Credit Parties for the Guaranteed Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to 6 collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against any Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by and of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Guarantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Guarantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Guarantor or to the Credit Document to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Guarantor's knowledge. SECTION 4. COVENANTS Each Guarantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is 7 caused by the failure to take such action or to refrain from taking such action by any of the Credit Parties. SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Guarantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth below its respective signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Guarantor is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the 8 execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under each of the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Guarantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of the Guarantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND 9 ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GUARANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Each Guarantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Guarantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders, or among the Guarantors and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY 10 JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 5.14 Additional Guarantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of each of the Credit Agreements shall become a Guarantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. 5.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Guarantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to the Guarantors, and the Administrative Agent shall execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request to evidence such termination. (b) At the request and sole expense of the Borrower, a Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreements. [Signature page follows] 11 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYNE CORPORATION By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notice to any Guarantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: _____________________________________ Name: _______________________________ Title: ______________________________ S-2 Annex 1 to Second Amended and Restated Subsidiary Guarantee Agreement ASSUMPTION AGREEMENT, dated as of ______________, _____, made by ______________________________, a ______________ corporation (the "Additional Guarantor"), in favor of Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") parties to the Credit Agreements referred to below. All capitalized terms not defined herein shall have the collective meanings ascribed to them in each of such Credit Agreements. W I T N E S S E T H: - - - - - - - - - - WHEREAS, (a) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the banks, financial institutions or other entities party thereto as Lenders (the "Facility A Lenders"), Lehman Commercial Paper Inc. ("LCPI"), as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a Second Amended and Restated Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), (b) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility B Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into an Amended and Restated 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement") and (c) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a new 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement, and, together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); WHEREAS, in connection with the Credit Agreements, certain Subsidiaries of the Borrower (other than the Additional Guarantor) have entered into a Subsidiary Guarantee Agreement and a Subsidiary Pledge Agreement, each amended and restated as of _________ __, 2000 (as amended, supplemented or otherwise modified from time to time, respectively, the "Subsidiary Guarantee Agreement" and the "Subsidiary Pledge Agreement") in favor of the Administrative Agent for the benefit of the Lenders; WHEREAS, the Credit Agreements require the Additional Guarantor to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; and Annex 1 - 1 WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; NOW, THEREFORE, IT IS AGREED: 1. Subsidiary Guarantee Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 5.14 of the Subsidiary Guarantee Agreement, hereby becomes a party to the Subsidiary Guarantee Agreement as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Guarantee Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the Subsidiary Guarantee Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 2. Subsidiary Pledge Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 7.15 of the Subsidiary Pledge Agreement, hereby becomes a party to the Subsidiary Pledge Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The information set forth in Annex 1-B hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Pledge Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in the Subsidiary Pledge Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 3. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. [ADDITIONAL GUARANTOR] By: ------------------------------ Name: Title: Address for Notices: ----------------------------------- ----------------------------------- ----------------------------------- Annex 1 - 2 Attention: Phone: ( ) ___________ Fax: ( ) ___________ Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ------------------------------------------- Name: Title: Annex 1 - 3 EXHIBIT B-3 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page SECTION 1. DEFINED TERMS..........................................................................................2 1.1. Definitions...............................................................................................2 1.2. Other Definitional Provisions.............................................................................4 1.3. Effect of Restatement.....................................................................................4 SECTION 2. PLEDGE.................................................................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES.........................................................................4 3.1. Representations in Credit Agreement.......................................................................4 3.2. Title; No Other Liens.....................................................................................5 3.3. Perfected First Priority Liens............................................................................5 3.4. Chief Executive Office....................................................................................5 3.5. Pledged Stock.............................................................................................5 SECTION 4. COVENANTS..............................................................................................5 4.1. Maintenance of Perfected Security Interest................................................................6 4.2. Pledged Stock.............................................................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS.........................................................................7 4A.1 Further Documentation.....................................................................................7 4A.3 Notices...................................................................................................7 SECTION 5. REMEDIAL PROVISIONS....................................................................................8 5.1. Pledged Stock.............................................................................................8 5.2. Proceeds to be Turned Over To Administrative Agent........................................................9 5.3. Application of Proceeds...................................................................................9 5.4. Code and Other Remedies...................................................................................9 5.5. Registration Rights......................................................................................10 5.6. Waiver; Deficiency......................................................................................11 SECTION 6. THE ADMINISTRATIVE AGENT..............................................................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc..............................................11 6.2. Duty of Administrative Agent.............................................................................12 6.3. Authority of Administrative Agent........................................................................12 SECTION 7. MISCELLANEOUS.........................................................................................13 7.1. Amendments in Writing....................................................................................13 7.2. Notices..................................................................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies......................................................13 7.4. Enforcement Expenses; Indemnification....................................................................13 7.5. Successors and Assigns...................................................................................14 7.6. Set-Off..................................................................................................14
i 7.7. Counterparts.............................................................................................14 7.8. Severability.............................................................................................14 7.9. Section Headings.........................................................................................15 7.10. Integration.............................................................................................15 7.11. GOVERNING LAW...........................................................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS.....................................................................15 7.13. Acknowledgments.........................................................................................16 7.14. WAIVER OF JURY TRIAL....................................................................................16 7.15. Releases................................................................................................16
ii SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, Holdings executed and delivered to the Original Administrative Agents a certain Amended and Restated Parent Pledge and Security Agreement dated as August 13, 1998 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, Holdings and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that Holdings execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Holdings, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of Holdings and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Parent Guarantee, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by Holdings with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by Holdings or any Subsidiary of Holdings with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and Lenders that are required to be paid by Holdings pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, Holdings while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 3 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to Holdings' Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Holdings hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by Holdings or in which Holdings now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and the Agents and the Lenders shall be entitled to rely on each of 4 them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, Holdings owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by Holdings to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of Holdings and any Persons purporting to purchase any Collateral from Holdings, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, Holdings' jurisdiction of organization and the location of Holdings' chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by Holdings hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by Holdings. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Holdings is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS 5 Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest . Holdings shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If Holdings shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, Holdings shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by Holdings to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by Holdings and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by Holdings, Holdings shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of Holdings, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, Holdings will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock 6 or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of Holdings or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) Holdings will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of Holdings, Holdings will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Holdings will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Holdings will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to Holdings of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), Holdings shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to Holdings, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by Holdings or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to Holdings to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) Holdings hereby authorizes and instructs each Issuer of any Pledged Stock pledged by Holdings hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Holdings, and Holdings agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by Holdings consisting of cash, checks and other near-cash items shall be held by Holdings in trust for the Agents and the Lenders, segregated from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly endorsed by Holdings to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by Holdings in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by Holdings and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to Holdings or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to Holdings or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Holdings or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office 9 of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Holdings, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to Holdings. To the extent permitted by applicable law, Holdings waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, Holdings will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Holdings agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Holdings recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to 10 agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Holdings acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Holdings agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Holdings further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against Holdings, and Holdings hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Holdings waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Holdings shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Holdings hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Holdings and in the name of Holdings or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Holdings hereby gives the Administrative Agent the power and right, on behalf of Holdings, without notice to or assent by Holdings, to do any or all of the following: (i) in the name of Holdings or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; 11 (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If Holdings fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by Holdings, shall be payable by Holdings to the Administrative Agent on demand. (d) Holdings hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holdings or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to Holdings for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Holdings acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action 12 taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and Holdings, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and Holdings shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent, nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against Holdings or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 13 (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent Holdings would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Holdings hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to Holdings, any such notice being expressly waived by Holdings, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of Holdings, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of Holdings to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against Holdings, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify Holdings promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any 14 such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND 15 (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to Holdings and the Administrative Agent shall deliver to Holdings any Collateral held by the Administrative Agent hereunder, and execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by Holdings in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of Holdings, shall execute and deliver to Holdings all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. [SIGNATURE PAGE FOLLOWS] 16 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: -------------------------------------- Name: --------------------------- Title: --------------------------- S-1 Schedule 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares - ---------------------------------- -------------- -------------------- ------------- L-3 Communications Corporation Common 1 100
Sch. 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016 Sch. 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Parent Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. L-3 Communications Corporation By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 EXHIBIT B-4A TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================
TABLE OF CONTENTS Page ---- Section 1. DEFINED TERMS.....................................................3 1.1 Definitions.......................................................3 1.2 Other Definitional Provisions.....................................4 1.3 Effect of Restatement.............................................4 Section 2. PLEDGE............................................................4 Section 3. REPRESENTATIONS AND WARRANTIES....................................5 3.1 Title; No Other Liens.............................................5 3.2 Perfected First Priority Liens....................................5 3.3 Chief Executive Office............................................5 3.4 Pledged Stock.....................................................5 Section 4. COVENANTS.........................................................6 4.1 Maintenance of Perfected Security Interest........................6 4.2 Pledged Stock.....................................................6 Section 4A. CERTAIN AFFIRMATIVE COVENANTS.....................................6 4A.1 Further Documentation.............................................6 4A.2 Payment of Obligations............................................6 4A.3 Notices...........................................................6 Section 5. REMEDIAL PROVISIONS...............................................8 5.1 Pledged Stock.....................................................8 5.2 Proceeds to be Turned Over To Administrative Agent................9 5.3 Application of Proceeds...........................................9 5.4 Code and Other Remedies...........................................9 5.5 Registration Rights..............................................10 5.6 Waiver; Deficiency...............................................11 Section 6. THE ADMINISTRATIVE AGENT.........................................11 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc......11 6.2 Duty of Administrative Agent.....................................12 6.3 Authority of Administrative Agent................................13
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TABLE OF CONTENTS Page ---- Section 7. MISCELLANEOUS....................................................13 7.1 Amendments in Writing............................................13 7.2 Notices..........................................................13 7.3 No Waiver by Course of Conduct; Cumulative Remedies..............13 7.4 Enforcement Expenses; Indemnification............................13 7.5 Successors and Assigns...........................................14 7.6 Set-Off..........................................................14 7.7 Counterparts.....................................................14 7.8 Severability.....................................................15 7.9 Section Headings.................................................15 7.10 Integration......................................................15 7.11 GOVERNING LAW....................................................15 7.12 SUBMISSION TO JURISDICTION; WAIVERS..............................15 7.13 Acknowledgments..................................................16 7.14 WAIVER OF JURY TRIAL.............................................16 7.15 Releases.........................................................16 7.16 Conflict.........................................................17
ii SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Corporation, a Delaware corporation (the "Borrower"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Amended and Restated Borrower Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into an Amended and Restated Charge Over Shares governed by the laws of England and Wales, under which certain shares of capital stock of L-3 Communications U.K. Ltd. owned by the Borrower have been pledged to the Administrative Agent (the "Charge Over Shares"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Borrower Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, the Borrower while this Agreement is in effect; provided that, in no event shall the Pledged Stock include more than 65.0 3 percent of the issued and outstanding stock of L-3 Communications U.K. Ltd. (the "U.K. Issuer Pledge Limitation"). "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Borrower hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in, all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. 4 SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by the Borrower to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor, duly executed in blank will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Pledged Stock. (a) Except for the U.K. Issuer Pledge Limitation, the shares of Pledged Stock pledged by the Borrower hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by the Borrower. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. 5 SECTION 4. COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. The Borrower shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.2 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Pledge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2 shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue 6 any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) The Borrower will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), the Borrower shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the Borrower, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Borrower Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the Borrower or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to the Borrower to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) The Borrower hereby authorizes and instructs each Issuer of any Pledged Stock pledged by the Borrower hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from the Borrower, and the Borrower agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Borrower or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the 9 Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrower, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to the Borrower. To the extent permitted by applicable law, the Borrower waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Borrower will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Borrower agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) The Borrower recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for 10 investment and not with a view to the distribution or resale thereof. The Borrower acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) The Borrower agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. The Borrower further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against the Borrower, and the Borrower hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. The Borrower waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. The Borrower shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, the Borrower hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or 11 otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, and other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 12 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any 13 and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 14 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE CREDIT AGREEMENTS AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; 15 (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 16 7.16 Conflict. In the event there is a conflict between the terms of this Agreement and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares or the Pledged Stock of L-3 U.K. and a court of competent jurisdiction determines that the laws of the United Kingdom shall govern such dispute, then the Charge Over Shares shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K.; provided that, if such a court determines that the laws of the State of New York shall govern such dispute, then this Borrower Pledge Agreement shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K. [Signature page follows] 17 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS CORPORATION By: --------------------------------- Christopher C. Cambria Vice President - General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 ATTENTION: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 ACCEPTED ON BEHALF OF THE AGENTS AND THE LENDERS AS OF THE DATE FIRST ABOVE WRITTEN: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ----------------------------------- Name: Title: S-1 SCHEDULE 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares ------ -------------- --------------------- ------------- L-3 Communications Ilex Common 1 100 Systems, Inc. Hygienetics Environmental Common 2 100 Services, Inc. L-3 Communications U.K. Ltd. Ordinary Shares 3 65 L-3 Communications SPD Common 1 100 Technologies Inc. L-3 Communications Aydin Common 1 1000 Corporation Microdyne Corporation* Common 1 1000
* Represented by the stock certificate of L-M Acquisition Corporation ("L-M") which was converted to the stock of the surviving company in the merger of L-M and Microdyne Corporation. Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016
ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Borrower Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A, as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. HYGIENETICS ENVIRONMENTAL SERVICES, INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary MICRODYNE CORPORATION Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS U.K. LTD. ------------------------------------------------ Name: ----------------------------------------- Title: ----------------------------------------- Address for Notices to all Signatories: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: (212) 805-5470 EXHIBIT B-4B TO CREDIT AGREEMENT ================================================================================ AMENDED AND RESTATED CHARGE OVER SHARES made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated April 24, 2000 ================================================================================ TABLE OF CONTENTS
Page SECTION 1. DEFINED TERMS.............................................................3 1.1. Definitions............................................................3 1.2. Other Definitional Provisions..........................................4 1.3. Effect of Restatement..................................................4 SECTION 2. CHARGE....................................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES............................................5 3.1. Title; No Other Liens..................................................5 3.2. Perfected First Fixed Charge Over Shares...............................5 3.3. Chief Executive Office.................................................5 3.4. Charged Shares.........................................................5 SECTION 4. COVENANTS.................................................................6 4.1. Undertaking to Pay.....................................................6 4.2. Charged Shares.........................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS............................................7 4A.1 Maintenance of Perfected Security Interest; Further Assurances.........7 4A.2 Payment of Obligations.................................................8 4A.3 Notices................................................................9 SECTION 5. REMEDIAL PROVISIONS.......................................................9 5.1. Charged Shares.........................................................9 5.2. Payments to be Turned Over To Administrative Agent....................10 5.3. Application of Dividends and Other Payments...........................10 5.4. Right to Enforce Security.............................................10 5.5. Right to Take Possession, Exercise Rights, etc........................11 5.6. Law of Property Act 1925 Not Applicable...............................11 5.7. No Liability of Administrative Agent..................................11 SECTION 6. THE ADMINISTRATIVE AGENT.................................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc...........11 6.2. Duty of Administrative Agent..........................................12 6.3. Authority of Administrative Agent.....................................13
i SECTION 7. MISCELLANEOUS............................................................13 7.1. Amendments in Writing.................................................13 7.2. Notices...............................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies...................13 7.4. Enforcement Expenses; Indemnification.................................13 7.5. Successors and Assigns................................................14 7.6. Set-Off...............................................................14 7.7. Counterparts..........................................................15 7.8. Severability..........................................................15 7.9. Section Headings......................................................15 7.10. Integration..........................................................15 7.11. GOVERNING LAW........................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS..................................15 7.13. Acknowledgments......................................................16 7.14. WAIVER OF JURY TRIAL.................................................16 7.15. Releases.............................................................17 7.16. Conflict; New York Law Pledge Agreement..............................17
ii AMENDED AND RESTATED CHARGE OVER SHARES This AMENDED AND RESTATED CHARGE OVER SHARES, dated April 24, 2000, is made between (i) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), and (ii) Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Charge Over Shares (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Charge Over Shares") in favour of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Charge Over Shares); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Charge Over Shares (as so amended and restated herein, this "Charge Over Shares") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into a Second Amended and Restated Borrower Pledge Agreement governed by the laws of the State of New York, pursuant to which the Borrower has, inter alia, pledged to the Administrative Agent certain shares of capital stock of L-3 Communications U.K. Ltd. (as amended, restated, supplemented or otherwise modified from time to time, the "New York Law Pledge Agreement"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Charge Over Shares. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Charge Over Shares in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Charged Shares": the shares listed on Schedule 1, together with any other shares, stock certificates, securities convertible into and warrants, options, and other rights to purchase or otherwise acquire, or rights of any nature whatsoever in respect of the share capital of any Person that may be issued or granted to, or held by, the Borrower while this Charge Over Shares is in effect; provided that, in no event shall the Charged Shares include more than 65.0 percent of the issued and outstanding capital shares of L-3 Communications U.K. Ltd. ("L-3 U.K.") (the "U.K. Issuer Share Charge Limitation"). "Charge Over Shares": this Amended and Restated Charge Over Shares, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Charged Shares. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation, (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Charge Over Shares, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel 3 to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Charge Over Shares shall refer to this Charge Over Shares as a whole and not to any particular provision of this Charge Over Shares, and Section and Schedule references are to this Charge Over Shares unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. (d) References to the Borrower, any Agent or the Lender include references to any person for the time being deriving title under each of them respectively. 1.3 Effect of Restatement. This Charge Over Shares amends, restates and supersedes the Existing Charge Over Shares; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Change Over Shares shall be deemed to refer without further amendment to this Charge Over Shares. SECTION 2. CHARGE The Borrower, as beneficial owner and as security for the payment and discharge of all the Obligations, hereby charges in favor of the Administrative Agent by way of a first fixed charge all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Charged Shares; (b) any other securities which the Borrower may, with the prior consent of the Administrative Agent, from time to time substitute for all or any of the Charged Shares; and (c) all other securities and all rights, moneys (including, without limitation, dividends) and property whatsoever which may from time to time at any time be derived from, accrue on or be offered in respect of the Charged Shares whether by way of redemption, exchange, conversion, rights, bonus, capital reorganization or otherwise howsoever. 4 As security for its obligations under this Charge Over Shares, the Borrower has delivered, or procured there to be delivered to the Administrative Agent: (i) all share certificates representing the Charged Shares; and (ii) blank, undated stock transfer forms in respect of the Charged Shares executed by the Borrower. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby represents and warrants as to itself and the Collateral charged by it hereunder to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest and charge granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Charge Over Shares and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Fixed Charge Over Shares. The charge granted pursuant to this Charge Over Shares: (a) constitutes a valid perfected charge over all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other charges and Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Charged Shares. (a) The Charged Shares charged by the Borrower hereunder constitute (i) 65 percent of the issued and outstanding shares of all classes of the Capital Stock of L-3 U.K. and (ii) all outstanding warrants, options or other rights to purchase, or other agreements outstanding with respect to, or property that is now or hereafter convertible into, or that requires the issuance 5 or sale of, any Charged Shares and such Charged Shares have been validly charged to the Administrative Agent pursuant hereto. (b) All the Charged Shares have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Charged Shares charged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Charge Over Shares and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Undertaking to Pay. The Borrower shall discharge each Obligation when due in accordance with its terms or, in the case of an Obligation the terms of which do not provide a time for payment, immediately on demand by the Administrative Agent. 4.2 Charged Shares. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the Charged Shares, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Share Charge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock transfer form or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional security for the Obligations. Any sums paid upon or in respect of the Charged Shares upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Charged Shares or any property shall be distributed upon or with respect to the Charged Shares pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the 6 Administrative Agent to be held by it hereunder as additional security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Charged Shares under circumstances described in this Section 4.2(a) shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any shares or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any shares or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of the Collateral (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Charge Over Shares or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Collateral. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Maintenance of Perfected Security Interest; Further Assurances. (a) The Borrower shall: (i) execute and deliver to the Administrative Agent (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the laws of England and Wales or such other country as the Administrative Agent may, in any particular case, reasonably specify; (ii) effect any registration or notarization, give any notice or take any other step, which the Administrative Agent may, by notice to the Borrower and with the consent of the Required Lenders, reasonably specify for any of the purposes described in Section 4A.1(b) or for any similar or related purpose. (b) Those purposes (which in each case the Administrative Agent shall have determined are necessary or desirable to give effect to the terms of this Charge Over Shares) are (i) validly and effectively to create any Lien or right of any kind which the Administrative Agent intended should be created by or pursuant to this Charge Over Shares or the Credit Agreements; 7 (ii) to create a specific mortgage or assignment of any particular part of the Collateral or otherwise to vest in the Administrative Agent the title to any particular part of the Collateral; (iii) to protect the priority, or increase the effectiveness, in any jurisdiction of any Lien which is created, or which the Administrative Agent intended should be created, by or pursuant to this Charge Over Shares or the Credit Agreements; (iv) to enable or assist the Administrative Agent to sell or otherwise deal with any part of the Collateral to transfer title to, or grant any interest or right relating to, any part of the Collateral or to exercise any power which is referred to in Section 5 or which is conferred by the Credit Agreements; (v) to enable or assist the Administrative Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Collateral in any country or under the law of any country. (c) The Administrative Agent may specify the terms of any document to be executed by the Borrower under Section 4A.1(a), and those terms may include any covenants, powers and provisions which the Administrative Agent reasonably considers appropriate to protect its own or any other Lender's or Agent's interests. (d) The Borrower shall comply with a notice under Section 4A.1(a) by the date specified in the notice. (e) At the same time as the Borrower delivers to the Administrative Agent any document executed under 4.3(a)(i), the Borrower shall also deliver to the Administrative Agent a certificate signed by two (2) of the Borrower's directors which shall: (i) set out the text of a resolution of the Borrower's directors specifically authorizing the execution of the document specified by the Administrative Agent; and (ii) state either that the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Borrower's by-laws or other constitutional documents. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings 8 could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Charged Shares. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsections 5.4 and/or 5.5, the Borrower shall be permitted to receive all cash dividends, principal and interest paid in respect of the Charged Shares paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Charged Shares; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Charge Over Shares or any other Credit Document. (b) THE BORROWER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF THE BORROWER WITH RESPECT TO THE COLLATERAL, INCLUDING THE RIGHT TO VOTE THE CHARGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE OCCURRENCE OF THE LAST TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE CHARGED SHARES, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE CHARGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND 9 WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY CHARGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE CHARGED SHARES OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE RESPONSIBLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO. Immediately following the occurrence of an Event of Default, the Borrower shall give notice to the Secretary of L-3 U.K. of the appointment of the Administrative Agent as the Borrower's proxy and the Borrower's attorney in accordance with this Section 5.1 and Section 6 in relation to the Charged Shares. 5.2 Payments to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all payments or other funds received in respect of any of the Collateral (including all dividends, distributions or other income in respect of the Collateral) by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All such payments or other funds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All such payments or other funds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Dividends and Other Payments. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of amounts held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such amounts held in any Collateral Account remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Right to Enforce Security. On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Charge Over Shares has become enforceable: 10 (a) the security constituted by this Charge Over Shares shall immediately become enforceable; (b) the Administrative Agent shall be entitled at any time or times to exercise the powers set out in Section 5.5 and in the Credit Agreements; and (c) the Administrative Agent shall be entitled at any time or times to exercise all the powers possessed by it as chargee of the Collateral conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Collateral concerned. 5.5 Right to Take Possession, Exercise Rights, etc. On the occurrence of an Event of Default, the Administrative Agent shall be entitled then or at any later time or times: (a) to exercise the power of sale and other powers conferred by Section 101 of the Law of Property Act, 1925 as varied or amended by this Charge Over Shares; (b) solely and exclusively to exercise all voting and/or consensual powers pertaining to the Charged Shares or any thereof and may exercise such powers in such manner as the Administrative Agent may think fit; (c) in connection with, or in order to facilitate, a sale of the Charged Shares, to remove the then existing Directors and Officers (with or without cause); and/or (d) to sell the Charged Shares or any part thereof at such place and in such manner and at such price or prices as the Administrative Agent may reasonably deem fit, and upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to each purchaser thereof the Charged Shares so sold. 5.6 Law of Property Act 1925 Not Applicable. The Borrower hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Charge Over Shares. 5.7 No Liability of Administrative Agent. The Administrative Agent shall not be obliged to check the nature or sufficiency of any payment received by it under this Charge Over Shares or to preserve, exercise or enforce any right forming part of, or relating to, any Collateral. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Charge Over Shares, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Charge Over Shares, and, without limiting the generality of the foregoing, the Borrower 11 hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Charge Over Shares are coupled with an interest and are irrevocable until this Charge Over Shares is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The 12 powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Charge Over Shares with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Charge Over Shares shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Charge Over Shares may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or 13 otherwise enforcing or preserving any rights under this Charge Over Shares and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Charge Over Shares. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Charge Over Shares to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Charge Over Shares shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Charge Over Shares without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights 14 of the Agents and Lenders under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agents or Lenders may have. 7.7 Counterparts. This Charge Over Shares may be executed by one or more of the parties to this Charge Over Shares on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Charge Over Shares shall be effective when a counterpart which bears the signature of the Borrower and a counterpart of the attached Acknowledgment and Consent which bears the signature of L-3 U.K. shall have been delivered to the Administrative Agent and the Administrative Agent shall have executed this Charge Over Shares. 7.8 Severability. Any provision of this Charge Over Shares which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Charge Over Shares are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Charge Over Shares and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS CHARGE OVER SHARES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF ENGLAND AND WALES. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF ANY OF ENGLAND, THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR 15 HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME AND THAT A JUDGMENT IN ANY PROCEEDINGS BROUGHT IN ANY COMPETENT COURT SHALL BE CONCLUSIVE AND BINDING UPON THE BORROWER AND MAY BE ENFORCED IN THE COURTS OF ANY OTHER JURISDICTION; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO AND WITH RESPECT TO ANY ACTION BROUGHT IN ENGLAND BY DELIVERING A COPY THEREOF OF TO L-3 U.K. WHICH THE BORROWER HEREBY APPOINTS AS ITS AGENT FOR SERVICE OF PROCESS IN ENGLAND WITH RESPECT TO ANY ACTION BROUGHT AGAINST THE BORROWER UNDER OR RELATING TO THIS CHARGE OVER SHARES OR ANY OF THE COLLATERAL; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Charge Over Shares and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Charge Over Shares or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN 16 ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Charge Over Shares and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 7.16 Conflict; New York Law Pledge Agreement. In the event there is a conflict between the terms of this Charge Over Shares and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares, and a court of competent jurisdiction determines that the laws of the State of New York shall govern such dispute, then the New York Law Pledge Agreement shall control such dispute as to the Charged Shares; provided that, if such a court determines that the laws of England and Wales shall govern such dispute, then this Charge Over Shares shall control such dispute as to the Charged Shares. [Signature page follows] 17 IN WITNESS whereof the parties hereto have caused this Charge Over Shares to be duly executed as a Deed the day and year first before written. Executed as a deed ) by L-3 COMMUNICATIONS CORPORATION ) SEAL ---- acting by______________________________________) Signature of Secretary_________________________) Signature of witness___________________________) ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 ATTENTION: President Phone: +1 212 697-1111 Fax: +1 212 805-5470 Executed as a deed ) by BANK OF AMERICA, N.A., ) AS ADMINISTRATIVE AGENT ) acting by______________________________________) Signature of Assistant Secretary_______________) Signature of witness___________________________) S-1 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Charge Over Shares dated _______ __, 2000 (the "Charge Over Shares"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Charge Over Shares and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Charge Over Shares. 3. The terms of Sections 5.1(a) and 5.5 of the Charge Over Shares shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Charge Over Shares. 4. The undersigned accepts the appointment by the Borrower pursuant to subsection 7.12(c) of the undersigned as agent for the Borrower for service of process in England for any action brought against the Borrower under or relating to the Charge Over Shares or any of the Collateral (as defined therein). L-3 COMMUNICATIONS U.K. LTD. _________________________________________ Name: ___________________________________ Title: __________________________________ Address for Notices: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: 212-805-5470 SCHEDULE 1 DESCRIPTION OF CHARGED SHARES CHARGED SHARES:
Issuer Class of Shares Share Certificate No. No. of Shares ------ --------------- --------------------- ------------- L-3 Communications U.K. Ltd. Ordinary 3 65
Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016
EXHIBIT B-5 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page Section 1. DEFINED TERMS...............................................................3 1.1 Definitions..........................................................................3 1.2 Other Definitional Provisions........................................................4 1.3 Effect of Restatement................................................................4 Section 2. PLEDGE......................................................................4 Section 3. REPRESENTATIONS AND WARRANTIES..............................................5 3.1 Representations in Credit Agreements.................................................5 3.2 Title; No Other Liens................................................................5 3.3 Perfected First Priority Liens.......................................................5 3.4 Chief Executive Office...............................................................6 3.5 Pledged Stock........................................................................6 Section 4. COVENANTS...................................................................6 4.1 Maintenance of Perfected Security Interest...........................................6 4.2 Pledged Stock........................................................................6 Section 4a. CERTAIN AFFIRMATIVE COVENANTS...............................................7 4A.1 Further Documentation................................................................8 4A.2 Payment of Obligations...............................................................8 4A.3 Notices..............................................................................8 Section 5. REMEDIAL PROVISIONS.........................................................8 5.1 Pledged Stock........................................................................8 5.2 Proceeds to be Turned Over To Administrative Agent...................................9 5.3 Application of Proceeds.............................................................10 5.4 Code and Other Remedies.............................................................10 5.5 Registration Rights.................................................................11 5.6 Waiver; Deficiency..................................................................12 Section 6. THE ADMINISTRATIVE AGENT...................................................12 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.........................12 6.2 Duty of Administrative Agent........................................................13 6.3 Authority of Administrative Agent...................................................13 Section 7. MISCELLANEOUS..............................................................14 7.1 Amendments in Writing...............................................................14 7.2 Notices.............................................................................14 7.3 No Waiver by Course of Conduct; Cumulative Remedies.................................14 7.4 Enforcement Expenses; Indemnification...............................................14 7.5 Successors and Assigns..............................................................15 7.6 Set-Off.............................................................................15 7.7 Counterparts........................................................................15 7.8 Severability........................................................................15 7.9 Section Headings....................................................................16 7.10 Integration.........................................................................16 7.11 GOVERNING LAW.......................................................................16 7.12 SUBMISSION TO JURISDICTION; WAIVERS.................................................16
i Page 7.13 Acknowledgments.....................................................................17 7.14 WAIVER OF JURY TRIAL................................................................17 7.15 Additional Grantors.................................................................17 7.16 Releases............................................................................17
ii SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Grantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, each Grantor executed and delivered to the Original Administrative Agents a certain Amended and Restated Subsidiary Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, each Grantor and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each Grantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that each Grantor execute and deliver this Agreement NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the 2 Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Subsidiary Guarantees, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, 3 indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Each Grantor hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt 4 and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Grantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Grantor, each of which is hereby incorporated herein by reference, are true and correct, and each of the Agents and Lenders shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Grantor's knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by each of the Grantors to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and 5 (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization and the location of such Grantor's chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If such Grantor shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, 6 duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in subsection 4.2(a) with respect to the Pledged Stock issued by it and (iii) the terms of subsections 5.1(c) and 5.5 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to subsections 5.1(c) or 5.5 with respect to the Pledged Stock issued by it. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 7 4A.1 Further Documentation. (a) Such Grantor will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Such Grantor will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), each Grantor 8 shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Stock pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Agents and the Lenders, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly endorsed by such Grantor to the Administrative Agent, if required). All Proceeds received 9 by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need 10 the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a 11 breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following: (i) in the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. 12 (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand. (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lender to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 13 SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Grantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided, that any such notice, request, or demand to or upon any Grantor shall be addressed to such Grantor at its address set forth below its respective signature hereto. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against such Grantor or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Grantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the 14 extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Each Grantor hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Agent or Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify such Grantor promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 15 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Grantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION 16 OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Each Grantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Grantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among the Grantors and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 attached to the Amended and Restated Subsidiary Guarantee Agreement executed concurrently herewith. 7.16 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors; provided, however, that the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor 17 all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement. [Signature page follows] 18 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By:_____________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By:______________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By:_______________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By:________________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYNE CORPORATION By:________________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notices for each Grantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By:_____________________________________ Name:________________________________ Title:_______________________________ S-2 Schedule 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK: - ------------------- -------------------- -------------- --------------------- ------------- - ------------------- -------------------- -------------- --------------------- ------------- Issuer Owner (Guarantor) Class of Stock Stock Certificate No. No. of Shares
Schedule 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE(1)
Grantor Jurisdiction of Organization Location ------- ---------------------------- -------- Hygienetics Environmental Delaware 1570 Buckeye Drive Services, Inc. Milpitas, CA 95035 L-3 Communications Ilex Delaware 1570 Buckeye Drive Systems, Inc. Milpitas, CA 95035 L-3 Communications Delaware 600 Third Avenue Aydin Corporation New York, NY 10016 L-3 Communications SPD Delaware 13500 Roosevelt Blvd. Technologies Inc. Philadelphia, PA 19116 Microdyne Corporation Maryland 600 Third Avenue New York, NY 10016
- -------------------- (1) Borrower to advise of Chief Executive Office for each Sub. Schedule 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Subsidiary Pledge Agreement dated as of _________ ____, 2000 (the "Agreement"), made by the Grantors party thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. [NAME OF ISSUER] ___________________________________ Name:______________________________ Title:_____________________________ Address for Notices: ___________________________________ ___________________________________ Fax:_______________________________ EXHIBIT C-1 to the Credit Agreement. [LETTERHEAD OF SIMPSON THACHER & BARTLETT] April 28, 2000 Bank of America, N.A., as Administrative Agent Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent Lehman Brothers, Inc. as Arranger Banc of America Securities LLC as Arranger and The Lenders listed on Schedule I hereto which are parties to the Credit Agreement on the date hereof Re: Second Amended and Restated Credit Agreement dated as of April 24, 2000, Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 and New 364 Day Credit Agreement dated as of April 24, 2000 Ladies and Gentlemen: We have acted as counsel to L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Holdings, Inc., a Delaware corporation (the "Parent Guarantor"), the subsidiaries of the Borrower named on Schedule II attached hereto (each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"; (the Borrower , the Parent Guarantor and the Subsidiary Guarantors being referred to herein collectively as the "Credit Parties") in connection with the preparation, execution and delivery of the following documents: (a) the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility A Credit Agreement"); (b) the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger and Bank of America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility B Credit Agreement"); (c) the New 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent, Banc of America Securities LLC and Lehman Brothers, Inc., as the Arrangers, Bank of America, N.A., as Administrative Agent and the financial institutions named therein as Managing Agents (the "Facility C Credit Agreement"; collectively with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); (d) the Notes; (e) the Parent Guarantee; (f) the Subsidiary Guarantee; (g) the Parent Pledge Agreement; (h) the Borrower Pledge Agreement; (i) the Subsidiary Pledge Agreement; and (j) the Charge Over Shares. The documents described in the foregoing clauses (a) through (j) are collectively referred to herein as the "Credit Documents"; the documents described in the foregoing clauses (g) through (j) are collectively referred to herein as the "Security Documents". Unless otherwise indicated, capitalized terms used but not defined herein shall have the respective meanings set forth in the Credit Agreements. This opinion is furnished to you pursuant to Section 5.I(m) of the Credit Agreements. In connection with this opinion, we have examined: 2 (A) the Credit Agreements, signed by each Credit Party party thereto, the Administrative Agent, Syndication Agent, Documentation Agent, Arranger and certain of the Lenders; (B) each other Credit Document, signed by each Credit Party party thereto; and (C) forms of the Notes to be delivered after the date hereof. We also have examined the originals, or duplicates or certified or conformed copies, of such records; agreements, instruments and other documents and have made such other investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Credit Parties. In addition, we have examined, and have relied as to matters of fact upon, the representations made in the Credit Documents. In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. In addition, we have assumed that (1) the Credit Parties have rights in the Collateral existing on the date hereof and will have rights in property which becomes Collateral after the date hereof and (2) "value" (as defined in Section 1-201(44) of the Uniform Commercial Code as in effect in the State of New York (the "New York UCC")) has been given by the Lenders to the Borrower for the security interests and other rights in the Collateral. In rendering the opinion set forth in paragraph 6 below with respect to the Notes, we have assumed that at the time of any execution and delivery of Notes after the date hereof, the Board of Directors of the Borrower (or any committee thereof acting pursuant to authority properly delegated to such committee by the Board of Directors) has not taken any action to rescind or otherwise reduce its prior authorization of the issuance of such Notes. Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth herein, we are of the opinion that: 1. Each of the Borrower and the Parent Guarantor (a) has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Delaware, (b) has the corporate power and authority to execute and deliver each of the Credit Documents to which it is a party, to perform its obligations thereunder and to grant the security interests to be granted by it pursuant to the Security Documents and (c) has duly authorized, executed and delivered each Credit Document to which it is a party. 3 2. Each of the Subsidiary Guarantors (other than Microdyne Corporation ("MICRODYNE") as to which we express no opinion) has duly authorized, executed and delivered each Credit Document to which it is a party. 3. The execution and delivery by each of the Borrower and the Parent Guarantor of the Credit Documents to which it is a party, the borrowings by the Borrower in accordance with the terms of the Credit Documents and the granting of the security interests to be granted by the Borrower and the Parent Guarantor pursuant to the Security Documents will not result in any violation of (1) the Certificate of Incorporation or By-Laws of either the Borrower or the Parent Guarantor, (2) assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 4. The execution and delivery by each Subsidiary Guarantor of the Credit Documents to which it is a party and the granting of the security interests to be granted by it pursuant to the Security Documents will not result in any violation of, assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 5. No consent, approval, authorization, order, filing, registration or qualification of or with any Federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law is required for the execution and delivery by any Credit Party of the Credit Documents to which it is a party, the borrowings by any Credit Party in accordance with the terms of the Credit Documents or the granting of any security interests under the Security Documents, except filings required for the perfection of security interests granted pursuant to the Security Documents and consents, waivers, approvals, filings and registrations described on Schedule 4.4 to the Credit Agreement. 6. Assuming that each of the Credit Documents is a valid and legally binding obligation of each of the Lenders parties thereto and assuming that (a) Microdyne is validly existing and in good standing under the laws of the State of Maryland and has duly authorized, executed and delivered the Credit Documents to which it is a party in accordance with its Articles of Incorporation and By-Laws, (b) execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party do not violate any applicable laws (excepting the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States, other than any government procurement statute or regulations issued pursuant thereto) and (c) execution, delivery and performance by each Credit Party of the Credit 4 Documents to which it is a party do not constitute a breach or violation of any agreement or instrument which is binding upon such Credit Party, each Credit Document (other than the Charge Over Shares) constitutes and each Note delivered to a Lender after the date hereof, assuming the due execution and delivery by the Borrower, will constitute the valid and legally binding obligation of each Credit Party which is a party thereto, enforceable against such Credit Party in accordance with its terms. 7. No Credit Party is an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended. 8. Assuming that the Borrower will comply with the provisions of the Credit Agreements relating to the use of proceeds, the execution and delivery of the Credit Agreements by the Borrower and the making of the Loans under the Credit Agreements will not violate Regulation, T, U or X of the Board of Governors of the Federal Reserve System. 9. The Parent Pledge Agreement and Borrower Pledge Agreement create in favor of the Administrative Agent for the benefit of the Lenders a security interest under the New York UCC in the Pledged Stock (as defined in the Pledge Agreements) described on Schedule I to each of the Parent Pledge Agreement and the Borrower Pledge Agreement (the "Pledged Securities"). 10. The Administrative Agent will have a perfected security interest in the Pledged Securities for the benefit of the Lenders under the New York UCC upon delivery to the Administrative Agent for the benefit of the Lenders in the State of New York of the certificates representing the Pledged Securities in registered form, endorsed in blank by an effective endorsement or accompanied by undated stock power with respect thereto duly endorsed in blank by an effective endorsement. 11. The choice of New York Law to govern each Credit Document in which such choice is stipulated is a valid and effective choice of law under the laws of the State of New York. Our opinions in paragraphs 6 and 9 above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. Our opinion in paragraph 6 above also is subject to the qualification that certain provisions of the Security Documents (other than the Charge Over Shares) (the "U.S. Security Documents") in whole or in part, may not be enforceable, although the inclusion of such provisions does not render the U.S. Security Documents invalid, and the U.S. Security Documents and the laws of the State of New York contain adequate remedial provisions for the practical realization of the rights and benefits afforded thereby. 5 Our opinions in paragraphs 9 and 10 above are limited to Articles 8 and 9 of the New York UCC, and therefore those opinion paragraphs do not address (i) collateral of a type not subject to Article 9 or 8, as the case may be, of the New York UCC, and (ii) under New York UCC'SS'9-103 what law governs perfection of the security interests granted in the collateral covered by this opinion letter. We express no opinion with respect to: (A) perfection of any security interest (1) in any Security Agreement Article 9 Collateral of a type represented by a certificate of title, (2) in any proceeds and (3) in any collateral consisting of money; . (B) the effect of 'SS'9-306(2) of the New York UCC with respect to any proceeds of Collateral that are not identifiable; (C) perfection of any security interest whose priority is subject to Section 9-313 of the New York UCC; (D) the priority of any security interest; (E) the effect of Section 552 of the Bankruptcy Code (11 U.S.C. 552) (relating to property acquired by a pledgor after the commencement of a case under the United States Bankruptcy Code with respect to such pledgor) and Section 506(c) of the Bankruptcy Code (11 U.S.C. 506(c) (relating to certain costs and expenses of a trustee in preserving or disposing of collateral; (F) the effect of any provision of the Credit Documents which is intended to establish any standard other than a standard set forth in the New York UCC as the measure of the performance by any party thereto of such party's obligations of good faith, diligence, reasonableness or care or of the fulfillment of the duties imposed on any secured party with respect to the maintenance, disposition or redemption of collateral, accounting for surplus proceeds of collateral or accepting collateral in discharge of liabilities; (G) the effect of any provision of the Credit Documents which is intended to permit modification thereof only by means of an agreement signed in writing by the parties thereto; (H) the effect of any provision of the Credit Documents insofar as it provides that any Person purchasing a participation from a Lender or other Person may exercise set-off or similar rights with respect to such participation or that any Lender or other Person may exercise set-off or similar rights other than in accordance with applicable law; 6 (I) the effect of any provision of the Credit Documents imposing penalties or forfeitures; (J) the enforceability of any provision of any of the Credit Documents to the extent that such provision constitutes a waiver of illegality as a defense to performance of contract obligations; or (K) the effect of any provision of the Credit Documents relating to indemnification or exculpation in connection with violations of any securities laws or relating to indemnification, contribution or exculpation in connection with willful, reckless or criminal acts or gross negligence of the indemnified or exculpated Person or the Person receiving contribution. In connection with the provisions of the Credit Documents whereby Credit Parties submit to the jurisdiction of the courts of the United States of America for the Southern District of New York, we note the limitations of 28 U.S.C. 'SS' 'SS'1331 and 1332 on subject matter jurisdiction of the Federal Court. In connection with the provisions of the Credit Documents which relate to forum selection of the courts of the United States for the Southern District of New York, (including, without limitation, any waiver of any objection to venue or any objection that a court is an inconvenient forum), we also note that such court's discretion to transfer an action from one Federal court to another under 28 U.S.C. 'SS'1404(a). We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the Federal law of the United States and the Delaware General Corporation Law. This opinion letter is rendered to you in connection with the above described transactions. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, /s/ SIMPSON THACHER & BARTLETT SIMPSON THACHER & BARTLETT 7 SCHEDULE I LENDERS LEHMAN COMMERCIAL PAPER INC. BANK OF AMERICA, N.A. THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA CREDIT LYONNAIS BANK ONE. N.A. FIRST UNION COMMERCIAL CORPORATION FLEET NATIONAL BANK THE FUJI BANK, LIMITED HSBC BANK USA SOCIETE GENERALE BANKBOSTON, N.A. BANK OF TOKYO - MITSUBISHI TRUST COMPANY BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC. BANK OF IRELAND BANQUE WORMS CAPITAL CORPORATION CREDIT INDUSTRIEL ET COMMERCIAL COMERICA BANK THE DAI-ICHI KANGYO BANK, LTD. DEN DANSKE BANK AKTIESELSKAB DEUTSCHE GENOSSENSCHAFTSBANK AG DRESDNER BANK AG ERSTE BANK DER OESTERREICHISCHEN GE CAPITAL COMMERCIAL FINANCE, INC. THE INDUSTRIAL BANK OF JAPAN, LIMITED MESS PIERSON CAPITAL CORP. MERITA BANK PLC THE MITSUBISHI TRUST AND BANKING CORPORATION NATIONAL CITY BANK THE ROYAL BANK OF SCOTLAND PLC SUMMIT BANK SUNTRUST BANK WEBSTER BANK 8 SCHEDULEII BORROWER SUBSIDIARIES HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware Corporation. L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware Corporation. L-3 COMMUNICATIONS SPD TECHNOLOGIES INC., a Delaware Corporation. L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware Corporation. MICRODYNE CORPORATION, a Maryland Corporation. 9 [NOTE: TO BE REPLACED WITH FINAL DRAFT OF GENERAL COUNSEL'S OPINION.] Exhibit C-2 to Credit Agreement ------------------- L-3 COMMUNICATIONS CORPORATION 600 THIRD AVENUE, 34th FLOOR NEW YORK, NEW YORK 10016 April __, 2000 Bank of America, N.A., as Administrative Agent 335 Madison Avenue New York, New York 10017 Lehman Commercial Paper Inc., as Arranger, Syndication Agent and Documentation Agent 3 World Financial Center, 9th Floor New York, New York 10285 Banc of America Securities LLC, as Arranger 9 W 57th Street, 32nd Floor New York, New York 10019 Lehman Brothers, Inc., as Arranger 3 World Financial Center New York, New York 10285 The Lenders Listed on Schedule 1 hereto Ladies and Gentlemen: I have acted as counsel to L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Ilex Systems, Inc., a Delaware corporation ("Ilex"), Hygienetics Environmental Systems, Inc., a Delaware corporation ("HES"), L-3 Communications SPD Technologies Inc., a Delaware corporation ("SPD"), L-3 Communications Aydin Corporation, a Delaware corporation ("Aydin") and Microdyne Corporation, a Maryland corporation ("Microdyne" and collectively with Ilex, HES, SPD and Aydin, the "Subsidiaries", and together with Holdings and the Borrower, the "Loan Parties"), in connection with (a) the Second Amended and Restated Credit Agreement dated as of April 24, 2000 (the "Facility A Credit Agreement") among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc. ("LCPI"), as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as Administrative Agent ("BOA"), (b) the Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility B Credit Agreement") among the Borrower, the Lenders parties thereto, LCPI, as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and BOA, as Administrative Agent and (c) the New 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility C Credit Agreement" and together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements") among the Borrower, the Lenders parties thereto, Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent, Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents. In that connection, you have requested this opinion in connection with the following documents: (i) the Credit Agreements, (ii) the Notes, (iii) the Parent Pledge Agreement, (iv) the Borrower Pledge Agreement, (v) the Subsidiary Pledge Agreement, (vi) the Parent Guarantee, (vii) the Subsidiary Guarantee and (viii) the Charge Over Shares (the documents referred to in clauses (i) through (viii) are referred to herein collectively as the "Loan Documents"). Terms defined in the Loan Documents are used herein as therein collectively defined. In connection with this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of each of the Loan Documents. In addition, I have examined originals or copies, certified or otherwise identified to my satisfaction, of such records, agreements, instruments and other documents as I have deemed relevant and necessary as a basis for the opinions hereinafter set forth. For the purposes hereof, I have assumed, with your permission, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and regularity of all documents examined by me. As to questions of fact relevant to this opinion, I have relied upon, and assume the accuracy of, the representations and warranties of the Loan Parties in the Loan Documents and have relied upon certificates and oral or written statements and other information of public officials, officers and representatives of the Loan Parties and others and assume compliance on the part of all parties to the Loan Documents with their covenants and agreements contained therein. In rendering the opinions expressed below, I have assumed, with your permission and without any independent investigation or verification of any kind, that (a) the Loan Documents constitute the valid and legally binding obligations of each party to the Loan Documents other than the Loan Parties, enforceable against such parties in accordance with their respective terms, and (b) the execution, delivery and performance by each Loan Party of each Loan Document to which it is a party do not contravene, or require any order, consent, approval, license, authorization, validation, filing, recording, registration or exemption not obtained or 2 made under, any applicable provision of any law, statute, rule or regulation (other than any law, statute, rule or regulation of the United States of America or the State of New York). Based upon the foregoing, and subject to the qualifications and limitations stated herein, I am of the opinion that: 1. Ilex has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Guarantee and the Subsidiary Pledge Agreement (collectively, the "Subsidiary Documents") and perform its obligations thereunder. 2. HES has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 3. SPD has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 4. Aydin has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 5. Microdyne has been duly incorporated and is validly existing and in good standing under the laws of the State of Maryland with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 6. Microdyne, has duly authorized, executed and delivered each Credit Document to which it is a party. 7. To my knowledge, there are no legal or governmental proceedings pending or threatened against any of the Loan Parties or to which any of their respective properties is subject which reasonably could be expected to have a Material Adverse Effect other than as disclosed in Schedule 4.6 to the Credit Agreements. 8. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Credit Agreements, the Notes, the Charge Over Shares and the Borrower Pledge Agreement (collectively, the "Borrower Credit Documents") by the Borrower, the borrowing and granting of security interests by the Borrower under the Borrower Credit Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court or other governmental authority binding upon the Borrower or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under 3 any material Contractual Obligation applicable to or binding upon the Borrower or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the any of the Pledge Agreements and/or the Guarantees (collectively, the "Security Documents"). 9. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Subsidiary Documents by each of the Subsidiaries party thereto, the making of the guarantee and granting of security interests by each of the Subsidiaries under the Subsidiary Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon any Subsidiary, (b) violate the provisions of any such Subsidiaries' Constitutional Documents or, (c) other than as disclosed in the Schedules to the Credit Agreements result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon any Subsidiary or any of their respective properties or assets or (ii) the creation of any lien on any of their respective properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 10. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Parent Guarantee and the Parent Pledge Agreement (collectively, the "Parent Documents") by Holdings, the making of the guarantee and granting of security interests by Holdings under the Parent Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon Holdings or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon Holdings or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 11. Based solely on certificates from public officials, I confirm that the Borrower is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Holdings is qualified to do business in New York. Based solely on certificates from public officials, I confirm that Ilex is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that HES is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that SPD is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Aydin is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Microdyne is 4 qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. 12. The Borrower's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of the Borrower's stock records, are owned of record by Holdings free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. Holdings has no direct Subsidiaries other than the Borrower. 13. Ilex's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Ilex's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 14. HES' authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of HES' stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 15. SPD's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of SPD's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 16. Aydin's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Aydin's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 17. Microdyne's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Microdyne's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. I am a member of the Bar of the State of New York and I express no opinion as to the laws of any jurisdiction other than the federal laws of the United States of America, the laws of the State of New York, the Delaware General Corporation Law and the [Maryland General Corporation Law]. This opinion is rendered to you in connection with the above-described transactions in my capacity as counsel to the Loan Parties. This opinion may not be relied upon 5 by you for any other purpose, or relied upon by any other person, firm or corporation without my prior written approval. Very truly yours, 6 Exhibit D to Credit Agreement ------------------- FORM OF BORROWING CERTIFICATE FOR SECOND AMENDED AND RESTATED CREDIT AGREEMENT Pursuant to subsection 5.1(g) of the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent "), Lehman Commercial Paper Inc. ("LCPI") as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI, as Arrangers, and the financial institutions named therein as Co-Agents and the undersigned hereby delivers this Certificate. The Borrower hereby requests that a [Eurodollar/Base Rate] Revolving Credit Loan be made in the aggregate principal amount of _________ on ______________, _______ [with an Interest Period of ___ months]. The undersigned hereby certifies as follows: (a) The representations and warranties made by the Borrower and each of its Subsidiaries and each of the other Credit Parties in the Credit Documents are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof (except to the extent they relate to a particular date, in which case they shall remain true and correct as of such date); and (b) No Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to the Loans and other extensions of credit requested to be made on such date. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Credit Agreement. The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such borrowing as if then made. 1 Please wire transfer the proceeds of the borrowing to the account of the Borrower at ____________________ Routing No.:_____________________ (Account No.______________), or as otherwise directed by the Borrower on the attached Schedule 1. The Borrower has caused this Borrowing Certificate to be executed and delivered, and the certification and warranties contained herein to be made, by its Responsible Officer this _____ day of _____, _____. L-3 COMMUNICATION CORPORATION By: _______________________________ Name: Title: 2 Exhibit E to Credit Agreement ---------------- FORM OF EXEMPTION CERTIFICATE OF NON-U.S. LENDER FOR SECOND AMENDED AND RESTATED CREDIT AGREEMENT Reference is made to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware Corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper Inc. ("LCPI") as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI, as Arrangers, and the financial institutions named therein as Co-Agents. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement. (the "Non-U.S. Lender") is providing this certificate pursuant to subsection 2.15(b) of the Credit Agreement. Under penalties of perjury, the Non-U.S. Lender hereby represents and warrants that: 1. The Non-U.S. Lender is the sole record and beneficial owner of the Note(s) in respect of which it is providing this certificate and it shall remain the sole beneficial owner of such Note(s) at all times during which it is the record holder of such Note(s). 2. The Non-U. S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In this regard, the Non-U.S. Lender further represents and warrants that: (a) the Non-U.S. Lender is not subject to regulatory or other legal requirements as a bank in any jurisdiction; (b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements; (c) the Non-U. S. Lender is not a 10-percent shareholder within the meaning of Section 881(c)(3)(B) of the Code; (d) the Non-U.S. Lender is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code; 3. The Non-U.S. Lender meets all of the requirements under Code Section 871(h) or 881(c) to be eligible for a complete exemption from withholding of U.S. Taxes on interest payments made to it under the Credit Agreement. IN WITNESS WHEREOF, the undersigned has duly executed this certificate. [NAME OF NON-U.S. LENDER] By: Name: Title: Date: 2 Exhibit F to Credit Agreement ------------------- FORM OF ASSIGNMENT AND ACCEPTANCE FOR SECOND AMENDED AND RESTATED CREDIT AGREEMENT Reference is made to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified prior to the Effective Date (as defined below), the "Credit Agreement"), among L-3 Communication Corporation, a Delaware corporation, (the "Borrower"), the Lenders and Co-Agents named therein, Bank of America N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper Inc. ("LCPI"), as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI as Arrangers. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. The Assignor identified on Schedule 1 hereto (the "Assignor") and the Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement with respect to those credit facilities contained in the Credit Agreement as set forth on Schedule 1 hereto (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Credit Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the Assigned Facilities and (i) requests that the Administrative Agent, upon request by the Assignee, exchange the attached Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor has retained any interest in any Assigned Facility, requests that the Administrative Agent exchange 1 the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date). 3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 4.1 thereof 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 Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to clause (b) of subsection 2.15 of the Credit Agreement. 4. The effective date of this Assignment and Acceptance shall be the Effective Date of Assignment described in Schedule 1 hereto (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 5. Upon such acceptance and recording, 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 Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Credit Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 7. THIS ASSIGNMENT AND ACCEPTANCE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND 2 CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto. 3 Schedule 1 to Assignment and Acceptance Name of Assignor:_______________________ Name of Assignee:_______________________ Effective Date of Assignment:___________
Credit Facility Assigned Principal Amount Assigned Commitment Percentage Assign - ------------------------ ------------------------- ---------------------------- $ ____________________ _______.____% [Name of Assignee] [Name of Assignor] By:_________________________ By: Title: Title: Accepted: Consented To: BANK OF AMERICA, N.A., L-3 COMMUNICATION CORPORATION'2' as Administrative Agent By: ________________________ Title: By:___________________________ Title: Accepted: BANK OF AMERICA, N.A., as Issuing Lender By:________________________ Title: Accepted: LEHMAN COMMERCIAL PAPER INC., as Syndication Agent By:_________________________ Title:
- ------------------ 1 Calculate the Commitment Percentage that is assigned to at least 9 decimal places and show as a percentage of the aggregate commitments of all Lenders. 2 The Credit Agreement provides that the consent of the Borrower is required unless the assignee (a) already is a Lender under the Credit Agreement, (b) is an affiliate of a Lender, or (c) in the case of a Lender that is an Investment Fund, any other such Investment Fund which is under common management with such Lender. 4 CH DOCS\222542.4 [W9'7] EX-99 9 0009.txt EXHIBIT 7.8 =============================================================================== AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT AMONG L-3 COMMUNICATIONS CORPORATION, A DELAWARE CORPORATION, AS BORROWER, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, THE CERTAIN FINANCIAL INSTITUTIONS NAMED AS CO-AGENTS HEREIN, BANC OF AMERICA SECURITIES LLC AND LEHMAN COMMERCIAL PAPER INC., AS ARRANGERS, BANK OF AMERICA, N.A. , AS ADMINISTRATIVE AGENT AND LEHMAN COMMERCIAL PAPER INC., AS DOCUMENTATION AGENT AND SYNDICATION AGENT DATED AS OF APRIL 24, 2000 =============================================================================== TABLE OF CONTENTS Page Section 1. DEFINITIONS.....................................................................................1 1.1 Defined Terms...................................................................................1 1.2 Other Definitional Provisions..................................................................26 1.3 Interrelationship with Original Credit Agreement...............................................26 1.4 Confirmation of Existing Obligations...........................................................27 Section 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS......................................................27 2.1 Commitments....................................................................................27 2.2 Procedure for Borrowing........................................................................27 2.3 Commitment Fee.................................................................................28 2.4 Termination or Reduction of Revolving 364 Day Commitments......................................28 2.5 Extension of Revolving 364 Day Termination Date; Conversion Option; Repayment of Loans; Evidence of Debt...............................................................................29 2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments.......................32 2.7 Conversion and Continuation Options............................................................34 2.8 Minimum Amounts and Maximum Number of Tranches.................................................35 2.9 Interest Rates and Payment Dates...............................................................35 2.10 Computation of Interest and Fees...............................................................36 2.11 Inability to Determine Interest Rate...........................................................36 2.12 Pro Rata Treatment and Payments................................................................37 2.13 Illegality.....................................................................................38 2.14 Requirements of Law............................................................................39 2.15 Taxes..........................................................................................40 2.16 Indemnity......................................................................................43 2.17 Replacement of Lenders.........................................................................44 2.18 Certain Fees...................................................................................45 2.19 Certain Rules Relating to the Payment of Additional Amounts....................................45 Section 3. LETTERS OF CREDIT..............................................................................45 3.1 L/C Commitment.................................................................................45 3.2 Procedure for Issuance of Letters of Credit....................................................46 3.3 Fees, Commissions and Other Charges............................................................47 3.4 L/C Participation..............................................................................47 3.5 Reimbursement Obligation of the Borrower.......................................................48 3.6 Obligations Absolute...........................................................................49 3.7 Letter of Credit Payments......................................................................50 3.8 Application....................................................................................50 3.9 Determination of Exchange Rate.................................................................50 Section 4. REPRESENTATIONS AND WARRANTIES.................................................................50 4.1 Financial Condition............................................................................50 4.2 No Change......................................................................................51 4.3 Corporate Existence; Compliance with Law.......................................................51 4.4 Corporate Power; Authorization; Enforceable Obligations........................................51
i 4.5 No Legal Bar...................................................................................52 4.6 No Material Litigation.........................................................................52 4.7 No Default.....................................................................................52 4.8 Ownership of Property; Liens...................................................................52 4.9 Intellectual Property..........................................................................52 4.10 Taxes..........................................................................................53 4.11 Federal Regulations............................................................................53 4.12 ERISA..........................................................................................53 4.13 Investment Company Act; Other Regulations......................................................54 4.14 Subsidiaries...................................................................................54 4.15 Purpose of Loans...............................................................................54 4.16 Environmental Matters..........................................................................54 4.17 Collateral Documents...........................................................................55 4.18 Accuracy and Completeness of Information.......................................................56 4.19 Labor Matters..................................................................................56 Section 5. CONDITIONS PRECEDENT...........................................................................56 5.1 Conditions to Initial Loans....................................................................56 5.2 Conditions to Each Extension of Credit.........................................................59 Section 6. AFFIRMATIVE COVENANTS..........................................................................60 6.1 SEC Filings....................................................................................60 6.2 Certificates; Other Information................................................................60 6.3 Payment of Obligations.........................................................................61 6.4 Conduct of Business; Maintenance of Existence and Property; Compliance with Law................61 6.5 Insurance......................................................................................61 6.6 Inspection of Property; Books and Records; Discussions.........................................62 6.7 Notices........................................................................................62 6.8 Environmental Laws.............................................................................63 6.9 Further Assurances.............................................................................63 6.10 Additional Collateral..........................................................................63 6.11 [Intentionally Omitted.].......................................................................64 6.12 Foreign Jurisdictions..........................................................................64 6.13 Government Contracts...........................................................................64 6.14 Lien Searches..................................................................................64 Section 7. NEGATIVE COVENANTS.............................................................................65 7.1 Financial Condition Covenants..................................................................65 7.2 Limitation on Indebtedness.....................................................................66 7.3 Limitation on Liens............................................................................67 7.4 Limitation on Guarantee Obligations............................................................69 7.5 Limitation on Fundamental Changes..............................................................69 7.6 Limitation on Sale of Assets...................................................................70 7.7 Limitation on Dividends........................................................................71 7.8 Limitation on Capital Expenditures.............................................................71 7.9 Limitation on Investments, Loans and Advances..................................................71 7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements................73 7.11 Limitation on Transactions with Affiliates.....................................................73 7.12 Limitation on Sales and Leasebacks.............................................................74 7.13 Limitation on Changes in Fiscal Year...........................................................74 7.14 Limitation on Negative Pledge Clauses..........................................................74 7.15 Limitation on Lines of Business................................................................74
ii 7.16 Designated Senior Debt.........................................................................74 Section 8. EVENTS OF DEFAULT..............................................................................75 Section 9. THE AGENTS; THE ARRANGERS......................................................................78 9.1 Appointment....................................................................................78 9.2 Delegation of Duties...........................................................................78 9.3 Exculpatory Provisions.........................................................................78 9.4 Reliance by Agents.............................................................................79 9.5 Notice of Default..............................................................................79 9.6 Non-Reliance on Agents and Other Lenders.......................................................79 9.7 Indemnification................................................................................80 9.8 Agents, in Their Individual Capacities.........................................................80 9.9 Successor Administrative Agent, Syndication Agent and Documentation Agent......................80 9.10 The Arrangers and the Co-Agents................................................................81 Section 10. MISCELLANEOUS..................................................................................81 10.1 Amendments and Waivers.........................................................................81 10.2 Notices........................................................................................82 10.3 No Waiver; Cumulative Remedies.................................................................85 10.4 Survival of Representations and Warranties.....................................................85 10.5 Payment of Expenses and Taxes..................................................................85 10.6 Successors and Assigns; Participation and Assignments..........................................86 10.7 Adjustments; Set-off...........................................................................89 10.8 Counterparts...................................................................................90 10.9 Severability...................................................................................90 10.10 Integration....................................................................................90 10.11 GOVERNING LAW..................................................................................91 10.12 SUBMISSION TO JURISDICTION; WAIVERS............................................................91 10.13 Acknowledgments................................................................................91 10.14 WAIVERS OF JURY TRIAL..........................................................................92 10.15 Confidentiality................................................................................92 10.16 Conversion of Currencies.......................................................................92 10.17 Year 2000......................................................................................93 10.18 Existing Agreements Superseded.................................................................93
iii
EXHIBITS - -------- Exhibit A-1 Form of Revolving 364 Day Note Exhibit A-2 Form of Term Note Exhibit B-1 Form of Parent Guarantee Exhibit B-2 Form of Subsidiary Guarantee Exhibit B-3 Form of Parent Pledge Agreement Exhibit B-4A Form of Borrower Pledge Agreement Exhibit B-4B Form of Charge Over Shares Exhibit B-5 Form of Subsidiary Pledge Agreement Exhibit C-1 Form of Legal Opinion of Simpson Thacher and Bartlett Exhibit C-2 Form of Internal Counsel Opinion Exhibit D Form of Borrowing Certificate Exhibit E Form of Certificate of Non U.S. Lender Exhibit F Form of Assignment and Acceptance SCHEDULES Schedule I Lenders and Commitments Schedule II Pricing Grid Schedule III Transaction Documents Schedule 4.4 Required Consents Schedule 4.5 No Legal Bar Schedule 4.6 Material Litigation Schedule 4.9 Intellectual Property Claims Schedule 4.10 Taxes Schedule 4.14 Subsidiaries Schedule 7.2(f) Existing Indebtedness Schedule 7.3(f) Existing Liens Schedule 7.4 Existing Guarantee Obligations Schedule 7.9(c) Officers Schedule 7.9(g) Existing Investments Schedule 7.9(k) Approved Investments
THIS AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT, dated as of April 24, 2000, is among L-3 Communications Corporation, a Delaware corporation (the "Borrower") which is wholly owned by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), the several banks and other financial institutions or entities from time to time parties hereto (the "Lenders"), Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and Lehman Commercial Paper Inc. ("LCPI") as arrangers (each, in such capacity, an "Arranger" and together, the "Arrangers"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Agents (as defined below) and the Lenders (in such capacity, the "Administrative Agent"), LCPI, as syndication agent and documentation agent (in such capacity, the "Syndication Agent" and the "Documentation Agent"), and certain financial institutions named as Co-Agents AMENDS AND RESTATES IN FULL the 364 Day Credit Agreement, dated August 13, 1998 (as amended, supplemented and/or modified from time to time prior to the date hereof, the "Original Credit Agreement"), among the Borrower, the lenders party thereto from time to time (the "Original Lenders"), the Arrangers, the Syndication Agent, Documentation Agent, the Administrative Agent and certain financial institutions named as co-agents; this amendment and restatement of the Original Credit Agreement, as amended, supplemented, restated or otherwise modified from time to time, is hereinafter referred to as this "Agreement" or the "Credit Agreement"). WHEREAS, the Borrower has requested that the Original Credit Agreement be amended and restated in full as set forth herein. NOW, THEREFORE, the parties hereto hereby agree to amend and restate the Original Credit Agreement as follows: SECTION 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Acquired Business": a company or business unit acquired by the Borrower or any of its Subsidiaries, provided that the Borrower has delivered to the Administrative Agent historical financial statements of such company or business unit prepared in accordance with GAAP. "Adjustment Date": the fifth day following the receipt by the Administrative Agent of the financial statements for the most recently completed fiscal period furnished pursuant to subsection 6.1 and the compliance certificate with respect to such financial statements furnished pursuant to subsection 6.2(c). "Administrative Agent": BOA, or following the resignation of BOA as Administrative Agent, any other Lender which may be appointed as Administrative Agent pursuant to subsection 9.9. "Affected Class": as defined in subsection 10.1. "Affected Lender": as defined in subsection 10.7. "Affiliate": as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agents": the collective reference to the Syndication Agent, the Documentation Agent and the Administrative Agent. "Aggregate Outstanding Extensions of Credit": as to any Lender with respect to any Type of Loan at any time, an amount equal to the sum of (a) the aggregate principal amount of all Loans of such Type made by such Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C Obligations then outstanding. "Agreement": this Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time. "Agreement Currency": as defined in subsection 10.16(b). "Alternative Currency": any currency which as of the time of any issuance or renewal, as applicable, of a Foreign L/C is freely tradable and convertible into Dollars and has been approved as an "Alternative Currency" for the purposes of this Agreement by the Issuing Lender. "Applicable Converted Commitment": as defined in subsection 2.5(b). "Applicable Creditor": as defined in subsection 10.16(b). "Applicable Holdback": as defined in subsection 2.6(b)(ii). "Applicable Issuing Lender": an Issuing Lender as to which any proposed Assignee under subsection 10.6 shall become an L/C Participant upon giving effect to the relevant Assignment and Acceptance. "Applicable Margin": at any time, the percentages set forth on Schedule II under the relevant column heading opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Applicable Margins determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to subsections 6.1 and 6.2, the Applicable Margins shall be (i) for the first 35 days subsequent to such due date, the Applicable Margin in effect prior to such due date and (ii) thereafter, those set forth opposite a Debt Ratio 2 captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Application": an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit. "Asset Sale": any sale, sale-leaseback, or other disposition by any Person or any Subsidiary thereof of any of its property or assets, including the stock of any Subsidiary of such Person, except sales and dispositions permitted by subsection 7.6 other than subsection 7.6(b) or (e). "Assignee": as defined in subsection 10.6(c). "Attributable Debt": in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Available Commitment": as to any Lender and any Type of Loan, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment with respect to such Type of Loan over (b) such Lender's Aggregate Outstanding Extensions of Credit with respect to such Type of Loan. "Base Rate": for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; and (b) the rate of interest in effect for such day as publicly announced from time to time by BOA in San Francisco, California, as its "reference rate." (The "reference rate" is a rate set by BOA based upon various factors including BOA'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.) "Base Rate Loans": Loans the rate of interest applicable to which is based upon the Base Rate. "BOA": as defined in the recitals to this Agreement. "Borrower Pledge Agreement": the Second Amended and Restated Borrower Pledge Agreement substantially in the form of Exhibit B-4A, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. "Borrowing Date": any Business Day specified in a notice pursuant to subsection 2.2 as a date on which the Borrower requests the Lenders to make Loans hereunder. 3 "Business": as defined in subsection 4.16. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco, California are authorized or required by law to close and, if the applicable Business Day relates to Eurodollar Loans or Foreign L/Cs, any day on which dealings are carried on in the applicable London interbank market. "Calculation Date": with respect to each Foreign L/C, during the period that such Foreign L/C is outstanding (or the Reimbursement Obligation in connection therewith has not been fully satisfied) (i) the last Business Day of a fiscal month, (ii) the date on which such Letter of Credit is to be issued or renewed by the Issuing Lender, (iii) the date on which any draft presented under such Letter of Credit is paid by the Issuing Lender, (iv) such other dates as the Borrower may reasonably request from time to time, and (v) such other dates as the Issuing Lender or the Administrative Agent may select from time to time, provided that the Borrower receives prompt notice thereof. "Capital Expenditures" for any fiscal period, the aggregate of all expenditures that, in conformity with GAAP (but excluding capitalized interest), are or are required to be included as additions during such period to property, plant or equipment reflected on the consolidated balance sheet of the Borrower and its Subsidiaries, excluding the expenditures relating to the Transaction. "Capital Lease Obligations": of any Person as of the date of determination, the aggregate liability of such Person under Financing Leases reflected on a balance sheet of such Person under GAAP. "Capital Partners": Lehman Brothers Capital Partners III, L.P. "Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing. "Cash Equivalents": (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 90 days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-2 by Standard and Poor's Ratings Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a nationally recognized rating agency if 4 both of S&P and Moody's cease publishing ratings of investments, (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody's, (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. "Change of Control": the occurrence of any of the following events: (i) the Principals and their Related Parties, as a whole, shall at any time cease to own, directly or indirectly, 51% of the Voting Stock of Holdings (measured by voting power rather than number of shares), determined on a fully diluted basis, and any "person" (as such term is defined in Section 13(d)(3) of the Exchange Act) other than the Principals and their Related Parties shall become the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 25% of the Voting Stock of Holdings (measured by voting power rather than number of shares); (ii) a majority of the members of the Board of Directors of Holdings fail to be (a) members of the Board of Directors incumbent as of the Closing Date, or (b) members nominated by the members of the Board of Directors incumbent on the Closing Date, or (c) members appointed by members of the Board nominated under clause (a) or (b); (iii) Holdings shall, at any time, cease to own 100% of the Capital Stock of the Borrower; or (iv) a "Change of Control" shall have occurred under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture.. "Charge Over Shares": the Amended and Restated Charge Over Shares substantially in the form of Exhibit B-4B, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. "Class": (i) Lenders having Loan Exposure (taken together as a single class), (ii) Facility A Lenders having Facility A Loan Exposure (taken together as a single class) and (iii) Facility C Lenders having Facility C Loan Exposure (taken together as a single class). 5 "Closing Date": the date on which the conditions precedent set forth in subsection 5.1 are satisfied. "Co-Agents": collectively, Fleet National Bank, The Bank of New York, The Bank of Nova Scotia, Credit Lyonnais, Bank One, N.A., First Union Commercial Corporation, HSBC Bank USA, and Societe Generale. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Collateral": all assets of the Credit Parties, now owned or hereinafter acquired, upon which a Lien is purported to be created by any Pledge Agreement. "Commitment": as to any Lender, such Lender's Revolving 364 Day Commitment and, subject to satisfaction of the conditions precedent in subsection 2.5(b) hereto, Term Loan Commitment. "Commitment Fee Rate": at any time, the applicable rates per annum on Schedule II under the relevant column heading for the Revolving 364 Day Facility set forth opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Commitment Fee Rate determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to subsections 6.1 and 6.2, the Commitment Fee Rate shall be (i) for the first 35 days subsequent to such due date, the Commitment Fee Rate in effect prior to such due date and (ii) thereafter, that set forth opposite a Debt Ratio captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Commitment Percentage": as to the Commitment of any Lender with respect to any Type of Loan at any time, the percentage which the Commitment of such Lender with respect to such Type of Loan then constitutes of the aggregate Commitments with respect to such Type of Loan (or, at any time after such Commitments shall have expired or terminated, the percentage which the aggregate amount of the Aggregate Outstanding Extensions of Credit of such Lender with respect to such Type of Loan constitutes of the aggregate amount of the Aggregate Outstanding Extensions of Credit of all Lenders with respect to such Type of Loan). "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 (b) or (c) of the Code. "Consolidated EBITDA": as of the last day of any fiscal quarter, Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired 6 Businesses (excluding, without duplication, (x) extraordinary gains and losses in accordance with GAAP, (y) gains and losses in connection with asset dispositions whether or not constituting extraordinary gains and losses and (z) gains or losses on discontinued operations) for the four fiscal quarters ended on such date, plus (i) Consolidated Interest Expense of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses for such period, plus (ii) to the extent deducted in computing such Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses, the sum of income taxes, depreciation and amortization for such period. "Consolidated Cash Interest Expense": as of the last day of any fiscal quarter, the amount of interest expense, paid in cash, of the Borrower and its Subsidiaries for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Interest Expense": for any Person, as of the last day of any fiscal quarter, the amount of interest expense of such Person for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Net Income": for any Person and for any fiscal period, net income of such Person, determined on a consolidated basis in accordance with GAAP. "Consolidated Total Assets": at any date, all assets of the Borrower and its Subsidiaries as determined according to the consolidated balance sheet contained in the SEC filing most recently delivered pursuant to subsection 6.1 or, if no such SEC filing has yet been delivered, the balance sheet referred to in subsection 4.1(a)(ii). "Consolidated Total Debt": at any date, all Indebtedness of the Borrower and its Subsidiaries outstanding on such date for borrowed money or the deferred purchase price of property, including, without limitation, in respect of Financing Leases but excluding Indebtedness permitted pursuant to subsection 7.2(g). "Consolidated Working Capital": at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in accordance with GAAP, be set forth opposite the caption "total current assets" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date over (b) the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption "total current liabilities" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries on such date (excluding, to the extent it would otherwise be included under current liabilities, any short-term Consolidated Total Debt and the current portion of any long-term Consolidated Total Debt). 7 "Constitutional Documents": as to any Person, the articles or certificate of incorporation and by-laws, partnership agreement or other organizational documents of such Person. "Contractual Obligation": 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. "Conversion Option": as defined in subsection 2.5(b). "Credit Documents": this Agreement, the Notes, the Applications, the Guarantees and the Pledge Agreements. "Credit Parties": the Borrower, Holdings, and each Subsidiary of the Borrower which is a party to a Credit Document. "December 1998 Subordinated Debt Documents": the December 1998 Subordinated Notes, the December 1998 Subordinated Notes Indenture, the Underwriting Agreement related thereto among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "December 1998 Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the December 1998 Subordinated Notes were issued. "December 1998 Subordinated Notes": the Borrower's Senior Subordinated Notes, due December 1, 2008 ("Initial December 1998 Subordinated Notes") issued on or about the December 8, 1998 and any notes, having the same terms as the Initial December 1998 Subordinated Notes, issued in exchange for the Initial December 1998 Subordinated Notes as contemplated by the documents governing the issuance of the Initial December 1998 Subordinated Notes. "Debt Ratio": as at the last day of any fiscal quarter, the ratio of (a) Consolidated Total Debt minus Designated Cash Balances on such date to (b) Consolidated EBITDA. "Default": any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Designated Cash Balances": at any time, the lesser of (a) actual unrestricted cash balances on hand of Borrower and its Subsidiaries which are not subject to any Liens in favor of any Person (other than those described in subsection 7.3(o) hereof) and (b) $50,000,000. 8 "Dollar Equivalent": at any time, (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any amount denominated in an Alternative Currency, the equivalent amount in Dollars as determined on the basis of the Exchange Rate for the purchase of Dollars with such Alternative Currency as of the most recent Calculation Date. "Dollars" and "$": dollars in lawful currency of the United States of America. "Domestic L/C": a Letter of Credit denominated in Dollars. "Dow Jones Page 3750": the display designated as page "3750" on the Dow Jones Market Service (formerly known as the Telerate Service) or such other page as may replace the "3750" page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for Dollar deposits. "Environmental Laws": any and all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or other legally enforceable requirement (including, without limitation, common law) of any foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health as affected by the environment as has been, is now, or may at any time hereafter be, in effect, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.'SS''SS' 9601 et seq.; the Toxic Substance Control Act, 15 U.S.C.'SS''SS'9601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.'SS''SS'1802 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.'SS''SS'6901 et seq.; the Clean Water Act; 33 U.S.C.'SS''SS'1251 et seq.; the Clean Air Act, 42 U.S.C.'SS''SS'7401 et seq.; or other similar federal and/or state environmental laws. "Environmental Permits": any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any applicable Environmental Law. "Equity Documents": the Stockholders Agreement, the Subscription Agreements and the Option Agreements. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurocurrency Reserve Requirements": means for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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 9 requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). "Eurodollar Business Day": means any Business Day on which commercial banks are open in London for the transaction of international business, including dealings in Dollar deposits in the international interbank markets. "Eurodollar Loans": Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Rate": means, for any Interest Period, with respect to Eurodollar Loans comprising part of the same borrowing, the rate of interest per annum (rounded upward to the next 1/100th of 1%) determined by the Administrative Agent as follows: LIBOR Eurodollar Rate = ------------------------------------ 1.00 - Eurodollar Reserve Percentage "Eurodollar Reserve Percentage": for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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"). "Event of Default": any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Excess Cash Flow": for any fiscal year of the Borrower, the excess of (a) the sum, without duplication, of (i) Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (ii) the net decrease, if any, in Consolidated Working Capital during such fiscal year, (iii) to the extent deducted in computing such Consolidated Net Income for the Borrower and its Subsidiaries, non-cash interest expense, depreciation and amortization for such fiscal year, (iv) extraordinary non-cash losses during such fiscal year subtracted in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (v) change in deferred tax liability of the Borrower for such fiscal year, (vi) non-cash losses in connection with asset dispositions whether or not constituting extraordinary losses and (vii) non-cash ordinary losses less (b) the sum, without duplication, of (i) the aggregate amount of permitted cash Capital Expenditures made by the Borrower and its Subsidiaries during such fiscal year, (ii) the net increase, if any, in Consolidated Working Capital during such fiscal year, (iii) the aggregate amount of payments of principal in respect of any Indebtedness not prohibited hereunder during such fiscal year (other than prepayments of (x) Revolving 364 Day Loans not accompanied by reductions of the Commitments hereunder, (y) Facility A Loans not accompanied by reductions of Facility A Commitments and/or (z) 10 Facility C Loans not accompanied by reductions of Facility C Commitments), (iv) deferred income tax credit of the Borrower for such fiscal year, (v) extraordinary non-cash gains during such fiscal year added in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (vi) non-cash gains in connection with asset dispositions whether or not constituting extraordinary gains and (vii) non-cash ordinary gains. "Exchange Act": the Securities Exchange Act of 1934, as amended. "Exchange Rate": on any day, with respect to any Alternative Currency, the spot rate at which Dollars are offered on such day by the Issuing Lender in San Francisco, California (or such other location selected by the Issuing Lender) for such Alternative Currency. "Extending Lender": any Lender consenting to the Extension Option. "Extension Option": as defined in subsection 2.5(a). "Facility A Administrative Agent": the "Administrative Agent" as defined in the Facility A Credit Agreement. "Facility A Agents": the "Agents" as defined in the Facility A Credit Agreement. "Facility A Commitments": the "Commitments" as defined in the Facility A Credit Agreement. "Facility A Credit Agreement": that certain Second Amended and Restated Credit Agreement of even date herewith among the Borrower, the Facility A Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities LLC as arrangers and certain financial institutions named as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility A Credit Documents": the "Credit Documents" as defined in the Facility A Credit Agreement. "Facility A Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility A Credit Agreement. "Facility A L/C Obligations": the "L/C Obligations" as defined in the Facility A Credit Agreement. "Facility A Lenders": the "Lenders" as defined in the Facility A Credit Agreement. 11 "Facility A Loan Exposure": the "Loan Exposure" as defined in the Facility A Credit Agreement. "Facility A Loans": the "Loans" as defined in the Facility A Credit Agreement. "Facility A Notes": the "Notes" as defined in the Facility A Credit Agreement. "Facility A Reimbursement Obligations": the "Reimbursement Obligations" as defined in the Facility A Credit Agreement. "Facility C Administrative Agent": the "Administrative Agent" as defined in the Facility C Credit Agreement. "Facility C Agents": the "Agents" as defined in the Facility C Credit Agreement. "Facility C Commitments": the "Commitments" as defined in the Facility C Credit Agreement. "Facility C Credit Agreement": that certain New 364 Day Credit Agreement of even date herewith among the Borrower, the Facility C Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities, LLC as arrangers and certain financial institutions named as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility C Credit Documents": the "Credit Documents" as defined in the Facility C Credit Agreement. "Facility C Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility C Credit Agreement. "Facility C Lenders": the "Lenders" as defined in the Facility C Credit Agreement. "Facility C Loan Exposure": the "Loan Exposure" as defined in the Facility C Credit Agreement. "Facility C Loans": the "Loans" as defined in the Facility C Credit Agreement. "Facility C Notes": the "Notes" as defined in the Facility C Credit Agreement. "Federal Funds Effective Rate": for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the FRB (including any such successor, "H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If on any relevant day the appropriate rate for such previous day is not yet published in H.15(519), the rate for such day will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. 12 (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Administrative Agent. "Financial L/C": a standby Letter of Credit not constituting a Performance L/C. "Financing Lease": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "Foreign L/C": a Letter of Credit denominated in an Alternative Currency. "Foreign L/C Obligations": at any time, an amount equal to the sum of (i) the Dollar Equivalent of the aggregate then undrawn and unexpired face amount of all then outstanding Foreign L/Cs and (ii) the Dollar Equivalent of the aggregate amount of all drawings under Foreign L/Cs which have not then been reimbursed pursuant to subsection 3.5. "Foreign Subsidiary": any Subsidiary which is organized under the laws of any jurisdiction outside the United States or under the laws of the U.S. Virgin Islands. "FRB": means the Board of Governors of the Federal Reserve System, and any governmental authority succeeding to any of its principal functions. "GAAP": generally accepted accounting principles in the United States of America in effect on the Closing Date. "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, reimbursement obligations under letters of credit and any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) 13 otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. "Guarantees": the Parent Guarantee and the Subsidiary Guarantee. "Immaterial Subsidiary": any Subsidiary of the Borrower having assets not exceeding five percent (5%) of the Consolidated Total Assets. "Indebtedness": of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices and accrued expenses incurred in the ordinary course of business), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under Financing Leases, (d) all obligations of such Person in respect of acceptances issued or created for the account of such Person and all reimbursement and other obligations with respect to any letters of credit and surety bonds, whether or not matured or drawn, (e) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and (f) all Attributable Debt of such Person with respect to sale and leaseback transactions of such Person. "Indenture": the Indenture between the Borrower and The Bank of New York, as trustee, pursuant to which the Subordinated Notes are issued. "Initial 1997 Credit Agreement": the Credit Agreement, dated as of April 30, 1997 among the Borrower, the lenders party thereto from time to time, Lehman Brothers Inc. as arranger, LCPI as syndication agent and documentation agent and BOA as administrative agent. "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. 14 "Interest Payment Date": (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last Business Day of such Interest Period, and (c) as to any Eurodollar Loan having an interest period longer than three months, (i) each Business Day which is three months or a whole multiple thereof after the first day of such Interest Period and (ii) the last Business Day of such Interest Period. "Interest Period": with respect to any Eurodollar Loan: (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three, six or, if made available by the Administrative Agent and the Lenders, nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; (b) thereafter, each period commencing on the last day of the preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or, if made available by the Administrative Agent and Lenders, nine or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; and (c) solely for the purpose of permitting the Borrower to (i) convert Revolving 364 Day Loans into Term Loans on the Revolving 364 Day Termination Date pursuant to the exercise of the Conversion Option, (ii) repay Revolving 364 Day Loans owing to Nonconsenting Lenders on the Revolving 364 Day Termination Date in connection with the exercise of the Extension Option and (iii) fund any scheduled amortization payment pursuant to subsection 2.5(b) in respect of any Term Loans then outstanding, a period commencing on the last day of the preceding Interest Period applicable to such Eurodollar Loan and ending on a Business Day which is no less than seven (7) and no more than thirty (30) days thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto. provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day; (ii) any Interest Period for any Loan that would otherwise extend beyond the applicable Termination Date shall end on the applicable Termination Date; 15 (iii) any Interest Period pertaining to a Eurodollar Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month in which such Interest Period would otherwise be scheduled to end) shall end on the last Business Day of the appropriate calendar month; and (iv) no Interest Period with respect to any portion of any Type of Term Loan shall extend beyond a date on which the Borrower is required to make a scheduled payment of principal of Term Loans of such Type unless the sum of (a) the aggregate principal amount of Term Loans of such Type that are Base Rate Loans plus (b) the aggregate principal amount of Term Loans of such Type that are Eurodollar Rate Loans with Interest Periods expiring on or before such date equals or exceeds the principal amount required to be paid on Term Loans of such Type on such date. "Interest Rate Agreement": any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement. "Interest Rate Agreement Obligations": the obligations of the Borrower or any of its Subsidiaries to make payments to counterparties under Interest Rate Agreements in the event of the occurrence of a termination event thereunder. "Issuing Lender": BOA, in its capacity as issuer of any Letter of Credit or, at the election of BOA, such other Lender or Lenders that agrees to act as Issuing Lender at the request of the Borrower, or upon resignation by BOA as an Issuing Lender at any time upon notice to the other parties to this Agreement, such other Lender or Lenders that agree to act as Issuing Lender at the request of the Borrower and to whom the Required Lenders consent in writing. "Judgment Currency": as defined in subsection 10.16 (b). "LCPI": as defined in the recitals to this Agreement. "L/C Fee Payment Date": the last Business Day of each March, June, September and December. "L/C Obligations": at any time, an amount equal to the sum of (a) the Dollar Equivalent of the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the Dollar Equivalent of the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to subsection 3.5. "L/C Participants": a collective reference to all the Revolving 364 Day Lenders other than the Applicable Issuing Lender. "Lender" and "Lenders": the persons identified as Lenders and listed on the signature pages of this Agreement (including the Issuing Lender), together with their successors and permitted assigns pursuant to subsection 10.6; provided that the term 16 "Lenders", when used in the context of a particular Commitment, shall mean Lenders having that Commitment. "Letters of Credit": as defined in subsection 3.1(a). "LIBOR": as to any Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period quoted on the second Eurodollar Business Day prior to the first day of such Interest Period, as such rate appears on the Dow Jones Page 3750 as of 11:00 A.M. (London time) on such date, as determined by the Administrative Agent and notified to the Lenders and the Borrower on such second prior Eurodollar Business Day. If LIBOR cannot be determined based on the Dow Jones Page 3750, LIBOR means the rate per annum, as supplied to the Administrative Agent, quoted by BOA's London Branch to prime banks in the London interbank market for deposits in Dollars at approximately 11:00 A.M. (London time) two Eurodollar Business Days prior to the first day of such Interest Period in an amount approximately equal to the principal amount of the Loans to which such Interest Period is to apply and for a period of time comparable to such Interest Period. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "Loan": any loan made by any Lender pursuant to this Agreement. "Loan Account": as defined in subsection 2.5(g). "Loan Exposure": with respect to any Lender as of any date of determination, (i) if there are no outstanding Letters of Credit or Revolving 364 Day Loans, that Lender's Revolving 364 Day Commitment, and (ii) otherwise, the sum of (a) the aggregate outstanding principal amount of the Revolving 364 Day Loans of that Lender plus (b) in the event that Lender is an Issuing Lender, the Dollar Equivalent of the aggregate stated or face amount in respect of all Letters of Credit issued by that Lender and outstanding (in each case net of any participations purchased by other Lenders in such Letters of Credit or any unreimbursed drawings thereunder) plus (c) in the event that Lender is a Term Lender, the outstanding principal amount of the Term Loans of that Lender plus (d) the Dollar Equivalent of the aggregate amount of all participations purchased by that Lender in any outstanding Letters of Credit or any unreimbursed drawings under any Letters of Credit. "Material Adverse Effect": a material adverse effect on (a) the business, assets, operations, property or condition (financial or otherwise) of Holdings and its Subsidiaries 17 taken as a whole or (b) the validity or enforceability of this or any of the other Credit Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder. "Materials of Environmental Concern": any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under, or that could give rise to liability under, any applicable Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products. "Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Proceeds": the aggregate cash proceeds (including Cash Equivalents) received by Holdings or any of its Subsidiaries in respect of: (a) any issuance by Holdings or any of its Subsidiaries of Indebtedness after the Closing Date; (b) any Asset Sale; and (c) any cash payments received in respect of promissory notes or other evidences of indebtedness delivered to Holdings or such Subsidiary in respect of an Asset Sale; in each case net of (without duplication) (i), (A) in the case of an Asset Sale, the amount required to repay any Indebtedness (other than the Loans) secured by a Lien on any assets of Holdings or a Subsidiary of Holdings that are sold or otherwise disposed of in connection with such Asset Sale and (B) reasonable and appropriate amounts established by Holdings or such Subsidiary, as the case may be, as a reserve against liabilities associated with such Asset Sale and retained by Holdings or such Subsidiary, (ii) the reasonable expenses (including legal fees and brokers' and underwriters' commissions, lenders fees, credit enhancement fees, accountants' fees, investment banking fees, survey costs, title insurance premiums and other customary fees, in any case, paid to third parties or, to the extent permitted hereby, Affiliates) incurred in effecting such issuance or sale and (iii) any taxes reasonably attributable to such sale and reasonably estimated by Holdings or such Subsidiary to be actually payable. "New Investment Sublimit" shall mean, as of any date of determination thereof, an amount equal to (a) $650,000,000 plus (b) (i) Net Proceeds derived from Asset Sales during the immediately preceding twelve (12) month period and (ii) Net Proceeds from any Asset Sale that were reinvested within the twelve (12) month period following such Asset Sale for the purposes permitted in subsection 7.9(k) to the extent not included in subclause (i) of this clause (b) plus (c) net cash proceeds derived from the issuance of any 18 equity securities of Holdings which are contributed to the Borrower as additional equity capital minus the amount of any Capital Expenditures funded in any fiscal year of the Borrower and its Subsidiaries which exceeds the amounts permitted during such fiscal year pursuant to subsection 7.8 hereof (without giving effect to the second proviso thereto referring to subsection 7.9(k)). "New Subordinated Debt Documents": the New Subordinated Notes, the New Subordinated Notes Indenture, the Underwriting Agreement dated as of May 18, 1998 among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "New Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the New Subordinated Notes were issued. "New Subordinated Notes": the Borrower's 8 1/2% Senior Subordinated Notes, due 2008 ("Initial New Subordinated Notes") issued on or about May 22, 1998 and any notes, having the same terms as the Initial New Subordinated Notes, issued in exchange for the Initial New Subordinated Notes as contemplated by the documents governing the issuance of the Initial New Subordinated Notes. "Non-Excluded Taxes": as defined in subsection 2.15. "Non-U.S. Lender": as defined in subsection 2.15(b). "Nonconsenting Lenders": as defined in subsection 2.17. "Notes": The Revolving 364 Day Notes and the Term Notes (or any of them). "Obligations": as defined in the Guarantees and the Pledge Agreements. "Option Agreements": the Option Agreements between Holdings and each of Frank C. Lanza and Robert V. LaPenta, each dated as of April 30, 1997. "Original Agents": the "Agents" under and as defined in the Original Credit Agreement. "Original Closing Date": August 13, 1998. "Original Credit Agreement": as defined in the preamble to this Agreement. "Original Lenders": as defined in the preamble to this Agreement. "Parent Distributions": as defined in the Parent Guarantee. 19 "Parent Guarantee": the Second Amended and Restated Parent Guarantee substantially in the form of Exhibit B-1, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Parent Pledge Agreement": the Second Amended and Restated Parent Pledge Agreement substantially in the form of Exhibit B-3, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Participant": as defined in subsection 10.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any successor thereto. "Performance L/C": a standby Letter of Credit issued to ensure the performance of services and/or delivery of goods by or on behalf of the Borrower. "Permitted Liens": Liens permitted to exist under subsection 7.3. "Permitted Stock Payments": (A) dividends by the Borrower to Holdings in amounts equal to the amounts required for Holdings to (i) pay franchise taxes and other fees required to maintain its legal existence and (ii) provide for other operating costs of up to $1,000,000 per fiscal year, (B) dividends by the Borrower to Holdings in amounts equal to amounts required for Holdings to pay federal, state and local income taxes to the extent such income taxes are actually due and owing; provided that the aggregate amount paid under this clause (B) does not exceed the amount that the Borrower would be required to pay in respect of the income of the Borrower and its Subsidiaries if the Borrower were a stand alone entity that was not owned by Holdings, and (C) from and after May 1, 1999, dividends by the Borrower to Holdings payable solely out of Excess Cash Flow, provided that, with respect to this clause (C), (i) as of the last day of the most recently completed fiscal quarter the Debt Ratio is less than or equal to 3.5 to 1, and (ii) the aggregate amount of dividends paid by the Borrower to Holdings under this clause (C) since the Original Closing Date does not exceed $5,000,000. "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan covered by ERISA and in respect of which the Borrower or any Commonly Controlled Entity maintains, administers, contributes to or is required to contribute to, or under which the Borrower or any Commonly Controlled Entity may incur any liability. "Pledge Agreements": the collective reference to the Parent Pledge Agreement, the Borrower Pledge Agreement, the Charge Over Shares, the Subsidiary Pledge Agreement, and any other security documents hereafter delivered to the Administrative 20 Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Borrower hereunder and under any of the other Credit Documents or to secure any guarantee of any such obligations and liabilities. "Principals": each of Lehman Brothers Holdings, Inc., Capital Partners, the Seller, Frank C. Lanza and Robert V. LaPenta. "Properties": as defined in subsection 4.16. "Purchase Agreement": the Purchase Agreement, dated as of April 25, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Register": as defined in subsection 10.6(d). "Registration Rights Agreement": the Registration Rights Agreement, dated as of April 30, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. "Reimbursement Amount": as defined in subsection 3.5(a). "Reimbursement Obligation": the obligation of the Borrower to reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn under Letters of Credit. "Related Party": with respect to the Principals, (a) any controlling stockholder, 51% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (b) a trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 51% or more controlling interest of which consist of the Principals and/or such other Persons referred to in the immediately preceding clause (a). "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Reportable Event": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under the regulations of the PBGC. "Required Lenders": at any time, Lenders the Loan Exposure for all Types of Loans of which aggregate more than 50%. "Requirement of Law": as to any Person, the Constitutional Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court 21 or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Requisite Class Lenders": at any time, (a) for the Class of Lenders having Loan Exposure, Lenders having or holding 66 2/3% of the aggregate Loan Exposure of all Lenders and (b) for the Class of Facility A Lenders having Facility A Loan Exposure, Facility A Lenders having or holding 66 2/3% of the aggregate Facility A Loan Exposure of all Facility A Lenders and (c) for the Class of Facility C Lenders having Facility C Loan Exposure, Facility C Lenders having or holding 66 2/3% of the aggregate Facility C Loan Exposure of all Facility C Lenders. "Responsible Officer": the chief executive officer, the president or vice president of the Borrower or, with respect to financial matters, the chief financial officer, vice president-finance or treasurer of the Borrower. "Restricted Government Contracts": as defined in the Pledge Agreements. "Revolving 364 Day Commitment": the commitment of a Lender, as set forth on Schedule I hereto as amended from time to time pursuant to this Agreement, to make Revolving 364 Day Loans to the Borrower pursuant to Subsection 2.1(a)(i); and "Revolving 364 Day Commitments" means such commitments of all Lenders in an aggregate amount not to exceed $200,000,000 at any time. "Revolving 364 Day Commitment Period": the period from and including the Closing Date to but not including the Revolving 364 Day Termination Date or such earlier date on which the Revolving 364 Day Commitments shall terminate as provided herein. "Revolving 364 Day Lender": any Lender or Lenders having a Revolving 364 Day Commitment or a Revolving 364 Day Loan outstanding. "Revolving 364 Day Loans": the Loans made by Revolving 364 Day Lenders to the Borrower pursuant to Subsection 2.1(a)(i). "Revolving 364 Day Notes": (i) the promissory notes of the Borrower, if any, issued pursuant to subsection 2.5(i) of the Original Credit Agreement prior to the Closing Date and/or pursuant to subsection 2.5(i) of this Agreement on or after the Closing Date, in each case, to evidence the Revolving 364 Day Loans of any Lender and (ii) any promissory notes issued by the Borrower pursuant to subsection 10.6(d) in connection with assignments of the Revolving 364 Day Commitments and Revolving 364 Day Loans of any Lenders, in each case substantially in the form of Exhibit A-1 annexed hereto, as they may be amended, supplemented or otherwise modified from time to time. "Revolving 364 Day Termination Date": August 10, 2000, as the same may be extended in accordance with subsection 2.5(a) hereof. 22 "SPD Technologies": SPD Technologies Inc., a Delaware corporation. "SPD Technologies Acquisition Agreement": the Agreement and Plan of Merger, dated as of July 2, 1998, among L-3 Communications Corporation, SPD Merger Co., SPD Technologies, Inc. and Midmark Capital L.P. "SEC": the Securities and Exchange Commission. "Securities Act": Securities Act of 1933, as amended. "Seller": Lockheed Martin Corporation, a Maryland corporation. "Similar Business": a business, at least a majority of whose revenues in the most recently ended calendar year were derived from (i) the sale of defense products, electronics, communications systems, aerospace products, avionics products and/or communications products, (ii) any services related thereto, (iii) any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto or any business of the Borrower and/or its Subsidiaries existing as of the Closing Date, and (iv) any combination of any of the foregoing. "Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Stockholders Agreement": the Stockholders Agreement, dated as of April 30, 1997, by and among the Borrower, Holdings, the Seller, the Principals and any other party that may from time to time become a party thereto as provided therein, as the same may be amended, supplemented or otherwise modified from time to time. "Subordinated Debt": indebtedness outstanding under the Subordinated Notes, the New Subordinated Notes and/or the December 1998 Subordinated Notes. "Subordinated Debt Documents": the Indenture, the Registration Rights Agreement, the Purchase Agreement and the Subordinated Notes. "Subordinated Notes": the Borrower's 10 3/8% Senior Subordinated Notes, due 2007 (the "Initial Subordinated Notes"), issued on April 30, 1997, and any subordinated notes of the Borrower, having the same terms as the Initial Subordinated Notes, issued in exchange for the Initial Subordinated Notes as contemplated by the Subordinated Debt Documents. "Subscription Agreements": the Common Stock Subscription Agreements between Holdings and each of Frank C. Lanza, Robert V. LaPenta, Capital Partners and the Seller, each dated as of April 30, 1997. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than 23 stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Subsidiary Guarantee": the Second Amended and Restated Subsidiary Guarantee substantially in the form of Exhibit B-2, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Subsidiary Pledge Agreement": the Second Amended and Restated Subsidiary Pledge Agreement substantially in the form of Exhibit B-5, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Swing Line Lender": as defined in the Facility A Credit Agreement. "Term Loan Commitment or Term Loan Commitments": the commitments of a Lender to convert all outstanding Revolving 364 Day Loans as of the Revolving 364 Day Termination Date into Term Loans pursuant to subsection 2.5(b); and Term Loan Commitments means such commitments of all Lenders in the aggregate, which shall not exceed an amount equal to the lesser of (x) the aggregate amount of Revolving 364 Day Loans outstanding as of the Revolving 364 Day Termination Date and (y) the aggregate amount of the Revolving 364 Day Commitments existing on the Revolving 364 Day Termination Date. "Term Lender": any Lender having a Term Loan Commitment or a Term Loan outstanding. "Term Loans": the Loans made or deemed made by the Term Lenders to the Borrower pursuant to subsection 2.1(a)(ii). "Term Notes": (i) the promissory notes of the Borrower, if any, which may be hereafter issued pursuant to subsection 2.5(b) on or about the Revolving 364 Day Termination Date to evidence all Revolving 364 Day Loans which were converted into Term Loans of any Lender and (ii) any promissory notes issued by the Borrower pursuant to subsection 10.6(d) in connection with assignments of the Term Loan Commitments and Term Loans of any Lender, in each case substantially in the form of Exhibit A-2 annexed hereto, as they may be amended, supplemented or otherwise modified from time to time. 24 "Termination Date": (i) with respect to the Term Loans, if any, March 31, 2003, and (ii) with respect to the Revolving 364 Day Commitments, the Revolving 364 Day Termination Date. "Tranche": the collective reference to Eurodollar Loans with then-current Interest Periods which all begin on the same date and end on the same date (whether or not such Loans shall originally have been made on the same day); Tranches may be identified as "Eurodollar Tranches". "Transaction": the transactions contemplated by the Transaction Documents. "Transaction Agreement": that certain Transaction Agreement, dated as of March 28, 1997 by and among Lockheed Martin Corporation, a Maryland corporation, Holdings, Capital Partners and its Affiliates, Frank C. Lanza and Robert V. LaPenta. "Transaction Documents": (i) the Transaction Agreement, the Schedules thereto and the documents set forth on Schedule III hereto, (ii) the Equity Documents, (iii) the Subordinated Debt Documents and (iv) the New Subordinated Debt Documents. "Transferee": as defined in subsection 10.6(f). "Type": a Revolving 364 Day Loan or a Term Loan, as applicable. "Uniform Customs": the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as the same may be amended from time to time. "U.S. Taxes": any tax, assessment, or other charge or levy and any liabilities with respect thereto, including any penalties, additions to tax, fines or interest thereon, imposed by or on behalf of the United States or any taxing authority thereof. "Voting Stock": of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Year 2000 Problem": any significant risk that computer hardware, software or equipment containing embedded microchips essential to the business or operations of the Borrower or any of its Subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively and reliably as in the case of dates or time periods occurring before January 1, 2000, including the making of accurate leap year calculations. 25 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any Credit Document or any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any Credit Document, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Interrelationship with Original Credit Agreement. (a) As stated in the preamble hereof, this Credit Agreement is intended to amend and restate the provisions of the Original Credit Agreement and, notwithstanding any substitution of Notes as of the Closing Date, except as expressly modified herein, (x) all of the terms and provisions of the Original Credit Agreement shall continue to apply for the period prior to the Closing Date, including any determinations of payment dates, interest rates, Events of Default or any amount that may be payable to the Original Agents or the Original Lenders (or their assignees or replacements hereunder), and (y) the obligations under the Original Credit Agreement shall continue to be paid or prepaid on or prior to the Closing Date, and shall from and after the Closing Date continue to be owing and be subject to the terms of this Credit Agreement. All references in the Notes and the other Credit Documents to (i) the Original Credit Agreement or the "Credit Agreement" shall be deemed to include references to this Credit Agreement and (ii) the "Lenders" or a "Lender" or to the "Agents" or any "Agent" shall mean such terms as defined in this Credit Agreement. As to all periods occurring on or after the Closing Date, all of the covenants set forth in the Original Credit Agreement shall be of no further force and effect, it being understood that all obligations of the Borrower under the Original Credit Agreement shall be governed by this Credit Agreement from and after the Closing Date. (b) The Borrower, the Agents and the Lenders acknowledge and agree that all outstanding Loans under the Original Credit Agreement (including all outstanding L/C Obligations) are hereby converted into Loans (and, as applicable, L/C Obligations) outstanding hereunder effective as of the Closing Date. The Borrower, the Agents and the Lenders acknowledge and agree that all interest, fees, costs and reimbursable expenses accruing or arising under the Original Credit Agreement which remain unpaid and outstanding as of the Closing 26 Date shall be and remain outstanding and payable as an obligation under this Agreement and the other Credit Documents. 1.4 Confirmation of Existing Obligations. The Borrower hereby agrees and admits that, as of the date hereof, it has no defenses to, or offsets or counterclaim against, any of its obligations to the Agents or any Lender under the Credit Documents of any kind whatsoever. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS 2.1 Commitments. (a) Subject to the terms and conditions hereof, each Lender severally agrees to make the loans described in this subsection 2.1(a) as applicable to the Borrower. (i) Revolving 364 Day Loans. Each Revolving 364 Day Lender severally agrees to make revolving credit loans to the Borrower, from time to time during the Revolving 364 Day Commitment Period, in an aggregate principal amount at any one time outstanding which, when added to such Lender's Commitment Percentage with respect to Revolving 364 Day Loans of the then outstanding L/C Obligations, does not exceed the amount of such Lender's Revolving 364 Day Commitment. During the Revolving 364 Day Commitment Period, the Borrower may use the Revolving 364 Day Commitments by borrowing, prepaying the Revolving 364 Day Loans, in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. (ii) Term Loans. In the event the conditions in subsection 2.5(b) to the exercise of the Conversion Option are satisfied, each Extending Lender severally agrees to convert, effective upon the Revolving 364 Day Termination Date, a principal amount of Revolving 364 Day Loans of such Lender into a Term Loan of such Lender to the Borrower in an aggregate principal amount which does not exceed the lesser of (a) the principal amount of Revolving 364 Day Loans of such Lender outstanding on the Revolving 364 Day Termination Date and (b) the principal amount of such Lender's 364 Day Commitment outstanding on the Revolving 364 Day Termination Date. Amounts borrowed under this subsection 2.1(a)(ii) and subsequently repaid may not be reborrowed. (b) The Loans may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 2.7, provided that, except as contemplated in clause (c) of the definition of Interest Period, no Revolving 364 Day Loan shall be made as a Eurodollar Loan after the day that is one month prior to the applicable Termination Date. 2.2 Procedure for Borrowing. The Borrower may borrow under the Revolving 364 Day Commitments during the Revolving 364 Day Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which 27 notice must be received by the Administrative Agent prior to (a) 11:00 A.M., New York City time, three Business Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially Eurodollar Loans, (b) 11:00 A.M., New York City time, on the requested Borrowing Date in the case of a Base Rate Loan), specifying (i) the amount to be borrowed of each Type of Loan, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the respective lengths of the initial Interest Periods therefor. Each borrowing under the Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $2,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then Available Commitments are less than $2,000,000, such lesser amount), and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof; provided that the Borrower may nevertheless borrow amounts below such minimum amounts in clauses (x) or (y) above solely for the purpose of (i) converting Revolving 364 Day Loans into Term Loans on the Revolving 364 Day Termination Date, (ii) repaying Revolving 364 Day Loans owing to any Nonconsenting Lenders on the Revolving 364 Day Termination Date and (iii) funding any scheduled amortization payment pursuant to subsection 2.5(b) in respect of any Term Loans then outstanding. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in subsection 10.2 prior to 11:00 A.M., New York City time (in the case of Eurodollar Loans) or 2:30 P.M., New York City time (in the case of Base Rate Loans), on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent in accordance with the Borrower's payment instructions with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. All notices given by the Borrower under this subsection 2.2 may be made by telephonic notice promptly confirmed in writing. 2.3 Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Revolving 364 Day Lender a commitment fee for the period from and including the first day of the Revolving 364 Day Commitment Period to and including the Revolving 364 Day Termination Date, computed at the Commitment Fee Rate on the daily amount of the Available Commitment of such Revolving 364 Day Lender during the period for which payment is made, payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Termination Date, commencing on the first of such dates to occur after the date hereof. 2.4 Termination or Reduction of Revolving 364 Day Commitments. The Borrower shall have the right, upon not less than three Business Days' written notice to the Administrative Agent, to terminate the Revolving 364 Day Commitments or, from time to time, to reduce the amount of the Revolving 364 Day Commitments ratably among the Revolving 364 Day Lenders; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving 364 Day Loans made on the effective date thereof, the aggregate principal amount of the Revolving 364 Day Loans then outstanding, 28 when added to the then outstanding L/C Obligations, would exceed the Revolving 364 Day Commitments then in effect. Any such reduction shall be in an amount equal to $2,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce permanently the Revolving 364 Day Commitments then in effect. 2.5 Extension of Revolving 364 Day Termination Date; Conversion Option; Repayment of Loans; Evidence of Debt. (a) Extension of Revolving 364 Day Termination Date. The Borrower may elect to forward to the Administrative Agent (for distribution to each Lender) no earlier than sixty (60) but no later than fifty-five (55) days prior to the initially scheduled Revolving 364 Day Termination Date a written request asking each Revolving 364 Day Lender to consent to the extension of the Revolving 364 Day Termination Date for one (1) additional 364 day period. Not later than 30 days after receipt of such written request, each Lender shall advise the Administrative Agent and the Borrower in writing whether such Lender consents to the proposed extension if all the conditions, including those set forth in subsection 5.2 of this Agreement, thereto have been satisfied. If all of the Revolving 364 Day Lenders have consented in writing to such extension and all conditions set forth in subsection 5.2 shall have been satisfied, then effective on the initially scheduled Revolving 364 Day Termination Date, the Revolving 364 Day Termination Date shall be deemed automatically extended by an additional 364 day period (herein, the "Extension Option"). If less than all of the Revolving 364 Day Lenders consent to the exercise of the proposed Extension Option (the "Extending Lenders"), the Borrower may replace all, some or none of such Nonconsenting Lenders on or before the initially scheduled Revolving 364 Day Termination Date pursuant to subsection 2.17 and repay all outstanding Revolving 364 Day Loans owing to each Nonconsenting Lender that is not being replaced, if any, on the initially scheduled Revolving 364 Day Termination Date (without giving effect to the Extension Option); provided that if the Extending Lenders do not hold more than 50% of the outstanding Revolving 364 Day Commitments, the Borrower will not be entitled to exercise the Extension Option with respect to any Extending Lenders nor shall any Lender failing to consent to the Extension Option be deemed a Nonconsenting Lender and be subject to replacement under subsection 2.17 as a result thereof. Subject to the foregoing proviso, if the Borrower desires to exercise the Extension Option with the Extending Lenders, Borrower shall provide the Administrative Agent (for distribution to each Lender) with not less than five (5) days prior written notice thereof in addition to satisfying all conditions precedent set forth above (other than the requirement that all Revolving 364 Day Lenders have timely consented to the Extension Option). On the date the Extension Option becomes effective, Schedule I hereto shall be deemed amended to accurately reflect the Revolving 364 Day Commitments of the Revolving 364 Day Lenders then in existence and the Administrative Agent shall promptly deliver a copy of such amended Schedule I to each Lender and the Borrower. (b) Conversion Option. Subject to the terms of this subsection 2.5(b), whether or not the Extension Option is utilized, the Borrower shall be entitled as of the Revolving 364 Day Termination Date to convert the principal amount of any or all Revolving 364 Day Loans (but not any obligations in respect of any Letters of Credit) outstanding as of the Revolving 364 29 Day Termination Date into Term Loans so long as each of the following conditions are met as of the effective date of such conversion to the satisfaction of the Administrative Agent (the "Conversion Option"): (i) each of the conditions precedent set forth in subsection 5.2 of this Agreement shall be satisfied, (ii) not later than five (5) Business Days before the Revolving 364 Day Termination Date, all Letters of Credit shall have terminated and/or been released and canceled to the satisfaction of the Issuing Lender and the Administrative Agent and all outstanding L/C Obligations in respect of any Letters of Credit shall have been paid in full in cash or cash collateralized on terms deemed satisfactory by the Administrative Agent and the Issuing Lender and (iii) not later than five (5) days before the Revolving 364 Day Termination Date, the Borrower shall have provided the Administrative Agent (for distribution to each Lender) (x) written notice of the Borrower's desire to exercise the Conversion Option, (y) a certificate of a Responsible Officer of the Borrower specifying the aggregate amount of Revolving 364 Day Loans to be paid in full and the amount of such Loans which will be converted to Term Loans, in each case, on the Revolving 364 Day Termination Date and certifying that all conditions precedent to exercise of the Conversion Option are satisfied and will remain satisfied on the Revolving 364 Day Termination Date and (z) Term Notes in the form of Exhibit A-2 hereto for each Lender that requests a Term Note pursuant to subsection 2.5(g)(ii) in the amount of each such Lender's respective Revolving 364 Day Loans which are to be converted into Term Loans of such Lender. If the Conversion Option is exercised, the Term Loans shall be repaid by the Borrower in nine (9) consecutive quarterly installments commencing on March 31, 2001, by funding on each amortization payment date set forth below an amount necessary to cause the aggregate principal amount of Term Loans outstanding on any such date to not exceed an amount equal to the product of (x) the "Applicable Percentage" set forth opposite such amortization payment date multiplied by (y) the aggregate amount of Revolving 364 Day Commitments of all Lenders in existence on the Revolving 364 Day Termination Date (the "Applicable Converted Commitment"):
Applicable Percentage of the Amortization Payment Date Applicable Converted Commitment ------------------------- ------------------------------- 3/31/01 90.0% 6/30/01 80.0% 9/30/01 70.0% 12/31/01 60.0% 3/31/02 50.0% 6/30/02 40.0% 9/30/02 30.0% 12/31/02 20.0% 3/31/03 0.0%
provided that the scheduled installments of principal of the Term Loans set forth above shall be reduced in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with subsection 2.6 (as provided in such subsection); and provided further that the Term Loans and all other amounts owed hereunder with respect to the Term Loans shall be paid 30 in full no later than March 31, 2003, and the final installment payable by the Borrower in respect of the Term Loans on such date shall be in an amount, if such amount is different from that specified above, sufficient to repay all amounts owing by the Borrower under this Agreement with respect to the Term Loans. (c) Replacement of Nonconsenting Lenders. If any Revolving 364 Day Lender declines to consent or fails to timely indicate its consent to the exercise by Borrower of the Extension Option and the Extending Lenders hold more than 50% of the Revolving 364 Day Commitments, such Lender shall be deemed a Nonconsenting Lender and be subject to replacement in accordance with the terms of subsection 2.17 hereof. (d) Payments on Revolving 364 Day Loans. Subject to the exercise of the Conversion Option in accordance with the terms of subsection 2.5(b), the Borrower hereby unconditionally promises to pay to the Administrative Agent on the Revolving 364 Day Termination Date (or such earlier date on which the Loans become due and payable pursuant to Section 8) for the account of each Revolving 364 Day Lender the then unpaid principal amount of each Revolving 364 Day Loan of such Lender. (e) Interest. The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date such Loans are made until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.9. (f) Recording. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (g) Loan Accounts and Register; Notes. (i) The Loans made by, and the Commitments of, each Lender shall be evidenced by one or more loan accounts ("Loan Accounts") maintained by such Lender and by the Register maintained by the Administrative Agent in the ordinary course of business. The Register maintained by the Administrative Agent shall, in the event of a discrepancy between the entries in the Administrative Agent's books and any Lender's books relating to such matters, be controlling and, absent manifest error, shall be conclusive as to the amount of the Loans made by the Lender to the Borrower, the interest and payments thereon and any other amounts owing in respect of this Agreement. The Borrower hereby designates the Administrative Agent to serve as the Borrower's agent, solely for purposes of this subsection 2.5(g) and subsection 10.6, to maintain the Register on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this subsection 2.5(g) and subsection 31 10.6 (other than any losses, claims, damages and liabilities to the extent incurred by reason of the gross negligence or willful misconduct of the Administrative Agent). (ii) If requested by any Lender, the Borrower shall execute and deliver to such Lender (and deliver a copy thereof to the Administrative Agent) one or more promissory notes evidencing the Loans owing to such Lender pursuant to this Agreement in accordance with subsection 2.5(i). (h) Prima Facie Evidence. The entries made in the Register and the Loan Accounts of each Lender maintained pursuant to subsection 2.5(g) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such Loan Account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement. For the avoidance of doubt, the existence or non-existence of any Note representing any Obligations owing to any Lender hereunder shall not affect the existence, amount, validity or enforceability of such Obligations, which in all events shall be absolute and unconditional. (i) Notes. The Borrower agrees that the Borrower will execute and deliver to each Lender that requests any such Note pursuant to subsection 2.5(g)(ii), a promissory note of the Borrower evidencing the Revolving 364 Day Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate insertions as to date and principal amount (a "Revolving 364 Day Note"). 2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments. (a) Subject to subsections 2.12 and 2.16, the Borrower may at any time and from time to time prepay any Loans, in whole or in part, without premium or penalty, upon irrevocable notice to the Administrative Agent prior to 11:00 A.M., New York City time, three Business Days prior to the date of prepayment in the case of Eurodollar Loans or on any Business Day in the case of Base Rate Loans, specifying the date and amount of prepayment, the Type of Loan to be prepaid (which Loans shall be prepaid on a pro rata basis among the applicable Lenders) and whether the prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of any such notice, the Administrative Agent shall promptly notify each applicable Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to subsection 2.16. Partial prepayments shall be in an aggregate principal amount of $2,000,000 or a whole multiple of $100,000 in excess thereof. In the event of any voluntary prepayment of the Term Loans, such voluntary prepayment shall be deemed applied to the next scheduled amortization payment(s) as described in subsection 2.5(b) (rather than be applied in inverse order of maturity). 32 (b) (i) If, subsequent to the Closing Date, Holdings or any of its Subsidiaries shall incur or permit the incurrence of any Indebtedness (other than Indebtedness permitted pursuant to subsection 7.2), 100% of the Net Proceeds thereof shall be promptly ratably applied toward the prepayment of the Loans, the Facility A Loans and the Facility C Loans and permanent reduction of the Commitments, the Facility A Commitments and the Facility C Commitments as set forth in clause (iv) of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to permit any Indebtedness not permitted by subsection 7.2. (ii) If, subsequent to the Original Closing Date, Holdings or any of its Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net Proceeds, subject to the Applicable Holdback (defined below) shall be promptly and ratably applied toward the prepayment of the Loans, the Facility A Loans and the Facility C Loans and permanent reduction of the Commitments, the Facility A Commitments and the Facility C Commitments as set forth in clause (iv) of this subsection 2.6(b); provided that Net Proceeds from any Asset Sales shall not be required to be so applied to the extent that such Net Proceeds are used by the Borrower or such Subsidiary to acquire assets to be employed in the business of the Borrower or its Subsidiaries within 365 days of receipt thereof, but if such Net Proceeds, subject to the Applicable Holdback (as defined below), are not so used, 100% of the amount of such Net Proceeds not so used shall be applied toward the prepayment of the Loans and the permanent reduction of the Commitments as set forth in clause (iv) of this subsection 2.6(b) on the earlier of (x) the 366th day after receipt of such Net Proceeds and (y) the date on which the Borrower has determined that such Net Proceeds shall not be so used. As used herein, "Applicable Holdback" shall mean an amount of Net Proceeds not in excess of $20,000,000 derived from any Asset Sales occurring since the Original Closing Date that has not been applied toward the prepayment of Loans and the permanent reduction of the Commitments as set forth in clause (iv) of subsection 2.6(b) which Borrower and/or its applicable Subsidiary may retain and not apply as a mandatory prepayment without the requirement of utilizing the same to acquire assets to be employed in the business of the Borrower or such applicable Subsidiary; provided, that if any Event of Default shall have occurred and be continuing, the Applicable Holdback amount shall be automatically reduced to zero unless and until such Event of Default is acknowledged in writing by the Required Lenders (or all the Lenders in cases where the unanimous consent of the Lenders is required) as cured or waived. (iii) [Intentionally Omitted] (iv) Except during any period in which an Event of Default has occurred and is continuing, any mandatory prepayments required by this subsection 2.6 shall be applied ratably to the outstanding principal amount of Facility A Loans, Facility C Loans and Loans, with a corresponding ratable permanent reduction of the Facility A Commitments, the Facility C Commitments and the Revolving 364 Day Commitments (or, if applicable, the Term Loans on a pro rata basis to reduce the unpaid scheduled installments of principal of the Term Loans in inverse order of maturity). Revolving 364 33 Day Commitment, Facility A Commitment and the Facility C Commitment reductions made pursuant to subsections 2.6(b)(i) and (ii) hereof (and the corresponding subsections of the Facility A Credit Agreement and the Facility C Credit Agreement) shall be applied to each Lender's respective Revolving 364 Day Commitment, each Facility A Lender's Facility A Commitment and/or each Facility C Lender's Facility C Commitment, as applicable, on a pro rata basis and shall reduce permanently such Commitments, Facility A Commitments and Facility C Commitments. At any time that an Event of Default has occurred and is continuing, all mandatory prepayments shall be applied in accordance with the terms of subsection 2.12 hereof (and the corresponding subsection of the Facility A Credit Agreement and the Facility C Credit Agreement). Mandatory prepayments shall not be subject to any minimum amount requirement. (v) If after giving effect to (i) any reduction of the Revolving 364 Day Commitments under subsection 2.4, 2.5 or 2.6 or (ii) any recalculation of the Exchange Rate pursuant to subsection 3.9, the aggregate outstanding principal amount of Revolving 364 Day Loans plus the aggregate outstanding amount of L/C Obligations shall exceed the aggregate amount of the Revolving 364 Day Commitments, such reduction or recalculation shall be accompanied by prepayment in the amount of such excess to be applied to the Revolving 364 Day Loans; provided that if the aggregate principal amount of Revolving 364 Day Loans then outstanding is less than the amount of such excess (because Letters of Credit constitute a portion of such excess), the Borrower shall immediately, without notice or demand, to the extent of the balance of such excess, replace outstanding Letters of Credit and/or deposit an amount (but in no event greater than such balance) in a cash collateral account opened by the Administrative Agent for the benefit of the Revolving 364 Day Lenders (such deposit to be in Dollars with respect to Domestic L/Cs and the applicable Alternative Currency with respect to Foreign L/Cs). The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the L/C Participants in such Letters of Credit, a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement and the other Credit Documents. Any amounts deposited in such accounts shall be released to the Borrower on any Calculation Date on which the aggregate outstanding principal amount of Revolving 364 Day Loans plus the aggregate outstanding amount of L/C Obligations equals or is less than the aggregate amount of the Revolving 364 Day Commitments, provided that no Default or Event of Default has occurred and is continuing. 2.7 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans, by giving the Administrative Agent prior irrevocable notice of such election at or before 11:00 A.M. New York City time, on the Business Day immediately preceding the date of the proposed conversion and of the amount and Type of Loan to be converted, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election at 34 or before 11:00 A.M., New York City time, on the third Business Day immediately preceding the date of the proposed conversion and of the amount and Type of Loan to be converted. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each applicable Lender thereof. All or any part of outstanding Eurodollar Loans and Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and is then continuing and (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Termination Date with respect to such Loan. (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans and of the amount and Type of Loan to be converted, provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is then continuing or (ii) after the date that is one month prior to the Termination Date with respect to such Loan and provided, further, that if the Borrower shall fail to give such notice or if such continuation is not permitted such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. (c) All notices given by Borrower under this subsection 2.7 may be made by telephonic notice promptly confirmed in writing. 2.8 Minimum Amounts and Maximum Number of Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000 in excess thereof; provided that the Borrower may nevertheless borrow amounts in any Eurodollar Tranche below such minimum amounts solely for the purpose of (i) converting Revolving 364 Day Loans into Term Loans on the Revolving 364 Day Termination Date, (ii) repaying Revolving 364 Day Loans owing to any Nonconsenting Lenders on the Revolving 364 Day Termination Date or (iii) funding any scheduled amortization payment pursuant to subsection 2.5(b) in respect of any Term Loans then outstanding. All Loans hereunder may be converted or continued into Base Rate Loans without reference to the minimum principal amount requirements for new Base Rate borrowings set forth in subsection 2.2 above. In no event shall the number of outstanding Eurodollar Tranches under this Agreement plus the number of outstanding Facility A Eurodollar Tranches and Facility C Eurodollar Tranches exceed 20 at any time. 2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin. 35 (b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin. (c) If all or a portion of (i) any principal of any Loan, (ii) any interest payable thereon, (iii) any commitment fee or (iv) any other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), the principal of the Loans and any such overdue interest, commitment fee or other amount shall bear interest at a rate per annum which is (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of any such overdue interest, commitment fee or other amount, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such overdue principal, interest, commitment fee or other amount is paid in full (as well after as before judgment). (d) Interest shall be payable with respect to each Loan in arrears on each Interest Payment Date and on the Termination Date with respect to such Loan, provided that interest accruing pursuant to paragraph (c) of this subsection shall be payable from time to time on demand. 2.10 Computation of Interest and Fees. (a) Interest on Base Rate Loans and fees shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed; all other interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.9(a) or (c). 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the eurodollar market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or 36 (b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be converted to or continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the first day of such Interest Period, to Base Rate Loans. Until such notice has been withdrawn in writing by the Administrative Agent (which the Administrative Agent agrees to do when the Administrative Agent has determined, or has been instructed by the Required Lenders that, the circumstances that prompted the delivery of such notice no longer exist), no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans. 2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Revolving 364 Day Lenders hereunder, each payment by the Borrower on account of any commitment fee hereunder and any reduction of the Revolving 364 Day Commitments of Revolving 364 Day Lenders shall be made pro rata according to the respective Commitment Percentages of the Revolving 364 Day Lenders. Except during any period in which an Event of Default has occurred and is continuing, each payment (including each prepayment) by the Borrower on account of principal of and interest on any Term Loans and/or the Revolving 364 Day Loans, and any application by the Administrative Agent of the proceeds of any Collateral, shall be made pro rata according to the respective outstanding principal amounts of such Loans then held by the Lenders. All payments (including prepayments) to be made by the Borrower hereunder in respect of any Loan, whether on account of principal, interest, Reimbursement Obligations (whether in respect of Domestic L/Cs or Foreign L/Cs), fees, expenses or otherwise, shall be made without set off or counterclaim and shall be made prior to 11:00 A.M., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders with respect to such Loans, at the Administrative Agent's office specified in subsection 10.2, in Dollars and in immediately available funds; provided, that, with respect to any Reimbursement Obligations of the Borrower arising from the presentment to the Issuing Lender of a draft under a Foreign L/C, the Borrower may make payment in the applicable Alternative Currency if such payment is received by the Issuing Lender on the date such draft is paid by the Issuing Lender. At any time that an Event of Default has occurred and is continuing, all payments (including prepayments) made by Borrower hereunder and any application by the Administrative Agent of the proceeds of any Collateral and/or payment under any Guarantee shall be applied in the following order: (1) to the ratable payment of all amounts due and owing by the Borrower pursuant to subsection 10.5 of this Agreement, subsection 10.5 of the Facility A Credit Agreement or subsection 10.5 or the Facility C Credit Agreement to the Agents, the Facility A Agents and/or the Facility C Agents and, after 37 payment in full thereof, to any other Lender, Facility A Lender or Facility C Lender; (2) to the ratable payment of all interest, fees and commissions due and owing under this Agreement, the Facility A Credit Agreement or the Facility C Credit Agreement or to the Agents, the Facility C Agents, the Facility A Agents, the Swing Line Lender, any Lender, any Facility A Lender or any Facility C Lender; (3) to the ratable payment (or cash collateralization) of the aggregate outstanding principal amount of Loans, Facility A Loans and Facility C Loans and the aggregate L/C Obligations and Facility A L/C Obligations; and (4) to the ratable payment of all other obligations of the Borrower to the Agents, the Facility A Agents, the Facility C Agents, the Swing Line Lender, any Lender, any Facility A Lender or any Facility C Lender under any Credit Document, Facility A Credit Document or Facility C Credit Document. For purposes of applying payments and proceeds distributed under clause 3 above, each Lender will first apply such amounts to all outstanding Loans of such Lender before such amounts will be held as cash collateral for L/C Obligations in which such Lender is a L/C Participant. The Administrative Agent, the Facility A Administrative Agent and the Facility C Administrative Agent shall ratably distribute such payments to the applicable Lenders, the Facility A Lenders and the Facility C Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its Commitment Percentage of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Borrower. The failure of any Lender to make any Loan to be made by it shall not relieve any other Lender of its obligation hereunder to make its Loan on such Borrowing Date. 2.13 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be 38 canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 2.16. If circumstances subsequently change so that any affected Lender shall determine that it is no longer so affected, such Lender will promptly notify the Borrower and the Administrative Agent, and upon receipt of such notice, the obligations of such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans shall be reinstated. 2.14 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Note, any Letter of Credit, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by subsection 2.15 and changes in the rate of net income taxes (including branch profits taxes and minimum taxes) or franchise taxes (imposed in lieu of net income taxes) of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or issuing or participating in Letters of Credit or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender upon written demand such additional amount or amounts as will compensate such Lender for such increased cost or reduced amount receivable; provided that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, in its reasonable discretion, in any legal, economic or regulatory manner) to designate a different Eurodollar lending office if the making of such designation would allow the Lender or its Eurodollar lending office to continue to perform its obligations to make Eurodollar Loans or to continue to fund or maintain Eurodollar Loans and avoid the need for, or reduce the amount of, 39 such increased cost. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower, through the Administrative Agent, of the event by reason of which it has become so entitled. If the Borrower so notifies the Administrative Agent within five Business Days after any Lender notifies the Borrower of any increased cost pursuant to the foregoing provisions of this Section, the Borrower may convert all Eurodollar Loans of such Lender then outstanding into Base Rate Loans in accordance with the terms hereof. Each Lender shall notify the Borrower within 120 days after it becomes aware of the imposition of such costs; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder or under any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a prompt written request therefor, the Borrower shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each Lender shall notify the Borrower within 120 days after it becomes aware of the imposition of such additional amount or amounts; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amount or amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (c) If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection, showing the calculation thereof in reasonable detail, submitted by such Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.15 Taxes. (a) Except as provided in this subsection 2.15, all payments made by the Borrower under this Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter 40 imposed, levied, collected, withheld or assessed by any Governmental Authority ("Taxes"), excluding Taxes on net income (including, without limitation, branch profits taxes and minimum taxes) and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender as a result of a present or former connection between any Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to any Agent or any Lender hereunder or under any Note, the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof with respect to any Taxes that are imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement or that are attributable to such Lender's failure to comply with the requirements of paragraph (b) of this subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter, the Borrower shall send to the relevant Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt, if any, received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the relevant Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the Lenders for any incremental taxes, interest or penalties that may become payable by any Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender, Assignee and Participant that is not a citizen or resident of the United States of America, a corporation, partnership created or organized in or under the laws of the United States of America, any estate that is subject to U.S. federal income taxation regardless of the source of its income or any trust which is subject to the supervision of a court within the United States and the control of a United States fiduciary as described in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) on or before the date on which it becomes a party to this Agreement (or, in the case of a Participant, on or before the date on which such Participant purchases the related participation) either: (A) two duly completed and signed copies of either Internal Revenue Service Form W-8 ECI (relating to such Non-U.S. Lender and entitling it to a complete exemption from withholding of U.S. Taxes on all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents) or Form 41 W-8 BEN (relating to all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents), or successor and related applicable forms, as the case may be; or (B) in the case of a Non-U.S. Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and that does not comply with the requirements of clause (A) hereof, (x) a statement in the form of Exhibit E (or such other form of statement as shall be reasonably requested by the Borrower from time to time) to the effect that such Non-U.S. Lender is eligible for a complete exemption from withholding of U.S. Taxes under Code Section 871(h) or 881(c), and (y) two duly completed and signed copies of Internal Revenue Service Form W-8 or successor and related applicable form (it being understood and agreed that no Participant and, without the prior written consent of the Borrower described in clause (B) of the proviso to the first sentence of subsection 10.6(c), no Assignee shall be entitled to deliver any forms or statements pursuant to this clause (B), but rather shall be required to deliver forms pursuant to clause (A) of this subsection 2.15(b)). Further, each Non-U.S. Lender agrees (i) to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two further duly completed and signed copies of such Forms W-8 ECI or W-8 BEN, as the case may be, or successor and related applicable forms, on or before the date that any such form expires or becomes obsolete and promptly after the occurrence of any event requiring a change from the most recent form(s) previously delivered by it to the Borrower (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) in accordance with applicable U.S. laws and regulations and (ii) in the case of a Non-U.S. Lender that delivers a statement in the form of Exhibit E (or such other form of statement as shall have been requested by the Borrower), to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such statement on an annual basis on the anniversary of the date on which such Non-U.S. Lender became a party to this Agreement and to deliver promptly to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such additional statements and forms as shall be reasonably requested by the Borrower from time to time unless, in any such case, any change in law or regulation has occurred subsequent to the date such Lender became a party to this Agreement (or in the case of a Participant, the date on which such Participant purchased the related participation) which renders all such forms inapplicable or which would prevent such Lender (or Participant) from properly completing and executing any such form with respect to it and such Lender promptly notifies the Borrower and the Administrative Agent (or, in the case of a Participant, the Lender from which the related participation shall have been purchased) if it is no longer able to deliver, or if it is required to withdraw or cancel, any form or statement previously delivered by it pursuant to this subsection 2.15(b). Each Non-U.S. Lender agrees to indemnify and hold harmless the Borrower from and against any taxes, penalties, interest or other costs or losses (including, without limitation, reasonable attorneys' fees and expenses) incurred or payable by the Borrower as a result of the failure of the Borrower to comply with its obligations to deduct or withhold any U.S. Taxes from any payments made 42 pursuant to this Agreement to such Non-U.S. Lender or the Administrative Agent which failure resulted from the Borrower's reliance on any form, statement, certificate or other information provided to it by such Non-U.S. Lender pursuant to clause (B) or clause (ii) of this subsection 2.15(b). The Borrower hereby agrees that for so long as a Non-U.S. Lender complies with this subsection 2.15(b), the Borrower shall not withhold any amounts from any payments made pursuant to this Agreement to such Non-U.S. Lender, unless the Borrower reasonably determines that it is required by law to withhold or deduct any amounts from any payments made to such Non-U.S. Lender pursuant to this Agreement. A Non-U.S. Lender shall not be required to deliver any form or statement pursuant to the immediately preceding sentences in this subsection 2.15(b) that such Non-U.S. Lender is not legally able to deliver (it being understood and agreed that the Borrower shall withhold or deduct such amounts from any payments made to such Non-U.S. Lender that the Borrower reasonably determines are required by law and that payments resulting from a failure to comply with this paragraph (b) shall not be subject to payment or indemnity by the Borrower pursuant to subsection 2.15(a)). If any Credit Party other than the Borrower makes any payment to any Non-U.S. Lender under any Credit Document, the foregoing provisions of this subsection 2.15 shall apply to such Non-U.S. Lender and such Credit Party as if such Credit Party were the Borrower (but a Non-U.S. Lender shall not be required to provide any form or make any statement to any such Credit Party unless such Non-U.S. Lender has received a request to do so from such Credit Party and has a reasonable time to comply with such request). (c) If a Lender shall become aware that it is entitled to receive a refund (whether by way of a direct payment or by offset) in respect of a Non-Excluded Tax paid by the Borrower, which refund, in the good faith judgment of such Lender, is allocable to such payment made pursuant to this Section, it shall promptly notify the Borrower of the availability of such refund and shall, within 30 days after the receipt of a request from the Borrower, apply for such refund at the Borrower's sole expense. If any Lender receives such refund (as described in the preceding sentence), it shall repay the amount of such refund (together with any interest received thereon) to the Borrower if all the payments due under this Section has been paid in full. 2.16 Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto (but excluding loss of margin). Such indemnification under this subsection 2.16 may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for 43 herein (but excluding loss of margin) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Each Lender claiming any payment pursuant to this subsection 2.16 shall do so by giving notice thereof to the Borrower and the Administrative Agent (showing calculation of the amount claimed in reasonable detail) within 60 Business Days after a failure to borrow, convert or continue Eurodollar Loans, or to prepay, after notice or after a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period therefor. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.17 Replacement of Lenders. If at any time (a) the Borrower becomes obligated to pay additional amounts described in subsections 2.13, 2.14 or 2.15 as a result of any condition described in such subsections, (b) any Lender ceases to make Eurodollar Loans pursuant to subsection 2.13, (c) any Lender becomes insolvent and its assets become subject to a receiver, liquidator, trustee, custodian or other Person having similar powers or (d) any Lender becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may, on five (5) Business Days' prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall) assign pursuant to subsection 10.6 all of its rights and obligations under this Agreement to a Lender or other entity selected by the Borrower and acceptable to the Administrative Agent for a purchase price equal to the outstanding principal amount of such Lender's Loans and all accrued interest and fees and other amounts payable hereunder (including amounts payable under subsection 2.16 as though such Loans were being paid instead of being purchased); provided that (i) the Borrower shall have no right to replace the Administrative Agent, (ii) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender, (iii) in the event of a replacement of a Nonconsenting Lender or a Lender to which the Borrower becomes obligated to pay additional amounts under one of the subsections described in clause (a) above, in order for the Borrower to be entitled to replace such a Lender, such replacement must take place no later than 180 days after (A) the date the Nonconsenting Lender shall have notified the Borrower and the Administrative Agent of its failure to agree to any requested consent, waiver or amendment or (B) the Lender shall have demanded payment of additional amounts under one of the subsections described in clause (a) above, as the case may be, and (iv) in no event shall the Lender hereby replaced be required to pay or surrender to its replacement Lender or other entity any of the fees received by such Lender hereby replaced pursuant to this Agreement. In the case of a replacement of a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to this subsection 2.17, the Borrower shall pay such additional amounts to such Lender prior to such Lender being replaced and the payment of such additional amounts shall be a condition to the replacement of such Lender. In the event that (x) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Credit Documents or to agree to any amendment thereto or consent to the Extension Option, (y) the consent, waiver or amendment in question requires the agreement of all Lenders in accordance with the terms of subsection 10.1 or relates to a request to exercise the Extension Option under subsection 2.5(a) and (z) the Required Lenders have agreed to such 44 consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender." 2.18 Certain Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the non-refundable fees at the times and in the amounts as set forth in that certain fee letter between the Administrative Agent and the Borrower dated on or about August 11, 1998. 2.19 Certain Rules Relating to the Payment of Additional Amounts. (a) Upon the request, and at the expense, of the Borrower, each Lender to which the Borrower is required to pay any additional amount pursuant to subsection 2.14 or 2.15 shall reasonably afford the Borrower the opportunity to contest, and reasonably cooperate with the Borrower in contesting, the imposition of any Non-Excluded Taxes or other amounts giving rise to such payment; provided that (i) such Lender shall not be required to afford the Borrower the opportunity to so contest unless the Borrower shall have confirmed in writing to such Lender its obligation to pay such amounts pursuant to this Agreement and (ii) the Borrower shall reimburse such Lender for its reasonable attorneys' and accountants' fees and disbursements incurred in so cooperating with the Borrower in contesting the imposition of such Non-Excluded Taxes. (b) Each Lender agrees that if it makes any demand for payment under subsection 2.14 or 2.15(a), or if any adoption or change of the type described in subsection 2.13 shall occur with respect to it, it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its reasonable discretion) to designate a different lending office if the making of such a designation would allow the Lender to continue to make and maintain Eurodollar Loans and would reduce or obviate the need for the Borrower to make payments under subsection 2.14 or 2.15(a), or would eliminate or reduce the effect of any adoption or change described in subsection 2.13. SECTION 3. LETTERS OF CREDIT 3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the Revolving 364 Day Lenders set forth in subsection 3.4(a), agrees to issue letters of credit ("Letters of Credit") for the account of the Borrower on any Business Day during the Revolving 364 Day Commitment Period in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (x) the L/C Obligations would exceed the L/C Commitment or (y) the Available Commitment with respect to Revolving 364 Day Loans of all Revolving 364 Day Lenders then outstanding would be less than zero. 45 (b) Each Domestic L/C shall (i) be denominated in Dollars, (ii) be a Performance L/C or a Financial L/C issued to support obligations of the Borrower or any of its Subsidiaries, contingent or otherwise, or be a commercial letter of credit for the purchase of goods and (iii) expire no later than the fifth Business Day prior to the Revolving 364 Day Termination Date. (c) Each Foreign L/C shall (i) be denominated in an Alternative Currency, (ii) be a Performance L/C or a Financial L/C issued to support obligations of the Borrower or any of its Subsidiaries, contingent or otherwise, or be a commercial letter of credit for the purchase of goods, and (iii) expire no later than the fifth Business Day prior to the Revolving 364 Day Termination Date. For purposes of this Agreement, the amount deemed outstanding under each Foreign L/C at any time, and the amount of the Borrower's Reimbursement Obligations under subsection 3.5 for any amounts paid by the Issuing Lender in connection with any Foreign L/C, shall be the Dollar Equivalent, as determined on the most recent Calculation Date, of (x) such Letter of Credit or (y) the Reimbursement Amount (as defined in Subsection 3.5(a)), as applicable. (d) Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, Domestic L/Cs shall also be subject to the laws of the State of New York. (e) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if (i) such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law or any policies of the Issuing Lender or (ii) in the case of any Foreign L/C, it has determined that it cannot provide such Letter of Credit in the applicable Alternative Currency. 3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit at any time prior to the fifth Business Day prior to the Revolving 364 Day Termination Date by delivering to the Issuing Lender with a copy to the Administrative Agent at its address for notices specified herein an Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower and the Administrative Agent (with copies for each Lender) promptly following the issuance thereof. 46 3.3 Fees, Commissions and Other Charges (a) The Borrower shall pay to the Administrative Agent, for the account of the Issuing and the L/C Participants, a letter of credit fee with respect to each Letter of Credit, computed for the period from and including the date of issuance of such Letter of Credit to the expiration date of such Letter of Credit at a rate per annum equal to (i) in the case of any such Letter of Credit issued as a Performance L/C, one-half (1/2) of the Applicable Margin then in effect for Eurodollar Loans, of the Dollar Equivalent of the aggregate face amount of such Letters of Credit outstanding and (ii) in the case of any other Letter of Credit (except for the type described in clause (i) above), the Applicable Margin then in effect for Eurodollar Loans, of the Dollar Equivalent of the aggregate face amount of such Letters of Credit outstanding, payable, in each such case, in arrears on each L/C Fee Payment Date and on the Termination Date; provided, that, with respect to any Foreign L/C, the Dollar Equivalent of the face amount of such Letter of Credit shall be recalculated on each Calculation Date during the period that such Letter of Credit is outstanding. Such fees shall be payable to the Administrative Agent to be shared ratably among the Revolving 364 Day Lenders in accordance with their respective Commitment Percentages with respect to Revolving 364 Day Loans. In addition, the Borrower shall pay to the Issuing Lender, for its sole account, a fee equal to 0.125% per annum of the Dollar Equivalent of the aggregate face amount of all outstanding Letters of Credit payable quarterly in arrears on each L/C Fee Payment Date and on the Revolving 364 Day Termination Date; provided, that, with respect to any Foreign L/C, the Dollar Equivalent of the face amount of such Letter of Credit shall be recalculated on each Calculation Date during the period that such Letter of Credit is outstanding. (b) In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit. (c) The Administrative Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and the relevant L/C Participants all fees and commissions received by the Administrative Agent for their respective accounts pursuant to this subsection. 3.4 L/C Participation. (a) The Issuing Lender irrevocably agrees to sell and hereby sells to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage with respect to Revolving 364 Day Loans from time to time in effect in the Issuing Lender's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this 47 Agreement or any such reimbursement payment received by the Issuing Lender is avoided or required to be returned in accordance with applicable law, such L/C Participant shall pay to the Issuing Lender upon demand in Dollars at the Issuing Lender's address for notices specified herein an amount equal to such L/C Participant's then Commitment Percentage with respect to Revolving 364 Day Loans of the Dollar Equivalent of the amount of such draft (determined on the date such draft is paid), or any part thereof, which is not so indefeasibly reimbursed; provided that, if such demand is made prior to 11:00 A.M., New York City time, on a Business Day, such L/C Participant shall make such payment to the Issuing Lender prior to the end of such Business Day and otherwise such L/C Participant shall make such payment on the next succeeding Business Day. (b) If any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to subsection 3.4(a) in respect of any portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate, as quoted by the Issuing Lender, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to subsection 3.4(a) is not in fact made available to the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans hereunder. A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with subsection 3.4(a), the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender will, if such payment is received prior to 11:00 A.M., New York City time, on a Business Day, distribute to such L/C Participant its pro rata share thereof prior to the end of such Business Day and otherwise the Issuing Lender will distribute such payment on the next succeeding Business Day; provided, however, that in the event that any such payment received by the Issuing Lender and distributed to the L/C Participants shall be required to be returned by the Issuing Lender, each such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it. 3.5 Reimbursement Obligation of the Borrower. (a) The Borrower agrees to reimburse the Issuing Lender on the same Business Day on which the Issuing Lender notifies the Borrower of the date and amount of a 48 draft presented under any Letter of Credit and paid by the Issuing Lender provided such notice is received by 1:00 P.M., New York City time, on such Business Day, and the next Business Day if such notice is received after such time. The Issuing Lender shall provide notice to the Borrower on each Business Day on which a draft is presented indicating the Dollar Equivalent of the amount of (i) such draft so paid (and, in the case of a Foreign L/C, the amount of such draft so paid stated in the applicable Alternative Currency) and (ii) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment ((i) and (ii) collectively with any interest accruing pursuant to paragraph (b) below, the "Reimbursement Amount"). Each such payment shall be made to the Issuing Lender at its address for notices specified herein in lawful money of the United States of America and in immediately available funds; provided, that, with respect to any Reimbursement Obligations of the Borrower arising from the presentment to the Issuing Lender of a draft under a Foreign L/C, the Borrower may make payment in the applicable Alternative Currency if such payment is received by the Issuing Lender on the date such draft is paid by the Issuing Lender. (b) Interest shall be payable on the Dollar Equivalent of any and all amounts remaining unpaid by the Borrower under this subsection from the date a draft presented under any Letter of Credit is paid by the Issuing Lender until payment in full (i) at the rate which would be payable on any Loans that are Base Rate Loans at such time until such payment is required to be made pursuant to subsection 3.5(a), and (ii) thereafter, at the rate which would be payable on any Loans that are Base Rate Loans at such time which were then overdue. (c) For the avoidance of doubt, subject to the provisos in the third sentence of subsection 2.12(a) and the last sentence of subsection 3.5(a) of this Agreement, all payments due from the Borrower hereunder in respect of Foreign L/Cs (and Reimbursement Obligations in connection therewith) shall be made in Dollars as provided in subsection 2.12 of this Agreement. 3.6 Obligations Absolute. (a) The Borrower's obligations under subsection 3.5(a) shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrower may have or have had against the Issuing Lender, any L/C Participant or any beneficiary of a Letter of Credit. (b) The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower's Reimbursement Obligations under subsection 3.5(a) shall not be affected by, among other things, (i) the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged (unless the Issuing Lender has knowledge of such invalidity, fraud or forgery), (ii) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred, or (iii) any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. 49 (c) Neither the Issuing Lender nor any L/C Participant shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Lender's gross negligence or willful misconduct. (d) The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender or any L/C Participant to the Borrower. 3.7 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower and the Administrative Agent of the date and the Dollar Equivalent of the amount thereof (and, in the case of a Foreign L/C, the amount thereof stated in the applicable Alternative Currency). If any draft shall be presented for payment under any Letter of Credit, the responsibility of the Issuing Lender to the Borrower in connection with such draft shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment appear on their face to be in conformity with such Letter of Credit. 3.8 Application. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall govern and control. 3.9 Determination of Exchange Rate. On each Calculation Date with respect to each outstanding Foreign L/C, the Issuing Lender shall determine the Exchange Rate as of such Calculation Date with respect to the applicable Alternative Currency and shall promptly notify the Administrative Agent and the Borrower thereof and of the Dollar Equivalent of all Foreign L/Cs outstanding on such Calculation Date. The Exchange Rate so determined shall become effective on such Calculation Date and shall remain effective until the next succeeding Calculation Date. SECTION 4. REPRESENTATIONS AND WARRANTIES To induce the Agents, the Issuing Lender, and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and warrants to the Agents, the Issuing Lender, and each Lender that: 4.1 Financial Condition. (a) The following financial statements concerning Borrower and its Subsidiaries have been delivered to the Agents and the Lenders and have been prepared in accordance with GAAP consistently applied throughout the periods covered (except as disclosed 50 therein and except, with respect to unaudited financial statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended: (i) The audited consolidated balance sheets at December 31, 1998 and the related statements of income and cash flows of Borrower and its Subsidiaries for the fiscal year then ended, certified by PricewaterhouseCoopers L.L.P. (ii) The unaudited condensed consolidated balance sheet(s) at September 30, 1999 and the related statement(s) of income and cash flows of Borrower and its Subsidiaries for the fiscal quarter then ended. (b) The unaudited pro forma consolidated balance sheet of the Borrower and its consolidated Subsidiaries which has been delivered pursuant to subsection 5.1(o) has been prepared based on the best information available to the Borrower as of the date of delivery thereof and presents fairly on a pro forma basis the estimated financial position of the Borrower and its consolidated Subsidiaries, as at December 31, 1999, adjusted to give effect to the acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc., and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. 4.2 No Change. Since September 30, 1999 there has been no development, event or circumstance which has had or could reasonably be expected to have a Material Adverse Effect. 4.3 Corporate Existence; Compliance with Law. Each of Holdings, the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is, or will be on or before the date set forth in subsection 6.12, duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 4.4 Corporate Power; Authorization; Enforceable Obligations. Each of Holdings, the Borrower and its Subsidiaries has the corporate power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party and, in the case of the Borrower, to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of such Credit Documents. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is 51 required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents to which the Borrower and each other Credit Party is a party, except those referred to in subsections 4.17 and 6.13 and those set forth on Schedule 4.4. This Agreement has been, and each other Credit Document will be, duly executed and delivered on behalf of the Borrower and each other Credit Party. This Agreement constitutes, and each other Credit Document to which it is a party when executed and delivered will constitute, a legal, valid and binding obligation of each Credit Party thereto enforceable against each such Credit Party, as the case may be, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 4.5 No Legal Bar. Except as set forth on Schedule 4.5 or as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution, delivery and performance of each Credit Document, the borrowing and use of the proceeds of the Loans and the consummation of the transactions contemplated by the Credit Documents: (a) will not violate any Requirement of Law or any Contractual Obligation applicable to or binding upon Holdings, the Borrower or any Subsidiary of the Borrower or any of their respective properties or assets and (b) will not result in the creation or imposition of any Lien on any of its properties or assets pursuant to any Requirement of Law applicable to it or any of its Contractual Obligations, except for the Liens arising under the Pledge Agreements. 4.6 No Material Litigation Except as set forth on Schedule 4.6, no litigation by, investigation by, or proceeding of or before any arbitrator or any Governmental Authority is pending or, to the knowledge of the Borrower, overtly threatened by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues with respect to any Credit Document or any of the transactions contemplated hereby or thereby or which could reasonably be expected to have a Material Adverse Effect. 4.7 No Default. Neither Holdings, the Borrower nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and its Subsidiaries (i) has good record and insurable title in fee simple to, or a valid leasehold interest in, all its material real property, (ii) has good title to, or a valid leasehold interest in, all its other material property and (iii) none of such property in clauses (i) and (ii) is or shall be subject to any Lien except as permitted by subsection 7.3. 4.9 Intellectual Property. Holdings, the Borrower and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, technology, know-how and 52 processes necessary for the conduct of its business as currently conducted except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect (the "Intellectual Property"). To the best of the Borrower's knowledge, and except as set forth on Schedule 4.9, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any valid basis for any such claim which could reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by Holdings, the Borrower and its Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 4.10 Taxes. Except as set forth on Schedule 4.10, each of Holdings, the Borrower and its Subsidiaries has filed or caused to be filed all material tax returns which, to the knowledge of the Borrower, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 4.11 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. 4.12 ERISA. The Borrower has provided to the Agents a true and correct copy of all agreements, arrangements and understandings relating to the transfer of Plans from the Seller to the Borrower (the "Transfer Agreements"). The Transfer Agreements are in full force and effect and have not been waived or modified without the consent of the Agents (which shall not be unreasonably withheld) except to the extent any such waiver or modification, singly or in the aggregate, could not be reasonably expected to have a Material Adverse Effect. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Reportable Event has occurred with respect to any Single Employer Plan, all contributions required to be made with respect to a Plan have been timely made; none of the Borrower or any of its Subsidiaries nor any Commonly Controlled Entity has incurred any material liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any liability (including any indirect, contingent or secondary liability) under any of the foregoing Sections with respect to any Plan; no termination or, or institution of proceedings to terminate or appoint a trustee to administer, a Single Employer Plan has occurred; and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code (except that with respect to any Multiemployer Plan, such representation 53 is deemed made only to the knowledge of the Borrower). No "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA), extension of any amortization period (within the meaning of Section 412 of the Code) or Lien in favor of the PBGC or a Plan has arisen or has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan. As of the last annual valuation date prior to the date on which this representation is made or deemed made, the fair market value of the assets available for benefits under each Single Employer Plan did not exceed the actuarial present value of all accumulated benefit obligations under such Plan by more than $20,000,000, all as determined in accordance with Statement of Financial Accounting Standards No. 87. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan for which there is any outstanding liability, and neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made in an amount which would be reasonably likely to have a Material Adverse Effect. To the best knowledge of the Borrower, no such Multiemployer Plan is in Reorganization or Insolvent. 4.13 Investment Company Act; Other Regulations. None of the Borrower or any of its Subsidiaries is an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. None of the Borrower or any of its subsidiaries is not subject to regulation under any Federal or State statute or regulation (other than Regulation X of the Board of Governors of the Federal Reserve System) which limits its ability to incur Indebtedness. 4.14 Subsidiaries. The Subsidiaries of the Borrower and their respective jurisdictions of incorporation shall be as set forth on Schedule 4.14. 4.15 Purpose of Loans. The proceeds of the Loans shall be used by the Borrower (i) to pay fees and expenses related to the preparation and negotiation of this Agreement and the other Credit Documents and (ii) for general corporate and working capital purposes in the ordinary course of business of the Borrower and its Subsidiaries, including, without limitation, the making of Investments permitted under subsection 7.9. 4.16 Environmental Matters. Except insofar as any exception to any of the following, or any aggregation of such exceptions, is not reasonably likely to result in a Material Adverse Effect: (a) The facilities and properties owned, leased or operated Holdings, by the Borrower or any of its Subsidiaries (the "Properties") do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could reasonably be expected to give rise to liability under, any applicable Environmental Law. 54 (b) None of Holdings, the Borrower nor any of its Subsidiaries has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor does the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened. (c) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, any applicable Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability under, any applicable Environmental Law. (d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Borrower, threatened, under any Environmental Law to which Holdings, the Borrower or any Subsidiary is or, to the knowledge of the Borrower, will be named as a party or with respect to the Properties or the Business, 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 Properties or the Business. (e) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of Holdings, the Borrower or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably give rise to liability under any applicable Environmental Laws. (f) The Properties and all operations at the Properties are in compliance, and have in the last 3 years been in compliance, in all material respects with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any applicable Environmental Law with respect to the Properties or the business operated by Holdings, the Borrower or any of its Subsidiaries (the "Business") which could materially interfere with the continued operation of the Properties or materially impair the fair saleable value thereof. (g) Holdings, the Borrower and its Subsidiaries hold and are in compliance with all Environmental Permits necessary for their operations. 4.17 Collateral Documents. Upon execution and delivery thereof by the parties thereto, each Pledge Agreement will be effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the pledged stock described therein and, when stock certificates representing or constituting the pledged stock described therein are delivered to the Administrative Agent, together with undated stock powers executed in blank therefor, such security interest shall, subject to the existence of 55 Permitted Liens, constitute a perfected first lien on, and security interest in, all right, title and interest of the pledgor party thereto in the pledged stock described therein. 4.18 Accuracy and Completeness of Information. No fact is known to Holdings, the Borrower or any of its Subsidiaries which has had or could reasonably be expected to have a Material Adverse Effect, which has not been disclosed to the Lenders by Holdings, the Borrower or its Subsidiaries in writing prior to the date hereof. Neither Holdings, the Borrower nor any Subsidiary of the Borrower is aware of any material liability of the Borrower or any of its Subsidiaries which is not fully disclosed in the most recent financial statements delivered to the Agents and Lenders pursuant to subsections 4.1 and 6.1 hereto. 4.19 Labor Matters. There are no strikes pending or, to the Borrower's knowledge, overtly threatened against Holdings, the Borrower or any of its Subsidiaries which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The hours worked and payments made to employees of Holdings, the Borrower and each of its Subsidiaries (and their predecessors) have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law, except to the extent such violations could not, or in the aggregate, be reasonably expected to have a Material Adverse Effect. SECTION 5. CONDITIONS PRECEDENT 5.1 Conditions to Effectiveness. This Agreement shall not be effective until the following conditions precedent have been satisfied or waived in writing by the Administrative Agent and the Requisite Class Lenders: (a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, (ii) the Guarantees and (iii) the Pledge Agreements, in each case executed, duly acknowledged and delivered by duly authorized officers of each party thereto, with a counterpart or a conformed copy for each Lender. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the capital stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. (b) Fees and Expenses. The Agents, the Arrangers and the Lenders shall have received all fees, expenses and other consideration required to be paid on or before the Closing Date and all attorneys fees and disbursements incurred by the Agents in connection with this Agreement shall have been paid on or before the Closing Date. (c) Good Standing Certificates. The Administrative Agent shall have received certificates of good standing for each Credit Party issued by the Secretary of State (or other relevant governmental officers) of the jurisdiction of incorporation of each Credit Party. 56 (d) Consents, Authorizations and Filings, Etc. All consents, authorizations and filings, if any, required in connection with the execution, delivery and performance by the Credit Parties, and the validity and enforceability against the Credit Parties, of the Credit Documents to which any of them is a party, shall have been obtained or made, and such consents, authorizations and filings shall be in full force and effect, except such consents, authorizations and filings, the failure to obtain which would not have a Material Adverse Effect. (e) Insurance. The Lenders shall have received (i) a reasonably satisfactory schedule describing all insurance maintained by the Borrower and its Subsidiaries pursuant to subsection 6.5, and (ii) binders (or other customary evidence as to the obtaining and maintenance by the Borrower and its Subsidiaries of such insurance) for each policy set forth on such schedule insuring against casualty and other usual and customary risks. (f) Litigation. On the Closing Date, there shall be no actions, suits or proceedings pending or threatened against any Credit Party (a) with respect to this Agreement or any other Credit Document or any Transaction Document or the transactions contemplated hereby or thereby or (b) which the Agents or the Required Lenders shall determine could reasonably be expected to have a Material Adverse Effect. (g) Borrowing Certificate. IF ANY LOAN IS TO BE REQUESTED ON THE CLOSING DATE, the Administrative Agent shall have received, with a counterpart for each Lender, a certificate of the Borrower, dated the Closing Date, substantially in the form of Exhibit D, with appropriate insertions and attachments, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (h) Corporate Proceedings of the Borrower. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of the Borrower authorizing (i) the execution, delivery and performance of the Credit Documents to which it is a party, (ii) the borrowings contemplated hereunder, and (iii) the stock pledges pursuant to the Borrower Pledge Agreement, certified by the Secretary or an Assistant Secretary of the Borrower as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (i) Borrower Incumbency Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a Certificate of the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of the Borrower executing any Credit Document reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (j) Corporate Proceedings of Other Credit Parties. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and 57 substance satisfactory to the Administrative Agent, of the Board of Directors of each Credit Party (other than the Borrower) authorizing (i) the execution, delivery and performance of the Credit Documents to which it is a party, and (ii) the granting by it of the Liens created pursuant to the Pledge Agreements to which it is a party, certified by the Secretary or an Assistant Secretary of each such Credit Party as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (k) Credit Party Incumbency Certificates. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of each Credit Party (other than the Borrower), dated the Closing Date, as to the incumbency and signature of the officers of such Credit Party executing any Credit Document, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of each such Credit Party. (l) Corporate Documents. The Administrative Agent shall have received, with a counterpart for each Lender, true and complete copies of the certificate of incorporation and by-laws of each Credit Party, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the such Credit Party. (m) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender the executed legal opinion of each of Simpson Thacher and Bartlett, special counsel to the Credit Parties, and Christopher C. Cambria, Vice President - General Counsel and Secretary of the Borrower and counsel to the other Credit Parties, substantially in the form of Exhibits C-1 and C-2, respectively. Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Agents may reasonably require. (n) Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificates representing the shares pledged pursuant to each of the Pledge Agreements together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof. (o) Pro Forma Financials. The Lenders shall have received a reasonably satisfactory unaudited pro forma consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 1999 which shall present fairly, in all material respects, on a pro forma basis, the estimated financial condition of the Borrower and its Subsidiaries as of such date, as adjusted to give effect to the acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc., and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. (p) Projections. Each Lender shall have received financial projections of the Borrower in form and substance reasonably satisfactory to the Agents prepared by the Borrower. 58 (q) No Default. No Default or Event of Default shall have occurred and be continuing. (r) Facility A Credit Agreement. All conditions set forth in clauses (a) through (q) of subsection 5.1 of the Facility A Credit Agreement shall have been satisfied or waived in writing by the Facility A Lenders required to affect a waiver of such condition. (s) Facility C Credit Agreement. All conditions set forth in clauses (a) through (q) and (t) through (w) of subsection 5.1 of the Facility C Credit Agreement shall have been satisfied or waived in writing by the Facility C Lenders required to affect a waiver of such condition. 5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit (including the issuance of any Letter of Credit) requested to be provided by it on any date (including, without limitation, its initial Loan and Letter(s) of Credit) is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by any Credit Party in or pursuant to the Credit Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except for any representation and warranty which is expressly made as of an earlier date, which representation and warranty shall have been true and correct in all material respects as of such earlier date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or will occur or exist after giving effect to the extensions of credit requested to be made on such date. Borrower shall not be in violation of Section 4.09 (Incurrence of Indebtedness and Issuance of Preferred Stock) of any of the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture on such date nor will such a violation occur or exist after giving effect to the extensions of credit requested to be made on such date. (c) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be satisfactory in form and substance to the Agents, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. Each borrowing by, and each Letter of Credit issued on behalf of, the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date thereof that the conditions contained in this subsection have been satisfied. 59 SECTION 6. AFFIRMATIVE COVENANTS The Borrower hereby agrees that, so long as the Commitments remain in effect or any amount is owing to any Lender or any Agent hereunder or under any other Credit Document, the Borrower shall and (except in the case of delivery of financial information, reports and notices) shall cause each of its Subsidiaries to: 6.1 SEC Filings. The Borrower will file on a timely basis with the SEC, to the extent such filings are accepted by the SEC and whether or not the Borrower has a class of securities registered under the Exchange Act, the annual reports, quarterly reports (including with respect to the fourth quarter of each fiscal year) and other documents that the Borrower would be required to file if the Borrower were subject to section 13(a) or 15(d) of the Exchange Act. The Borrower will also be required (i) to deliver to the Administrative Agent and each Lender, copies of such reports and documents within five days after the date on which the Borrower files such reports and documents with the SEC or the date on which the Borrower would be required to file such reports and documents if the Borrower were so required and (ii) if filing such reports and documents with the SEC is not accepted by the SEC or is prohibited under the Exchange Act, to promptly notify the Administrative Agent in writing of the occurrence of any such event and to supply at the Borrower's cost copies of such reports and documents to the Administrative Agent and any Lender upon request. All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 6.2 Certificates; Other Information. Furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of the independent certified public accountants reporting on such financial statements stating that, in performing their audit, nothing came to their attention that caused them to believe that the Borrower failed to comply with the provisions of subsection 7.1, except as specified in such certificate; (b) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of a Responsible Officer stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary has been formed or acquired, the Borrower has complied with the requirements of subsection 6.10 with respect thereto) and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; (c) concurrently with the delivery of financial statements pursuant to subsection 6.1, a certificate of a Responsible Officer of the Borrower setting forth, in 60 reasonable detail, the computations, as applicable, of (i) the Debt Ratio and (ii) the financial covenants set forth in subsection 7.1, as of such last day or for the fiscal period then ended, as the case may be; (d) not later than 60 days after the end of each fiscal year of the Borrower, a copy of the projections by the Borrower of the operating budget and cash flow budget of the Borrower and its Subsidiaries for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer to the effect that such projections have been prepared on the basis of sound financial planning practice and that such Officer has no reason to believe they are incorrect or misleading in any material respect; (e) within five days after the same are sent, copies of all financial statements and reports which the Borrower or Holdings sends to its stockholders; and (f) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be. 6.4 Conduct of Business; Maintenance of Existence and Property; Compliance with Law. Except as permitted by subsection 7.5 and subsection 7.6, (a) continue to engage in business of the same general type as now conducted by it; (b) preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business; (c) keep all property useful and necessary in its business in good working order and condition (ordinary wear and tear and damage by fire and/or other casualty or taking by condemnation excepted) except if (i) in the reasonable business judgment of the Borrower or such Subsidiary, as the case may be, it is in its best economic interest not to preserve and maintain such rights, privileges or franchises, and (ii) such failure to preserve and maintain such privileges, rights or franchises would not materially adversely affect the rights of the Lenders hereunder or the value of the Collateral, and except as otherwise permitted pursuant to subsection 7.5; and (d) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, be reasonably expected to have a Material Adverse Effect. 6.5 Insurance. The Borrower will, and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies of similar stature engaged in the same or similar businesses operating in the same or similar locations. 61 6.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records (except to the extent any such access is restricted by a Requirement of Law) at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify the Borrower prior to any contact with such accountants and give the Borrower the opportunity to participate in such discussions; provided, further, that the Borrower shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 6.7 Notices. Promptly give notice to the Administrative Agent and each Lender of: (a) the occurrence of any Default or Event of Default; (b) any (i) default or event of default under any Contractual Obligation of the Borrower or any of its Subsidiaries, (ii) litigation, investigation or proceeding which may exist at any time between the Borrower or any of its Subsidiaries and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect or (iii) any material asset sale (describing in reasonable detail the assets sold, the consideration received therefor and the proposed use of the proceeds thereof); (c) any other litigation or proceeding affecting the Borrower or any of its Subsidiaries in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; and (d) the following events, as soon as possible and in any event within 45 days after the Borrower knows or has reason to know thereof: (i) the incurrence of an accumulated funding deficiency or the filing of an application to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, the creation of any Lien in favor of the PBGC or a Plan, the occurrence of any "Trigger Event" (as defined in the Transfer Agreements) and the reassumption by the Seller of sponsorship of any Single Employer Plan, (ii) except where such event or liability could not reasonably be expected to have a Material Adverse Effect, the occurrence or expected occurrence of any Reportable Event with respect to any Plan (other than a Multiple Employer Plan), or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan, or a failure to make any required contribution to a Plan, (iii) the institution of proceedings by the PBGC with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, 62 any Single Employer Plan or Multiemployer Plan or (iv) except as could not reasonably be expected to have a Material Adverse Effect, the institution of proceedings or the taking of any other action with respect to the withdrawal from or termination of any Single Employer Plan; Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto. 6.8 Environmental Laws. (a) (i) Comply in all material respects with all Environmental Laws applicable to it, and obtain, comply in all material respects with and maintain any and all material Environmental Permits necessary for its operations as conducted and as planned; and (ii) take all reasonable efforts to ensure that all of its tenants, subtenants, contractors, subcontractors, and invitees comply in all material respects with all applicable Environmental Laws, and obtain, comply in all material respects with and maintain any and all material Environmental Permits, applicable to any of them. Notwithstanding the foregoing, upon learning of any actual or suspected noncompliance, the Borrower or one or more of its Subsidiaries, as appropriate, shall promptly undertake all reasonable efforts to achieve material compliance. (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions in each case required under applicable Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding applicable Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not be reasonably expected to have a Material Adverse Effect. 6.9 Further Assurances. Upon the reasonable request of the Administrative Agent, promptly perform or cause to be performed any and all acts and execute or cause to be executed and delivered any and all documents which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 6.10 Additional Collateral. (a) With respect to any Capital Stock of any newly created or acquired Subsidiary or any newly issued Capital Stock of any existing Subsidiary acquired after the Original Closing Date by the Borrower or any of its Subsidiaries that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject, promptly (and in any event within 30 days after the acquisition thereof): (i) execute and deliver to the Administrative Agent such amendments to the relevant Pledge Agreements or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such Capital Stock, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all 63 applicable Requirements of Law, including delivering all such original certificates evidencing such Capital Stock to the Administrative Agent together with undated stock powers executed in blank therefor, and (iii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, the Borrower shall not be required to grant to the Administrative Agent a Lien upon the Capital Stock of any Immaterial Subsidiary. (b) With respect to any Person that, subsequent to the Original Closing Date, becomes a direct or indirect Subsidiary of the Borrower, promptly (and in any event within 30 days after such Person becomes a Subsidiary): (i) cause such new Subsidiary to become a party to the Subsidiary Pledge Agreement and the Subsidiary Guarantee and (ii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clause (i) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the Capital Stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. 6.11 [Intentionally Omitted.] 6.12 Foreign Jurisdictions. Maintain due qualification as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 6.13 Government Contracts. The Borrower and its Subsidiaries shall apply for and maintain all material facility security clearances and personnel security clearances required of the Borrower under all Requirements of Law to perform and deliver under any and all Government Contracts and as otherwise may be necessary to continue to perform the business of the Borrower and its Subsidiaries. 6.14 Lien Searches Not later than 45 days following the Closing Date, the Borrower shall deliver to the Administrative Agent the results of a search of Uniform Commercial Code, tax and judgment filings made with respect to each of the Borrower and its Subsidiaries (other than any Immaterial Subsidiaries) in each jurisdiction in which the Borrower or such applicable Subsidiary maintains its principal place of business or any material assets and a certificate of a Responsible Officer 64 certifying that such lien search results do not disclose any Liens, except for Liens permitted hereunder. SECTION 7. NEGATIVE COVENANTS The Borrower hereby agrees that, so long as any portion of the Commitments remain in effect or any amount is owing to any Lender or any of the Agents hereunder or under any other Credit Document, the Borrower shall not, and (except with respect to subsection 7.1), shall not permit any of its Subsidiaries to, directly or indirectly: 7.1 Financial Condition Covenants. (a) Debt Ratio. Permit the Debt Ratio at the last day of any fiscal quarter to be greater than the ratio set forth below opposite the fiscal quarter during which such fiscal quarter occurs:
Fiscal Quarter Ending Ratio --------------------- ----- December 31, 1999 4.75 March 31, 2000 4.75 June 30, 2000 4.75 September 30, 2000 4.50 December 31, 2000 4.50 March 31, 2001 4.50 June 30, 2001 4.50 September 30, 2001 3.75 December 31, 2001 3.75 March 31, 2002 3.75 June 30, 2002 3.75 September 30, 2002 3.25 and thereafter
(b) Interest Coverage. Permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense during any Test Period to be less than the ratio set forth opposite such period below (such ratio, the "Interest Coverage Ratio"):
Test Period Interest Coverage Ratio ----------- ----------------------- 10/1/99 - 12/31/99 2.25 1/1/00 - 3/31/00 2.25 4/1/00 - 6/30/00 2.25 7/1/00 - 9/30/00 2.50 10/1/00 - 12/31/00 2.50
65 1/1/01 - 3/31/01 2.50 4/1/01 - 6/30/01 2.50 7/1/01 - 9/30/01 2.75 10/1/01 - 12/31/01 2.75 1/1/02 - 3/31/02 2.75 4/1/02 - 6/30/02 2.75 7/1/02 - 9/30/02 3.00 10/1/02 - and thereafter 3.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness (including in respect of Interest Rate Agreements), except: (a) Indebtedness of the Borrower under this Agreement, the Facility A Credit Agreement and the Facility C Credit Agreement; (b) Indebtedness of the Borrower incurred to finance the acquisition of fixed or capital assets (whether pursuant to a loan, a Financing Lease or otherwise) in an aggregate principal amount not exceeding $25,000,000 at any time outstanding; (c) Indebtedness assumed in connection with any Investment permitted pursuant to subsection 7.9(k) hereof. (d) additional Indebtedness of the Borrower not exceeding $50,000,000 in aggregate principal amount at any one time outstanding (of which up to $35,000,000 may be secured by Liens permitted pursuant to subsection 7.3(i) hereof); (e) Indebtedness of the Borrower in respect of not more than (i) $225,000,000 principal amount of Subordinated Notes issued on the April 30, 1997 (ii) $180,000,000 principal amount of New Subordinated Notes issued on May 22, 1998 and (iii) $200,000,000 principal amount of December 1998 Subordinated Notes issued on or about December 8, 1998; (f) the Indebtedness of the Borrower and its Subsidiaries outstanding on the Original Closing Date and reflected on Schedule 7.2(f), and refundings or refinancings thereof, provided that no such refunding or refinancing shall shorten the maturity or increase the principal amount of the original Indebtedness; (g) Guarantee Obligations permitted by subsection 7.4; (h) the incurrence by any Credit Party of intercompany Indebtedness between or among the Credit Parties; provided, however, that if the Borrower is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations; (i) Indebtedness secured by Permitted Liens; 66 (j) Indebtedness of the Borrower or any of its Subsidiaries (other than as described under subsection 7.2(a) above) incurred in connection with the issuance of any surety bonds, performance letters of credit or other similar performance bonds required pursuant to any Contractual Obligation or Requirement of Law to which Borrower or any of its Subsidiaries are subject in an aggregate principal amount not exceeding $100,000,000 at any time outstanding, less, without duplication, the aggregate amount of then existing Guarantee Obligations permitted under 7.4(g); and (k) Up to $30,000,000 of purchase money Indebtedness the proceeds of which are utilized to acquire the real property (including improvements thereon) and related assets currently utilized by the Borrower's communications systems west division in Salt Lake City, Utah, on terms reasonably satisfactory to the Agents. 7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for: (a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements; (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) easements, rights-of-way, zoning restrictions, other restrictions and other similar encumbrances previously or hereafter incurred in the ordinary course of business 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 Borrower or such Subsidiary; (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by subsection 7.2(f), provided that no such Lien is expanded to cover any additional property (other than after-acquired title in or on such 67 property and proceeds of the existing collateral in accordance with the instrument creating such Lien) after the Closing Date and that the amount of Indebtedness secured thereby is not increased and extensions, renewals or replacements thereof provided that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the original Indebtedness; and provided, further, that the assets of the Borrower and its Subsidiaries encumbered by such Liens are existing equipment and other existing tangible assets; (g) Liens securing Indebtedness of the Borrower and its Subsidiaries permitted by subsections 7.2(b) and 7.2(k) incurred to finance the acquisition of fixed or capital assets, provided that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) and (iii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the original purchase price of such property of such property at the time it was acquired; (h) Liens on the property or assets of a corporation which becomes a Subsidiary after the date hereof securing Indebtedness permitted by subsection 7.2(c), provided that (i) such Liens existed at the time such corporation became a Subsidiary and were not created in anticipation thereof, (ii) any such Lien is not expanded to cover any property or assets of such corporation after the time such corporation becomes a Subsidiary (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), and (iii) the amount of Indebtedness secured thereby is not increased; (i) Liens (not otherwise permitted hereunder) which secure obligations not exceeding (as to the Borrower and all Subsidiaries) $35,000,000 in aggregate amount at any time outstanding; (j) Liens created pursuant to the Pledge Agreements; (k) Liens on the property of the Borrower or any of its Subsidiaries in favor of landlords securing licenses, subleases or leases entered into in the ordinary course of business; (l) licenses, leases or subleases permitted hereunder granted to other Persons not interfering in any material respect in the business of the Borrower or any of its Subsidiaries; (m) so long as no Default or Event of Default shall have occurred and be continuing under clause (f) of Section 8, attachment or judgment Liens in an aggregate amount outstanding at any one time not in excess of $7,500,000; 68 (n) Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements entered into by the Borrower, or any of its subsidiaries in the ordinary course of business; and (o) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business and which are within the general parameters customary in the banking industry. 7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any Guarantee Obligation except: (a) Guarantee Obligations in existence on the date hereof and listed on Schedule 7.4 and extensions, renewals and replacements thereof, provided, however, that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the Indebtedness guaranteed by the original guarantee; (b) Guarantee Obligations incurred after the date hereof in an aggregate amount not to exceed $30,000,000 at any one time outstanding for the Borrower and its Subsidiaries; (c) guarantees made by the Subsidiaries of the Borrower pursuant to the Subordinated Debt Documents, the New Subordinated Debt Documents and the December 1998 Subordinated Debt Documents; (d) Guarantee Obligations under the Credit Documents and the Facility A Credit Documents and the Facility C Credit Documents; (e) L/C Obligations and the Facility A L/C Obligations; (f) Guarantee Obligations of the Borrower or any Subsidiary in respect of obligations of a Subsidiary permitted to be incurred by such Subsidiary by this Agreement; and (g) Guarantee Obligations in respect of surety bonds and/or performance letters of credit which shall not exceed $100,000,000 at any time less, without duplication, the amount of outstanding Indebtedness permitted under subsection 7.2(j). 7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, or make any material change in its present method of conducting business, except: 69 (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any one or more wholly owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or Subsidiaries shall be the continuing or surviving corporations); and (b) any wholly owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other wholly owned Subsidiary of the Borrower that is a Credit Party. 7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any Person other than the Borrower or any wholly owned Subsidiary, except: (a) the sale or other disposition of obsolete or worn out property in the ordinary course of business; (b) the sale of any property or assets not otherwise permitted by this subsection 7.6; provided that the Net Proceeds thereof shall be applied pursuant to subsection 2.6(b)(ii); (c) as permitted pursuant to subsection 7.5(b); (d) the sale, lease, transfer or exchange of inventory in the ordinary course of business; (e) transfers resulting from any casualty or condemnation of property or assets; (f) intercompany sales or transfers of assets made in the ordinary course of business; (g) licenses, leases or subleases of tangible property in the ordinary course of business; (h) any consignment arrangements or similar arrangements for the sale of assets in the ordinary course of business; (i) the sale or discount of overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; and (j) the conveyance, sale, assignment or contribution to any new Subsidiary of the Borrower or any existing Subsidiary of the Borrower assets of the 70 Borrower or any Subsidiary of the Borrower not exceeding five percent (5%) of the Consolidated Total Assets. 7.7 Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Borrower or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Subsidiary other than Permitted Stock Payments. 7.8 Limitation on Capital Expenditures. Make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (excluding any such asset acquired in connection with normal replacement and maintenance programs properly charged to current operations) except for capital expenditures in the ordinary course of business not exceeding $45,000,000 in the aggregate for the Borrower and its Subsidiaries during any fiscal year of the Borrower; provided, that up to 50% of any such amount not so expended in the fiscal year for which it is permitted above may be carried over for expenditure in the next following fiscal year; provided, further, that Borrower and/or its Subsidiaries may exceed the annual limit on capital expenditures set forth above by utilizing any amounts available for Investments permitted under subsection 7.9(k) hereto to fund such additional Capital Expenditures. 7.9 Limitation on Investments, Loans and Advances. Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in, any Person ("Investments"), except: (a) extensions of trade credit in the ordinary course of business; (b) investments in Cash Equivalents; (c) loans to officers of the Borrower listed on Schedule 7.9(c) in aggregate principal amounts outstanding not to exceed the respective amounts set forth for such officers on said Schedule; (d) loans and advances to employees of the Borrower or its Subsidiaries for travel, entertainment and relocation expenses in the ordinary course of business in an aggregate amount for the Borrower and its Subsidiaries not to exceed $1,000,000 at any one time outstanding; (e) investments by the Borrower in its Subsidiaries that are Credit Parties and investments by such Subsidiaries in the Borrower and in other Subsidiaries that are Credit Parties; 71 (f) so long as no Event of Default has occurred and is continuing, loans by the Borrower to its employees (other than any Principals or their Related Parties) in connection with (i) management incentive plans, (ii) management stock purchase plans, and (iii) obligations of employee option-holders of Storm Control Systems, Inc. to fund the exercise of such options, which loans in (i), (ii) and (iii) in the aggregate do not exceed $5,000,000; (g) Investments in existence on the Original Closing Date set forth on Schedule 7.9(g) and extensions, renewals, modifications or restatements or replacements thereof; provided that no such extension, renewal, modification or restatement shall increase the amount of the original loan, advance or investment; (h) promissory notes and other similar non-cash consideration received by the Borrower and its Subsidiaries in connection with the dispositions permitted by subsection 7.6(b); (i) Investments permitted by subsection 7.6(b) and subsection 7.6(j); (j) Investments (including debt obligations and Capital Stock) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (k) Investments made at any time from and after the Original Closing Date to acquire (i) all or any portion of the Capital Stock, or all or any portion of the assets, of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business, or (ii) all or substantially all of the assets of any division of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business; provided, that, (a) if such Investment is an acquisition of a majority of the Voting Stock of any Person, such Person's board of directors or similar governing body shall have approved such acquisition and (b) at the time of each such Investment described above in clauses (i) and (ii) (both before and after giving effect to such Investment), there shall exist no Default or Event of Default and the aggregate consideration paid (regardless of form, including in the case of an acquisition of assets, any assumed obligations) in connection with all Investments made pursuant to this subsection 7.9(k) shall not exceed the New Investment Sublimit (without deducting therefrom (w) the portion of any purchase price for any Investment funded with Capital Stock of Holdings, (x) consideration paid by the Borrower in connection with the acquisition of SPD Technologies pursuant to the SPD Technologies Acquisition Agreement, (y) consideration not exceeding $92 million paid by Borrower in connection with the acquisition of Microdyne Corporation and (z) any consideration paid prior to December 8, 1998 by the Borrower in connection with any Investment which is listed on Schedule 7.9(k) hereto); provided, further, that in connection with each individual, or series of related, Investments made pursuant to this subsection 7.9(k), the Borrower shall deliver to the Administrative Agent, on or prior to the date which is one Business Day 72 prior to the consummation of such Investment or Investments, a certificate of a Responsible Officer that certifies that no Default or Event of Default has occurred and is continuing or will be caused as a result of consummating such proposed Investment. 7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements. (a) Make any optional payment or prepayment on or redemption or purchase of, or deliver any funds to any trustee for the prepayment, redemption or defeasance of, any Subordinated Debt or amend, modify or change, or consent or agree to any amendment, modification or change to any of the material terms of any such Subordinated Debt Documents, New Subordinated Debt Documents or December 1998 Subordinated Debt Documents (other than any such amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon). (b) Amend its Constitutional Documents in any manner which could adversely affect the rights of the Lenders under the Credit Documents or their ability to enforce the same. (c) Modify or amend, or waive any provision or condition contained in, any of the Transaction Documents in any manner that could reasonably be expected to be adverse to the Lenders. 7.11 Limitation on Transactions with Affiliates. (a) Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (i) otherwise permitted under this Agreement, (ii) in the ordinary course of the Borrower's or such Subsidiary's business and (iii) upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate. (b) In addition, notwithstanding the foregoing, the Borrower and its Subsidiaries shall be entitled to make the following payments and/or to enter into the following transactions: (i) the payment of reasonable and customary fees and reimbursement of expenses payable to directors of the Borrower and Holdings; (ii) the employment arrangements with respect to the procurement of services of directors, officers and employees in the ordinary course of business and the payment of reasonable fees in connection therewith; (iii) payments to directors and officers of the Borrower and its Subsidiaries in respect of the indemnification of such Persons in such respective 73 capacities from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, as the case may be, pursuant to the Constitutional Documents or other corporate action of the Borrower or its Subsidiaries, respectively, or pursuant to applicable law; and (iv) transactions described in the Transaction Documents. 7.12 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by the Borrower or any Subsidiary of real or personal property which has been or is to be sold or transferred by the Borrower or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Subsidiary; provided that the Borrower may enter into a sale and leaseback transaction if the Borrower could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction and (b) incurred a Lien to secure such Indebtedness, in each case in accordance with the restrictions contained in this Agreement and the other Credit Documents. 7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the Borrower to end on a day other than December 31. 7.14 Limitation on Negative Pledge Clauses. Enter into with any Person any agreement, other than (a) this Agreement, the Facility A Credit Agreement and the Facility C Credit Agreement, (b) the Subordinated Debt Documents, the New Subordinated Debt Documents or the December 1998 Subordinated Debt Documents, and (c) any industrial revenue bonds, purchase money mortgages or Financing Leases permitted by this Agreement (in which cases, any prohibition or limitation shall only be effective against the assets financed thereby other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired. 7.15 Limitation on Lines of Business. Enter into any business, either directly or through any Subsidiary (other than an Immaterial Subsidiary), except for Similar Businesses. 7.16 Designated Senior Debt. Designate any Indebtedness or other obligation, other than Indebtedness under the Credit Documents, as "Designated Senior Debt," as such term is defined in the Indenture as in effect on April 30, 1997, the New Subordinated Debt Indenture as in effect on May 22, 1998 or the December 1998 Subordinated Debt Indenture as in effect on December 8, 1998, or any comparable designation that confers upon the holders of such Indebtedness or other obligation (or any Person acting on their behalf) the right to initiate blockage periods under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture or any other Indebtedness or other obligation of the Borrower and its Subsidiaries (other than as a result of a payment default). 74 SECTION 8. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation when due in accordance with the terms thereof or hereof; or the Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; (b) Any representation or warranty made or deemed made by the Borrower or any other Credit Party herein or in any other Credit Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Credit Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; (c) The Borrower or any other Credit Party shall default in the observance or performance of any agreement contained in Section 7 or subsection 6.7(a) of this Agreement, Section 4 of the Parent Guarantee, Section 4 of the Subsidiary Guarantee, Section 4 of the Parent Pledge Agreement, Section 4 of the Borrower Pledge Agreement, or Section 4 of the Subsidiary Pledge Agreement; (d) The Borrower or any other Credit Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Credit Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days; (e) The Borrower or any of its Subsidiaries shall (i) default (x) in any payment of principal of or interest of any Indebtedness (other than the Loans, the L/C Obligations and any intercompany debt) or Interest Rate Agreement Obligations or (y) in the payment of any Guarantee Obligation (excluding any guaranties of the Obligations), beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (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 become due prior to its stated maturity or such Guarantee Obligation to become payable; provided, however, that no Default or Event of Default shall exist under this paragraph unless (i) the aggregate amount of Indebtedness, Interest Rate Agreement Obligations and/or Guarantee Obligations in respect of which any default or other event or condition referred to in this paragraph shall have occurred shall be equal to at least $7,500,000 and (ii) such default continues for a period in excess of 10 days; 75 (f) (i) Holdings, the Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings, the Borrower or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings, the Borrower or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Holdings, Borrower or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings, the Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan that is not in the ordinary course; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; (h) One or more judgments or decrees shall be entered against Holdings, the Borrower or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance (which coverage has been acknowledged by the appropriate insurers)) of $7,500,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; 76 (i) (i) Any of the Pledge Agreements shall cease, for any reason, to be in full force and effect (unless released by the Administrative Agent at the direction of the requisite Lenders or as otherwise permitted under this Agreement or the other Credit Documents), or the Borrower or any other Credit Party which is a party to any of the Pledge Agreements shall so assert or (ii) the Lien created by any of the Pledge Agreements shall cease to be enforceable and of the same effect and priority purported to be created thereby (and, if such invalidity is such so as to be amenable to cure without materially disadvantaging the position of the Administrative Agent and the Lenders, as the case may be, as secured parties thereunder, the Credit Party shall have failed to cure such invalidity within 30 days after notice from the Administrative Agent); (j) The Guarantee Obligation of any Credit Party under the Credit Documents shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Credit Party or any Person acting on behalf of any Credit Party, shall deny or disaffirm its obligations under such Guarantee Obligation; (k) There shall have occurred a Change in Control; or (l) An "Event of Default" as defined in the Facility A Credit Agreement and/or the Facility C Credit Agreement shall have occurred and be continuing; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) of this Section above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice of default to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the Dollar Equivalent of the aggregate then undrawn and unexpired amount of such Letters of Credit. The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the L/C Participants (and the benefit of each such "Issuing 77 Lender" and the "L/C Participants" as defined in the Facility A Credit Agreement), a security interest in such cash collateral to secure all obligations of the Borrower under this Agreement, the Facility A Credit Agreement, the other Credit Documents and the other Facility A Credit Documents. Amounts held in such cash collateral account shall be applied by the Administrative Agent in accordance with subsection 2.12 hereof. The Borrower shall execute and deliver to the Administrative Agent, for the account of the Issuing Lender and the L/C Participants (and each applicable "Issuing Lender" and the "L/C Participants" as defined in the Facility A Credit Agreement), such further documents and instruments as the Administrative Agent may request to evidence the creation and perfection of the within security interest in such cash collateral account. EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION, PRESENTMENT, DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY EXPRESSLY WAIVED. SECTION 9. THE AGENTS; THE ARRANGERS 9.1 Appointment. Each Lender hereby irrevocably designates and appoints each of the Agents as the agent of such Lender under this Agreement and the other Credit Documents, and each such Lender irrevocably authorizes each of the Agents, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against any of the Agents. 9.2 Delegation of Duties. The Agents may execute any of their duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. None of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 9.3 Exculpatory Provisions. Neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by such Agent under or in connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for 78 any failure of the Borrower to perform its obligations hereunder or thereunder. None of the Agents shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of the Borrower. 9.4 Reliance by Agents. The Agents shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by such Agent. The Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with such Agent. Except as expressly provided in this Agreement, the Agents shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that any Agent receives such a notice, such Agent shall give notice thereof to the Lenders. Each Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until such Agent shall have received such directions, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by any of the Agents hereafter taken, including any review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty by any of the Agents to any Lender. Each Lender represents to each of the Agents that it has, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and credit worthiness of the Borrower and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender 79 also represents that it will, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any of the Agents hereunder (or copies of which have been provided to the Administrative Agent pursuant to this Agreement), none of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Credit Party which may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 9.7 Indemnification. The Lenders agree to indemnify each of the Agents in their respective capacities as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitment Percentages with respect to all Types of Loans in effect on the date on which indemnification is sought, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against any of the Agents in any way relating to or arising out of, the Commitments, this Agreement, any of the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any of the Agents under or in connection with any of the foregoing provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 9.8 Agents, in Their Individual Capacities. The Agents and their respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower as though the Agents were not acting in such capacities hereunder and under the other Credit Documents. With respect to the Loans made or renewed by it and any Note issued to it or Loan Account maintained by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include the Agents in their individual capacities. 9.9 Successor Administrative Agent, Syndication Agent and Documentation Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. 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 80 successor administrative agent shall, unless a Default or Event of Default shall have occurred and be continuing, be approved by the Borrower. 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, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Section 9 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 which is 30 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 administrative agent as provided for above. Similarly, the Syndication Agent and/or the Documentation Agent may resign as Syndication Agent and/or Documentation Agent, as the case may be, upon 30 days' notice to the Lenders. The procedure for replacement and effective date of resignation for the Syndication Agent and the Documentation Agent shall be identical to that provided above for the Administrative Agent. 9.10 The Arrangers and the Co-Agents. Except as expressly set forth herein, each of the Arrangers and the Co-Agents, in their respective capacities as such, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement or the other Credit Documents. SECTION 10. MISCELLANEOUS 10.1 Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this subsection. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend any scheduled date of maturity of any Loan, extend the expiration of any Letter of Credit beyond the Revolving 364 Day Termination Date, or reduce the stated rate or amount of any interest or fee payable hereunder or extend the scheduled date of any payment thereof, in each case without the consent of each 81 Lender affected thereby, or increase the commitment of any Lender or extend the expiry of the commitment of any Lender without the consent of such Lender, (ii) amend, modify or waive the definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Credit Documents, in each case without the written consent of all the Lenders, (iii) release all or substantially all of the Collateral or release all or substantially all of the Credit Parties from their Guarantee Obligations under the Credit Documents without the consent of all Lenders, (iv) amend, modify or waive any provision of Section 9 without the written consent of the then Agents, or (v) amend, modify or waive any provision of this Agreement or any other Credit Document which would directly and adversely affect the Arrangers or the Agents or the Issuing Lender without the written consent of the Arrangers, the Agents or the Issuing Lender, as the case may be. In addition to the foregoing, (A) no amendment, modification, termination or waiver of any provision of subsection 2.5, subsection 2.6 or subsection 2.12 which has the effect of changing any interim scheduled payments, voluntary or mandatory prepayments, the application of any scheduled payment or voluntary or mandatory prepayment, the application of proceeds of any Collateral or any Commitment reductions applicable to any Class (an "Affected Class") in a manner that disproportionately disadvantages such Class relative to the other Class shall be effective without the written concurrence of the Requisite Class Lenders of the Affected Class (it being understood and agreed that any amendment, modification, termination or waiver of any provision which only postpones or reduces any interim scheduled payment, voluntary or mandatory prepayment or Commitment reduction from those set forth in subsection 2.6 with respect to only one Class shall be deemed to not disproportionately disadvantage the other Class and, therefore, shall not require the consent of Requisite Class Lenders of such other Class), (B) no amendment, modification, termination or waiver of any provision of any Guarantee or Pledge Agreement shall be effective without the written concurrence of the Requisite Class Lenders for each Class and (C) no amendment, modification or waiver with respect to any provision of this subsection 10.1 or to the definition of "Requisite Class Lenders" shall be effective without the written concurrence of all Lenders, all Facility A Lenders and all Facility C Lenders Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agents and the Issuing Lender and all future holders of the Loans. Any extension of a Letter of Credit by the Issuing Lender shall be treated hereunder as issuance of a new Letter of Credit. In the case of any waiver, the Borrower, the Lenders and the Agents and the Issuing Lender shall be restored to their former positions and rights hereunder and under the other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. 10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when delivered, (b) in the case of delivery by mail, three days after being deposited in the mails, postage prepaid, or (c) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows in the case of the Borrower, the Administrative Agent, Issuing Lender, the Syndication Agent and the 82 Documentation Agent, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto: Holdings, the Borrower or any of its Subsidiaries: L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: Robert LaPenta Fax: (212) 805-5470 with a copy to Attention: Christopher C. Cambria Fax: (212) 805-5494 The Administrative Agent: Addresses for notices of borrowing, prepayments and other administrative matters: Bank of America, N.A. 1850 Gateway Boulevard, 5th Floor Concord, CA 94520 Attention: Agency Administrative Services #5596 Josephine T. Flores, Vice President Fax: (925) 675-8500 Tel: (925) 675-8374 Addresses for all other notices (including with respect to amendments and waivers): Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, CA 94103
83 Attention: Agency Management #10831 Dietmar Schiel, Vice President Fax: (415) 436-3425 Tel: (415) 436-2769 with a copy to: Bank of America, N.A. 335 Madison Avenue New York, NY 10017 Attention: Lisa B. Choi Fax: (212) 503-7066 Tel: (212) 503-8101 The Issuing Lender: Bank of America, N.A. 333 S. Beaudry Avenue, 19th Floor Los Angeles CA 90017-1486 Attention: Trade Operations Center - Standby Letters of Credit #22621 Sandra M. Leon, Vice President Fax: (213) 345-6694 Tel: (213) 345-5231 The Documentation Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michele Swanson Fax: (212) 528-0819 The Syndication Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michelle Swanson Fax: (212) 528-0819
84 provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not be effective until received. 10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse each of the Agents for all of their respective reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees, charges and disbursements of a single counsel for the Lenders (in addition to any local counsel), (b) to pay or reimburse each Lender and each Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit Documents and any such other documents, including, without limitation, the fees and disbursements of counsel to each Lender and of counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each Agent and each Issuing Lender harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and each Arranger, each Agent and each Issuing Lender harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or the other Credit Documents or the use of the proceeds of the Loans in connection with the Transaction, including, without limitation, any of the foregoing relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower, any of its Subsidiaries or any of the Properties (all the foregoing in this clause, collectively, the "indemnified liabilities"), it being understood that the Borrower shall have an obligation hereunder to the Lender or any Agent with respect to any indemnified liabilities incurred by any 85 Agents, Arranger or the Issuing Lender or any Lender as a result of any Materials of Environmental Concern that are first manufactured, emitted, generated, treated, released, spilled, stored or disposed of on, at or from any Property or any violation of any Environmental Law, which in any case first occurs on or with respect to such Property (i) after the Property is transferred to any Agent, Arranger, Issuing Lender or any Lender or their successors or assigns by foreclosure sale, deed in lieu of foreclosure, or similar transfer or, following such transfer, (ii) in connection with, but prior to, the sale, leasing or other transfer of such Property by such Agent, Arranger, Issuing Lender, or any Lender or their successors or assigns to one or more third parties; provided, however, that the Borrower shall have no obligation hereunder to any Agent or the Issuing Lender or any Lender with respect to otherwise indemnified liabilities arising from the gross negligence or willful misconduct of such Agent or the Issuing Lender or any such Lender, or with respect to otherwise indemnified liabilities following the sale, leasing or other transfer of such Property to one or more third parties. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 10.6 Successors and Assigns; Participation and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Agents and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its business and in accordance with applicable law and the limitations set forth in subsection 2.1(a)(ii), at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender or any other interest of such Lender hereunder and under the other Credit Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Credit Documents, and the Borrower and the Agents shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Credit Documents. No Lender shall be entitled to create in favor of any Participant, in the participation agreement pursuant to which such Participant's participating interest shall be created or otherwise, any right to vote on, consent to or approve any matter relating to this Agreement or any other Credit Document except for those specified in clauses (i), (ii) and (iii) of the proviso to subsection 10.1. The Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in subsection 10.7(a) as fully as if it 86 were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to its participation in the Letters of Credit, the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that in the case of subsection 2.15, such Participant shall have complied with the requirements of said subsection; provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Any Lender may, in the ordinary course of its business and in accordance with applicable law and the limitations set forth in subsection 2.1(a)(ii), at any time and from time to time assign to any Lender, any affiliate thereof or, in the case of Lender that is an investment fund which is regularly engaged in making, purchasing or investing in loans or securities (an "Investment Fund"), any other such Investment Fund which is under common management with such Lender, or, with the consent of the Borrower, the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender (which in each case shall not be unreasonably withheld), to an additional bank, Investment Fund or financial institution (an "Assignee") all or any part of its rights and obligations under this Agreement and the other Credit Documents pursuant to an Assignment and Acceptance, substantially in the form of Exhibit F, executed by such Assignee, such assigning Lender (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower, the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender) and delivered to the Administrative Agent for its acceptance and recording in the Register with a copy to the Syndication Agent, provided that, in the case of any such assignment to an additional bank or financial institution, (A) either (x) such assignment is of all the rights and obligations of the assigning Lender or (y) the sum of the aggregate principal amount of the Loans, the aggregate amount of the L/C Obligations and the aggregate amount of the unused Commitments being assigned and, if such assignment is of less than all of the rights and obligations of the assigning Lender, the sum of the aggregate principal amount of the Loans, the aggregate amount of the L/C Obligations and the aggregate amount of the unused Commitments remaining with the assigning Lender are each not less than $5,000,000 (or such lesser amount as may be agreed to by the Borrower and the Administrative Agent) and (B) each Assignee which is a Non-U.S. Lender shall comply with the provisions of clause (A) of subsection 2.15(b) hereof, or, with the prior written consent of the Borrower, which shall not be unreasonably withheld, the provisions of clause (B) of subsection 2.15(b) hereof (and, in either case, with all of the other provisions of subsection 2.15(b) hereof). Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto). Notwithstanding any provision of this paragraph (c) and paragraph (f) of this subsection, the consent of the Borrower shall not be 87 required for any assignment which occurs at any time when any of the events described in clause (f) of Section 8 shall have occurred and be continuing. (d) The Administrative Agent, on behalf of the Borrower, shall maintain at the address of the Administrative Agent referred to in subsection 10.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and Commitments of and principal amounts of the Loans of each Type owing to each Lender from time to time and the registered owners of the Obligations evidenced by the Notes and the Loan Accounts. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of a Loan, a Note or other Obligation hereunder as the owner thereof for all purposes of this Agreement and the other Credit Documents, notwithstanding any notice to the contrary. Any assignment of any Loan, Commitment or other obligation evidenced by a Note or a Loan Account shall be effective only upon appropriate entries with respect thereto being made in the Register, and prior to such recordation, all amounts owing to the assignor with respect thereto shall remain owing to the assignor. Any assignment or transfer of all or part of an Obligation evidenced by a Note shall be registered in the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Obligation, duly endorsed by (or accompanied by a written instrument of assignment or transfer duly executed by) the holder thereof, and thereupon one or more new Notes shall be issued to the designated Assignee, if requested, and the old Note shall be returned by the Administrative Agent to the Borrower marked "canceled." (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower the Administrative Agent, the Syndication Agent and each Applicable Issuing Lender) together with payment to the Administrative Agent of a registration and processing fee of $3,000 (provided that no such payment shall be required whenever LCPI or BOA is the assigning Lender), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower. Following the effective date of any such Assignment and Acceptance, the Administrative Agent shall be entitled to update Schedule I hereto to reflect the then outstanding Commitments of each Lender whereupon such amended Schedule I shall be substituted for the pre-existing Schedule I and be deemed a part of this Agreement without any further action or consent of any party and the Administrative Agent shall promptly deliver a copy of such amended Schedule I to each Lender and the Borrower. (f) The Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee, subject to the provisions of subsection 10.15, any and all financial information in such Lender's possession concerning the Borrower and its Affiliates which has been delivered to such Lender by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf 88 of the Borrower in connection with such Lender's credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement. (g) If, pursuant to this subsection 10.6, any interest in this Agreement or any Loan is transferred to any Transferee which would be a Non-U.S. Lender upon the effectiveness of such transfer, the assigning Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the assigning Lender (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) that under applicable law and treaties no U.S. Taxes will be required to be withheld by the Administrative Agent, the Borrower or the assigning Lender with respect to any payments to be made to such Transferee in respect of the Loans, (ii) to furnish to the assigning Lender (and, in the case of any Assignee registered in the Register, the Administrative Agent and the Borrower such Internal Revenue Service Forms required to be furnished pursuant to subsection 2.15(b) and (iii) to agree (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) to be bound by the provisions of subsection 2.15(b). (h) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this subsection concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. (i) Notwithstanding any other provision contained in this Agreement or any other Credit Document to the contrary, (x) any Lender may assign all or any portion of the Loans held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned Loans made by the Borrower to or for the account of the assigning or pledging Lender in accordance with the terms of this Agreement shall satisfy the Borrower's obligations hereunder in respect to such assigned Loans to the extent of such payments and (y) with the consent of the Administrative Agent (not to be unreasonably withheld), any Lender which is an Investment Fund may pledge all or any portion of its Loans to its trustee in support of its obligations to its trustee. No such assignment shall release the assigning Lender from its obligations hereunder. 10.7 Adjustments; Set-off. (a) At any time that an Event of Default has occurred and is continuing, if any Lender (a "benefited Lender") shall at any time receive any payment of all or part of its Loans or the Reimbursement Obligations owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in clause (f) of Section 8, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, Facility A Lender or Facility C Lender (any such affected Lender, Facility A Lender or Facility C Lender, hereinafter, an "Affected Lender"), if any, in respect of the Borrower's obligations owing to such other Affected Lender, whether under this Agreement, the Facility A Credit Agreement or 89 Facility C Credit Agreement, including any interest thereon, such benefited Lender shall purchase for cash from each other Affected Lender a participating interest in such portion of each such other Affected Lender's Loans or the Reimbursement Obligations owing to it, Facility A Loans or Facility A Reimbursement Obligations and/or Facility C Loans owing to it, or shall provide such other Affected Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Affected Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest unless the benefited Lender is required by court order to pay interest thereon, in which case each Lender returning funds to such benefited Lender shall pay its pro rata share of such interest. (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender and Borrower also agree that all proceeds of any such set-off shall be subject to the ratable sharing provisions of subsections 2.12 and 10.7(a) hereof to the same extent as if an Event of Default had occurred and was then continuing. 10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 10.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 90 10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 10.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 10.13 Acknowledgments. The Borrower hereby acknowledges that: 91 (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents; (b) none of the Arrangers, the Agents nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between any of the Agents and the Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders. 10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE ARRANGERS, THE LENDERS AND THE OTHER PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 10.15 Confidentiality. Each Lender agrees to keep confidential all non-public information provided to it by the Borrower pursuant to this Agreement that is designated by the Borrower in writing as confidential (excluding any such information already in the possession of such Lender or provided to such Lender by a third party not in violation of this Agreement which, in either case, is not, to the knowledge of such Lender, subject to a confidentiality agreement); provided that nothing herein shall prevent any Lender from disclosing any such information (i) to any Agent or any other Lender or any of its Affiliates, (ii) to any Transferee or prospective Transferee or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors which receives such information and agrees to be bound by the confidentiality provisions hereof, (iii) to its employees, directors, agents, attorneys, accountants and other professional advisors, (iv) upon the request or demand of any Governmental Authority having jurisdiction over such Lender, (v) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (vi) which has been publicly disclosed other than in breach of this Agreement, or (vii) in connection with the exercise of any remedy hereunder. 10.16 Conversion of Currencies. (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the date on which final judgment is given. 92 (b) The obligations of the Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the "Applicable Creditor") shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than the currency in which such sum is stated to be due hereunder (the "Agreement Currency"), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Borrower contained in this subsection 10.16 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder. 10.17 Year 2000. The Borrower has reviewed, or will expeditiously review, its operations and those of its Subsidiaries with a view to assessing whether its businesses, or the businesses of any of its Subsidiaries, are experiencing any Year 2000 Problem. The Borrower shall take all actions necessary and commit adequate resources to assure that its computer-based and other systems (and those of all of its Subsidiaries) are able to effectively process data, including dates after January 1, 2000, without experiencing any Year 2000 Problem that could reasonably be expected to cause a Material Adverse Effect. At the request of the Required Lenders, the Borrower will provide the Administrative Agent with assurances and substantiations (including, but not limited to, the results of internal or external audit reports prepared in the ordinary course of business) reasonably acceptable to the Administrative Agent as to the capability of the Borrower and its Subsidiaries to conduct its and their businesses and operations after January 1, 2000 without experiencing a Year 2000 Problem causing a Material Adverse Effect. The Borrower represents and warrants that it has a reasonable basis to believe that no Year 2000 Problem will cause a Material Adverse Effect. 10.18 Existing Agreements Superseded. As set forth in subsection 1.3 hereof, the Original Credit Agreement is superseded by this Credit Agreement, which has been executed in renewal, amendment, restatement and modification, but not in novation or extinguishment of, the obligations under the Original Credit Agreement. [SIGNATURE PAGES FOLLOW] 93 SIGNATURE PAGES TO AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. L-3 COMMUNICATIONS CORPORATION By: /s/ Lawrence W. O'Brien ----------------------------- Title: Vice President and Treasurer BANK OF AMERICA, N.A, as Administrative Agent By: /s/ Liliana Claar ----------------------------- Title: Vice President BANK OF AMERICA, N.A., as a Lender and Swing Line Lender By: /s/ Lisa Choi ----------------------------- Title: Vice President LEHMAN COMMERCIAL PAPER INC., as Documentation Agent, Syndication Agent and as a Lender By: /s/ Michele Swanson ----------------------------- Title: Authorized Signatory SIGNATURE PAGES TO AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT THE BANK OF NEW YORK By: /s/ Ken Sneider ----------------------------- Title: Vice President THE BANK OF NOVA SCOTIA By: /s/ John Hopmans ----------------------------- Title: Managing Director BANK ONE, NA By: /s/ Andrea S. Kantor ----------------------------- Title: Vice President BANKBOSTON, N.A. By: /s/ J.G. O'Donnell ----------------------------- Title: Managing Director THE BANK OF TOKYO - MITSUBISHI TRUST COMPANY By: /s/ Hidekazu Kojima ----------------------------- Title: Vice President CREDIT LYONNAIS By: /s/ Scott Chappelka ----------------------------- Title: Vice President FIRST UNION COMMERCIAL CORPORATION By: /s/ Michael Landini ----------------------------- Title: Vice President FLEET NATIONAL BANK By: /s/ Roger C. Boucher ----------------------------- Title: Senior Vice-President THE FUJI BANK, LIMITED By: /s/ John D. Doyle ------------------------------- Title: Vice President & Manager HSBC BANK USA By: /s/ Desmond English ----------------------------- Title: Associate Director SOCIETE GENERALE By: /s/ Jose A. Moreno ----------------------------- Title: Director Exhibit A-1 to Credit Agreement FORM OF REVOLVING 364 DAY NOTE THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT. $__________________ New York, New York -------------,--- FOR VALUE RECEIVED, the undersigned, L-3 Communications Corporation, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of ________________ (the "Lender") at the office of Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as administrative agent (in such capacity, the "Administrative Agent"), located at 1850 Gateway Boulevard, Concord, California, 94520, in lawful money of the United States of America and in immediately available funds, on the Revolving 364 Day Termination Date, the principal amount of (a) ______________ Dollars ($____________), or, if less, (b) the aggregate unpaid principal amount of all Revolving 364 Day Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.9 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type, and amount of each Revolving 364 Day Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Revolving 364 Day Loan. This Note (a) is one of the Revolving 364 Day Notes referred to in the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions or entities from time to time parties thereto, Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) as the Administrative Agent, Lehman Commercial Paper Inc. ("LCPI") and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as the Arrangers, LCPI as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Co-Agents, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment, in whole or in part, as provided in the Credit Agreement. This Note is secured and 1 guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, 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. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. [This Note merely re-evidences the Note issued to Lender pursuant to the Original Credit Agreement (the "Prior Note"), is given in substitution therefor, and not in satisfaction thereof, and is in no way intended to constitute a novation or payment and refunding of the Prior Note. All interest and principal outstanding under the Prior Note shall continue in all respects to be outstanding hereunder.](1) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. L-3 COMMUNICATIONS CORPORATION By:_________________________________ Name: Title: - ------------- (1) To be added if Lender requesting a Note holds a Prior Note issued under the Original Credit Agreement. 2 Schedule A to Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ---------------------------------------------------------------------------------------------------------------------------------- Amount of Base Amount Amount of Base Rate Unpaid Principal Date Rate Loans Converted to Amount of Principal of Loans Converted to Balance of Base Notation Made By Base Rate Loans Base Rate Loans Repaid Eurodollar Loans Rate Loans - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- ==================================================================================================================================
Schedule B to Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ---------------------------------------------------------------------------------------------------------------------------------- Amount of Amount Interest Period and Amount of Amount of Eurodollar Unpaid Principal Date Eurodollar Converted to Eurodollar Rate with Principal of Loans Converted to Balance of Notation Loans Eurodollar Loans Respect Thereto Eurodollar Repaid Base Rate Loans Eurodollar Loans Made By - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- ==================================================================================================================================
Exhibit A-2 to Credit Agreement FORM OF TERM NOTE THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT. $ New York, New York -------------- --------------, ---- FOR VALUE RECEIVED, the undersigned, L-3 Communications Corporation, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of (the "Lender") at the office of Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as administrative agent (in such capacity, the "Administrative Agent"), located at 1850 Gateway Boulevard, Concord, California, 94520, in lawful money of the United States of America and in immediately available funds, on the Termination Date the principal amount of (a) DOLLARS ($ ), or, if less, (b) the aggregate unpaid principal amount of all Term Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.9 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type, and amount of each Term Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Term Loan. This Note (a) is one of the Term Notes referred to in the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions or entities from time to time parties thereto, Bank of America, N.A. (f/k/a Bank of America National Trust Savings Association) as the Administrative Agent, Lehman Commercial Paper Inc. ("LCPI") and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as the Arrangers, LCPI as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Co-Agents, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, 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. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. L-3 COMMUNICATIONS CORPORATION By: _____________________________ Name: Title: 2 Schedule A to Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ---------------------------------------------------------------------------------------------------------------------------------- Amount of Base Amount Amount of Base Rate Unpaid Principal Date Rate Loans Converted to Amount of Principal of Loans Converted to Balance of Base Notation Made By Base Rate Loans Base Rate Loans Repaid Eurodollar Loans Rate Loans - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- ==================================================================================================================================
Schedule B to Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ---------------------------------------------------------------------------------------------------------------------------------- Amount of Amount Interest Period and Amount of Amount of Eurodollar Unpaid Principal Date Eurodollar Converted to Eurodollar Rate with Principal of Loans Converted to Balance of Notation Loans Eurodollar Loans Respect Thereto Eurodollar Repaid Base Rate Loans Eurodollar Loans Made By - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- ==================================================================================================================================
EXHIBIT B-1 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================
TABLE OF CONTENTS Page ---- SECTION 1. DEFINED TERMS.........................................................2 1.1. Definitions..................................................................2 1.2. Other Definitional Provisions................................................4 1.3. Effect of Restatement........................................................4 SECTION 2. GUARANTEE..............................................................4 2.1. Guarantee....................................................................4 2.2. No Subrogation...............................................................5 2.3. Amendments, etc. with respect to the Guaranteed Obligations..................6 2.4. Guarantee Absolute and Unconditional.........................................6 2.5. Reinstatement................................................................7 2.6. Payments.....................................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES.........................................7 3.1. Representations in Credit Agreements.........................................7 SECTION 4. COVENANTS..............................................................8 4.1. Covenants in Credit Agreements...............................................8 4.2. Issuance of Indebtedness.....................................................8 4.3. Investments..................................................................8 4.4. Activity.....................................................................8 4.5. Distributions................................................................8 4.6. Notices......................................................................8 4.7. Foreign Jurisdictions........................................................8 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS.........................................8 4A.1 Reports......................................................................8 4A.2 Certificates; Other Information..............................................9 4A.3 Inspection of Property, Books and Records; Discussions.......................9 4A.4 Notices......................................................................9 4A.5 Further Assurance...........................................................10 4A.6 Additional Collateral.......................................................10 4A.7 Payment of Obligations......................................................10 SECTION 5. MISCELLANEOUS.........................................................11 5.1. Amendments in Writing.......................................................11 5.2. Notices.....................................................................11 5.3. No Waiver by Course of Conduct; Cumulative Remedies.........................11 5.4. Enforcement Expenses; Indemnification.......................................11 5.5. Successors and Assigns......................................................12 5.6. Counterparts................................................................12
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TABLE OF CONTENTS Page ---- 5.7. Severability...............................................................12 5.8. Section Headings...........................................................12 5.9. Integration................................................................12 5.10. GOVERNING LAW..............................................................12 5.11. SUBMISSION TO JURISDICTION; WAIVERS........................................12 5.12. Acknowledgments............................................................13 5.13. WAIVER OF JURY TRIAL.......................................................13 5.14. Releases...................................................................14
ii SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. (f/k/a Bank of America NT & SA) as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent, the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, Holdings has executed and delivered to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents, the Amended and Parent Guarantee Agreement (the "Prior Guarantee"), dated as of August 13, 1998 in respect of the obligations of the Borrower to the Administrative Agent for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreement; WHEREAS, Holdings, the Agents, the Arrangers and the Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that Holdings shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. 2 (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower or any other Credit Party with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). "Parent Distributions": the collective reference to any of the following, whether direct or indirect: (i) the declaration or payment of any dividend or other distribution on or in respect of any shares of any class of any Capital Stock of Holdings, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other retirement for value of any such shares of Capital Stock of Holdings, now or hereafter outstanding, (iii) any other payment by Holdings to the holder 3 of any shares of any class of the Capital Stock of Holdings in their capacity as such and (iv) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of Holdings now or hereafter outstanding; provided, however, that the term "Parent Distribution" shall not include payments of salaries or bonuses to employees of Holdings in their capacities as such. "Permitted Parent Distributions": (a) the issuance by Holdings of options or other equity securities of Holdings to outside directors, members of management or employees of Holdings in the ordinary course of business, (b) cash payments made in lieu of issuing fractional shares of Holdings' common stock or preferred stock, (c) cash payments to repurchase Capital Stock of Holdings solely with the proceeds of dividends received from the Borrower pursuant to clause (C) of the definition of Permitted Stock Payments in the Credit Agreements; provided, however, that such payments do not exceed $5,000,000, and (d) the application of up to $2,000,000 of the proceeds of the sale of common stock of Holdings to the repurchase of common stock of Holdings from management of Holdings or the Borrower. "Subscription Agreements": (a) that certain common stock agreement dated April 30, 1997, by and between Frank C. Lanza and Holdings and (b) that certain common stock agreement dated April 30, 1997, by and between Robert V. LaPenta and Holdings, in each case, as in effect on the date hereof. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Holdings hereby unconditionally and irrevocably guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective 4 successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of Holdings hereunder shall be joint and several with the Obligations of the other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of Holdings hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by Holdings under applicable federal and state laws relating to the insolvency of debtors without rending the guarantee of Holdings hereunder unenforceable. (c) Holdings agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of Holdings hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders, hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of Holdings under this Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated (notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding). (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of Holdings hereunder, and Holdings shall, notwithstanding any such payment (other than any payment made by Holdings in respect of the Guaranteed Obligations or any payment received or collected from Holdings in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of Holdings hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 No Subrogation. Notwithstanding any payment made by Holdings hereunder or any set-off or application of funds of Holdings by any of the Agents or Lenders, Holdings shall not be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall Holdings seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by Holdings hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of the Guaranteed Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to Holdings on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by Holdings in trust for the Agents and the Lenders, segregated 5 from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly indorsed by Holdings to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.3 Amendments, etc. with respect to the Guaranteed Obligations. Holdings shall remain obligated hereunder notwithstanding that, without any reservation of rights against Holdings and without notice to or further assent by Holdings, any demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such Agent or Lender and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.4 Guarantee Absolute and Unconditional. Holdings waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Credit Parties, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Holdings waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Holdings understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or the Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the other Credit Parties for the 6 Guaranteed Obligations, or of Holdings under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Holdings, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve Holdings of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against Holdings. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.5 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the any of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.6 Payments. Holdings hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 7 SECTION 4. COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. Holdings shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by Holdings or any of its Subsidiaries. 4.2 Issuance of Indebtedness. Holdings shall not issue, incur or assume any Indebtedness or any Guarantee Obligations other than Indebtedness and Guarantee Obligations under the Credit Documents to which it is a party. 4.3 Investments. Holdings shall not have outstanding or acquire any Investment in any Person other than Investments in Capital Stock of the Borrower and Cash Equivalents. 4.4 Activity. Holdings shall not engage in any business activity other than its ownership and voting of the Capital Stock of the Borrower and the performance of its obligations under the Credit Documents to which it is a party and the Transaction Documents to which it is a party. 4.5 Distributions. Holdings shall not make any Parent Distributions other than Parent Distributions payable solely in common stock of Holdings and Permitted Parent Distributions. 4.6 Notices. Holdings shall promptly give notice to the Administrative Agent of the occurrence of any Default or Event of Default. 4.7 Foreign Jurisdictions. No later than the Closing Date, Holdings shall be duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Reports. Holdings will deliver to the Administrative Agent promptly upon their becoming available, copies of all consolidated or consolidating financial statements, reports, notices and proxy statements sent or made available generally by Holdings to its security holders, 8 of all regular and periodic reports and all registrations statements and prospectuses, if any, filed by Holdings with any securities exchange or with the Securities and Exchange Commission and of all press releases and other statements made available generally by Holdings to the public concerning Holdings. 4A.2 Certificates; Other Information. Holdings shall furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery by the Borrower of the financial statements referred to in subsection 6.1 of each of the Credit Agreements, a certificate of a Responsible Officer of Holdings stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; and (b) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 4A.3 Inspection of Property, Books and Records; Discussions. Holdings shall keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of Holdings and its Subsidiaries with officers and employees of Holdings and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify Holdings prior to any contact with such accountants and give Holdings the opportunity to participate in such discussion; provided, further, that Holdings shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 4A.4 Notices. Holdings shall promptly give written notice to the Administrative Agent of: (a) any (i) default or event of default under any Contractual Obligation of Holdings or (ii) litigation, investigation or proceeding which may exist at any time between Holdings and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect; (b) any litigation or proceeding affecting Holdings in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; (c) the following events, as soon as possible and in any event within 45 days after Holdings knows or has reason to know thereof: (i) the occurrence or 9 expected occurrence of any Reportable Event with respect to any plan (other than a Multiple Employer Plan), a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or Holdings or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan; and Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action Holdings proposes to take with respect thereto. 4A.5 Further Assurance. Upon the request of the Administrative Agent, Holdings shall promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including, without limitation, financing, statements and continuation statements) for filing under the provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Agents and the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 4A.6 Additional Collateral. With respect to any Capital Stock acquired after the Closing Date by Holdings that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject promptly (and in any event within 30 days after the acquisition thereof): Holdings shall (i) execute and deliver to the Administrative Agent such amendments to the Parent Pledge Agreement or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. 4A.7 Payment of Obligations. Holdings shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings or its Subsidiaries, as the case may be; provided that, notwithstanding the foregoing, Holdings and each of its Subsidiaries shall have the right to pay any such obligation and in good faith contest, by proper legal actions or proceedings, the invalidity or amount of such claims. 10 SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon Holdings shall be addressed to Holdings at its notice address set forth below its signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against Holdings under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. 11 (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE 12 SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 13 5.14 Releases. At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to Holdings, and the Administrative Agent shall execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. [Signature page follows] 14 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: ------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ---------------------------------- Name: --------------------------- Title: --------------------------- S-1 EXHIBIT B-2 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS
Page SECTION 1. DEFINED TERMS..................................................3 1.1. Definitions..........................................................3 1.2. Other Definitional Provisions........................................4 1.3. Effect of Restatement................................................4 SECTION 2. GUARANTEE......................................................4 2.1. Guarantee............................................................4 2.2. Right of Contribution................................................5 2.3. No Subrogation.......................................................5 2.4. Amendments, etc. with respect to the Guaranteed Obligations..........5 2.5. Guarantee Absolute and Unconditional.................................6 2.6. Reinstatement........................................................7 2.7. Payments.............................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES.................................7 3.1. Representations in Credit Agreements.................................7 SECTION 4. COVENANTS......................................................7 4.1. Covenants in Credit Agreements.......................................7 SECTION 5. MISCELLANEOUS..................................................8 5.1. Amendments in Writing................................................8 5.2. Notices..............................................................8 5.3. No Waiver by Course of Conduct; Cumulative Remedies..................8 5.4. Enforcement Expenses; Indemnification................................8 5.5. Successors and Assigns...............................................9 5.6. Counterparts.........................................................9 5.7. Severability.........................................................9 5.8. Section Headings.....................................................9 5.9. Integration..........................................................9 5.10. GOVERNING LAW.......................................................9 5.11. SUBMISSION TO JURISDICTION; WAIVERS.................................9 5.12. Acknowledgments....................................................10 5.13. WAIVER OF JURY TRIAL...............................................10 5.14. Additional Guarantors..............................................11 5.15. Releases...........................................................11
i SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Guarantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Guarantors are parties to an Amended and Restated Subsidiary Guarantee Agreement dated as of August 13, 1998 (the "Prior Guarantee"), in respect of the obligations of the Borrower to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreements; WHEREAS, the Guarantors, Agents, Arrangers and Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Guarantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Guarantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that the Guarantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower 2 thereunder, each Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guarantors": the collective reference to each Guarantor. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the 3 Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of each of the Guarantors hereunder shall be joint and several with the Obligations of all other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors without rendering the guarantee of such Guarantor hereunder unenforceable. (c) Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of each Guarantor under this 4 Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding. (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of any Guarantor hereunder, and each Guarantor shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Agents and the Lenders, and each Guarantor shall remain jointly and severally liable to the Agents and the Lenders for the full amount guaranteed by such Guarantor hereunder. 2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by any of the Agents or Lenders, no Guarantor shall be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by such Guarantor hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of any of the Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Agents and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.4 Amendments, etc. with respect to the Guaranteed Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any 5 demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such party and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Credit Parties for the Guaranteed Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to 6 collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against any Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by and of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Guarantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Guarantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Guarantor or to the Credit Document to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Guarantor's knowledge. SECTION 4. COVENANTS Each Guarantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is 7 caused by the failure to take such action or to refrain from taking such action by any of the Credit Parties. SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Guarantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth below its respective signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Guarantor is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the 8 execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under each of the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Guarantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of the Guarantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND 9 ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GUARANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Each Guarantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Guarantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders, or among the Guarantors and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY 10 JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 5.14 Additional Guarantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of each of the Credit Agreements shall become a Guarantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. 5.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Guarantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to the Guarantors, and the Administrative Agent shall execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request to evidence such termination. (b) At the request and sole expense of the Borrower, a Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreements. [Signature page follows] 11 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYNE CORPORATION By: ---------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notice to any Guarantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: _____________________________________ Name: _______________________________ Title: ______________________________ S-2 Annex 1 to Second Amended and Restated Subsidiary Guarantee Agreement ASSUMPTION AGREEMENT, dated as of ______________, _____, made by ______________________________, a ______________ corporation (the "Additional Guarantor"), in favor of Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") parties to the Credit Agreements referred to below. All capitalized terms not defined herein shall have the collective meanings ascribed to them in each of such Credit Agreements. W I T N E S S E T H: - - - - - - - - - - WHEREAS, (a) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the banks, financial institutions or other entities party thereto as Lenders (the "Facility A Lenders"), Lehman Commercial Paper Inc. ("LCPI"), as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a Second Amended and Restated Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), (b) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility B Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into an Amended and Restated 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement") and (c) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a new 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement, and, together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); WHEREAS, in connection with the Credit Agreements, certain Subsidiaries of the Borrower (other than the Additional Guarantor) have entered into a Subsidiary Guarantee Agreement and a Subsidiary Pledge Agreement, each amended and restated as of _________ __, 2000 (as amended, supplemented or otherwise modified from time to time, respectively, the "Subsidiary Guarantee Agreement" and the "Subsidiary Pledge Agreement") in favor of the Administrative Agent for the benefit of the Lenders; WHEREAS, the Credit Agreements require the Additional Guarantor to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; and Annex 1 - 1 WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; NOW, THEREFORE, IT IS AGREED: 1. Subsidiary Guarantee Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 5.14 of the Subsidiary Guarantee Agreement, hereby becomes a party to the Subsidiary Guarantee Agreement as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Guarantee Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the Subsidiary Guarantee Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 2. Subsidiary Pledge Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 7.15 of the Subsidiary Pledge Agreement, hereby becomes a party to the Subsidiary Pledge Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The information set forth in Annex 1-B hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Pledge Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in the Subsidiary Pledge Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 3. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. [ADDITIONAL GUARANTOR] By: ------------------------------ Name: Title: Address for Notices: ----------------------------------- ----------------------------------- ----------------------------------- Annex 1 - 2 Attention: Phone: ( ) ___________ Fax: ( ) ___________ Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ------------------------------------------- Name: Title: Annex 1 - 3 EXHIBIT B-3 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page SECTION 1. DEFINED TERMS..........................................................................................2 1.1. Definitions...............................................................................................2 1.2. Other Definitional Provisions.............................................................................4 1.3. Effect of Restatement.....................................................................................4 SECTION 2. PLEDGE.................................................................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES.........................................................................4 3.1. Representations in Credit Agreement.......................................................................4 3.2. Title; No Other Liens.....................................................................................5 3.3. Perfected First Priority Liens............................................................................5 3.4. Chief Executive Office....................................................................................5 3.5. Pledged Stock.............................................................................................5 SECTION 4. COVENANTS..............................................................................................5 4.1. Maintenance of Perfected Security Interest................................................................6 4.2. Pledged Stock.............................................................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS.........................................................................7 4A.1 Further Documentation.....................................................................................7 4A.3 Notices...................................................................................................7 SECTION 5. REMEDIAL PROVISIONS....................................................................................8 5.1. Pledged Stock.............................................................................................8 5.2. Proceeds to be Turned Over To Administrative Agent........................................................9 5.3. Application of Proceeds...................................................................................9 5.4. Code and Other Remedies...................................................................................9 5.5. Registration Rights......................................................................................10 5.6. Waiver; Deficiency......................................................................................11 SECTION 6. THE ADMINISTRATIVE AGENT..............................................................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc..............................................11 6.2. Duty of Administrative Agent.............................................................................12 6.3. Authority of Administrative Agent........................................................................12 SECTION 7. MISCELLANEOUS.........................................................................................13 7.1. Amendments in Writing....................................................................................13 7.2. Notices..................................................................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies......................................................13 7.4. Enforcement Expenses; Indemnification....................................................................13 7.5. Successors and Assigns...................................................................................14 7.6. Set-Off..................................................................................................14
i 7.7. Counterparts.............................................................................................14 7.8. Severability.............................................................................................14 7.9. Section Headings.........................................................................................15 7.10. Integration.............................................................................................15 7.11. GOVERNING LAW...........................................................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS.....................................................................15 7.13. Acknowledgments.........................................................................................16 7.14. WAIVER OF JURY TRIAL....................................................................................16 7.15. Releases................................................................................................16
ii SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, Holdings executed and delivered to the Original Administrative Agents a certain Amended and Restated Parent Pledge and Security Agreement dated as August 13, 1998 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, Holdings and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that Holdings execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Holdings, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of Holdings and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Parent Guarantee, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by Holdings with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by Holdings or any Subsidiary of Holdings with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and Lenders that are required to be paid by Holdings pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, Holdings while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 3 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to Holdings' Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Holdings hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by Holdings or in which Holdings now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and the Agents and the Lenders shall be entitled to rely on each of 4 them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, Holdings owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by Holdings to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of Holdings and any Persons purporting to purchase any Collateral from Holdings, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, Holdings' jurisdiction of organization and the location of Holdings' chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by Holdings hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by Holdings. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Holdings is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS 5 Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest . Holdings shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If Holdings shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, Holdings shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by Holdings to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by Holdings and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by Holdings, Holdings shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of Holdings, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, Holdings will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock 6 or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of Holdings or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) Holdings will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of Holdings, Holdings will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Holdings will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Holdings will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to Holdings of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), Holdings shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to Holdings, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by Holdings or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to Holdings to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) Holdings hereby authorizes and instructs each Issuer of any Pledged Stock pledged by Holdings hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Holdings, and Holdings agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by Holdings consisting of cash, checks and other near-cash items shall be held by Holdings in trust for the Agents and the Lenders, segregated from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly endorsed by Holdings to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by Holdings in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by Holdings and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to Holdings or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to Holdings or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Holdings or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office 9 of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Holdings, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to Holdings. To the extent permitted by applicable law, Holdings waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, Holdings will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Holdings agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Holdings recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to 10 agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Holdings acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Holdings agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Holdings further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against Holdings, and Holdings hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Holdings waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Holdings shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Holdings hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Holdings and in the name of Holdings or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Holdings hereby gives the Administrative Agent the power and right, on behalf of Holdings, without notice to or assent by Holdings, to do any or all of the following: (i) in the name of Holdings or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; 11 (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If Holdings fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by Holdings, shall be payable by Holdings to the Administrative Agent on demand. (d) Holdings hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holdings or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to Holdings for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Holdings acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action 12 taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and Holdings, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and Holdings shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent, nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against Holdings or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 13 (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent Holdings would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Holdings hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to Holdings, any such notice being expressly waived by Holdings, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of Holdings, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of Holdings to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against Holdings, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify Holdings promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any 14 such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND 15 (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to Holdings and the Administrative Agent shall deliver to Holdings any Collateral held by the Administrative Agent hereunder, and execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by Holdings in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of Holdings, shall execute and deliver to Holdings all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. [SIGNATURE PAGE FOLLOWS] 16 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: -------------------------------------------- Name: ---------------------------------- Title: ---------------------------------- S-1 Schedule 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares - ---------------------------------- -------------- -------------------- ------------- L-3 Communications Corporation Common 1 100
Sch. 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016 Sch. 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Parent Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. L-3 Communications Corporation By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 EXHIBIT B-4A TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================
TABLE OF CONTENTS Page ---- Section 1. DEFINED TERMS.....................................................3 1.1 Definitions.......................................................3 1.2 Other Definitional Provisions.....................................4 1.3 Effect of Restatement.............................................4 Section 2. PLEDGE............................................................4 Section 3. REPRESENTATIONS AND WARRANTIES....................................5 3.1 Title; No Other Liens.............................................5 3.2 Perfected First Priority Liens....................................5 3.3 Chief Executive Office............................................5 3.4 Pledged Stock.....................................................5 Section 4. COVENANTS.........................................................6 4.1 Maintenance of Perfected Security Interest........................6 4.2 Pledged Stock.....................................................6 Section 4A. CERTAIN AFFIRMATIVE COVENANTS.....................................6 4A.1 Further Documentation.............................................6 4A.2 Payment of Obligations............................................6 4A.3 Notices...........................................................6 Section 5. REMEDIAL PROVISIONS...............................................8 5.1 Pledged Stock.....................................................8 5.2 Proceeds to be Turned Over To Administrative Agent................9 5.3 Application of Proceeds...........................................9 5.4 Code and Other Remedies...........................................9 5.5 Registration Rights..............................................10 5.6 Waiver; Deficiency...............................................11 Section 6. THE ADMINISTRATIVE AGENT.........................................11 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc......11 6.2 Duty of Administrative Agent.....................................12 6.3 Authority of Administrative Agent................................13
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TABLE OF CONTENTS Page ---- Section 7. MISCELLANEOUS....................................................13 7.1 Amendments in Writing............................................13 7.2 Notices..........................................................13 7.3 No Waiver by Course of Conduct; Cumulative Remedies..............13 7.4 Enforcement Expenses; Indemnification............................13 7.5 Successors and Assigns...........................................14 7.6 Set-Off..........................................................14 7.7 Counterparts.....................................................14 7.8 Severability.....................................................15 7.9 Section Headings.................................................15 7.10 Integration......................................................15 7.11 GOVERNING LAW....................................................15 7.12 SUBMISSION TO JURISDICTION; WAIVERS..............................15 7.13 Acknowledgments..................................................16 7.14 WAIVER OF JURY TRIAL.............................................16 7.15 Releases.........................................................16 7.16 Conflict.........................................................17
ii SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Corporation, a Delaware corporation (the "Borrower"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Amended and Restated Borrower Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into an Amended and Restated Charge Over Shares governed by the laws of England and Wales, under which certain shares of capital stock of L-3 Communications U.K. Ltd. owned by the Borrower have been pledged to the Administrative Agent (the "Charge Over Shares"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Borrower Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, the Borrower while this Agreement is in effect; provided that, in no event shall the Pledged Stock include more than 65.0 3 percent of the issued and outstanding stock of L-3 Communications U.K. Ltd. (the "U.K. Issuer Pledge Limitation"). "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Borrower hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in, all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. 4 SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by the Borrower to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor, duly executed in blank will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Pledged Stock. (a) Except for the U.K. Issuer Pledge Limitation, the shares of Pledged Stock pledged by the Borrower hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by the Borrower. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. 5 SECTION 4. COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. The Borrower shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.2 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Pledge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2 shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue 6 any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) The Borrower will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), the Borrower shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the Borrower, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Borrower Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the Borrower or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to the Borrower to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) The Borrower hereby authorizes and instructs each Issuer of any Pledged Stock pledged by the Borrower hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from the Borrower, and the Borrower agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Borrower or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the 9 Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrower, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to the Borrower. To the extent permitted by applicable law, the Borrower waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Borrower will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Borrower agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) The Borrower recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for 10 investment and not with a view to the distribution or resale thereof. The Borrower acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) The Borrower agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. The Borrower further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against the Borrower, and the Borrower hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. The Borrower waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. The Borrower shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, the Borrower hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or 11 otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, and other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 12 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any 13 and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 14 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE CREDIT AGREEMENTS AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; 15 (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 16 7.16 Conflict. In the event there is a conflict between the terms of this Agreement and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares or the Pledged Stock of L-3 U.K. and a court of competent jurisdiction determines that the laws of the United Kingdom shall govern such dispute, then the Charge Over Shares shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K.; provided that, if such a court determines that the laws of the State of New York shall govern such dispute, then this Borrower Pledge Agreement shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K. [Signature page follows] 17 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS CORPORATION By: --------------------------------- Christopher C. Cambria Vice President - General Counsel and Secretary ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 ATTENTION: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 ACCEPTED ON BEHALF OF THE AGENTS AND THE LENDERS AS OF THE DATE FIRST ABOVE WRITTEN: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ----------------------------------- Name: Title: S-1 SCHEDULE 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares ------ -------------- --------------------- ------------- L-3 Communications Ilex Common 1 100 Systems, Inc. Hygienetics Environmental Common 2 100 Services, Inc. L-3 Communications U.K. Ltd. Ordinary Shares 3 65 L-3 Communications SPD Common 1 100 Technologies Inc. L-3 Communications Aydin Common 1 1000 Corporation Microdyne Corporation* Common 1 1000
* Represented by the stock certificate of L-M Acquisition Corporation ("L-M") which was converted to the stock of the surviving company in the merger of L-M and Microdyne Corporation. Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016
ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Borrower Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A, as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. HYGIENETICS ENVIRONMENTAL SERVICES, INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION ------------------------------------------------ Christopher C. Cambria Vice President - General Counsel and Secretary MICRODYNE CORPORATION Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS U.K. LTD. ------------------------------------------------ Name: ----------------------------------------- Title: ----------------------------------------- Address for Notices to all Signatories: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: (212) 805-5470 EXHIBIT B-4B TO CREDIT AGREEMENT ================================================================================ AMENDED AND RESTATED CHARGE OVER SHARES made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated April 24, 2000 ================================================================================ TABLE OF CONTENTS
Page SECTION 1. DEFINED TERMS.............................................................3 1.1. Definitions............................................................3 1.2. Other Definitional Provisions..........................................4 1.3. Effect of Restatement..................................................4 SECTION 2. CHARGE....................................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES............................................5 3.1. Title; No Other Liens..................................................5 3.2. Perfected First Fixed Charge Over Shares...............................5 3.3. Chief Executive Office.................................................5 3.4. Charged Shares.........................................................5 SECTION 4. COVENANTS.................................................................6 4.1. Undertaking to Pay.....................................................6 4.2. Charged Shares.........................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS............................................7 4A.1 Maintenance of Perfected Security Interest; Further Assurances.........7 4A.2 Payment of Obligations.................................................8 4A.3 Notices................................................................9 SECTION 5. REMEDIAL PROVISIONS.......................................................9 5.1. Charged Shares.........................................................9 5.2. Payments to be Turned Over To Administrative Agent....................10 5.3. Application of Dividends and Other Payments...........................10 5.4. Right to Enforce Security.............................................10 5.5. Right to Take Possession, Exercise Rights, etc........................11 5.6. Law of Property Act 1925 Not Applicable...............................11 5.7. No Liability of Administrative Agent..................................11 SECTION 6. THE ADMINISTRATIVE AGENT.................................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc...........11 6.2. Duty of Administrative Agent..........................................12 6.3. Authority of Administrative Agent.....................................13
i SECTION 7. MISCELLANEOUS............................................................13 7.1. Amendments in Writing.................................................13 7.2. Notices...............................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies...................13 7.4. Enforcement Expenses; Indemnification.................................13 7.5. Successors and Assigns................................................14 7.6. Set-Off...............................................................14 7.7. Counterparts..........................................................15 7.8. Severability..........................................................15 7.9. Section Headings......................................................15 7.10. Integration..........................................................15 7.11. GOVERNING LAW........................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS..................................15 7.13. Acknowledgments......................................................16 7.14. WAIVER OF JURY TRIAL.................................................16 7.15. Releases.............................................................17 7.16. Conflict; New York Law Pledge Agreement..............................17
ii AMENDED AND RESTATED CHARGE OVER SHARES This AMENDED AND RESTATED CHARGE OVER SHARES, dated April 24, 2000, is made between (i) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), and (ii) Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Charge Over Shares (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Charge Over Shares") in favour of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Charge Over Shares); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Charge Over Shares (as so amended and restated herein, this "Charge Over Shares") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into a Second Amended and Restated Borrower Pledge Agreement governed by the laws of the State of New York, pursuant to which the Borrower has, inter alia, pledged to the Administrative Agent certain shares of capital stock of L-3 Communications U.K. Ltd. (as amended, restated, supplemented or otherwise modified from time to time, the "New York Law Pledge Agreement"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Charge Over Shares. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Charge Over Shares in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Charged Shares": the shares listed on Schedule 1, together with any other shares, stock certificates, securities convertible into and warrants, options, and other rights to purchase or otherwise acquire, or rights of any nature whatsoever in respect of the share capital of any Person that may be issued or granted to, or held by, the Borrower while this Charge Over Shares is in effect; provided that, in no event shall the Charged Shares include more than 65.0 percent of the issued and outstanding capital shares of L-3 Communications U.K. Ltd. ("L-3 U.K.") (the "U.K. Issuer Share Charge Limitation"). "Charge Over Shares": this Amended and Restated Charge Over Shares, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Charged Shares. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation, (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Charge Over Shares, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel 3 to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Charge Over Shares shall refer to this Charge Over Shares as a whole and not to any particular provision of this Charge Over Shares, and Section and Schedule references are to this Charge Over Shares unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. (d) References to the Borrower, any Agent or the Lender include references to any person for the time being deriving title under each of them respectively. 1.3 Effect of Restatement. This Charge Over Shares amends, restates and supersedes the Existing Charge Over Shares; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Change Over Shares shall be deemed to refer without further amendment to this Charge Over Shares. SECTION 2. CHARGE The Borrower, as beneficial owner and as security for the payment and discharge of all the Obligations, hereby charges in favor of the Administrative Agent by way of a first fixed charge all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Charged Shares; (b) any other securities which the Borrower may, with the prior consent of the Administrative Agent, from time to time substitute for all or any of the Charged Shares; and (c) all other securities and all rights, moneys (including, without limitation, dividends) and property whatsoever which may from time to time at any time be derived from, accrue on or be offered in respect of the Charged Shares whether by way of redemption, exchange, conversion, rights, bonus, capital reorganization or otherwise howsoever. 4 As security for its obligations under this Charge Over Shares, the Borrower has delivered, or procured there to be delivered to the Administrative Agent: (i) all share certificates representing the Charged Shares; and (ii) blank, undated stock transfer forms in respect of the Charged Shares executed by the Borrower. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby represents and warrants as to itself and the Collateral charged by it hereunder to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest and charge granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Charge Over Shares and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Fixed Charge Over Shares. The charge granted pursuant to this Charge Over Shares: (a) constitutes a valid perfected charge over all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other charges and Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Charged Shares. (a) The Charged Shares charged by the Borrower hereunder constitute (i) 65 percent of the issued and outstanding shares of all classes of the Capital Stock of L-3 U.K. and (ii) all outstanding warrants, options or other rights to purchase, or other agreements outstanding with respect to, or property that is now or hereafter convertible into, or that requires the issuance 5 or sale of, any Charged Shares and such Charged Shares have been validly charged to the Administrative Agent pursuant hereto. (b) All the Charged Shares have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Charged Shares charged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Charge Over Shares and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Undertaking to Pay. The Borrower shall discharge each Obligation when due in accordance with its terms or, in the case of an Obligation the terms of which do not provide a time for payment, immediately on demand by the Administrative Agent. 4.2 Charged Shares. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the Charged Shares, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Share Charge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock transfer form or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional security for the Obligations. Any sums paid upon or in respect of the Charged Shares upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Charged Shares or any property shall be distributed upon or with respect to the Charged Shares pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the 6 Administrative Agent to be held by it hereunder as additional security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Charged Shares under circumstances described in this Section 4.2(a) shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any shares or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any shares or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of the Collateral (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Charge Over Shares or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Collateral. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Maintenance of Perfected Security Interest; Further Assurances. (a) The Borrower shall: (i) execute and deliver to the Administrative Agent (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the laws of England and Wales or such other country as the Administrative Agent may, in any particular case, reasonably specify; (ii) effect any registration or notarization, give any notice or take any other step, which the Administrative Agent may, by notice to the Borrower and with the consent of the Required Lenders, reasonably specify for any of the purposes described in Section 4A.1(b) or for any similar or related purpose. (b) Those purposes (which in each case the Administrative Agent shall have determined are necessary or desirable to give effect to the terms of this Charge Over Shares) are (i) validly and effectively to create any Lien or right of any kind which the Administrative Agent intended should be created by or pursuant to this Charge Over Shares or the Credit Agreements; 7 (ii) to create a specific mortgage or assignment of any particular part of the Collateral or otherwise to vest in the Administrative Agent the title to any particular part of the Collateral; (iii) to protect the priority, or increase the effectiveness, in any jurisdiction of any Lien which is created, or which the Administrative Agent intended should be created, by or pursuant to this Charge Over Shares or the Credit Agreements; (iv) to enable or assist the Administrative Agent to sell or otherwise deal with any part of the Collateral to transfer title to, or grant any interest or right relating to, any part of the Collateral or to exercise any power which is referred to in Section 5 or which is conferred by the Credit Agreements; (v) to enable or assist the Administrative Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Collateral in any country or under the law of any country. (c) The Administrative Agent may specify the terms of any document to be executed by the Borrower under Section 4A.1(a), and those terms may include any covenants, powers and provisions which the Administrative Agent reasonably considers appropriate to protect its own or any other Lender's or Agent's interests. (d) The Borrower shall comply with a notice under Section 4A.1(a) by the date specified in the notice. (e) At the same time as the Borrower delivers to the Administrative Agent any document executed under 4.3(a)(i), the Borrower shall also deliver to the Administrative Agent a certificate signed by two (2) of the Borrower's directors which shall: (i) set out the text of a resolution of the Borrower's directors specifically authorizing the execution of the document specified by the Administrative Agent; and (ii) state either that the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Borrower's by-laws or other constitutional documents. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings 8 could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Charged Shares. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsections 5.4 and/or 5.5, the Borrower shall be permitted to receive all cash dividends, principal and interest paid in respect of the Charged Shares paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Charged Shares; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Charge Over Shares or any other Credit Document. (b) THE BORROWER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF THE BORROWER WITH RESPECT TO THE COLLATERAL, INCLUDING THE RIGHT TO VOTE THE CHARGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE OCCURRENCE OF THE LAST TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE CHARGED SHARES, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE CHARGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND 9 WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY CHARGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE CHARGED SHARES OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE RESPONSIBLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO. Immediately following the occurrence of an Event of Default, the Borrower shall give notice to the Secretary of L-3 U.K. of the appointment of the Administrative Agent as the Borrower's proxy and the Borrower's attorney in accordance with this Section 5.1 and Section 6 in relation to the Charged Shares. 5.2 Payments to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all payments or other funds received in respect of any of the Collateral (including all dividends, distributions or other income in respect of the Collateral) by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All such payments or other funds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All such payments or other funds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Dividends and Other Payments. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of amounts held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such amounts held in any Collateral Account remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Right to Enforce Security. On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Charge Over Shares has become enforceable: 10 (a) the security constituted by this Charge Over Shares shall immediately become enforceable; (b) the Administrative Agent shall be entitled at any time or times to exercise the powers set out in Section 5.5 and in the Credit Agreements; and (c) the Administrative Agent shall be entitled at any time or times to exercise all the powers possessed by it as chargee of the Collateral conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Collateral concerned. 5.5 Right to Take Possession, Exercise Rights, etc. On the occurrence of an Event of Default, the Administrative Agent shall be entitled then or at any later time or times: (a) to exercise the power of sale and other powers conferred by Section 101 of the Law of Property Act, 1925 as varied or amended by this Charge Over Shares; (b) solely and exclusively to exercise all voting and/or consensual powers pertaining to the Charged Shares or any thereof and may exercise such powers in such manner as the Administrative Agent may think fit; (c) in connection with, or in order to facilitate, a sale of the Charged Shares, to remove the then existing Directors and Officers (with or without cause); and/or (d) to sell the Charged Shares or any part thereof at such place and in such manner and at such price or prices as the Administrative Agent may reasonably deem fit, and upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to each purchaser thereof the Charged Shares so sold. 5.6 Law of Property Act 1925 Not Applicable. The Borrower hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Charge Over Shares. 5.7 No Liability of Administrative Agent. The Administrative Agent shall not be obliged to check the nature or sufficiency of any payment received by it under this Charge Over Shares or to preserve, exercise or enforce any right forming part of, or relating to, any Collateral. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Charge Over Shares, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Charge Over Shares, and, without limiting the generality of the foregoing, the Borrower 11 hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Charge Over Shares are coupled with an interest and are irrevocable until this Charge Over Shares is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The 12 powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Charge Over Shares with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Charge Over Shares shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Charge Over Shares may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or 13 otherwise enforcing or preserving any rights under this Charge Over Shares and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Charge Over Shares. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Charge Over Shares to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Charge Over Shares shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Charge Over Shares without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights 14 of the Agents and Lenders under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agents or Lenders may have. 7.7 Counterparts. This Charge Over Shares may be executed by one or more of the parties to this Charge Over Shares on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Charge Over Shares shall be effective when a counterpart which bears the signature of the Borrower and a counterpart of the attached Acknowledgment and Consent which bears the signature of L-3 U.K. shall have been delivered to the Administrative Agent and the Administrative Agent shall have executed this Charge Over Shares. 7.8 Severability. Any provision of this Charge Over Shares which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Charge Over Shares are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Charge Over Shares and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS CHARGE OVER SHARES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF ENGLAND AND WALES. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF ANY OF ENGLAND, THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR 15 HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME AND THAT A JUDGMENT IN ANY PROCEEDINGS BROUGHT IN ANY COMPETENT COURT SHALL BE CONCLUSIVE AND BINDING UPON THE BORROWER AND MAY BE ENFORCED IN THE COURTS OF ANY OTHER JURISDICTION; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO AND WITH RESPECT TO ANY ACTION BROUGHT IN ENGLAND BY DELIVERING A COPY THEREOF OF TO L-3 U.K. WHICH THE BORROWER HEREBY APPOINTS AS ITS AGENT FOR SERVICE OF PROCESS IN ENGLAND WITH RESPECT TO ANY ACTION BROUGHT AGAINST THE BORROWER UNDER OR RELATING TO THIS CHARGE OVER SHARES OR ANY OF THE COLLATERAL; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Charge Over Shares and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Charge Over Shares or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN 16 ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Charge Over Shares and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 7.16 Conflict; New York Law Pledge Agreement. In the event there is a conflict between the terms of this Charge Over Shares and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares, and a court of competent jurisdiction determines that the laws of the State of New York shall govern such dispute, then the New York Law Pledge Agreement shall control such dispute as to the Charged Shares; provided that, if such a court determines that the laws of England and Wales shall govern such dispute, then this Charge Over Shares shall control such dispute as to the Charged Shares. [Signature page follows] 17 IN WITNESS whereof the parties hereto have caused this Charge Over Shares to be duly executed as a Deed the day and year first before written. Executed as a deed ) by L-3 COMMUNICATIONS CORPORATION ) SEAL ---- acting by______________________________________) Signature of Secretary_________________________) Signature of witness___________________________) ADDRESS FOR NOTICES: 600 Third Avenue 34th Floor New York, New York 10016 ATTENTION: President Phone: +1 212 697-1111 Fax: +1 212 805-5470 Executed as a deed ) by BANK OF AMERICA, N.A., ) AS ADMINISTRATIVE AGENT ) acting by______________________________________) Signature of Assistant Secretary_______________) Signature of witness___________________________) S-1 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Charge Over Shares dated _______ __, 2000 (the "Charge Over Shares"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Charge Over Shares and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Charge Over Shares. 3. The terms of Sections 5.1(a) and 5.5 of the Charge Over Shares shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Charge Over Shares. 4. The undersigned accepts the appointment by the Borrower pursuant to subsection 7.12(c) of the undersigned as agent for the Borrower for service of process in England for any action brought against the Borrower under or relating to the Charge Over Shares or any of the Collateral (as defined therein). L-3 COMMUNICATIONS U.K. LTD. _________________________________________ Name: ___________________________________ Title: __________________________________ Address for Notices: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: 212-805-5470 SCHEDULE 1 DESCRIPTION OF CHARGED SHARES CHARGED SHARES:
Issuer Class of Shares Share Certificate No. No. of Shares ------ --------------- --------------------- ------------- L-3 Communications U.K. Ltd. Ordinary 3 65
Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016
EXHIBIT B-5 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page Section 1. DEFINED TERMS...............................................................3 1.1 Definitions..........................................................................3 1.2 Other Definitional Provisions........................................................4 1.3 Effect of Restatement................................................................4 Section 2. PLEDGE......................................................................4 Section 3. REPRESENTATIONS AND WARRANTIES..............................................5 3.1 Representations in Credit Agreements.................................................5 3.2 Title; No Other Liens................................................................5 3.3 Perfected First Priority Liens.......................................................5 3.4 Chief Executive Office...............................................................6 3.5 Pledged Stock........................................................................6 Section 4. COVENANTS...................................................................6 4.1 Maintenance of Perfected Security Interest...........................................6 4.2 Pledged Stock........................................................................6 Section 4a. CERTAIN AFFIRMATIVE COVENANTS...............................................7 4A.1 Further Documentation................................................................8 4A.2 Payment of Obligations...............................................................8 4A.3 Notices..............................................................................8 Section 5. REMEDIAL PROVISIONS.........................................................8 5.1 Pledged Stock........................................................................8 5.2 Proceeds to be Turned Over To Administrative Agent...................................9 5.3 Application of Proceeds.............................................................10 5.4 Code and Other Remedies.............................................................10 5.5 Registration Rights.................................................................11 5.6 Waiver; Deficiency..................................................................12 Section 6. THE ADMINISTRATIVE AGENT...................................................12 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.........................12 6.2 Duty of Administrative Agent........................................................13 6.3 Authority of Administrative Agent...................................................13 Section 7. MISCELLANEOUS..............................................................14 7.1 Amendments in Writing...............................................................14 7.2 Notices.............................................................................14 7.3 No Waiver by Course of Conduct; Cumulative Remedies.................................14 7.4 Enforcement Expenses; Indemnification...............................................14 7.5 Successors and Assigns..............................................................15 7.6 Set-Off.............................................................................15 7.7 Counterparts........................................................................15 7.8 Severability........................................................................15 7.9 Section Headings....................................................................16 7.10 Integration.........................................................................16 7.11 GOVERNING LAW.......................................................................16 7.12 SUBMISSION TO JURISDICTION; WAIVERS.................................................16
i Page 7.13 Acknowledgments.....................................................................17 7.14 WAIVER OF JURY TRIAL................................................................17 7.15 Additional Grantors.................................................................17 7.16 Releases............................................................................17
ii SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Grantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: - - - - - - - - - - WHEREAS, each Grantor executed and delivered to the Original Administrative Agents a certain Amended and Restated Subsidiary Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, each Grantor and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each Grantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that each Grantor execute and deliver this Agreement NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the 2 Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Subsidiary Guarantees, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, 3 indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Each Grantor hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt 4 and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Grantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Grantor, each of which is hereby incorporated herein by reference, are true and correct, and each of the Agents and Lenders shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Grantor's knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by each of the Grantors to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and 5 (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization and the location of such Grantor's chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If such Grantor shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, 6 duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in subsection 4.2(a) with respect to the Pledged Stock issued by it and (iii) the terms of subsections 5.1(c) and 5.5 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to subsections 5.1(c) or 5.5 with respect to the Pledged Stock issued by it. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 7 4A.1 Further Documentation. (a) Such Grantor will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Such Grantor will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), each Grantor 8 shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Stock pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Agents and the Lenders, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly endorsed by such Grantor to the Administrative Agent, if required). All Proceeds received 9 by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need 10 the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a 11 breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following: (i) in the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. 12 (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand. (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lender to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 13 SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Grantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided, that any such notice, request, or demand to or upon any Grantor shall be addressed to such Grantor at its address set forth below its respective signature hereto. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against such Grantor or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Grantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the 14 extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Each Grantor hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Agent or Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify such Grantor promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 15 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Grantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION 16 OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Each Grantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Grantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among the Grantors and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 attached to the Amended and Restated Subsidiary Guarantee Agreement executed concurrently herewith. 7.16 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors; provided, however, that the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor 17 all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement. [Signature page follows] 18 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By:_____________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By:______________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By:_______________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By:________________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYNE CORPORATION By:________________________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notices for each Grantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By:_____________________________________ Name:________________________________ Title:_______________________________ S-2 Schedule 1 DESCRIPTION OF PLEDGED STOCK PLEDGED STOCK: - ------------------- -------------------- -------------- --------------------- ------------- - ------------------- -------------------- -------------- --------------------- ------------- Issuer Owner (Guarantor) Class of Stock Stock Certificate No. No. of Shares
Schedule 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE(1)
Grantor Jurisdiction of Organization Location ------- ---------------------------- -------- Hygienetics Environmental Delaware 1570 Buckeye Drive Services, Inc. Milpitas, CA 95035 L-3 Communications Ilex Delaware 1570 Buckeye Drive Systems, Inc. Milpitas, CA 95035 L-3 Communications Delaware 600 Third Avenue Aydin Corporation New York, NY 10016 L-3 Communications SPD Delaware 13500 Roosevelt Blvd. Technologies Inc. Philadelphia, PA 19116 Microdyne Corporation Maryland 600 Third Avenue New York, NY 10016
- -------------------- (1) Borrower to advise of Chief Executive Office for each Sub. Schedule 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Subsidiary Pledge Agreement dated as of _________ ____, 2000 (the "Agreement"), made by the Grantors party thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. [NAME OF ISSUER] ___________________________________ Name:______________________________ Title:_____________________________ Address for Notices: ___________________________________ ___________________________________ Fax:_______________________________ EXHIBIT C-1 to the Credit Agreement. [LETTERHEAD OF SIMPSON THACHER & BARTLETT] April 28, 2000 Bank of America, N.A., as Administrative Agent Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent Lehman Brothers, Inc. as Arranger Banc of America Securities LLC as Arranger and The Lenders listed on Schedule I hereto which are parties to the Credit Agreement on the date hereof Re: Second Amended and Restated Credit Agreement dated as of April 24, 2000, Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 and New 364 Day Credit Agreement dated as of April 24, 2000 Ladies and Gentlemen: We have acted as counsel to L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Holdings, Inc., a Delaware corporation (the "Parent Guarantor"), the subsidiaries of the Borrower named on Schedule II attached hereto (each, a "Subsidiary Guarantor"and, collectively, the "Subsidiary Guarantors"; (the Borrower, the Parent Guarantor and the Subsidiary Guarantors being referred to herein collectively as the "Credit Parties") in connection with the preparation, execution and delivery of the following documents: (a) the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility A Credit Agreement"); (b) the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger and Bank of America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility B Credit Agreement"); (c) the New 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent, Banc of America Securities LLC and Lehman Brothers, Inc., as the Arrangers, Bank of America, N.A., as Administrative Agent and the financial institutions named therein as Managing Agents (the "Facility C Credit Agreement"; collectively with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); (d) the Notes; (e) the Parent Guarantee; (f) the Subsidiary Guarantee; (g) the Parent Pledge Agreement; (h) the Borrower Pledge Agreement; (i) the Subsidiary Pledge Agreement; and (j) the Charge Over Shares. The documents described in the foregoing clauses (a) through (j) are collectively referred to herein as the "Credit Documents"; the documents described in the foregoing clauses (g) through (j) are collectively referred to herein as the "Security Documents". Unless otherwise indicated, capitalized terms used but not defined herein shall have the respective meanings set forth in the Credit Agreements. This opinion is furnished to you pursuant to Section 5.1(m) of the Credit Agreements. In connection with this opinion, we have examined: 2 (A) the Credit Agreements, signed by each Credit Party party thereto, the Administrative Agent, Syndication Agent, Documentation Agent, Arranger and certain of the Lenders; (B) each other Credit Document, signed by each Credit Party party thereto; and (C) forms of the Notes to be delivered after the date hereof. We also have examined the originals, or duplicates or certified or confonned copies, of such records; agreements, instruments and other documents and have made such other investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Credit Parties. In addition, we have examined, and have relied as to matters of fact upon, the representations made in the Credit Documents. In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. In addition, we have assumed that (1) the Credit Parties have rights in the Collateral existing on the date hereof and will have rights in property which becomes Collateral after the date hereof and (2) "value" (as defined in Section 1-201(44) of the Uniform Commercial Code as in effect in the State of New York (the "New York UCC")) has been given by the Lenders to the Borrower for the security interests and other rights in the Collateral. In rendering the opinion set forth in paragraph 6 below with respect to the Notes, we have assumed that at the time of any execution and delivery of Notes after the date hereof, the Board of Directors of the Borrower (or any committee thereof acting pursuant to authority properly delegated to such committee by the Board of Directors) has not taken any action to rescind or otherwise reduce its prior authorization of the issuance of such Notes. Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth herein, we are of the opinion that: 1. Each of the Borrower and the Parent Guarantor (a) has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Delaware, (b) has the corporate power and authority to execute and deliver each of the Credit Documents to which it is a party, to perform its obligations thereunder and to grant the security interests to be granted by it pursuant to the Security Documents and (c) has duly authorized, executed and delivered each Credit Document to which it is a party. 3 2. Each of the Subsidiary Guarantors (other than Microdyne Corporation ("Microdyne"), as to which we express no opinion) has duly authorized, executed and delivered each Credit Document to which it is a party. 3. The execution and delivery by each of the Borrower and the Parent Guarantor of the Credit Documents to which it is a party, the borrowings by the Borrower in accordance with the terms of the Credit Documents and the granting of the security interests to be granted by the Borrower and the Parent Guarantor pursuant to the Security Documents will not result in any violation of (1) the Certificate of Incorporation or By-Laws of either the Borrower or the Parent Guarantor, (2) assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 4. The execution and delivery by each Subsidiary Guarantor of the Credit Documents to which it is a party and the granting of the security interests to be granted by it pursuant to the Security Documents will not result in any violation of, assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 5. No consent, approval, authorization, order, filing, registration or qualification of or with any Federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law is required for the execution and delivery by any Credit Party of the Credit Documents to which it is a party, the borrowings by any Credit Party in accordance with the terms of the Credit Documents or the granting of any security interests under the Security Documents, except filings required for the perfection of security interests granted pursuant to the Security Documents and consents, waivers, approvals, filings and registrations described on Schedule 4.4 to the Credit Agreement. 6. Assuming that each of the Credit Documents is a valid and legally binding obligation of each of the Lenders parties thereto and assuming that (a) Mierodyne is validly existing and in good standing under the laws of the State of Maryland and has duly authorized, executed and delivered the Credit Documents to which it is a party in accordance with its Articles of Incorporation and By-Laws, (b) execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party do not violate any applicable laws (excepting the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States, other than any government procurement statute or regulations issued pursuant thereto) and (c) execution, delivery and performance by each Credit Party of the Credit 4 Documents to which it is a party do not constitute a breach or violation of any agreement or instrument which is binding upon such Credit Party, each Credit Document (other than the Charge Over Shares) constitutes and each Note delivered to a Lender after the date hereof, assuming the due execution and delivery by the Borrower, will constitute the valid and legally binding obligation of each Credit Party which is a party thereto, enforceable against such Credit Party in accordance with its terms. 7. No Credit Party is an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended. 8. Assuming that the Borrower will comply with the provisions of the Credit Agreements relating to the use of proceeds, the execution and delivery of the Credit Agreements by the Borrower and the making of the Loans under the Credit Agreements will not violate Regulation, T, U or X of the Board of Governors of the Federal Reserve System. 9. The Parent Pledge Agreement and Borrower Pledge Agreement create in favor of the Administrative Agent for the benefit of the Lenders a security interest under the New York UCC in the Pledged Stock (as defined in the Pledge Agreements) described on Schedule I to each of the Parent Pledge Agreement and the Borrower Pledge Agreement (the "Pledged Securities"). 10. The Administrative Agent will have a perfected security interest in the Pledged Securities for the benefit of the Lenders under the New York UCC upon delivery to the Administrative Agent for the benefit of the Lenders in the State of New York of the certificates representing the Pledged Securities in registered form, endorsed in blank by an effective endorsement or accompanied by undated stock power with respect thereto duly endorsed in blank by an effective endorsement. 11. The choice of New York Law to govern each Credit Document in which such choice is stipulated is a valid and effective choice of law under the laws of the State of New York. Our opinions in paragraphs 6 and 9 above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. Our opinion in paragraph 6 above also is subject to the qualification that certain provisions of the Security Documents (other than the Charge Over Shares) (the "U.S. Security Documents") in whole or in part, may not be enforceable, although the inclusion of such provisions does not render the U.S. Security Documents invalid, and the U.S. Security Documents and the laws of the State of New York contain adequate remedial provisions for the practical realization of the rights and benefits afforded thereby. 5 Our opinions in paragraphs 9 and 10 above are limited to Articles 8 and 9 of the New York UCC, and therefore those opinion paragraphs do not address (i) collateral of a type not subject to Article 9 or 8, as the case may be, of the New York UCC, and (ii) under New York UCC 9-103 what law governs perfection of the security interests granted in the collateral covered by this opinion letter. We express no opinion with respect to: (A) perfection of any security interest (1) in any Security Agreement Article 9 Collateral of a type represented by a certificate of title, (2) in any proceeds and (3) in any collateral consisting of money; (B) the effect of 9-306(2) of the New York UCC with respect to any proceeds of Collateral that are not identifiable; (C) perfection of any security interest whose priority is subject to Section 9-313 of the New York UCC; (D) the priority of any security interest; (E) the effect of Section 552 of the Bankruptcy Code (I I U.S.C. 552) (relating to property acquired by a pledgor after the commencement of a case under the United States Bankruptcy Code with respect to such pledgor) and Section 506(c) of the Bankruptcy Code (11 U.S.C. 506(c) (relating to certain costs and expenses of a trustee in preserving or disposing of collateral; (F) the effect of any provision of the Credit Documents which is intended to establish any standard other than a standard set forth in the New York UCC as the measure of the performance by any party thereto of such party's obligations of good faith, diligence, reasonableness or care or of the fulfillment of the duties imposed on any secured party with respect to the maintenance, disposition or redemption of collateral, accounting for surplus proceeds of collateral or accepting collateral in discharge of liabilities; (G) the effect of any provision of the Credit Documents which is intended to permit modification thereof only by means of an agreement signed in writing by the parties thereto; (H) the effect of any provision of the Credit Documents insofar as it provides that any Person purchasing a participation from a Lender or other Person may exercise set-off or similar rights with respect to such participation or that any Lender or other Person may exercise set-off or similar rights other than in accordance with applicable law; 6 (I) the effect of any provision of the Credit Documents imposing penalties or forfeitures; (J) the enforceability of any provision of any of the Credit Documents to the extent that such provision constitutes a waiver of illegality as a defense to performance of contract obligations; or (K) the effect of any provision of the Credit Documents relating to indemnification or exculpation in connection with violations of any securities laws or relating to indemnification, contribution or exculpation in connection with willful, reckless or criminal acts or gross negligence of the indemnified or exculpated Person or the Person receiving contribution. In connection with the provisions of the Credit Documents whereby Credit Parties submit to the jurisdiction of the courts of the United States of America for the Southern District of New York, we note the limitations of 28 U.S.C.'SS''SS' 1331 and 1332 on subject matter jurisdiction of the Federal Court. In connection with the provisions of the Credit Documents which relate to forum selection of the courts of the United States for the Southern District of New York, (including, without limitation, any waiver of any objection to venue or any objection that a court is an inconvenient forum), we also note that such court's discretion to transfer an action from one Federal court to another under 28 U.S.C.'SS' 1404(a). We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the Federal law of the United States and the Delaware General Corporation Law. This opinion letter is rendered to you in connection with the above described transactions. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or tarnished to, any other person, firm or corporation without our prior written consent. Very truly yours, /s/ SIMPSON THACHER & BARTLETT ------------------------------ SIMPSON THACHER & BARTLETT 7 SCHEDULE I LENDERS - ------- LEHMAN COMMERCIAL PAPER INC. BANK OF AMERICA, N.A. THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA CREDIT LYONNAIS BANK ONE. N.A. FIRST UNION COMMERCIAL CORPORATION FLEET NATIONAL BANK THE FUJI BANK, LIMITED HSBC BANK USA SOCIETE GENERALE BANKBOSTON, N.A. BANK OF TOKYO - MITSUBISHI TRUST COMPANY BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC. BANK OF IRELAND BANQUE WORMS CAPITAL CORPORATION CREDIT INDUSTRIEL ET COMMERCIAL COMERICA BANK THE DAI-ICHI KANGYO BANK, LTD. DEN DANSKE BANK AKTIESELSKAB DEUTSCHE GENOSSENSCHAFTSBANK AG DRESDNER BANK AG ERSTE BANK DER OESTERREICHISCHEN GE CAPITAL COMMERCIAL FINANCE, INC. THE INDUSTRIAL BANK OF JAPAN, LIMITED MESS PIERSON CAPITAL CORP. MERITA BANK PLC THE MITSUBISHI TRUST AND BANKING CORPORATION NATIONAL CITY BANK THE ROYAL BANK OF SCOTLAND PLC SUMMIT BANK SUNTRUST BANK WEBSTER BANK 8 SCHEDULE II BORROWER SUBSIDIARIES - --------------------- HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware Corporation. L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware Corporation. L-3 COMMUNICATIONS SPD TECHNOLOGIES INC., a Delaware Corporation. L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware Corporation. MICRODYNE CORPORATION, a Maryland Corporation. 9 [Note: To be replaced with final draft of general counsel's opinion.] Exhibit C-2 to Credit Agreement L-3 COMMUNICATIONS CORPORATION 600 THIRD AVENUE, 34th FLOOR NEW YORK, NEW YORK 10016 April __, 2000 Bank of America, N.A., as Administrative Agent 335 Madison Avenue New York, New York 10017 Lehman Commercial Paper Inc., as Arranger, Syndication Agent and Documentation Agent 3 World Financial Center, 9th Floor New York, New York 10285 Banc of America Securities LLC, as Arranger 9 W 57th Street, 32nd Floor New York, New York 10019 Lehman Brothers, Inc., as Arranger 3 World Financial Center New York, New York 10285 The Lenders Listed on Schedule 1 hereto Ladies and Gentlemen: I have acted as counsel to L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Ilex Systems, Inc., a Delaware corporation ("Ilex"), Hygienetics Environmental Systems, Inc., a Delaware corporation ("HES"), L-3 Communications SPD Technologies Inc., a Delaware corporation ("SPD"), L-3 Communications Aydin Corporation, a Delaware corporation ("Aydin") and Microdyne Corporation, a Maryland corporation ("Microdyne" and collectively with Ilex, HES, SPD and Aydin, the "Subsidiaries", and together with Holdings and the Borrower, the "Loan Parties"), in connection with (a) the Second Amended and Restated Credit Agreement dated as of April 24, 2000 (the "Facility A Credit Agreement") among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc. ("LCPI"), as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as Administrative Agent ("BOA"), (b) the Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility B Credit Agreement") among the Borrower, the Lenders parties thereto, LCPI, as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and BOA, as Administrative Agent and (c) the New 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility C Credit Agreement" and together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements") among the Borrower, the Lenders parties thereto, Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent, Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents. In that connection, you have requested this opinion in connection with the following documents: (i) the Credit Agreements, (ii) the Notes, (iii) the Parent Pledge Agreement, (iv) the Borrower Pledge Agreement, (v) the Subsidiary Pledge Agreement, (vi) the Parent Guarantee, (vii) the Subsidiary Guarantee and (viii) the Charge Over Shares (the documents referred to in clauses (i) through (viii) are referred to herein collectively as the "Loan Documents"). Terms defined in the Loan Documents are used herein as therein collectively defined. In connection with this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of each of the Loan Documents. In addition, I have examined originals or copies, certified or otherwise identified to my satisfaction, of such records, agreements, instruments and other documents as I have deemed relevant and necessary as a basis for the opinions hereinafter set forth. For the purposes hereof, I have assumed, with your permission, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and regularity of all documents examined by me. As to questions of fact relevant to this opinion, I have relied upon, and assume the accuracy of, the representations and warranties of the Loan Parties in the Loan Documents and have relied upon certificates and oral or written statements and other information of public officials, officers and representatives of the Loan Parties and others and assume compliance on the part of all parties to the Loan Documents with their covenants and agreements contained therein. In rendering the opinions expressed below, I have assumed, with your permission and without any independent investigation or verification of any kind, that (a) the Loan Documents constitute the valid and legally binding obligations of each party to the Loan Documents other than the Loan Parties, enforceable against such parties in accordance with their respective terms, and (b) the execution, delivery and performance by each Loan Party of each Loan Document to which it is a party do not contravene, or require any order, consent, approval, license, authorization, validation, filing, recording, registration or exemption not obtained or 2 made under, any applicable provision of any law, statute, rule or regulation (other than any law, statute, rule or regulation of the United States of America or the State of New York). Based upon the foregoing, and subject to the qualifications and limitations stated herein, I am of the opinion that: 1. Ilex has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Guarantee and the Subsidiary Pledge Agreement (collectively, the "Subsidiary Documents") and perform its obligations thereunder. 2. HES has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 3. SPD has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 4. Aydin has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 5. Microdyne has been duly incorporated and is validly existing and in good standing under the laws of the State of Maryland with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 6. Microdyne, has duly authorized, executed and delivered each Credit Document to which it is a party. 7. To my knowledge, there are no legal or governmental proceedings pending or threatened against any of the Loan Parties or to which any of their respective properties is subject which reasonably could be expected to have a Material Adverse Effect other than as disclosed in Schedule 4.6 to the Credit Agreements. 8. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Credit Agreements, the Notes, the Charge Over Shares and the Borrower Pledge Agreement (collectively, the "Borrower Credit Documents") by the Borrower, the borrowing and granting of security interests by the Borrower under the Borrower Credit Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court or other governmental authority binding upon the Borrower or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under 3 any material Contractual Obligation applicable to or binding upon the Borrower or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the any of the Pledge Agreements and/or the Guarantees (collectively, the "Security Documents"). 9. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Subsidiary Documents by each of the Subsidiaries party thereto, the making of the guarantee and granting of security interests by each of the Subsidiaries under the Subsidiary Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon any Subsidiary, (b) violate the provisions of any such Subsidiaries' Constitutional Documents or, (c) other than as disclosed in the Schedules to the Credit Agreements result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon any Subsidiary or any of their respective properties or assets or (ii) the creation of any lien on any of their respective properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 10. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Parent Guarantee and the Parent Pledge Agreement (collectively, the "Parent Documents") by Holdings, the making of the guarantee and granting of security interests by Holdings under the Parent Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon Holdings or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon Holdings or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 11. Based solely on certificates from public officials, I confirm that the Borrower is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Holdings is qualified to do business in New York. Based solely on certificates from public officials, I confirm that Ilex is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that HES is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that SPD is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Aydin is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Microdyne is 4 qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. 12. The Borrower's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of the Borrower's stock records, are owned of record by Holdings free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. Holdings has no direct Subsidiaries other than the Borrower. 13. Ilex's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Ilex's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 14. HES' authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of HES' stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 15. SPD's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of SPD's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 16. Aydin's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Aydin's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 17. Microdyne's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Microdyne's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. I am a member of the Bar of the State of New York and I express no opinion as to the laws of any jurisdiction other than the federal laws of the United States of America, the laws of the State of New York, the Delaware General Corporation Law and the [Maryland General Corporation Law]. This opinion is rendered to you in connection with the above-described transactions in my capacity as counsel to the Loan Parties. This opinion may not be relied upon 5 by you for any other purpose, or relied upon by any other person, firm or corporation without my prior written approval. Very truly yours, 6 Exhibit D to Credit Agreement FORM OF BORROWING CERTIFICATE FOR AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT Pursuant to subsection 5.1(g) of the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper Inc. ("LCPI") as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI, as Arrangers, and the financial institutions named therein as Co-Agents, the undersigned hereby delivers this Certificate. The Borrower hereby requests that a [Eurodollar/Base Rate] Revolving 364 Day Loan be made in the aggregate principal amount of _____________ on ________________, ____ [with an Interest Period of ___ months]. The undersigned hereby certifies as follows: (a) The representations and warranties made by the Borrower and each of its Subsidiaries and each of the other Credit Parties in the Credit Documents are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof (except to the extent they relate to a particular date, in which case they shall remain true and correct as of such date); and (b) No Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to the Loans and other extensions of credit requested to be made on such date. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Credit Agreement. The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such borrowing as if then made. 1 Please wire transfer the proceeds of the borrowing to the account of the Borrower at ___________________ Routing No.:____________________________ (Account No. ____________), or as otherwise directed by the Borrower on the attached Schedule 1. The Borrower has caused this Borrowing Certificate to be executed and delivered, and the certification and warranties contained herein to be made, by its Responsible Officer this _____ day of _________________, ____. L-3 COMMUNICATION CORPORATION By:_________________________________ Name: Title: 2 Exhibit E to Credit Agreement FORM OF EXEMPTION CERTIFICATE OF NON-U.S. LENDER FOR AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT Reference is made to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware Corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper Inc. ("LCPI") as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI as Arrangers, and the financial institutions named therein as Co-Agents. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement. (the "Non-U.S. Lender") is providing this certificate pursuant to subsection 2.15(b) of the Credit Agreement. Under penalties of perjury, the Non-U.S. Lender hereby represents and warrants that: 1. The Non-U.S. Lender is the sole record and beneficial owner of the Note(s) in respect of which it is providing this certificate and it shall remain the sole beneficial owner of such Note(s) at all times during which it is the record holder of such Note(s). 2. The Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In this regard, the Non-U.S. Lender further represents and warrants that: (a) the Non-U.S. Lender is not subject to regulatory or other legal requirements as a bank in any jurisdiction; (b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements; (c) the Non-U.S. Lender is not a 10-percent shareholder within the meaning of Section 881(c)(3)(B) of the Code; (d) the Non-U.S. Lender is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code; 3. The Non-U.S. Lender meets all of the requirements under Code Section 871(h) or 881(c) to be eligible for a complete exemption from withholding of U.S. Taxes on interest payments made to it under the Credit Agreement. IN WITNESS WHEREOF, the undersigned has duly executed this certificate. [NAME OF NON-U.S. LENDER] By: ____________________________ Name: Title: Date:__________________ 2 Exhibit F to Credit Agreement FORM OF ASSIGNMENT AND ACCEPTANCE FOR AMENDED AND RESTATED 364 DAY CREDIT AGREEMENT Reference is made to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified prior to the Effective Date (as defined below), the "Credit Agreement"), among L-3 Communication Corporation, a Delaware corporation, (the "Borrower"), the Lenders and Co-Agents named therein, Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association) ("BOA"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper Inc. ("LCPI"), as Syndication Agent and Documentation Agent, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) and LCPI as Arrangers. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. The Assignor identified on Schedule 1 hereto (the "Assignor") and the Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement and other Credit Documents with respect to those credit facilities contained in the Credit Agreement as set forth on Schedule 1 hereto (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Credit Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder, that such interest is free and clear of any such adverse claim and that Assignor is legally authorized to enter into this Assignment and Acceptance; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the Assigned Facilities and (i) requests that the Administrative Agent, upon request by the Assignee, exchange the attached Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor has retained any interest in any Assigned Facility, requests that the Administrative Agent exchange the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date). 3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 4.1 thereof 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 Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to clause (b) of subsection 2.15 of the Credit Agreement. 4. The effective date of this Assignment and Acceptance shall be the Effective Date of Assignment described in Schedule 1 hereto (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 5. Upon such acceptance and recording, 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 Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Credit Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment 2 and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 7. THIS ASSIGNMENT AND ACCEPTANCE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto. 3 Schedule 1 to Assignment and Acceptance Name of Assignor:______________________________ Name of Assignee:______________________________ Effective Date of Assignment:__________________
Credit Facility Assigned Principal Amount Assigned Commitment Percentage Assigned(1) ------------------------ ------------------------- --------------------------------- $ ___________________ _________._____ % [Name of Assignee] [Name of Assignor] By: __________________________ By: _____________________________ Title: Title: Accepted: Consented To: BANK OF AMERICA, N.A., L-3 COMMUNICATION CORPORATION(2) as Administrative Agent By: _____________________________ By: __________________________ Title: Title: Accepted: BANK OF AMERICA, N.A., as Issuing Lender By: __________________________ Title: Accepted: LEHMAN COMMERCIAL PAPER INC., as Syndication Agent By: ___________________________ Title:
- ---------- (1) Calculate the Commitment Percentage that is assigned to at least 9 decimal places and show as a percentage of the aggregate commitments of all Lenders. (2) The Credit Agreement provides that the consent of the Borrower is required unless the assignee (a) already is a Lender under the Credit Agreement, (b) is an affiliate of a Lender, or (c) in the case of a Lender that is an Investment Fund, any other such Investment Fund which is under common management with such Lender. EX-99 10 0010.txt EXHIBIT 7.9 ================================================================================ NEW 364 DAY CREDIT AGREEMENT among L-3 COMMUNICATIONS CORPORATION, a Delaware corporation, as Borrower, The Several Lenders from Time to Time Parties Hereto, The certain Financial Institutions named as Managing Agents herein, BANC OF AMERICA SECURITIES LLC and LEHMAN BROTHERS, INC., as Arrangers, BANK OF AMERICA, N.A. , as Administrative Agent and LEHMAN COMMERCIAL PAPER INC., as Documentation Agent and Syndication Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page SECTION 1. DEFINITIONS......................................................1 1.1 Defined Terms.........................................................1 1.2 Other Definitional Provisions........................................23 SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS.......................23 2.1 Commitments..........................................................23 2.2 Procedure for Borrowing..............................................24 2.3 Commitment Fee.......................................................24 2.4 Termination or Reduction of Commitments..............................25 2.5 Extension of Termination Date; Repayment of Loans; Evidence of Debt..25 2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments..........................................................27 2.7 Conversion and Continuation Options..................................29 2.8 Minimum Amounts and Maximum Number of Tranches.......................30 2.9 Interest Rates and Payment Dates.....................................30 2.10 Computation of Interest and Fees.....................................31 2.11 Inability to Determine Interest Rate.................................31 2.12 Pro Rata Treatment and Payments......................................32 2.13 Illegality...........................................................33 2.14 Requirements of Law..................................................34 2.15 Taxes................................................................35 2.16 Indemnity............................................................38 2.17 Replacement of Lenders...............................................39 2.18 Certain Fees.........................................................40 2.19 Certain Rules Relating to the Payment of Additional Amounts..........40 SECTION 3. [INTENTIONALLY OMITTED].........................................40 SECTION 4. REPRESENTATIONS AND WARRANTIES..................................40 4.1 Financial Condition..................................................41 4.2 No Change............................................................41 4.3 Corporate Existence; Compliance with Law.............................41 4.4 Corporate Power; Authorization; Enforceable Obligations..............42 4.5 No Legal Bar.........................................................42 4.6 No Material Litigation...............................................42 4.7 No Default...........................................................42 4.8 Ownership of Property; Liens.........................................42 4.9 Intellectual Property................................................43 4.10 Taxes................................................................43 4.11 Federal Regulations..................................................43 4.12 ERISA................................................................43 4.13 Investment Company Act; Other Regulations............................44 4.14 Subsidiaries.........................................................44 4.15 Purpose of Loans.....................................................44 4.16 Environmental Matters................................................44 i 4.17 Collateral Documents.................................................46 4.18 Accuracy and Completeness of Information.............................46 4.19 Labor Matters........................................................46 4.20 Acquisition..........................................................46 4.21 Solvency.............................................................47 SECTION 5. CONDITIONS PRECEDENT............................................47 5.1 Conditions to Initial Loans..........................................47 5.2 Conditions to Each Extension of Credit...............................51 SECTION 6. AFFIRMATIVE COVENANTS...........................................52 6.1 SEC Filings..........................................................52 6.2 Certificates; Other Information......................................52 6.3 Payment of Obligations...............................................53 6.4 Conduct of Business; Maintenance of Existence and Property; Compliance with Law..................................................53 6.5 Insurance............................................................54 6.6 Inspection of Property; Books and Records; Discussions...............54 6.7 Notices..............................................................54 6.8 Environmental Laws...................................................55 6.9 Further Assurances...................................................55 6.10 Additional Collateral................................................56 6.11 [Intentionally Omitted.].............................................56 6.12 Foreign Jurisdictions................................................57 6.13 Government Contracts.................................................57 6.14 Lien Searches........................................................57 SECTION 7. NEGATIVE COVENANTS..............................................57 7.1 Financial Condition Covenants........................................57 7.2 Limitation on Indebtedness...........................................58 7.3 Limitation on Liens..................................................59 7.4 Limitation on Guarantee Obligations..................................61 7.5 Limitation on Fundamental Changes....................................62 7.6 Limitation on Sale of Assets.........................................62 7.7 Limitation on Dividends..............................................63 7.8 Limitation on Capital Expenditures...................................63 7.9 Limitation on Investments, Loans and Advances........................64 7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements...........................................65 7.11 Limitation on Transactions with Affiliates...........................66 7.12 Limitation on Sales and Leasebacks...................................66 7.13 Limitation on Changes in Fiscal Year.................................66 7.14 Limitation on Negative Pledge Clauses................................67 7.15 Limitation on Lines of Business......................................67 7.16 Designated Senior Debt...............................................67 SECTION 8. EVENTS OF DEFAULT...............................................67 SECTION 9. THE AGENTS; THE ARRANGERS.......................................70 9.1 Appointment..........................................................70 9.2 Delegation of Duties.................................................71 9.3 Exculpatory Provisions...............................................71 9.4 Reliance by Agents...................................................71 9.5 Notice of Default....................................................71 ii 9.6 Non-Reliance on Agents and Other Lenders.............................72 9.7 Indemnification......................................................72 9.8 Agents, in Their Individual Capacities...............................73 9.9 Successor Administrative Agent, Syndication Agent and Documentation Agent..................................................73 9.10 The Arrangers and the Managing Agents................................73 SECTION 10. MISCELLANEOUS...................................................74 10.1 Amendments and Waivers..............................................74 10.2 Notices.............................................................75 10.3 No Waiver; Cumulative Remedies......................................77 10.4 Survival of Representations and Warranties..........................77 10.5 Payment of Expenses and Taxes.......................................77 10.6 Successors and Assigns; Participation and Assignments...............78 10.7 Adjustments; Set-off................................................82 10.8 Counterparts........................................................83 10.9 Severability........................................................83 10.10 Integration.........................................................83 10.11 GOVERNING LAW.......................................................83 10.12 SUBMISSION TO JURISDICTION; WAIVERS.................................84 10.13 Acknowledgments.....................................................84 10.14 WAIVERS OF JURY TRIAL...............................................85 10.15 Confidentiality.....................................................85 10.16 Conversion of Currencies............................................85 10.17 Year 2000...........................................................86 iii EXHIBITS Exhibit A-1 Form of Note Exhibit B-1 Form of Parent Guarantee Exhibit B-2 Form of Subsidiary Guarantee Exhibit B-3 Form of Parent Pledge Agreement Exhibit B-4A Form of Borrower Pledge Agreement Exhibit B-4B Form of Charge Over Shares Exhibit B-5 Form of Subsidiary Pledge Agreement Exhibit C-1 Form of Legal Opinion of Simpson Thacher and Bartlett Exhibit C-2 Form of Internal Counsel Opinion Exhibit D Form of Borrowing Certificate Exhibit E Form of Certificate of Non U.S. Lender Exhibit F Form of Assignment and Acceptance SCHEDULES Schedule I Lenders and Commitments Schedule II Pricing Grid Schedule 4.4 Required Consents Schedule 4.5 No Legal Bar Schedule 4.6 Material Litigation Schedule 4.9 Intellectual Property Claims Schedule 4.10 Taxes Schedule 4.14 Subsidiaries Schedule 4.20 Acquisition Documents Schedule 7.2(f) Existing Indebtedness Schedule 7.3(f) Existing Liens Schedule 7.4 Existing Guarantee Obligations Schedule 7.9(c) Officers Schedule 7.9(g) Existing Investments Schedule 7.9(k) Approved Investments iv THIS NEW 364 DAY CREDIT AGREEMENT, dated as of April 24, 2000, is among L-3 Communications Corporation, a Delaware corporation (the "Borrower") which is wholly owned by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), the several banks and other financial institutions or entities from time to time parties hereto (the "Lenders"), Banc of America Securities LLC and Lehman Brothers, Inc. ("LBI") as arrangers (each, in such capacity, an "Arranger" and together, the "Arrangers"), Bank of America, N.A. ("BOA"), as administrative agent for the Agents (as defined below) and the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper, Inc. ("LCPI"), as syndication agent and documentation agent (in such capacity, the "Syndication Agent" and the "Documentation Agent"), and certain financial institutions named as Managing Agents (as amended, supplemented, restated or otherwise modified from time to time, is hereinafter referred to as this "Agreement" or the "Credit Agreement"). WHEREAS, the Borrower has requested that the Lenders extend credit to it for working capital and general corporate purposes (including acquisitions, as permitted herein) of the Borrower and its Subsidiaries upon the terms and subject to conditions set forth herein; and WHEREAS, the Lenders are willing to extend such credit to the Borrower upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, the parties hereto hereby agree as follows: SECTION 1. DEFINITIONS 1.1 Defined TermsAs used in this Agreement, the following terms shall have the following meanings: "Acquired Business": a company or business unit acquired by the Borrower or any of its Subsidiaries, provided that the Borrower has delivered to the Administrative Agent historical financial statements of such company or business unit prepared in accordance with GAAP. "Acquired Company": Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. "Acquisition": the purchase of the Acquired Company by Borrower pursuant to the terms of the Acquisition Documents. "Acquisition Documents": the Asset Purchase Agreement among Honeywell Inc. (as seller), Borrower (as buyer), and Honeywell International Inc. (as guarantor), dated as of February 10, 2000, and all material agreements, instruments and other documents executed or delivered pursuant thereto or in connection with all exhibits, schedules and attachments thereto. "Adjustment Date": the fifth day following the receipt by the Administrative Agent of the financial statements for the most recently completed fiscal period furnished pursuant to subsection 6.1 and the compliance certificate with respect to such financial statements furnished pursuant to subsection 6.2(c). "Administrative Agent": BOA, or following the resignation of BOA as Administrative Agent, any other Lender which may be appointed as Administrative Agent pursuant to subsection 9.9. "Affected Class": as defined in subsection 10.1. "Affected Lender": as defined in subsection 10.7. "Affiliate": as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agents": the collective reference to the Syndication Agent, the Documentation Agent and the Administrative Agent. "Aggregate Outstanding Extensions of Credit": as to any Lender, an amount equal to the sum of the aggregate principal amount of all Loans made by such Lender then outstanding. "Agreement": this Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time. "Agreement Currency": as defined in subsection 10.16(b). "Applicable Creditor": as defined in subsection 10.16(b). "Applicable Holdback": as defined in subsection 2.6(b)(ii). "Applicable Margin": at any time, the percentages set forth on Schedule II under the relevant column heading opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Applicable Margins determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to subsections 6.1 and 6.2, the Applicable Margins shall be (i) for the first 35 days subsequent to such due date, the Applicable Margin in effect prior to such due date and (ii) thereafter, those set forth opposite a Debt Ratio captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Arranger": as defined in the recitals to this Agreement. 2 "Asset Sale": any sale, sale-leaseback, or other disposition by any Person or any Subsidiary thereof of any of its property or assets, including the stock of any Subsidiary of such Person, except sales and dispositions permitted by subsection 7.6 other than subsection 7.6(b) or (e). "Assignee": as defined in subsection 10.6(c). "Attributable Debt": in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Available Commitment": as to any Lender, at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Aggregate Outstanding Extensions of Credit. "Base Rate": for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; and (b) the rate of interest in effect for such day as publicly announced from time to time by BOA in San Francisco, California, as its "reference rate." (The "reference rate" is a rate set by BOA based upon various factors including BOA'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.) "Base Rate Loans": Loans the rate of interest applicable to which is based upon the Base Rate. "BOA": as defined in the recitals to this Agreement. "Borrower Pledge Agreement": the Second Amended and Restated Borrower Pledge Agreement substantially in the form of Exhibit B-4A, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. "Borrowing Date": any Business Day specified in a notice pursuant to subsection 2.2 as a date on which the Borrower requests the Lenders to make Loans hereunder. "Business": as defined in subsection 4.16. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco, California are authorized or required by law to close and, if the applicable Business Day relates to Eurodollar Loans, any day on which dealings are carried on in the applicable London interbank market. 3 "Capital Expenditures" for any fiscal period, the aggregate of all expenditures that, in conformity with GAAP (but excluding capitalized interest), are or are required to be included as additions during such period to property, plant or equipment reflected on the consolidated balance sheet of the Borrower and its Subsidiaries, excluding the expenditures relating to the Transaction. "Capital Lease Obligations": of any Person as of the date of determination, the aggregate liability of such Person under Financing Leases reflected on a balance sheet of such Person under GAAP. "Capital Partners": Lehman Brothers Capital Partners III, L.P. "Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing. "Cash Equivalents": (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 90 days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-2 by Standard and Poor's Ratings Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a nationally recognized rating agency if both of S&P and Moody's cease publishing ratings of investments, (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody's, (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. "Change of Control": the occurrence of any of the following events: (i) the Principals and their Related Parties, as a whole, shall at any time cease to own, directly or indirectly, 51% of the Voting Stock of Holdings (measured by voting power rather than number of shares), determined on a fully diluted basis, and any "person" (as such term is defined in Section 13(d)(3) of the Exchange Act) other than 4 the Principals and their Related Parties shall become the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 25% of the Voting Stock of Holdings (measured by voting power rather than number of shares); (ii) a majority of the members of the Board of Directors of Holdings fail to be (a) members of the Board of Directors incumbent as of the Closing Date, or (b) members nominated by the members of the Board of Directors incumbent on the Closing Date, or (c) members appointed by members of the Board nominated under clause (a) or (b); (iii) Holdings shall, at any time, cease to own 100% of the Capital Stock of the Borrower; or (iv) a "Change of Control" shall have occurred under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture. "Charge Over Shares": the Amended and Restated Charge Over Shares substantially in the form of Exhibit B-4B, to be executed and delivered by the Borrower, as the same may be amended, supplemented or otherwise modified. "Class": (i) Lenders having Loan Exposure (taken together as a single class), (ii) Facility A Lenders having Facility A Loan Exposure (taken together as a single class) and (iii) Facility B Lenders having Facility B Loan Exposure (taken together as a single class). "Closing Date": the date on which the conditions precedent set forth in subsection 5.1 are satisfied. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Collateral": all assets of the Credit Parties, now owned or hereinafter acquired, upon which a Lien is purported to be created by any Pledge Agreement. "Commitment" and "Commitments": the commitment of a Lender, as set forth on Schedule I hereto as amended from time to time pursuant to this Agreement, to make Loans to the Borrower pursuant to Subsection 2.1(a)(i); and "Commitments" means such commitments of all Lenders in an aggregate amount not to exceed $300,000,000. "Commitment Fee Rate": at any time, the applicable rates per annum on Schedule II under the relevant column heading for the Revolving 364-Day Facility set forth opposite the level of the Debt Ratio most recently determined; provided that (a) except as expressly set forth in Schedule II, the Commitment Fee Rate determined for any Adjustment Date shall remain in effect until a subsequent Adjustment Date for which the Debt Ratio falls within a different level and (b) if the financial statements and related compliance certificate for any fiscal period are not delivered by the date due pursuant to 5 subsections 6.1 and 6.2, the Commitment Fee Rate shall be (i) for the first 35 days subsequent to such due date, the Commitment Fee Rate in effect prior to such due date and (ii) thereafter, that set forth opposite a Debt Ratio captioned "greater than or equal to 4.75," in either case, until the date of delivery of such financial statements and compliance certificate. "Commitment Percentage": as to the Commitment of any Lender, the percentage which the Commitment of such Lender constitutes of the aggregate Commitments (or, at any time after such Commitments shall have expired or terminated, the percentage which the aggregate amount of the Aggregate Outstanding Extensions of Credit of such Lender constitutes of the aggregate amount of the Aggregate Outstanding Extensions of Credit of all Lenders). "Commitment Period": the period from and including the Closing Date to but not including the Termination Date or such earlier date on which the Commitments shall terminate as provided herein. "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 (b) or (c) of the Code. "Consolidated EBITDA": as of the last day of any fiscal quarter, Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses (excluding, without duplication, (x) extraordinary gains and losses in accordance with GAAP, (y) gains and losses in connection with asset dispositions whether or not constituting extraordinary gains and losses and (z) gains or losses on discontinued operations) for the four fiscal quarters ended on such date, plus (i) Consolidated Interest Expense of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses for such period, plus (ii) to the extent deducted in computing such Consolidated Net Income of the Borrower, its Subsidiaries and, without duplication, the Acquired Businesses, the sum of income taxes, depreciation and amortization for such period. "Consolidated Cash Interest Expense": as of the last day of any fiscal quarter, the amount of interest expense, paid in cash, of the Borrower and its Subsidiaries for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Interest Expense": for any Person, as of the last day of any fiscal quarter, the amount of interest expense of such Person for the four fiscal quarters ended on such date, determined on a consolidated basis in accordance with GAAP for such period. "Consolidated Net Income": for any Person and for any fiscal period, net income of such Person, determined on a consolidated basis in accordance with GAAP. 6 "Consolidated Total Assets": at any date, all assets of the Borrower and its Subsidiaries as determined according to the consolidated balance sheet contained in the SEC filing most recently delivered pursuant to subsection 6.1 or, if no such SEC filing has yet been delivered, the balance sheet referred to in subsection 4.1(a)(ii). "Consolidated Total Debt": at any date, all Indebtedness of the Borrower and its Subsidiaries outstanding on such date for borrowed money or the deferred purchase price of property, including, without limitation, in respect of Financing Leases but excluding Indebtedness permitted pursuant to subsection 7.2(g). "Consolidated Working Capital": at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in accordance with GAAP, be set forth opposite the caption "total current assets" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date over (b) the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption "total current liabilities" (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries on such date (excluding, to the extent it would otherwise be included under current liabilities, any short-term Consolidated Total Debt and the current portion of any long-term Consolidated Total Debt). "Constitutional Documents": as to any Person, the articles or certificate of incorporation and by-laws, partnership agreement or other organizational documents of such Person. "Contractual Obligation": 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. "Credit Documents": this Agreement, the Notes, the Applications, the Guarantees and the Pledge Agreements. "Credit Parties": the Borrower, Holdings, and each Subsidiary of the Borrower which is a party to a Credit Document. "Debt Ratio": as at the last day of any fiscal quarter, the ratio of (a) Consolidated Total Debt minus Designated Cash Balances on such date to (b) Consolidated EBITDA. "December 1998 Subordinated Debt Documents": the December 1998 Subordinated Notes, the December 1998 Subordinated Notes Indenture, the Underwriting Agreement related thereto among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "December 1998 Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the December 1998 Subordinated Notes were issued. 7 "December 1998 Subordinated Notes": the Borrower's Senior Subordinated Notes, due December 1, 2008 ("Initial December 1998 Subordinated Notes") issued on or about the December 8, 1998 and any notes, having the same terms as the Initial December 1998 Subordinated Notes, issued in exchange for the Initial December 1998 Subordinated Notes as contemplated by the documents governing the issuance of the Initial December 1998 Subordinated Notes. "Default": any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Designated Cash Balances": at any time, the lesser of (a) actual unrestricted cash balances on hand of Borrower and its Subsidiaries which are not subject to any Liens in favor of any Person (other than those described in subsection 7.3(o) hereof) and (b) $50,000,000. "Dollars" and "$": dollars in lawful currency of the United States of America. "Dow Jones Page 3750": the display designated as page "3750" on the Dow Jones Market Service (formerly known as the Telerate Service) or such other page as may replace the "3750" page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for Dollar deposits. "Environmental Laws": any and all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or other legally enforceable requirement (including, without limitation, common law) of any foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health as affected by the environment as has been, is now, or may at any time hereafter be, in effect, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C'SS''SS' 9601 et seq.; the Toxic Substance Control Act, 15 U.S.C.'SS''SS' 9601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C'SS''SS'1802 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C'SS''SS'6901 et seq.; the Clean Water Act; 33 U.S.C'SS''SS'1251 et seq.; the Clean Air Act, 42 U.S.C'SS''SS'7401 et seq.; or other similar federal and/or state environmental laws. "Environmental Permits": any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any applicable Environmental Law. "Equity Documents": the Stockholders Agreement, the Subscription Agreements and the Option Agreements. 8 "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurocurrency Reserve Requirements": means for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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"). "Eurodollar Business Day": means any Business Day on which commercial banks are open in London for the transaction of international business, including dealings in Dollar deposits in the international interbank markets. "Eurodollar Loans": Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Rate": means, for any Interest Period, with respect to Eurodollar Loans comprising part of the same borrowing, the rate of interest per annum (rounded upward to the next 1/100th of 1%) determined by the Administrative Agent as follows: Eurodollar Rate = LIBOR ------------------------------------ 1.00 - Eurodollar Reserve Percentage "Eurodollar Reserve Percentage": for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) 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"). "Event of Default": any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Excess Cash Flow": for any fiscal year of the Borrower, the excess of (a) the sum, without duplication, of (i) Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (ii) the net decrease, if any, in Consolidated Working Capital during such fiscal year, (iii) to the extent deducted in computing such Consolidated Net Income for the Borrower and its Subsidiaries, non-cash interest expense, depreciation and amortization for such fiscal year, (iv) extraordinary non-cash losses during such fiscal year subtracted in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (v) change in deferred tax liability of the Borrower for such fiscal year, (vi) non-cash losses in connection with asset dispositions whether or not constituting extraordinary losses and (vii) non-cash ordinary 9 losses less (b) the sum, without duplication, of (i) the aggregate amount of permitted cash Capital Expenditures made by the Borrower and its Subsidiaries during such fiscal year, (ii) the net increase, if any, in Consolidated Working Capital during such fiscal year, (iii) the aggregate amount of payments of principal in respect of any Indebtedness not prohibited hereunder during such fiscal year (other than prepayments of (x) Loans not accompanied by reductions of the Commitments hereunder, (y) Facility A Loans not accompanied by reductions of Facility A Commitments and/or (z) Facility B Loans not accompanied by reductions of Facility B Commitments), (iv) deferred income tax credit of the Borrower for such fiscal year, (v) extraordinary non-cash gains during such fiscal year added in the determination of Consolidated Net Income for the Borrower and its Subsidiaries for such fiscal year, (vi) non-cash gains in connection with asset dispositions whether or not constituting extraordinary gains and (vii) non-cash ordinary gains. "Exchange Act": the Securities Exchange Act of 1934, as amended. "Extending Lender": any Lender consenting to the Extension Option. "Extension Option": as defined in subsection 2.5(a). "Facility A Administrative Agent": the "Administrative Agent" as defined in the Facility A Credit Agreement. "Facility A Agents": the "Agents" as defined in the Facility A Credit Agreement. "Facility A Commitments": the "Commitments" as defined in the Facility A Credit Agreement. "Facility A Credit Agreement": that certain Second Amended and Restated Credit Agreement of even date herewith among the Borrower, the Facility A Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities LLC as arrangers and certain financial institutions named as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility A Credit Documents": the "Credit Documents" as defined in the Facility A Credit Agreement. "Facility A Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility A Credit Agreement. "Facility A L/C Obligations": the "L/C Obligations" as defined in the Facility A Credit Agreement. "Facility A Lenders": the "Lenders" as defined in the Facility A Credit Agreement. 10 "Facility A Loan Exposure": the "Loan Exposure" as defined in the Facility A Credit Agreement. "Facility A Loans": the "Loans" as defined in the Facility A Credit Agreement. "Facility A Notes": the "Notes" as defined in the Facility A Credit Agreement. "Facility A Reimbursement Obligations": the "Reimbursement Obligations" as defined in the Facility A Credit Agreement. "Facility B Administrative Agent": the "Administrative Agent" as defined in the Facility B Credit Agreement. "Facility B Agents": the "Agents" as defined in the Facility B Credit Agreement. "Facility B Commitments": the "Commitments" as defined in the Facility B Credit Agreement. "Facility B Credit Agreement": that certain Amended and Restated 364 Day Credit Agreement of even date herewith among the Borrower, the Facility B Lenders, BOA as administrative agent, LCPI as syndication agent and documentation agent, LCPI and Banc of America Securities, LLC as arrangers and certain financial institutions named as co-agents, as the same may be amended, supplemented, restated or otherwise modified from time to time. "Facility B Credit Documents": the "Credit Documents" as defined in the Facility B Credit Agreement. "Facility B Eurodollar Tranche": "Eurodollar Tranche" as defined in the Facility B Credit Agreement. "Facility B L/C Obligations": the "L/C Obligations" as defined in the Facility B Credit Agreement. "Facility B Lenders": the "Lenders" as defined in the Facility B Credit Agreement. "Facility B Loan Exposure": the "Loan Exposure" as defined in the Facility B Credit Agreement. "Facility B Loans": the "Loans" as defined in the Facility B Credit Agreement. "Facility B Notes": the "Notes" as defined in the Facility B Credit Agreement. "Facility B Reimbursement Obligations": the "Reimbursement Obligations" as defined in the Facility B Credit Agreement. 11 "Federal Funds Effective Rate": for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the FRB (including any such successor, "H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If on any relevant day the appropriate rate for such previous day is not yet published in H.15(519), the rate for such day will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Administrative Agent. "Financing Lease": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "Foreign Subsidiary": any Subsidiary which is organized under the laws of any jurisdiction outside the United States or under the laws of the U.S. Virgin Islands. "FRB": means the Board of Governors of the Federal Reserve System, and any governmental authority succeeding to any of its principal functions. "GAAP": generally accepted accounting principles in the United States of America in effect on the Closing Date. "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, reimbursement obligations under letters of credit and any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of 12 the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. "Guarantees": the Parent Guarantee and the Subsidiary Guarantee. "Immaterial Subsidiary": any Subsidiary of the Borrower having assets not exceeding five percent (5%) of the Consolidated Total Assets. "Indebtedness": of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices and accrued expenses incurred in the ordinary course of business), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under Financing Leases, (d) all obligations of such Person in respect of acceptances issued or created for the account of such Person and all reimbursement and other obligations with respect to any letters of credit and surety bonds, whether or not matured or drawn, (e) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and (f) all Attributable Debt of such Person with respect to sale and leaseback transactions of such Person. "Indenture": the Indenture between the Borrower and The Bank of New York, as trustee, pursuant to which the Subordinated Notes are issued. "Initial 1997 Credit Agreement": the Credit Agreement, dated as of April 30, 1997 among the Borrower, the lenders party thereto from time to time, Lehman Brothers Inc. as arranger, LCPI as syndication agent and documentation agent and BOA as administrative agent. "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. "Interest Payment Date": (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last Business Day of such Interest Period, and (c) as to any Eurodollar Loan having an interest period longer than three months, (i) each Business Day which is three months or a whole multiple thereof after the first day of such Interest Period and (ii) the last Business Day of such Interest Period. 13 "Interest Period": with respect to any Eurodollar Loan: (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; (b) thereafter, each period commencing on the last day of the preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; (c) solely for the purpose of permitting the Borrower to repay the Loans owing to Nonconsenting Lenders on the Termination Date in connection with the exercise of an Extension Option, a period commencing on the last day of the preceding Interest Period, with respect to such Eurodollar Loan and ending on a Business Day which is seven (7) days thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; and (d) solely for the purpose of permitting the Borrower and the Arrangers to complete syndication of the Commitments, a period commencing on the borrowing date, conversion date, or last day of the preceding Interest Period, as the case may be, with respect to such Eurodollar Loan and ending on a Business Day which is seven (7) days thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current borrowing date, conversion date or Interest Period with respect thereto; provided, that such Interest Period option shall terminate and cease to be available to Borrower on the Syndication Completion Date; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day; (ii) any Interest Period for any Loan that would otherwise extend beyond the applicable Termination Date shall end on the applicable Termination Date; and (iii) any Interest Period pertaining to a Eurodollar Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically 14 corresponding day in the calendar month in which such Interest Period would otherwise be scheduled to end) shall end on the last Business Day of the appropriate calendar month. "Interest Rate Agreement": any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement. "Interest Rate Agreement Obligations": the obligations of the Borrower or any of its Subsidiaries to make payments to counterparties under Interest Rate Agreements in the event of the occurrence of a termination event thereunder. "Judgment Currency": as defined in subsection 10.16 (b). "LBI": as defined in the recitals to this Agreement. "LCPI": as defined in the recitals to this Agreement. "Lender" and "Lenders": the persons identified as Lenders and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 10.6; provided that the term "Lenders", when used in the context of a particular Commitment, shall mean Lenders having that Commitment. "LIBOR": as to any Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period quoted on the second Eurodollar Business Day prior to the first day of such Interest Period, as such rate appears on the Dow Jones Page 3750 as of 11:00 A.M. (London time) on such date, as determined by the Administrative Agent and notified to the Lenders and the Borrower on such second prior Eurodollar Business Day. If LIBOR cannot be determined based on the Dow Jones Page 3750, LIBOR means the rate per annum, as supplied to the Administrative Agent, quoted by BOA's London Branch to prime banks in the London interbank market for deposits in Dollars at approximately 11:00 A.M. (London time) two Eurodollar Business Days prior to the first day of such Interest Period in an amount approximately equal to the principal amount of the Loans to which such Interest Period is to apply and for a period of time comparable to such Interest Period. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "Loan": any loan made by any Lender pursuant to this Agreement. "Loan Account": as defined in subsection 2.5(g). 15 "Loan Exposure": with respect to any Lender as of any date of determination, (i) if there are no outstanding Loans, that Lender's Commitment, and (ii) otherwise, the sum of the aggregate outstanding principal amount of the Loans of that Lender. "Managing Agents": those Lenders which, from time to time, are designated in writing by the Administrative Agent and the Syndication Agent as "Managing Agents" under this Agreement. "Material Adverse Effect": a material adverse effect on (a) the business, assets, operations, property or condition (financial or otherwise) of Holdings and its Subsidiaries taken as a whole, (b) the validity or enforceability of this or any of the other Credit Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder or (c) solely for purposes of the representations and warranties of Borrower made on the Closing Date, the Acquisition. "Materials of Environmental Concern": any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under, or that could give rise to liability under, any applicable Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products. "Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Proceeds": the aggregate cash proceeds (including Cash Equivalents) received by Holdings or any of its Subsidiaries in respect of: (a) any issuance by Holdings or any of its Subsidiaries of Indebtedness after the Closing Date; (b) any issuance by Holdings or any of its Subsidiaries of any Capital Stock after the Closing Date; (c) any Asset Sale; and (d) any cash payments received in respect of promissory notes or other evidences of indebtedness delivered to Holdings or such Subsidiary in respect of an Asset Sale; in each case net of (without duplication) (i), (A) in the case of an Asset Sale, the amount required to repay any Indebtedness (other than the Loans) secured by a Lien on any assets of Holdings or a Subsidiary of Holdings that are sold or otherwise disposed of in connection with such Asset Sale and (B) reasonable and appropriate amounts established by Holdings or such Subsidiary, as the case may be, as a reserve against liabilities associated with such Asset Sale and retained by Holdings or such Subsidiary, (ii) the reasonable expenses (including legal fees and 16 brokers' and underwriters' commissions, lenders fees, credit enhancement fees, accountants' fees, investment banking fees, survey costs, title insurance premiums and other customary fees, in any case, paid to third parties or, to the extent permitted hereby, Affiliates) incurred in effecting such issuance or sale and (iii) any taxes reasonably attributable to such sale and reasonably estimated by Holdings or such Subsidiary to be actually payable. "New Investment Sublimit" shall mean, as of any date of determination thereof, an amount equal to (a) $650,000,000 plus (b) (i) Net Proceeds derived from Asset Sales during the immediately preceding twelve (12) month period and (ii) Net Proceeds from any Asset Sale that were reinvested within the twelve (12) month period following such Asset Sale for the purposes permitted in subsection 7.9(k) to the extent not included in subclause (i) of this clause (b) plus (c) net cash proceeds derived from the issuance of any equity securities of Holdings which are contributed to the Borrower as additional equity capital minus the amount of any Capital Expenditures funded in any fiscal year of the Borrower and its Subsidiaries which exceeds the amounts permitted during such fiscal year pursuant to subsection 7.8 hereof (without giving effect to the second proviso thereto referring to subsection 7.9(k)). "New Lender": as defined in subsection 2.1(a)(i). "New Subordinated Debt Documents": the New Subordinated Notes, the New Subordinated Notes Indenture, the Underwriting Agreement dated as of May 18, 1998 among Borrower, its domestic Subsidiaries, Lehman Brothers Inc., and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC) and any other documents or agreements executed in connection therewith. "New Subordinated Debt Indenture": the Indenture between the Borrower and the Bank of New York, as trustee, pursuant to which the New Subordinated Notes were issued. "New Subordinated Notes": the Borrower's 8 1/2% Senior Subordinated Notes, due 2008 ("Initial New Subordinated Notes") issued on or about May 22, 1998 and any notes, having the same terms as the Initial New Subordinated Notes, issued in exchange for the Initial New Subordinated Notes as contemplated by the documents governing the issuance of the Initial New Subordinated Notes. "Non-Excluded Taxes": as defined in subsection 2.15. "Non-U.S. Lender": as defined in subsection 2.15(b). "Nonconsenting Lenders": as defined in subsection 2.17. "Notes": (i) the promissory notes of the Borrower issued pursuant to subsection 2.5(i) of this Agreement on or after the Closing Date to evidence the Loans of any Lender and (ii) any promissory notes issued by the Borrower pursuant to subsection 10.6(d) in 17 connection with assignments of the Commitments and Loans of any Lenders, in each case substantially in the form of Exhibit A-1 annexed hereto, as they may be amended, supplemented or otherwise modified from time to time. "Obligations": as defined in the Guarantees and the Pledge Agreements. "Option Agreements": the Option Agreements between Holdings and each of Frank C. Lanza and Robert V. LaPenta, each dated as of April 30, 1997. "Original Agents": the "Agents" under and as defined in the Original Credit Agreement. "Original Closing Date": August 13, 1998. "Original Credit Agreement": as defined in the preamble to the Facility B Credit Agreement. "Original Lenders": as defined in the preamble to this Agreement. "Parent Distributions": as defined in the Parent Guarantee. "Parent Guarantee": the Second Amended and Restated Parent Guarantee substantially in the form of Exhibit B-1, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Parent Pledge Agreement": the Second Amended and Restated Parent Pledge Agreement substantially in the form of Exhibit B-3, to be executed and delivered by Holdings, as the same may be amended, supplemented or otherwise modified. "Participant": as defined in subsection 10.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any successor thereto. "Permitted Liens": Liens permitted to exist under subsection 7.3. "Permitted Stock Payments": (A) dividends by the Borrower to Holdings in amounts equal to the amounts required for Holdings to (i) pay franchise taxes and other fees required to maintain its legal existence and (ii) provide for other operating costs of up to $1,000,000 per fiscal year, (B) dividends by the Borrower to Holdings in amounts equal to amounts required for Holdings to pay federal, state and local income taxes to the extent such income taxes are actually due and owing; provided that the aggregate amount paid under this clause (B) does not exceed the amount that the Borrower would be required to pay in respect of the income of the Borrower and its Subsidiaries if the Borrower were a stand alone entity that was not owned by Holdings, and (C) from and after May 1, 1999, dividends by the Borrower to Holdings payable solely out of Excess Cash Flow, provided that, with respect to this clause (C), (i) as of the last day of the most 18 recently completed fiscal quarter the Debt Ratio is less than or equal to 3.5 to 1, and (ii) the aggregate amount of dividends paid by the Borrower to Holdings under this clause (C) since the Original Closing Date does not exceed $5,000,000. "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan covered by ERISA and in respect of which the Borrower or any Commonly Controlled Entity maintains, administers, contributes to or is required to contribute to, or under which the Borrower or any Commonly Controlled Entity may incur any liability. "Pledge Agreements": the collective reference to the Parent Pledge Agreement, the Borrower Pledge Agreement, the Charge Over Shares, the Subsidiary Pledge Agreement, and any other security documents hereafter delivered to the Administrative Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Borrower hereunder and under any of the other Credit Documents or to secure any guarantee of any such obligations and liabilities. "Principals": each of Lehman Brothers Holdings, Inc., Capital Partners, the Seller, Frank C. Lanza and Robert V. LaPenta. "Properties": as defined in subsection 4.16. "Purchase Agreement": the Purchase Agreement, dated as of April 25, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Register": as defined in subsection 10.6(d). "Registration Rights Agreement": the Registration Rights Agreement, dated as of April 30, 1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica Securities, Inc. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. "Related Party": with respect to the Principals, (a) any controlling stockholder, 51% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal or (b) a trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 51% or more controlling interest of which consist of the Principals and/or such other Persons referred to in the immediately preceding clause (a). "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. 19 "Reportable Event": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under the regulations of the PBGC. "Required Lenders": at any time, Lenders the Loan Exposure for all Loans of which aggregate more than 50%. "Requirement of Law": as to any Person, the Constitutional Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Requisite Class Lenders": at any time, (a) for the Class of Lenders having Loan Exposure, Lenders having or holding 66 2/3% of the aggregate Loan Exposure of all Lenders, (b) for the Class of Facility A Lenders having Facility A Loan Exposure, Facility A Lenders having or holding 66 2/3% of the aggregate Facility A Loan Exposure of all Facility A Lenders and (c) for the Class of Facility B Lenders having Facility B Loan Exposure, Facility B Lenders having or holding 66 2/3% of the aggregate Facility B Loan Exposure of all Facility B Lenders. "Responsible Officer": the chief executive officer, the president or vice president of the Borrower or, with respect to financial matters, the chief financial officer, vice president-finance or treasurer of the Borrower. "Restricted Government Contracts": as defined in the Pledge Agreements. "SPD Technologies": SPD Technologies Inc., a Delaware corporation. "SPD Technologies Acquisition Agreement": the Agreement and Plan of Merger, dated as of July 2, 1998, among L-3 Communications Corporation, SPD Merger Co., SPD Technologies, Inc. and Midmark Capital L.P. "SEC": the Securities and Exchange Commission. "Securities Act": Securities Act of 1933, as amended. "Seller": Lockheed Martin Corporation, a Maryland corporation. "Similar Business": a business, at least a majority of whose revenues in the most recently ended calendar year were derived from (i) the sale of defense products, electronics, communications systems, aerospace products, avionics products and/or communications products, (ii) any services related thereto, (iii) any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto or any business of the Borrower and/or its Subsidiaries existing as of the Closing Date, and (iv) any combination of any of the foregoing. 20 "Single Employer Plan": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Solvent": when used with respect to any Person, as of any date of determination, (a) the amount of the "present fair saleable value" of the assets of such Person will, as of such date, exceed the amount of all "liabilities of such Person, contingent or otherwise", as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, (d) such Person will be able to pay its debts as they mature, and (e) such Person is not insolvent within the meaning of any applicable Requirements of Law. For purposes of this definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured. "Stockholders Agreement": the Stockholders Agreement, dated as of April 30, 1997, by and among the Borrower, Holdings, the Seller, the Principals and any other party that may from time to time become a party thereto as provided therein, as the same may be amended, supplemented or otherwise modified from time to time. "Subordinated Debt": indebtedness outstanding under the Subordinated Notes, the New Subordinated Notes and/or the December 1998 Subordinated Notes. "Subordinated Debt Documents": the Indenture, the Registration Rights Agreement, the Purchase Agreement and the Subordinated Notes. "Subordinated Notes": the Borrower's 103/8 % Senior Subordinated Notes, due 2007 (the "Initial Subordinated Notes"), issued on April 30, 1997, and any subordinated notes of the Borrower, having the same terms as the Initial Subordinated Notes, issued in exchange for the Initial Subordinated Notes as contemplated by the Subordinated Debt Documents. "Subscription Agreements": the Common Stock Subscription Agreements between Holdings and each of Frank C. Lanza, Robert V. LaPenta, Capital Partners and the Seller, each dated as of April 30, 1997. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than 21 stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Subsidiary Guarantee": the Second Amended and Restated Subsidiary Guarantee substantially in the form of Exhibit B-2, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Subsidiary Pledge Agreement": the Second Amended and Restated Subsidiary Pledge Agreement substantially in the form of Exhibit B-5, to be executed and delivered by the Borrower's Subsidiaries (other than any Immaterial Subsidiary or Foreign Subsidiary of the Borrower), as the same may be amended, supplemented or otherwise modified. "Swing Line Lender": as defined in the Facility A Credit Agreement. "Syndication Completion Date": shall mean the earlier to occur of (i) the date on which syndication of the Commitments has occurred to the mutual satisfaction of the Arrangers and the Borrower and (ii) 180 days from the Closing Date. "Termination Date": April 27, 2001, as the same may be extended in accordance with subsection 2.5(a) hereof. "Tranche": the collective reference to Eurodollar Loans with then-current Interest Periods which all begin on the same date and end on the same date (whether or not such Loans shall originally have been made on the same day); Tranches may be identified as "Eurodollar Tranches". "Transaction": the transactions contemplated by the Transaction Documents. "Transaction Agreement": that certain Transaction Agreement, dated as of March 28, 1997 by and among Lockheed Martin Corporation, a Maryland corporation, Holdings, Capital Partners and its Affiliates, Frank C. Lanza and Robert V. LaPenta. "Transaction Documents": (i) the Transaction Agreement, the Schedules thereto and related documentation, (ii) the Equity Documents, (iii) the Subordinated Debt Documents and (iv) the New Subordinated Debt Documents. "Transferee": as defined in subsection 10.6(f). 22 "U.S. Taxes": any tax, assessment, or other charge or levy and any liabilities with respect thereto, including any penalties, additions to tax, fines or interest thereon, imposed by or on behalf of the United States or any taxing authority thereof. "Voting Stock": of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Year 2000 Problem": any significant risk that computer hardware, software or equipment containing embedded microchips essential to the business or operations of the Borrower or any of its Subsidiaries will not, in the case of dates or time periods occurring after December 31, 1999, function at least as effectively and reliably as in the case of dates or time periods occurring before January 1, 2000, including the making of accurate leap year calculations. 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any Credit Document or any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any Credit Document, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS 2.1 Commitments. (a) Subject to the terms and conditions hereof, each Lender severally agrees to make the loans described in this subsection 2.1(a) as applicable to the Borrower. (i) Loans. Each Lender severally agrees to make revolving credit loans to the Borrower, from time to time during the Commitment Period, in an aggregate principal 23 amount at any one time outstanding which does not exceed the amount of such Lender's Commitment. During the Commitment Period, the Borrower may use the Commitments by borrowing, prepaying the Loans, in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. (b) The Loans may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 2.7, provided that, except as contemplated in clause (c) of the definition of Interest Period, no Loan shall be made as a Eurodollar Loan after the day that is one month prior to the applicable Termination Date. 2.2 Procedure for Borrowing. The Borrower may borrow under the Commitments during the Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to (a) 11:00 A.M., New York City time, three Business Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially Eurodollar Loans, (b) 11:00 A.M., New York City time, on the requested Borrowing Date in the case of a Base Rate Loan), specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the respective lengths of the initial Interest Periods therefor. Each borrowing under the Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $2,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then Available Commitments are less than $2,000,000, such lesser amount), and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof; provided that the Borrower may nevertheless borrow amounts below such minimum amounts in clauses (x) or (y) above solely for the purpose of (i) repaying Loans owing to any Nonconsenting Lenders on the Termination Date and (ii) permitting the addition of any New Lender or increasing the Commitment of any existing Lender pursuant to subsection 2.1(a)(i). Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in subsection 10.2 prior to 11:00 A.M., New York City time (in the case of Eurodollar Loans) or 2:30 P.M., New York City time (in the case of Base Rate Loans), on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent in accordance with the Borrower's payment instructions with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. All notices given by the Borrower under this subsection 2.2 may be made by telephonic notice promptly confirmed in writing. 2.3 Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee for the period from and including the first day of the Commitment Period to and including the Termination Date, computed at the 24 Commitment Fee Rate on the daily amount of the Available Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Termination Date, commencing on the first of such dates to occur after the date hereof. 2.4 Termination or Reduction of Commitments. The Borrower shall have the right, upon not less than three Business Days' written notice to the Administrative Agent, to terminate the Commitments or, from time to time, to reduce the amount of the Commitments ratably among the Lenders; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate principal amount of the Loans then outstanding, would exceed the Commitments then in effect. Any such reduction shall be in an amount equal to $2,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce permanently the Commitments then in effect. 2.5 Extension of Termination Date; Repayment of Loans; Evidence of Debt. (a) Extension of Termination Date. The Borrower may elect to forward to the Administrative Agent (for distribution to each Lender) no earlier than sixty (60) but no later than fifty-five (55) days prior to the initially scheduled Termination Date a written request asking each Lender to consent to the extension of the Termination Date for one (1) additional 364 day period. Not later than 30 days after receipt of such written request, each Lender shall advise the Administrative Agent and the Borrower in writing whether such Lender consents to the proposed extension if all the conditions, including those set forth in subsection 5.2 of this Agreement, thereto have been satisfied. If all of the Lenders have consented in writing to such extension and all conditions set forth in subsection 5.2 shall have been satisfied, then effective on the initially scheduled Termination Date, the Termination Date shall be deemed automatically extended by an additional 364 day period (herein, the "Extension Option"). If less than all of the Lenders consent to the exercise of the proposed Extension Option (the "Extending Lenders"), the Borrower may replace all, some or none of such Nonconsenting Lenders on or before the initially scheduled Termination Date pursuant to subsection 2.17 and repay all outstanding Loans owing to each Nonconsenting Lender that is not being replaced, if any, on the initially scheduled Termination Date (without giving effect to the Extension Option); provided that if the Extending Lenders do not hold more than 50% of the outstanding Commitments, the Borrower will not be entitled to exercise the Extension Option with respect to any Extending Lenders nor shall any Lender failing to consent to the Extension Option be deemed a Nonconsenting Lender and be subject to replacement under subsection 2.17 as a result thereof. Subject to the foregoing proviso, if the Borrower desires to exercise the Extension Option with the Extending Lenders, Borrower shall provide the Administrative Agent (for distribution to each Lender) with not less than five (5) days prior written notice thereof in addition to satisfying all conditions precedent set forth above (other 25 than the requirement that all Lenders have timely consented to the Extension Option). On the date the Extension Option becomes effective, Schedule I hereto shall be deemed amended to accurately reflect the Commitments of the Lenders then in existence and the Administrative Agent shall promptly deliver a copy of such amended Schedule I to each Lender and the Borrower. (b) [Intentionally Omitted]. (c) Replacement of Nonconsenting Lenders. If any Lender declines to consent or fails to timely indicate its consent to the exercise by Borrower of the Extension Option and the Extending Lenders hold more than 50% of the Commitments, such Lender shall be deemed a Nonconsenting Lender and be subject to replacement in accordance with the terms of subsection 2.17 hereof. (d) Payments on Loans. The Borrower hereby unconditionally promises to pay to the Administrative Agent on the Termination Date (or such earlier date on which the Loans become due and payable pursuant to Section 8) for the account of each Lender the then unpaid principal amount of each Loan of such Lender. (e) Interest. The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date such Loans are made until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.9. (f) Recording. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (g) Loan Accounts and Register; Notes. (i) The Loans made by, and the Commitments of, each Lender shall be evidenced by one or more loan accounts ("Loan Accounts") maintained by such Lender and by the Register maintained by the Administrative Agent in the ordinary course of business. The Register maintained by the Administrative Agent shall, in the event of a discrepancy between the entries in the Administrative Agent's books and any Lender's books relating to such matters, be controlling and, absent manifest error, shall be conclusive as to the amount of the Loans made by the Lender to the Borrower, the interest and payments thereon and any other amounts owing in respect of this Agreement. The Borrower hereby designates the Administrative Agent to serve as the Borrower's agent, solely for purposes of this subsection 2.5(g) and subsection 10.6, to maintain the Register on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each Lender. The Borrower agrees to indemnify the 26 Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this subsection 2.5(g) and subsection 10.6 (other than any losses, claims, damages and liabilities to the extent incurred by reason of the gross negligence or willful misconduct of the Administrative Agent). (ii) If requested by any Lender, the Borrower shall execute and deliver to such Lender (and deliver a copy thereof to the Administrative Agent) one or more promissory notes evidencing the Loans owing to such Lender pursuant to this Agreement in accordance with subsection 2.5(i). (h) Prima Facie Evidence. The entries made in the Register and the Loan Accounts of each Lender maintained pursuant to subsection 2.5(g) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such Loan Account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement. For the avoidance of doubt, the existence or non-existence of any Note representing any Obligations owing to any Lender hereunder shall not affect the existence, amount, validity or enforceability of such Obligations, which in all events shall be absolute and unconditional. (i) Notes. The Borrower agrees that the Borrower will execute and deliver to each Lender that requests any such Note pursuant to subsection 2.5(g)(ii), a promissory note of the Borrower evidencing the Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate insertions as to date and principal amount (a "Note"). 2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments. (a) Subject to subsections 2.12 and 2.16, the Borrower may at any time and from time to time prepay any Loans, in whole or in part, without premium or penalty, upon irrevocable notice to the Administrative Agent prior to 11:00 A.M., New York City time, three Business Days prior to the date of prepayment in the case of Eurodollar Loans or on any Business Day in the case of Base Rate Loans, specifying the date and amount of prepayment of the Loans (which Loans shall be prepaid on a pro rata basis among the applicable Lenders) and whether the prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of any such notice, the Administrative Agent shall promptly notify each applicable Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, 27 together with any amounts payable pursuant to subsection 2.16. Partial prepayments shall be in an aggregate principal amount of $2,000,000 or a whole multiple of $100,000 in excess thereof. (b) (i) If, subsequent to the Closing Date, Holdings or any of its Subsidiaries shall incur or permit the incurrence of any Indebtedness (other than Indebtedness permitted pursuant to subsection 7.2), 100% of the Net Proceeds thereof shall be promptly ratably applied toward the prepayment of the Loans, the Facility A Loans and the Facility B Loans and permanent reduction of the Commitments, the Facility A Commitments and the Facility B Commitments as set forth in clause (iv) of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to permit any Indebtedness not permitted by subsection 7.2. (ii) If, subsequent to the Original Closing Date, Holdings or any of its Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net Proceeds, subject to the Applicable Holdback (defined below) shall be promptly and ratably applied toward the prepayment of the Loans, the Facility A Loans and the Facility B Loans and permanent reduction of the Commitments, the Facility A Commitments and the Facility B Commitments as set forth in clause (iv) of this subsection 2.6(b); provided that Net Proceeds from any Asset Sales shall not be required to be so applied to the extent that such Net Proceeds are used by the Borrower or such Subsidiary to acquire assets to be employed in the business of the Borrower or its Subsidiaries within 365 days of receipt thereof, but if such Net Proceeds, subject to the Applicable Holdback (as defined below), are not so used, 100% of the amount of such Net Proceeds not so used shall be applied toward the prepayment of the Loans and the permanent reduction of the Commitments as set forth in clause (iv) of this subsection 2.6(b) on the earlier of (x) the 366th day after receipt of such Net Proceeds and (y) the date on which the Borrower has determined that such Net Proceeds shall not be so used. As used herein, "Applicable Holdback" shall mean an amount of Net Proceeds not in excess of $20,000,000 derived from any Asset Sales occurring since the Original Closing Date that has not been applied toward the prepayment of Loans and the permanent reduction of the Commitments as set forth in clause (iv) of subsection 2.6(b) which Borrower and/or its applicable Subsidiary may retain and not apply as a mandatory prepayment without the requirement of utilizing the same to acquire assets to be employed in the business of the Borrower or such applicable Subsidiary; provided, that if any Event of Default shall have occurred and be continuing, the Applicable Holdback amount shall be automatically reduced to zero unless and until such Event of Default is acknowledged in writing by the Required Lenders (or all the Lenders in cases where the unanimous consent of the Lenders is required) as cured or waived. (iii) If, subsequent to the Closing Date, any Capital Stock shall be issued by Holdings, the Borrower or any of its Subsidiaries, an amount equal to 50% of the Net Proceeds thereof shall be promptly ratably applied on the date of such issuance toward the prepayment of the Loans, and permanent reduction of the Commitments, as set forth 28 in clause (iv) of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to permit any issuance of Capital Stock not permitted by subsection 7.6. (iv) Except during any period in which an Event of Default has occurred and is continuing, any mandatory prepayments required by subsection 2.6(b)(i) and (ii) shall be applied ratably to the outstanding principal amount of Facility A Loans, Facility B Loans and Loans, with a corresponding ratable permanent reduction of the Facility A Commitments, the Facility B Commitments and the Commitments. Commitment, Facility A Commitment and Facility B Commitment reductions made pursuant to subsections 2.6(b)(i) and (ii) (and the corresponding subsections of the Facility A Credit Agreement and the Facility B Credit Agreement) hereof shall be applied to each Lender's respective Commitment, each Facility A Lender's Facility A Commitment and/or each Facility B Lender's Facility B Commitment, as applicable, on a pro rata basis and shall reduce permanently such Commitments, Facility A Commitments and Facility B Commitments. In addition, except during any period in which an Event of Default has occurred and is continuing, any mandatory prepayments required by subsection 2.6(b)(iii) shall be applied ratably to the outstanding principal amount of Loans, with a corresponding permanent reduction of the Commitments. The Commitment reductions made pursuant to subsection 2.6(b)(iii) hereof shall be applied to each Lender's respective Commitment and shall reduce permanently such Commitments. At any time that an Event of Default has occurred and is continuing, all mandatory prepayments shall be applied in accordance with the terms of subsection 2.12 hereof (and the corresponding subsection of the Facility A Credit Agreement and the Facility B Credit Agreement). Mandatory prepayments shall not be subject to any minimum amount requirement. (v) If after giving effect to any reduction of the Commitments under subsection 2.4, 2.5 or 2.6, the aggregate outstanding principal amount of Loans shall exceed the aggregate amount of the Commitments, such reduction or recalculation shall be accompanied by prepayment in the amount of such excess to be applied to the Loans. 2.7 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans, by giving the Administrative Agent prior irrevocable notice of such election at or before 11:00 A.M. New York City time, on the Business Day immediately preceding the date of the proposed conversion and of the amount to be converted, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election at or before 11:00 A.M., New York City time, on the third Business Day immediately preceding the date of the proposed conversion and of the amount to be converted. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each 29 applicable Lender thereof. All or any part of outstanding Eurodollar Loans and Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and is then continuing and (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Termination Date with respect to such Loan. (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans and of the amount to be converted, provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is then continuing or (ii) after the date that is one month prior to the Termination Date with respect to such Loan and provided, further, that if the Borrower shall fail to give such notice or if such continuation is not permitted such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. (c) All notices given by Borrower under this subsection 2.7 may be made by telephonic notice promptly confirmed in writing. 2.8 Minimum Amounts and Maximum Number of Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000 in excess thereof; provided that the Borrower may nevertheless borrow amounts in any Eurodollar Tranche below such minimum amounts solely for the purpose of (i) repaying Loans owing to any Nonconsenting Lenders on the Termination Date or (ii) permitting the addition of any New Lender or any increasing the Commitment of any existing Lender pursuant to subsection 2.1(a)(i). All Loans hereunder may be converted or continued into Base Rate Loans without reference to the minimum principal amount requirements for new Base Rate borrowings set forth in subsection 2.2 above. In no event shall the number of outstanding Eurodollar Tranches under this Agreement plus the number of outstanding Facility A Eurodollar Tranches and Facility B Eurodollar Tranches exceed 20 at any time. 2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin. (b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin. 30 (c) If all or a portion of (i) any principal of any Loan, (ii) any interest payable thereon, (iii) any commitment fee or (iv) any other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), the principal of the Loans and any such overdue interest, commitment fee or other amount shall bear interest at a rate per annum which is (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of any such overdue interest, commitment fee or other amount, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such overdue principal, interest, commitment fee or other amount is paid in full (as well after as before judgment). (d) Interest shall be payable with respect to each Loan in arrears on each Interest Payment Date and on the Termination Date with respect to such Loan, provided that interest accruing pursuant to paragraph (c) of this subsection shall be payable from time to time on demand. 2.10 Computation of Interest and Fees. (a) Interest on Base Rate Loans and fees shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed; all other interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.9(a) or (c). 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the eurodollar market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or 31 (b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be converted to or continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the first day of such Interest Period, to Base Rate Loans. Until such notice has been withdrawn in writing by the Administrative Agent (which the Administrative Agent agrees to do when the Administrative Agent has determined, or has been instructed by the Required Lenders that, the circumstances that prompted the delivery of such notice no longer exist), no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans. 2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee hereunder and any reduction of the Commitments of Lenders shall be made pro rata according to the respective Commitment Percentages of the Lenders. Except during any period in which an Event of Default has occurred and is continuing, each payment (including each prepayment) by the Borrower on account of principal of and interest on the Loans, and any application by the Administrative Agent of the proceeds of any Collateral, shall be made pro rata according to the respective outstanding principal amounts of such Loans then held by the Lenders. All payments (including prepayments) to be made by the Borrower hereunder in respect of any Loan, whether on account of principal, interest, fees, expenses or otherwise, shall be made without set off or counterclaim and shall be made prior to 11:00 A.M., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders with respect to such Loans, at the Administrative Agent's office specified in subsection 10.2, in Dollars and in immediately available funds. At any time that an Event of Default has occurred and is continuing, all payments (including prepayments) made by Borrower hereunder and any application by the Administrative Agent of the proceeds of any Collateral and/or payment under any Guarantee shall be applied in the following order: (1) to the ratable payment of all amounts due and owing by the Borrower pursuant to subsection 10.5 of this Agreement, subsection 10.5 of the Facility A Credit Agreement or subsection 10.5 or the Facility B Credit Agreement to the Agents, the Facility A Agents and/or the Facility B Agents and, after payment in full thereof, to any other Lender, Facility A Lender or Facility B Lender; (2) to the ratable payment of all interest, fees and commissions due and owing under this Agreement, the Facility A Credit Agreement or the Facility B Credit Agreement 32 or to the Agents, the Facility B Agents, the Facility A Agents, the Swing Line Lender, any Lender, any Facility A Lender or any Facility B Lender; (3) to the ratable payment (or cash collateralization) of the aggregate outstanding principal amount of Loans, Facility A Loans and Facility B Loans and the aggregate Facility A L/C Obligations and Facility B L/C Obligations; and (4) to the ratable payment of all other obligations of the Borrower to the Agents, the Facility A Agents, the Facility B Agents, the Swing Line Lender, any Lender, any Facility A Lender or any Facility B Lender under any Credit Document, Facility A Credit Document or Facility B Credit Document. The Administrative Agent, the Facility A Administrative Agent and the Facility B Administrative Agent shall ratably distribute such payments to the applicable Lenders, the Facility A Lenders and the Facility B Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its Commitment Percentage of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Borrower. The failure of any Lender to make any Loan to be made by it shall not relieve any other Lender of its obligation hereunder to make its Loan on such Borrowing Date. 2.13 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be 33 converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 2.16. If circumstances subsequently change so that any affected Lender shall determine that it is no longer so affected, such Lender will promptly notify the Borrower and the Administrative Agent, and upon receipt of such notice, the obligations of such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans shall be reinstated. 2.14 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Note or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by subsection 2.15 and changes in the rate of net income taxes (including branch profits taxes and minimum taxes) or franchise taxes (imposed in lieu of net income taxes) of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender upon written demand such additional amount or amounts as will compensate such Lender for such increased cost or reduced amount receivable; provided that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, in its reasonable discretion, in any legal, economic or regulatory manner) to designate a different Eurodollar lending office if the making of such designation would allow the Lender or its Eurodollar lending office to continue to perform its obligations to make Eurodollar Loans or to continue to fund or maintain Eurodollar Loans and avoid the need for, or reduce the amount of, such increased cost. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower, through the Administrative Agent, of the event by reason of which it has 34 become so entitled. If the Borrower so notifies the Administrative Agent within five Business Days after any Lender notifies the Borrower of any increased cost pursuant to the foregoing provisions of this Section, the Borrower may convert all Eurodollar Loans of such Lender then outstanding into Base Rate Loans in accordance with the terms hereof. Each Lender shall notify the Borrower within 120 days after it becomes aware of the imposition of such costs; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a prompt written request therefor, the Borrower shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each Lender shall notify the Borrower within 120 days after it becomes aware of the imposition of such additional amount or amounts; provided that if such Lender fails to so notify the Borrower within such 120-day period, such Lender shall not be entitled to claim any additional amount or amounts pursuant to this subsection for any period ending on a date which is prior to 120 days before such notification. (c) If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection, showing the calculation thereof in reasonable detail, submitted by such Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.15 Taxes. (a) Except as provided in this subsection 2.15, all payments made by the Borrower under this Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future 35 income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority ("Taxes"), excluding Taxes on net income (including, without limitation, branch profits taxes and minimum taxes) and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender as a result of a present or former connection between any Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to any Agent or any Lender hereunder or under any Note, the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof with respect to any Taxes that are imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement or that are attributable to such Lender's failure to comply with the requirements of paragraph (b) of this subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter, the Borrower shall send to the relevant Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt, if any, received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the relevant Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the Lenders for any incremental taxes, interest or penalties that may become payable by any Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender, Assignee and Participant that is not a citizen or resident of the United States of America, a corporation, partnership created or organized in or under the laws of the United States of America, any estate that is subject to U.S. federal income taxation regardless of the source of its income or any trust which is subject to the supervision of a court within the United States and the control of a United States fiduciary as described in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) on or before the date on which it becomes a party to this Agreement 36 (or, in the case of a Participant, on or before the date on which such Participant purchases the related participation) either: (A) two duly completed and signed copies of either Internal Revenue Service Form W-8 ECI (relating to such Non-U.S. Lender and entitling it to a complete exemption from withholding of U.S. Taxes on all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents) or Form W-8 BEN (relating to all amounts to be received by such Non-U.S. Lender pursuant to this Agreement and the other Credit Documents), or successor and related applicable forms, as the case may be; or (B) in the case of a Non-U.S. Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and that does not comply with the requirements of clause (A) hereof, (x) a statement in the form of Exhibit E (or such other form of statement as shall be reasonably requested by the Borrower from time to time) to the effect that such Non-U.S. Lender is eligible for a complete exemption from withholding of U.S. Taxes under Code Section 871(h) or 881(c), and (y) two duly completed and signed copies of Internal Revenue Service Form W-8 or successor and related applicable form (it being understood and agreed that no Participant and, without the prior written consent of the Borrower described in clause (B) of the proviso to the first sentence of subsection 10.6(c), no Assignee shall be entitled to deliver any forms or statements pursuant to this clause (B), but rather shall be required to deliver forms pursuant to clause (A) of this subsection 2.15(b)). Further, each Non-U.S. Lender agrees (i) to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two further duly completed and signed copies of such Forms W-8 ECI or W-8 BEN, as the case may be, or successor and related applicable forms, on or before the date that any such form expires or becomes obsolete and promptly after the occurrence of any event requiring a change from the most recent form(s) previously delivered by it to the Borrower (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) in accordance with applicable U.S. laws and regulations and (ii) in the case of a Non-U.S. Lender that delivers a statement in the form of Exhibit E (or such other form of statement as shall have been requested by the Borrower), to deliver to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such statement on an annual basis on the anniversary of the date on which such Non-U.S. Lender became a party to this Agreement and to deliver promptly to the Borrower and the Administrative Agent, and if applicable, the assigning Lender, such additional statements and forms as shall be reasonably requested by the Borrower from time to time unless, in any such case, any change in law or regulation has occurred subsequent to the date such Lender became a party to this Agreement (or in the case of a Participant, the date on which such Participant purchased the related participation) which renders all such forms inapplicable or which would prevent such Lender (or Participant) from properly completing and executing any such form with respect to it and such Lender promptly notifies the Borrower and the Administrative Agent (or, in the case of a Participant, the Lender from which the related participation shall have been 37 purchased) if it is no longer able to deliver, or if it is required to withdraw or cancel, any form or statement previously delivered by it pursuant to this subsection 2.15(b). Each Non-U.S. Lender agrees to indemnify and hold harmless the Borrower from and against any taxes, penalties, interest or other costs or losses (including, without limitation, reasonable attorneys' fees and expenses) incurred or payable by the Borrower as a result of the failure of the Borrower to comply with its obligations to deduct or withhold any U.S. Taxes from any payments made pursuant to this Agreement to such Non-U.S. Lender or the Administrative Agent which failure resulted from the Borrower's reliance on any form, statement, certificate or other information provided to it by such Non-U.S. Lender pursuant to clause (B) or clause (ii) of this subsection 2.15(b). The Borrower hereby agrees that for so long as a Non-U.S. Lender complies with this subsection 2.15(b), the Borrower shall not withhold any amounts from any payments made pursuant to this Agreement to such Non-U.S. Lender, unless the Borrower reasonably determines that it is required by law to withhold or deduct any amounts from any payments made to such Non-U.S. Lender pursuant to this Agreement. A Non-U.S. Lender shall not be required to deliver any form or statement pursuant to the immediately preceding sentences in this subsection 2.15(b) that such Non-U.S. Lender is not legally able to deliver (it being understood and agreed that the Borrower shall withhold or deduct such amounts from any payments made to such Non-U.S. Lender that the Borrower reasonably determines are required by law and that payments resulting from a failure to comply with this paragraph (b) shall not be subject to payment or indemnity by the Borrower pursuant to subsection 2.15(a)). If any Credit Party other than the Borrower makes any payment to any Non-U.S. Lender under any Credit Document, the foregoing provisions of this subsection 2.15 shall apply to such Non-U.S. Lender and such Credit Party as if such Credit Party were the Borrower (but a Non-U.S. Lender shall not be required to provide any form or make any statement to any such Credit Party unless such Non-U.S. Lender has received a request to do so from such Credit Party and has a reasonable time to comply with such request). (c) If a Lender shall become aware that it is entitled to receive a refund (whether by way of a direct payment or by offset) in respect of a Non-Excluded Tax paid by the Borrower, which refund, in the good faith judgment of such Lender, is allocable to such payment made pursuant to this Section, it shall promptly notify the Borrower of the availability of such refund and shall, within 30 days after the receipt of a request from the Borrower, apply for such refund at the Borrower's sole expense. If any Lender receives such refund (as described in the preceding sentence), it shall repay the amount of such refund (together with any interest received thereon) to the Borrower if all the payments due under this Section has been paid in full. 2.16 Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the 38 last day of an Interest Period with respect thereto (but excluding loss of margin). Such indemnification under this subsection 2.16 may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (but excluding loss of margin) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Each Lender claiming any payment pursuant to this subsection 2.16 shall do so by giving notice thereof to the Borrower and the Administrative Agent (showing calculation of the amount claimed in reasonable detail) within 60 Business Days after a failure to borrow, convert or continue Eurodollar Loans, or to prepay, after notice or after a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period therefor. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.17 Replacement of Lenders. If at any time (a) the Borrower becomes obligated to pay additional amounts described in subsections 2.13, 2.14 or 2.15 as a result of any condition described in such subsections, (b) any Lender ceases to make Eurodollar Loans pursuant to subsection 2.13, (c) any Lender becomes insolvent and its assets become subject to a receiver, liquidator, trustee, custodian or other Person having similar powers or (d) any Lender becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may, on five (5) Business Days' prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall) assign pursuant to subsection 10.6 all of its rights and obligations under this Agreement to a Lender or other entity selected by the Borrower and acceptable to the Administrative Agent for a purchase price equal to the outstanding principal amount of such Lender's Loans and all accrued interest and fees and other amounts payable hereunder (including amounts payable under subsection 2.16 as though such Loans were being paid instead of being purchased); provided that (i) the Borrower shall have no right to replace the Administrative Agent, (ii) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender, (iii) in the event of a replacement of a Nonconsenting Lender or a Lender to which the Borrower becomes obligated to pay additional amounts under one of the subsections described in clause (a) above, in order for the Borrower to be entitled to replace such a Lender, such replacement must take place no later than 180 days after (A) the date the Nonconsenting Lender shall have notified the Borrower and the Administrative Agent of its failure to agree to any requested consent, waiver or amendment or (B) the Lender shall have demanded payment of additional amounts under one of the subsections described in clause (a) above, as the case may be, and (iv) in no event shall the Lender hereby replaced be required to pay or surrender to its replacement Lender or other entity any of the fees received by such Lender hereby replaced pursuant to this Agreement. In the case of a replacement of a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to this subsection 2.17, the Borrower shall pay such additional amounts to such Lender prior to such Lender being replaced and the payment of such additional amounts shall be 39 a condition to the replacement of such Lender. In the event that (x) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Credit Documents or to agree to any amendment thereto or consent to the Extension Option, (y) the consent, waiver or amendment in question requires the agreement of all Lenders in accordance with the terms of subsection 10.1 or relates to a request to exercise the Extension Option under subsection 2.5(a) and (z) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender." 2.18 Certain Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the non-refundable fees at the times and in the amounts as set forth in that certain fee letter between the Administrative Agent and the Borrower dated on or about March 1, 2000 2.19 Certain Rules Relating to the Payment of Additional Amounts. (a) Upon the request, and at the expense, of the Borrower, each Lender to which the Borrower is required to pay any additional amount pursuant to subsection 2.14 or 2.15 shall reasonably afford the Borrower the opportunity to contest, and reasonably cooperate with the Borrower in contesting, the imposition of any Non-Excluded Taxes or other amounts giving rise to such payment; provided that (i) such Lender shall not be required to afford the Borrower the opportunity to so contest unless the Borrower shall have confirmed in writing to such Lender its obligation to pay such amounts pursuant to this Agreement and (ii) the Borrower shall reimburse such Lender for its reasonable attorneys' and accountants' fees and disbursements incurred in so cooperating with the Borrower in contesting the imposition of such Non-Excluded Taxes. (b) Each Lender agrees that if it makes any demand for payment under subsection 2.14 or 2.15(a), or if any adoption or change of the type described in subsection 2.13 shall occur with respect to it, it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its reasonable discretion) to designate a different lending office if the making of such a designation would allow the Lender to continue to make and maintain Eurodollar Loans and would reduce or obviate the need for the Borrower to make payments under subsection 2.14 or 2.15(a), or would eliminate or reduce the effect of any adoption or change described in subsection 2.13. SECTION 3. [INTENTIONALLY OMITTED] SECTION 4. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into this Agreement and to make the Loans, the Borrower hereby represents and warrants to the Agents and each Lender that: 40 4.1 Financial Condition. (a) The following financial statements concerning Borrower and its Subsidiaries have been delivered to the Agents and the Lenders and have been prepared in accordance with GAAP consistently applied throughout the periods covered (except as disclosed therein and except, with respect to unaudited financial statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended: (i) The audited consolidated balance sheets at December 31, 1998 and the related statements of income and cash flows of Borrower and its Subsidiaries for the fiscal year then ended, certified by PricewaterhouseCoopers L.L.P. (ii) The unaudited condensed consolidated balance sheet(s) at September 30, 1999 and the related statement(s) of income and cash flows of Borrower and its Subsidiaries for the fiscal quarter then ended. (b) The unaudited pro forma consolidated balance sheet of the Borrower and its consolidated Subsidiaries which has been delivered pursuant to subsection 5.1(o) has been prepared based on the best information available to the Borrower as of the date of delivery thereof and presents fairly on a pro forma basis the estimated financial position of the Borrower and its consolidated Subsidiaries, as at December 31, 1999, adjusted to give effect to the acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc. and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. 4.2 No Change. Since September 30, 1999 there has been no development, event or circumstance which has had or could reasonably be expected to have a Material Adverse Effect. 4.3 Corporate Existence; Compliance with Law. Each of Holdings, the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is, or will be on or before the date set forth in subsection 6.12, duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 41 4.4 Corporate Power; Authorization; Enforceable Obligations. Each of Holdings, the Borrower and its Subsidiaries has the corporate power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party and, in the case of the Borrower, to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of such Credit Documents. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents to which the Borrower and each other Credit Party is a party, except those referred to in subsections 4.17 and 6.13 and those set forth on Schedule 4.4. This Agreement has been, and each other Credit Document will be, duly executed and delivered on behalf of the Borrower and each other Credit Party. This Agreement constitutes, and each other Credit Document to which it is a party when executed and delivered will constitute, a legal, valid and binding obligation of each Credit Party thereto enforceable against each such Credit Party, as the case may be, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 4.5 No Legal Bar. Except as set forth on Schedule 4.5 or as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution, delivery and performance of each Credit Document, the borrowing and use of the proceeds of the Loans and the consummation of the transactions contemplated by the Credit Documents: (a) will not violate any Requirement of Law or any Contractual Obligation applicable to or binding upon Holdings, the Borrower or any Subsidiary of the Borrower or any of their respective properties or assets and (b) will not result in the creation or imposition of any Lien on any of its properties or assets pursuant to any Requirement of Law applicable to it or any of its Contractual Obligations, except for the Liens arising under the Pledge Agreements. 4.6 No Material Litigation. Except as set forth on Schedule 4.6, no litigation by, investigation by, or proceeding of or before any arbitrator or any Governmental Authority is pending or, to the knowledge of the Borrower, overtly threatened by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues with respect to any Credit Document or any of the transactions contemplated hereby or thereby or which could reasonably be expected to have a Material Adverse Effect. 4.7 No Default. Neither Holdings, the Borrower nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and its Subsidiaries (i) has good record and insurable title in fee simple to, or a valid leasehold interest in, all its material real property, (ii) has good title to, or a valid leasehold interest in, all its other 42 material property and (iii) none of such property in clauses (i) and (ii) is or shall be subject to any Lien except as permitted by subsection 7.3. 4.9 Intellectual Property. Holdings, the Borrower and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, technology, know-how and processes necessary for the conduct of its business as currently conducted except for those the failure to own or license which could not reasonably be expected to have a Material Adverse Effect (the "Intellectual Property"). To the best of the Borrower's knowledge, and except as set forth on Schedule 4.9, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any valid basis for any such claim which could reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by Holdings, the Borrower and its Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 4.10 Taxes. Except as set forth on Schedule 4.10, each of Holdings, the Borrower and its Subsidiaries has filed or caused to be filed all material tax returns which, to the knowledge of the Borrower, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 4.11 Federal Regulations. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. 4.12 ERISA. The Borrower has provided to the Agents a true and correct copy of all agreements, arrangements and understandings relating to the transfer of Plans from the Seller to the Borrower (the "Transfer Agreements"). The Transfer Agreements are in full force and effect and have not been waived or modified without the consent of the Agents (which shall not be unreasonably withheld) except to the extent any such waiver or modification, singly or in the aggregate, could not be reasonably expected to have a Material Adverse Effect. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Reportable Event has occurred with respect to any Single Employer Plan, all contributions required to be made with respect to a Plan have been timely made; none of the Borrower or any of its Subsidiaries nor any Commonly Controlled Entity has incurred any material liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any liability (including any indirect, contingent or secondary 43 liability) under any of the foregoing Sections with respect to any Plan; no termination or, or institution of proceedings to terminate or appoint a trustee to administer, a Single Employer Plan has occurred; and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code (except that with respect to any Multiemployer Plan, such representation is deemed made only to the knowledge of the Borrower). No "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA), extension of any amortization period (within the meaning of Section 412 of the Code) or Lien in favor of the PBGC or a Plan has arisen or has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan. As of the last annual valuation date prior to the date on which this representation is made or deemed made, the fair market value of the assets available for benefits under each Single Employer Plan did not exceed the actuarial present value of all accumulated benefit obligations under such Plan by more than $20,000,000, all as determined in accordance with Statement of Financial Accounting Standards No. 87. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan for which there is any outstanding liability, and neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made in an amount which would be reasonably likely to have a Material Adverse Effect. To the best knowledge of the Borrower, no such Multiemployer Plan is in Reorganization or Insolvent. 4.13 Investment Company Act; Other Regulations. None of the Borrower or any of its Subsidiaries is an "investment company," or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. None of the Borrower or any of its subsidiaries is not subject to regulation under any Federal or State statute or regulation (other than Regulation X of the Board of Governors of the Federal Reserve System) which limits its ability to incur Indebtedness. 4.14 Subsidiaries. The Subsidiaries of the Borrower and their respective jurisdictions of incorporation shall be as set forth on Schedule 4.14. 4.15 Purpose of Loans. The proceeds of the Loans shall be used by the Borrower (i) to pay the cash portion of the purchase price for the Acquired Company pursuant to the Acquisition Documents, (ii) to pay fees and expenses related to the preparation and negotiation of the Acquisition Documents, this Agreement and the other Credit Documents and (iii) for general corporate and working capital purposes in the ordinary course of business of the Borrower and its Subsidiaries, including, without limitation, the making of Investments permitted under subsection 7.9. 4.16 Environmental Matters. Except insofar as any exception to any of the following, or any aggregation of such exceptions, is not reasonably likely to result in a Material Adverse Effect: 44 (a) The facilities and properties owned, leased or operated Holdings, by the Borrower or any of its Subsidiaries (the "Properties") do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could reasonably be expected to give rise to liability under, any applicable Environmental Law. (b) None of Holdings, the Borrower nor any of its Subsidiaries has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor does the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened. (c) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, any applicable Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability under, any applicable Environmental Law. (d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Borrower, threatened, under any Environmental Law to which Holdings, the Borrower or any Subsidiary is or, to the knowledge of the Borrower, will be named as a party or with respect to the Properties or the Business, 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 Properties or the Business. (e) There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of Holdings, the Borrower or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably give rise to liability under any applicable Environmental Laws. (f) The Properties and all operations at the Properties are in compliance, and have in the last 3 years been in compliance, in all material respects with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any applicable Environmental Law with respect to the Properties or the business operated by Holdings, the Borrower or any of its Subsidiaries (the "Business") which could materially interfere with 45 the continued operation of the Properties or materially impair the fair saleable value thereof. (g) Holdings, the Borrower and its Subsidiaries hold and are in compliance with all Environmental Permits necessary for their operations. 4.17 Collateral Documents. Upon execution and delivery thereof by the parties thereto, each Pledge Agreement will be effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the pledged stock described therein and, when stock certificates representing or constituting the pledged stock described therein are delivered to the Administrative Agent, together with undated stock powers executed in blank therefor, such security interest shall, subject to the existence of Permitted Liens, constitute a perfected first lien on, and security interest in, all right, title and interest of the pledgor party thereto in the pledged stock described therein. 4.18 Accuracy and Completeness of Information. No fact is known to Holdings, the Borrower or any of its Subsidiaries which has had or could reasonably be expected to have a Material Adverse Effect, which has not been disclosed to the Lenders by Holdings, the Borrower or its Subsidiaries in writing prior to the date hereof. Neither Holdings, the Borrower nor any Subsidiary of the Borrower is aware of any material liability of the Borrower or any of its Subsidiaries which is not fully disclosed in the most recent financial statements delivered to the Agents and Lenders pursuant to subsections 4.1 and 6.1 hereto. 4.19 Labor Matters. There are no strikes pending or, to the Borrower's knowledge, overtly threatened against Holdings, the Borrower or any of its Subsidiaries which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The hours worked and payments made to employees of Holdings, the Borrower and each of its Subsidiaries (and their predecessors) have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law, except to the extent such violations could not, or in the aggregate, be reasonably expected to have a Material Adverse Effect. 4.20 Acquisition. The Acquisition Documents listed on Schedule 4.20 attached hereto constitute all of the material agreements, instruments and undertakings to which Holdings, the Borrower or any of its Subsidiaries is bound or by which such Person or any of its property or assets is bound or affected relating to, or arising out of, the Acquisition (including, without limitation, any agreements, instruments or undertakings assumed pursuant to the Acquisition Documents). None of such material agreements, instruments or undertakings have been amended, supplemented or otherwise modified, and all such material agreements, instruments and undertakings are in full force and effect. As of the Closing Date, the Borrower is not in default under any of the Acquisition Documents and, to the best of Borrower's knowledge, no other party to any Acquisition Document is in default thereunder. Upon the funding of the initial Loan under this Agreement on the Closing Date, the Acquisition shall have been consummated in accordance with the material terms of the Acquisition Documents. As of the Closing Date, the representations and warranties of the Borrower contained in the Acquisition Documents are true and correct in all material respects. 46 4.21 Solvency. Each Credit Party is, and after giving effect to the Acquisition and the incurrence of all Indebtedness and obligations being incurred in connection with the Credit Documents and the Acquisition will be and will continue to be, Solvent. SECTION 5. CONDITIONS PRECEDENT 5.1 Conditions to Initial Loans. The agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction, immediately prior to or concurrently with the making of such extension of credit (including the making of any Loan) on the Closing Date, of the following conditions precedent: (a) Credit Documents. The Administrative Agent shall have received (i) this Agreement, (ii) the Guarantees and (iii) the Pledge Agreements, in each case executed, duly acknowledged and delivered by duly authorized officers of each party thereto, with a counterpart or a conformed copy for each Lender. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the capital stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. (b) Fees and Expenses. The Agents, the Arrangers and the Lenders shall have received all fees, expenses and other consideration required to be paid on or before the Closing Date and all attorneys fees and disbursements incurred by the Agents in connection with this Agreement shall have been paid on or before the Closing Date. (c) Good Standing Certificates. The Administrative Agent shall have received certificates of good standing for each Credit Party issued by the Secretary of State (or other relevant governmental officers) of the jurisdiction of incorporation of each Credit Party. (d) Consents, Authorizations and Filings, Etc. All consents, authorizations and filings, if any, required in connection with the execution, delivery and performance by the Credit Parties, and the validity and enforceability against the Credit Parties, of the Credit Documents to which any of them is a party, shall have been obtained or made, and such consents, authorizations and filings shall be in full force and effect, except such consents, authorizations and filings, the failure to obtain which would not have a Material Adverse Effect. In addition, all governmental, shareholder and third party consents, authorizations, 47 approvals and filings, if any, necessary or, in the reasonable discretion of the Agents, advisable in connection with the Acquisition, the continuing operations of Holdings, the Borrower and its Subsidiaries and the transactions contemplated hereby and by the Acquisition Documents shall have been obtained and be in full force and effect, and all applicable waiting periods (including any under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended), if any, shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose materially adverse conditions on the Acquisition or the financing contemplated hereby. (e) Insurance. The Lenders shall have received (i) a reasonably satisfactory schedule describing all insurance maintained by the Borrower and its Subsidiaries pursuant to subsection 6.5, and (ii) binders (or other customary evidence as to the obtaining and maintenance by the Borrower and its Subsidiaries of such insurance) for each policy set forth on such schedule insuring against casualty and other usual and customary risks. (f) Litigation. On the Closing Date, there shall not exist actions, suits or proceedings pending or threatened against any Credit Party or any order, decree, judgment, ruling or injunction (a) with respect to this Agreement or any other Credit Document or any Acquisition Document or the transactions contemplated hereby or thereby, (b) which the Agents or the Required Lenders shall determine could reasonably be expected to have a Material Adverse Effect or (c) which restrains the consummation of the Acquisition in the manner contemplated by the Acquisition Documents. (g) Borrowing Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of the Borrower, dated the Closing Date, substantially in the form of Exhibit D, with appropriate insertions and attachments, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (h) Corporate Proceedings of the Borrower. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of the Borrower authorizing (i) the execution, delivery and performance of the Credit Documents and Acquisition Documents to which it is a party, (ii) the borrowings contemplated hereunder, and (iii) the stock pledges pursuant to the Borrower Pledge Agreement, certified by the Secretary or an Assistant Secretary of the Borrower as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. 48 (i) Borrower Incumbency Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a Certificate of the Borrower, dated the Closing Date, as to the incumbency and signature of the officers of the Borrower executing any Credit Document or Acquisition Document reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of the Borrower. (j) Corporate Proceedings of Other Credit Parties. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of each Credit Party (other than the Borrower) authorizing (i) the execution, delivery and performance of the Credit Documents to which it is a party, and (ii) the granting by it of the Liens created pursuant to the Pledge Agreements to which it is a party, certified by the Secretary or an Assistant Secretary of each such Credit Party as of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (k) Credit Party Incumbency Certificates. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of each Credit Party (other than the Borrower), dated the Closing Date, as to the incumbency and signature of the officers of such Credit Party executing any Credit Document, reasonably satisfactory in form and substance to the Administrative Agent, executed by the President or any Vice President and the Secretary or any Assistant Secretary of each such Credit Party. (l) Corporate Documents. The Administrative Agent shall have received, with a counterpart for each Lender, true and complete copies of the certificate of incorporation and by-laws of each Credit Party, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the such Credit Party. (m) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender the executed legal opinion of each of Simpson Thacher and Bartlett, special counsel to the Credit Parties, and Christopher C. Cambria, Vice President - General Counsel and Secretary of the Borrower and counsel to the other Credit Parties, substantially in the form of Exhibits C-1 and C-2, respectively. Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Agents may reasonably require. (n) Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificates representing the shares pledged pursuant to each of 49 the Pledge Agreements together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof. The Administrative Agent shall have also received any other documents reasonably requested by and in form and substance satisfactory to the Administrative Agent evidencing that the Administrative Agent (on behalf of the Lenders) holds, on a ratable basis with the Facility A Administrative Agent and the Facility B Administrative Agent, a perfected, first priority Lien in all of the Collateral, subject only to Permitted Liens. (o) Pro Forma Financials. The Lenders shall have received a reasonably satisfactory unaudited pro forma consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 1999 which shall present fairly, in all material respects, on a pro forma basis, the estimated financial condition of the Borrower and its Subsidiaries as of such date, as adjusted to give effect to the acquisition by Borrower of (i) the Training Devices and Training Systems ("TDTS") assets of Raytheon, Inc. and (ii) the assets of Honeywell Inc.'s Traffic Alert and Collision Avoidance System product line. (p) Projections. Each Lender shall have received financial projections of the Borrower in form and substance reasonably satisfactory to the Agents prepared by the Borrower. (q) No Default. No Default or Event of Default shall have occurred and be continuing. (r) Facility A Credit Agreement. All conditions set forth in clauses (a) through (q) of subsection 5.1 of the Facility A Credit Agreement shall have been satisfied or waived in writing by the Facility A Lenders required to affect a waiver of such condition. (s) Facility B Credit Agreement. All conditions set forth in clauses (a) through (q) of subsection 5.1 of the Facility B Credit Agreement shall have been satisfied or waived in writing by the Facility B Lenders required to affect a waiver of such condition. (t) Acquisition; Closing Certificate. Each of the Acquisition Documents shall have been executed and delivered by each of the parties thereto and shall be in form and substance reasonably satisfactory to the Agents, and concurrent with the funding of the initial Loans under this Agreement, the Acquisition shall be consummated in accordance with the material terms and conditions of the Acquisition Documents. The Agents shall have received a certificate of a Responsible Officer, in form and substance acceptable to the Agents confirming that (i) other than the payment of the purchase price with the proceeds of Loans, all conditions precedent to the consummation of the Acquisition in accordance with the material terms of the Acquisition Documents have been met, (ii) except as expressly disclosed in the Acquisition Documents, 50 no liabilities (actual or contingent) shall be assumed or incurred by Holdings, Borrower or its Subsidiaries which are reasonably likely to result in a Material Adverse Effect and (iii) all conditions precedent set forth in this Section 5.1 have been met. (u) Financial and Other Information. The Agents shall have received and reviewed, with results satisfactory to the Agents, all diligence information requested with respect to the Acquired Company and its subsidiaries, if any, with respect to any actual or contingent liabilities to be assumed by Borrower in connection with the Acquisition. The Agents shall have also received and found to be reasonably satisfactory (i) the Confidential Offering Memorandum (including the related financial summary) concerning the Acquired Company which was prepared by Honeywell Inc. and (ii) any financial information concerning the Acquired Company received by Borrower prior to the Closing Date from Honeywell Inc. and/or its affiliates or agents. (v) Solvency Certificate. The Agents shall have received a solvency certificate in form and substance reasonably satisfactory to the Agents as to the financial condition and solvency of Holdings and its Subsidiaries (on a consolidated basis) after giving effect to the Acquisition and the incurrence of Indebtedness related to such Acquisition. (w) No Change. On the Closing Date, there shall not have occurred any material adverse change since September 30, 1999 in the business, assets, liabilities operations, property or condition (financial or otherwise) of Holdings and its Subsidiaries taken as a whole and/or the Acquired Company and its subsidiaries taken as a whole. 5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be provided by it on any date (including, without limitation, its initial Loan) is subject to the satisfaction of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by any Credit Party in or pursuant to the Credit Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except for any representation and warranty which is expressly made as of an earlier date, which representation and warranty shall have been true and correct in all material respects as of such earlier date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or will occur or exist after giving effect to the extensions of credit requested to be made on such date. Borrower shall not be in violation of Section 4.09 {Incurrence of Indebtedness and Issuance of Preferred Stock} of any of the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture on such date nor will such a 51 violation occur or exist after giving effect to the extensions of credit requested to be made on such date. (c) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be satisfactory in form and substance to the Agents, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date thereof that the conditions contained in this subsection have been satisfied. SECTION 6. AFFIRMATIVE COVENANTS The Borrower hereby agrees that, so long as the Commitments remain in effect or any amount is owing to any Lender or any Agent hereunder or under any other Credit Document, the Borrower shall and (except in the case of delivery of financial information, reports and notices) shall cause each of its Subsidiaries to: 6.1 SEC Filings. The Borrower will file on a timely basis with the SEC, to the extent such filings are accepted by the SEC and whether or not the Borrower has a class of securities registered under the Exchange Act, the annual reports, quarterly reports (including with respect to the fourth quarter of each fiscal year) and other documents that the Borrower would be required to file if the Borrower were subject to section 13(a) or 15(d) of the Exchange Act. The Borrower will also be required (i) to deliver to the Administrative Agent and each Lender, copies of such reports and documents within five days after the date on which the Borrower files such reports and documents with the SEC or the date on which the Borrower would be required to file such reports and documents if the Borrower were so required and (ii) if filing such reports and documents with the SEC is not accepted by the SEC or is prohibited under the Exchange Act, to promptly notify the Administrative Agent in writing of the occurrence of any such event and to supply at the Borrower's cost copies of such reports and documents to the Administrative Agent and any Lender upon request. All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 6.2 Certificates; Other Information. Furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of the independent certified public accountants reporting 52 on such financial statements stating that, in performing their audit, nothing came to their attention that caused them to believe that the Borrower failed to comply with the provisions of subsection 7.1, except as specified in such certificate; (b) concurrently with the delivery of the financial statements referred to in subsection 6.1, a certificate of a Responsible Officer stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary has been formed or acquired, the Borrower has complied with the requirements of subsection 6.10 with respect thereto) and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; (c) concurrently with the delivery of financial statements pursuant to subsection 6.1, a certificate of a Responsible Officer of the Borrower setting forth, in reasonable detail, the computations, as applicable, of (i) the Debt Ratio and (ii) the financial covenants set forth in subsection 7.1, as of such last day or for the fiscal period then ended, as the case may be; (d) not later than 60 days after the end of each fiscal year of the Borrower, a copy of the projections by the Borrower of the operating budget and cash flow budget of the Borrower and its Subsidiaries for the succeeding fiscal year, such projections to be accompanied by a certificate of a Responsible Officer to the effect that such projections have been prepared on the basis of sound financial planning practice and that such Officer has no reason to believe they are incorrect or misleading in any material respect; (e) within five days after the same are sent, copies of all financial statements and reports which the Borrower or Holdings sends to its stockholders; and (f) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be. 6.4 Conduct of Business; Maintenance of Existence and Property; Compliance with Law. Except as permitted by subsection 7.5 and subsection 7.6, (a) continue to engage in business of the same general type as now conducted by it; (b) preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business; (c) keep all property useful and necessary in its business in good working order and condition (ordinary wear and tear and damage by fire and/or other casualty or taking by condemnation excepted) except if (i) in the reasonable business judgment of the Borrower or such Subsidiary, as the case may be, it 53 is in its best economic interest not to preserve and maintain such rights, privileges or franchises, and (ii) such failure to preserve and maintain such privileges, rights or franchises would not materially adversely affect the rights of the Lenders hereunder or the value of the Collateral, and except as otherwise permitted pursuant to subsection 7.5; and (d) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, be reasonably expected to have a Material Adverse Effect. 6.5 Insurance. The Borrower will, and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies of similar stature engaged in the same or similar businesses operating in the same or similar locations. 6.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records (except to the extent any such access is restricted by a Requirement of Law) at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify the Borrower prior to any contact with such accountants and give the Borrower the opportunity to participate in such discussions; provided, further, that the Borrower shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 6.7 Notices. Promptly give notice to the Administrative Agent and each Lender of: (a) the occurrence of any Default or Event of Default; (b) any (i) default or event of default under any Contractual Obligation of the Borrower or any of its Subsidiaries, (ii) litigation, investigation or proceeding which may exist at any time between the Borrower or any of its Subsidiaries and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect or (iii) any material asset sale (describing in reasonable detail the assets sold, the consideration received therefor and the proposed use of the proceeds thereof); (c) any other litigation or proceeding affecting the Borrower or any of its Subsidiaries in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; and (d) the following events, as soon as possible and in any event within 45 days after the Borrower knows or has reason to know thereof: (i) the incurrence of an accumulated funding deficiency or the filing of an application to the Secretary of the 54 Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, the creation of any Lien in favor of the PBGC or a Plan, the occurrence of any "Trigger Event" (as defined in the Transfer Agreements) and the reassumption by the Seller of sponsorship of any Single Employer Plan, (ii) except where such event or liability could not reasonably be expected to have a Material Adverse Effect, the occurrence or expected occurrence of any Reportable Event with respect to any Plan (other than a Multiple Employer Plan), or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan, or a failure to make any required contribution to a Plan, (iii) the institution of proceedings by the PBGC with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan or (iv) except as could not reasonably be expected to have a Material Adverse Effect, the institution of proceedings or the taking of any other action with respect to the withdrawal from or termination of any Single Employer Plan; Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto. 6.8 Environmental Laws. (a) (i) Comply in all material respects with all Environmental Laws applicable to it, and obtain, comply in all material respects with and maintain any and all material Environmental Permits necessary for its operations as conducted and as planned; and (ii) take all reasonable efforts to ensure that all of its tenants, subtenants, contractors, subcontractors, and invitees comply in all material respects with all applicable Environmental Laws, and obtain, comply in all material respects with and maintain any and all material Environmental Permits, applicable to any of them. Notwithstanding the foregoing, upon learning of any actual or suspected noncompliance, the Borrower or one or more of its Subsidiaries, as appropriate, shall promptly undertake all reasonable efforts to achieve material compliance. (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions in each case required under applicable Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding applicable Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not be reasonably expected to have a Material Adverse Effect. 6.9 Further Assurances. Upon the reasonable request of the Administrative Agent, promptly perform or cause to be performed any and all acts and execute or cause to be executed and delivered any and all documents which are necessary or advisable to maintain in 55 favor of the Administrative Agent, for the benefit of the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 6.10 Additional Collateral. (a) With respect to any Capital Stock of any newly created or acquired Subsidiary or any newly issued Capital Stock of any existing Subsidiary acquired after the Original Closing Date by the Borrower or any of its Subsidiaries that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject, promptly (and in any event within 30 days after the acquisition thereof): (i) execute and deliver to the Administrative Agent such amendments to the relevant Pledge Agreements or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such Capital Stock, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, including delivering all such original certificates evidencing such Capital Stock to the Administrative Agent together with undated stock powers executed in blank therefor, and (iii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, the Borrower shall not be required to grant to the Administrative Agent a Lien upon the Capital Stock of any Immaterial Subsidiary. (b) With respect to any Person that, subsequent to the Original Closing Date, becomes a direct or indirect Subsidiary of the Borrower, promptly (and in any event within 30 days after such Person becomes a Subsidiary): (i) cause such new Subsidiary to become a party to the Subsidiary Pledge Agreement and the Subsidiary Guarantee and (ii) if requested by the Administrative Agent or the Required Lenders, deliver to the Administrative Agent legal opinions relating to the matters described in clause (i) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, no Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be required to execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no more than 65% of the Capital Stock of or equity interests in any Foreign Subsidiary of the Borrower or any of its Subsidiaries if more than 65% of the assets of such Subsidiary are securities of foreign companies (such determination to be made on the basis of fair market value), shall be required to be pledged hereunder. 6.11 [Intentionally Omitted.] 56 6.12 Foreign Jurisdictions. Maintain due qualification as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 6.13 Government Contracts. The Borrower and its Subsidiaries shall apply for and maintain all material facility security clearances and personnel security clearances required of the Borrower under all Requirements of Law to perform and deliver under any and all Government Contracts and as otherwise may be necessary to continue to perform the business of the Borrower and its Subsidiaries. 6.14 Lien Searches. Not later than 45 days following the Closing Date, the Borrower shall deliver to the Administrative Agent the results of a search of Uniform Commercial Code, tax and judgment filings made with respect to each of the Borrower and its Subsidiaries (other than any Immaterial Subsidiaries) in each jurisdiction in which the Borrower or such applicable Subsidiary maintains its principal place of business or any material assets and a certificate of a Responsible Officer certifying that such lien search results do not disclose any Liens, except for Liens permitted hereunder. SECTION 7. NEGATIVE COVENANTS The Borrower hereby agrees that, so long as any portion of the Commitments remain in effect or any amount is owing to any Lender or any of the Agents hereunder or under any other Credit Document, the Borrower shall not, and (except with respect to subsection 7.1), shall not permit any of its Subsidiaries to, directly or indirectly: 7.1 Financial Condition Covenants. (a) Debt Ratio. Permit the Debt Ratio at the last day of any fiscal quarter to be greater than the ratio set forth below opposite the fiscal quarter during which such fiscal quarter occurs: Fiscal Quarter Ending Ratio --------------------- ----- December 31, 1999 4.75 March 31, 2000 4.75 June 30, 2000 4.75 September 30, 2000 4.50 December 31, 2000 4.50 March 31, 2001 4.50 June 30, 2001 4.50 September 30, 2001 3.75 December 31, 2001 3.75 57 March 31, 2002 3.75 June 30, 2002 3.75 September 30, 2002 3.25 and thereafter (b) Interest Coverage. Permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense during any Test Period to be less than the ratio set forth opposite such period below (such ratio, the "Interest Coverage Ratio"): Test Period Interest Coverage Ratio ----------- ----------------------- 10/1/99 - 12/31/99 2.25 1/1/00 - 3/31/00 2.25 4/1/00 - 6/30/00 2.25 7/1/00 - 9/30/00 2.50 10/1/00 - 12/31/00 2.50 1/1/01 - 3/31/01 2.50 4/1/01 - 6/30/01 2.50 7/1/01 - 9/30/01 2.75 10/1/01 - 12/31/01 2.75 1/1/02 - 3/31/02 2.75 4/1/02 - 6/30/02 2.75 7/1/02 - 9/30/02 3.00 10/1/02 - and thereafter 3.00 7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness (including in respect of Interest Rate Agreements), except: (a) Indebtedness of the Borrower under this Agreement, the Facility A Credit Agreement and the Facility B Credit Agreement; (b) Indebtedness of the Borrower incurred to finance the acquisition of fixed or capital assets (whether pursuant to a loan, a Financing Lease or otherwise) in an aggregate principal amount not exceeding $25,000,000 at any time outstanding; (c) Indebtedness assumed in connection with any Investment permitted pursuant to subsection 7.9(k) hereof. (d) additional Indebtedness of the Borrower not exceeding $50,000,000 in aggregate principal amount at any one time outstanding (of which up to $35,000,000 may be secured by Liens permitted pursuant to subsection 7.3(i) hereof); 58 (e) Indebtedness of the Borrower in respect of not more than (i) $225,000,000 principal amount of Subordinated Notes issued on the April 30, 1997 (ii) $180,000,000 principal amount of New Subordinated Notes issued on May 22, 1998 and (iii) $200,000,000 principal amount of December 1998 Subordinated Notes issued on or about December 8, 1998; (f) the Indebtedness of the Borrower and its Subsidiaries outstanding on the Original Closing Date and reflected on Schedule 7.2(f), and refundings or refinancings thereof, provided that no such refunding or refinancing shall shorten the maturity or increase the principal amount of the original Indebtedness; (g) Guarantee Obligations permitted by subsection 7.4; (h) the incurrence by any Credit Party of intercompany Indebtedness between or among the Credit Parties; provided, however, that if the Borrower is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations; (i) Indebtedness secured by Permitted Liens; (j) Indebtedness of the Borrower or any of its Subsidiaries (other than as described under subsection 7.2(a) above) incurred in connection with the issuance of any surety bonds, performance letters of credit or other similar performance bonds required pursuant to any Contractual Obligation or Requirement of Law to which Borrower or any of its Subsidiaries are subject in an aggregate principal amount not exceeding $100,000,000 at any time outstanding, less, without duplication, the aggregate amount of then existing Guarantee Obligations permitted under 7.4(g); and (k) Up to $30,000,000 of purchase money Indebtedness the proceeds of which are utilized to acquire the real property (including improvements thereon) and related assets currently utilized by the Borrower's communications systems west division in Salt Lake City, Utah, on terms reasonably satisfactory to the Agents. 7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for: (a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; 59 (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements; (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) easements, rights-of-way, zoning restrictions, other restrictions and other similar encumbrances previously or hereafter incurred in the ordinary course of business 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 Borrower or such Subsidiary; (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by subsection 7.2(f), provided that no such Lien is expanded to cover any additional property (other than after-acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) after the Closing Date and that the amount of Indebtedness secured thereby is not increased and extensions, renewals or replacements thereof provided that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the original Indebtedness; and provided, further, that the assets of the Borrower and its Subsidiaries encumbered by such Liens are existing equipment and other existing tangible assets; (g) Liens securing Indebtedness of the Borrower and its Subsidiaries permitted by subsections 7.2(b) and 7.2(k) incurred to finance the acquisition of fixed or capital assets, provided that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) and (iii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the original purchase price of such property of such property at the time it was acquired; (h) Liens on the property or assets of a corporation which becomes a Subsidiary after the date hereof securing Indebtedness permitted by subsection 7.2(c), provided that (i) such Liens existed at the time such corporation became a Subsidiary and were not created in anticipation thereof, (ii) any such Lien is not expanded to cover any property or assets of such corporation after the time such corporation becomes a Subsidiary (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), and (iii) the amount of Indebtedness secured thereby is not increased; 60 (i) Liens (not otherwise permitted hereunder) which secure obligations not exceeding (as to the Borrower and all Subsidiaries) $35,000,000 in aggregate amount at any time outstanding; (j) Liens created pursuant to the Pledge Agreements; (k) Liens on the property of the Borrower or any of its Subsidiaries in favor of landlords securing licenses, subleases or leases entered into in the ordinary course of business; (l) licenses, leases or subleases permitted hereunder granted to other Persons not interfering in any material respect in the business of the Borrower or any of its Subsidiaries; (m) so long as no Default or Event of Default shall have occurred and be continuing under clause (f) of Section 8, attachment or judgment Liens in an aggregate amount outstanding at any one time not in excess of $7,500,000; (n) Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements entered into by the Borrower, or any of its subsidiaries in the ordinary course of business; and (o) Liens in favor of a banking institution arising by operation of law encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business and which are within the general parameters customary in the banking industry. 7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any Guarantee Obligation except: (a) Guarantee Obligations in existence on the date hereof and listed on Schedule 7.4 and extensions, renewals and replacements thereof, provided, however, that no such extension, renewal or replacement shall shorten the fixed maturity or increase the principal amount of the Indebtedness guaranteed by the original guarantee; (b) Guarantee Obligations incurred after the date hereof in an aggregate amount not to exceed $30,000,000 at any one time outstanding for the Borrower and its Subsidiaries; (c) guarantees made by the Subsidiaries of the Borrower pursuant to the Subordinated Debt Documents, the New Subordinated Debt Documents and the December 1998 Subordinated Debt Documents; (d) Guarantee Obligations under the Credit Documents and the Facility A Credit Documents and the Facility B Credit Documents; 61 (e) Facility A L/C Obligations and the Facility B L/C Obligations; (f) Guarantee Obligations of the Borrower or any Subsidiary in respect of obligations of a Subsidiary permitted to be incurred by such Subsidiary by this Agreement; and (g) Guarantee Obligations in respect of surety bonds and/or performance letters of credit which shall not exceed $100,000,000 at any time less, without duplication, the amount of outstanding Indebtedness permitted under subsection 7.2(j). 7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, or make any material change in its present method of conducting business, except: (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any one or more wholly owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or Subsidiaries shall be the continuing or surviving corporations); and (b) any wholly owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other wholly owned Subsidiary of the Borrower that is a Credit Party. 7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any Person other than the Borrower or any wholly owned Subsidiary, except: (a) the sale or other disposition of obsolete or worn out property in the ordinary course of business; (b) the sale of any property or assets not otherwise permitted by this subsection 7.6; provided that the Net Proceeds thereof shall be applied pursuant to subsection 2.6(b)(ii); (c) as permitted pursuant to subsection 7.5(b); (d) the sale, lease, transfer or exchange of inventory in the ordinary course of business; 62 (e) transfers resulting from any casualty or condemnation of property or assets; (f) intercompany sales or transfers of assets made in the ordinary course of business; (g) licenses, leases or subleases of tangible property in the ordinary course of business; (h) any consignment arrangements or similar arrangements for the sale of assets in the ordinary course of business; (i) the sale or discount of overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; and (j) the conveyance, sale, assignment or contribution to any new Subsidiary of the Borrower or any existing Subsidiary of the Borrower assets of the Borrower or any Subsidiary of the Borrower not exceeding five percent (5%) of the Consolidated Total Assets. 7.7 Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Borrower or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Subsidiary other than Permitted Stock Payments. 7.8 Limitation on Capital Expenditures. Make or commit to make (by way of the acquisition of securities of a Person or otherwise) any expenditure in respect of the purchase or other acquisition of fixed or capital assets (excluding any such asset acquired in connection with normal replacement and maintenance programs properly charged to current operations) except for capital expenditures in the ordinary course of business not exceeding $45,000,000 in the aggregate for the Borrower and its Subsidiaries during any fiscal year of the Borrower; provided, that up to 50% of any such amount not so expended in the fiscal year for which it is permitted above may be carried over for expenditure in the next following fiscal year (except in the case of the fiscal year ended December 31, 1999, in which case Borrower shall be permitted to carry forward for expenditure in the fiscal year ending December 31, 2000 unexpended amounts for Capital Expenditures permitted to be carried forward for such fiscal year under the Facility A Credit Agreement and the Facility B Credit Agreement); provided, further, that Borrower and/or its Subsidiaries may exceed the annual limit on capital expenditures set forth above by utilizing any amounts available for Investments permitted under subsection 7.9(k) hereto to fund such additional Capital Expenditures. 63 7.9 Limitation on Investments, Loans and Advances. Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in, any Person ("Investments"), except: (a) extensions of trade credit in the ordinary course of business; (b) investments in Cash Equivalents; (c) loans to officers of the Borrower listed on Schedule 7.9(c) in aggregate principal amounts outstanding not to exceed the respective amounts set forth for such officers on said Schedule; (d) loans and advances to employees of the Borrower or its Subsidiaries for travel, entertainment and relocation expenses in the ordinary course of business in an aggregate amount for the Borrower and its Subsidiaries not to exceed $1,000,000 at any one time outstanding; (e) investments by the Borrower in its Subsidiaries that are Credit Parties and investments by such Subsidiaries in the Borrower and in other Subsidiaries that are Credit Parties; (f) so long as no Event of Default has occurred and is continuing, loans by the Borrower to its employees (other than any Principals or their Related Parties) in connection with (i) management incentive plans, (ii) management stock purchase plans, and (iii) obligations of employee option-holders of Storm Control Systems, Inc. to fund the exercise of such options, which loans in (i), (ii) and (iii) in the aggregate do not exceed $5,000,000; (g) Investments in existence on the Original Closing Date set forth on Schedule 7.9(g) and extensions, renewals, modifications or restatements or replacements thereof; provided that no such extension, renewal, modification or restatement shall increase the amount of the original loan, advance or investment; (h) promissory notes and other similar non-cash consideration received by the Borrower and its Subsidiaries in connection with the dispositions permitted by subsection 7.6(b); (i) Investments permitted by subsection 7.6(b) and subsection 7.6(j); (j) Investments (including debt obligations and Capital Stock) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; 64 (k) Investments made at any time from and after the Original Closing Date to acquire (i) all or any portion of the Capital Stock, or all or any portion of the assets, of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business, or (ii) all or substantially all of the assets of any division of any Person (other than the Borrower or any of its Subsidiaries) that is engaged in a Similar Business; provided, that, (a) if such Investment is an acquisition of a majority of the Voting Stock of any Person, such Person's board of directors or similar governing body shall have approved such acquisition and (b) at the time of each such Investment described above in clauses (i) and (ii) (both before and after giving effect to such Investment), there shall exist no Default or Event of Default and the aggregate consideration paid (regardless of form, including in the case of an acquisition of assets, any assumed obligations) in connection with all Investments made pursuant to this subsection 7.9(k) shall not exceed the New Investment Sublimit (without deducting therefrom (w) the portion of any purchase price for any Investment funded with Capital Stock of Holdings, (x) consideration paid by the Borrower in connection with the acquisition of SPD Technologies pursuant to the SPD Technologies Acquisition Agreement, (y) consideration not exceeding $92 million paid by Borrower in connection with the acquisition of Microdyne Corporation and (z) any consideration paid prior to December 8, 1998 by the Borrower in connection with any Investment which is listed on Schedule 7.9(k) hereto); provided, further, that in connection with each individual, or series of related, Investments made pursuant to this subsection 7.9(k), the Borrower shall deliver to the Administrative Agent, on or prior to the date which is one Business Day prior to the consummation of such Investment or Investments, a certificate of a Responsible Officer that certifies that no Default or Event of Default has occurred and is continuing or will be caused as a result of consummating such proposed Investment. 7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements. (a) Make any optional payment or prepayment on or redemption or purchase of, or deliver any funds to any trustee for the prepayment, redemption or defeasance of, any Subordinated Debt or amend, modify or change, or consent or agree to any amendment, modification or change to any of the material terms of any such Subordinated Debt Documents, New Subordinated Debt Documents or December 1998 Subordinated Debt Documents (other than any such amendment, modification or change which would extend the maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or extend the date for payment of interest thereon). (b) Amend its Constitutional Documents in any manner which could adversely affect the rights of the Lenders under the Credit Documents or their ability to enforce the same. 65 (c) Modify or amend, or waive any provision or condition contained in, any of the Transaction Documents in any manner that could reasonably be expected to be adverse to the Lenders. 7.11 Limitation on Transactions with Affiliates. (a) Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (i) otherwise permitted under this Agreement, (ii) in the ordinary course of the Borrower's or such Subsidiary's business and (iii) upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate. (b) In addition, notwithstanding the foregoing, the Borrower and its Subsidiaries shall be entitled to make the following payments and/or to enter into the following transactions: (i) the payment of reasonable and customary fees and reimbursement of expenses payable to directors of the Borrower and Holdings; (ii) the employment arrangements with respect to the procurement of services of directors, officers and employees in the ordinary course of business and the payment of reasonable fees in connection therewith; (iii) payments to directors and officers of the Borrower and its Subsidiaries in respect of the indemnification of such Persons in such respective capacities from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, as the case may be, pursuant to the Constitutional Documents or other corporate action of the Borrower or its Subsidiaries, respectively, or pursuant to applicable law; and (iv) transactions described in the Transaction Documents. 7.12 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by the Borrower or any Subsidiary of real or personal property which has been or is to be sold or transferred by the Borrower or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Subsidiary; provided that the Borrower may enter into a sale and leaseback transaction if the Borrower could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction and (b) incurred a Lien to secure such Indebtedness, in each case in accordance with the restrictions contained in this Agreement and the other Credit Documents. 7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the Borrower to end on a day other than December 31. 66 7.14 Limitation on Negative Pledge Clauses. Enter into with any Person any agreement, other than (a) this Agreement, the Facility A Credit Agreement and the Facility B Credit Agreement, (b) the Subordinated Debt Documents, the New Subordinated Debt Documents or the December 1998 Subordinated Debt Documents, and (c) any industrial revenue bonds, purchase money mortgages or Financing Leases permitted by this Agreement (in which cases, any prohibition or limitation shall only be effective against the assets financed thereby other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien), which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired. 7.15 Limitation on Lines of Business. Enter into any business, either directly or through any Subsidiary (other than an Immaterial Subsidiary), except for Similar Businesses. 7.16 Designated Senior Debt. Designate any Indebtedness or other obligation, other than Indebtedness under the Credit Documents, as "Designated Senior Debt," as such term is defined in the Indenture as in effect on April 30, 1997, the New Subordinated Debt Indenture as in effect on May 22, 1998 or the December 1998 Subordinated Debt Indenture as in effect on December 8, 1998, or any comparable designation that confers upon the holders of such Indebtedness or other obligation (or any Person acting on their behalf) the right to initiate blockage periods under the Indenture, the New Subordinated Debt Indenture or the December 1998 Subordinated Debt Indenture or any other Indebtedness or other obligation of the Borrower and its Subsidiaries (other than as a result of a payment default). SECTION 8. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Borrower shall fail to pay any principal of any Loan when due in accordance with the terms thereof or hereof; or the Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; (b) Any representation or warranty made or deemed made by the Borrower or any other Credit Party herein or in any other Credit Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Credit Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; (c) The Borrower or any other Credit Party shall default in the observance or performance of any agreement contained in Section 7 or subsection 6.7(a) of this Agreement, Section 4 of the Parent Guarantee, Section 4 of the 67 Subsidiary Guarantee, Section 4 of the Parent Pledge Agreement, Section 4 of the Borrower Pledge Agreement, or Section 4 of the Subsidiary Pledge Agreement; (d) The Borrower or any other Credit Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Credit Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days; (e) The Borrower or any of its Subsidiaries shall (i) default (x) in any payment of principal of or interest of any Indebtedness (other than the Loans and any intercompany debt) or Interest Rate Agreement Obligations or (y) in the payment of any Guarantee Obligation (excluding any guaranties of the Obligations), beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (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 become due prior to its stated maturity or such Guarantee Obligation to become payable; provided, however, that no Default or Event of Default shall exist under this paragraph unless (i) the aggregate amount of Indebtedness, Interest Rate Agreement Obligations and/or Guarantee Obligations in respect of which any default or other event or condition referred to in this paragraph shall have occurred shall be equal to at least $7,500,000 and (ii) such default continues for a period in excess of 10 days; (f) (i) Holdings, the Borrower or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings, the Borrower or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings, the Borrower or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or 68 unbonded for a period of 60 days; or (iii) there shall be commenced against the Holdings, Borrower or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings, the Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan that is not in the ordinary course; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; (h) One or more judgments or decrees shall be entered against Holdings, the Borrower or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance (which coverage has been acknowledged by the appropriate insurers)) of $7,500,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; (i) (i) Any of the Pledge Agreements shall cease, for any reason, to be in full force and effect (unless released by the Administrative Agent at the direction of the requisite Lenders or as otherwise permitted under this Agreement or the other Credit Documents), or the Borrower or any other Credit Party which is a party to any of the Pledge Agreements shall so assert or (ii) the Lien created by any of the Pledge Agreements shall cease to be enforceable and of the same 69 effect and priority purported to be created thereby (and, if such invalidity is such so as to be amenable to cure without materially disadvantaging the position of the Administrative Agent and the Lenders, as the case may be, as secured parties thereunder, the Credit Party shall have failed to cure such invalidity within 30 days after notice from the Administrative Agent); (j) The Guarantee Obligation of any Credit Party under the Credit Documents shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Credit Party or any Person acting on behalf of any Credit Party, shall deny or disaffirm its obligations under such Guarantee Obligation; (k) There shall have occurred a Change in Control; or (l) An "Event of Default" as defined in the Facility A Credit Agreement and/or the Facility B Credit Agreement shall have occurred and be continuing; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) of this Section above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice of default to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION, PRESENTMENT, DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY EXPRESSLY WAIVED. SECTION 9. THE AGENTS; THE ARRANGERS 9.1 Appointment. Each Lender hereby irrevocably designates and appoints each of the Agents as the agent of such Lender under this Agreement and the other Credit Documents, and each such Lender irrevocably authorizes each of the Agents, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except 70 those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against any of the Agents. 9.2 Delegation of Duties. The Agents may execute any of their duties under this Agreement and the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. None of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 9.3 Exculpatory Provisions. Neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower or any officer thereof contained in this Agreement or any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by such Agent under or in connection with, this Agreement or any other Credit Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for any failure of the Borrower to perform its obligations hereunder or thereunder. None of the Agents shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Credit Document, or to inspect the properties, books or records of the Borrower. 9.4 Reliance by Agents. The Agents shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by such Agent. The Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with such Agent. Except as expressly provided in this Agreement, the Agents shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received 71 notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that any Agent receives such a notice, such Agent shall give notice thereof to the Lenders. Each Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until such Agent shall have received such directions, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither any of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by any of the Agents hereafter taken, including any review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty by any of the Agents to any Lender. Each Lender represents to each of the Agents that it has, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and credit worthiness of the Borrower and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Credit Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any of the Agents hereunder (or copies of which have been provided to the Administrative Agent pursuant to this Agreement), none of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Credit Party which may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 9.7 Indemnification. The Lenders agree to indemnify each of the Agents in their respective capacities as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitment Percentages with respect to all Loans in effect on the date on which indemnification is sought, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against any of the Agents in any way relating to or arising out of, the Commitments, this Agreement, any of the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any of the Agents under or in connection with any of the foregoing provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, 72 expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 9.8 Agents, in Their Individual Capacities. The Agents and their respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower as though the Agents were not acting in such capacities hereunder and under the other Credit Documents. With respect to the Loans made or renewed by it and any Note issued to it or Loan Account maintained by it, each Agent shall have the same rights and powers under this Agreement and the other Credit Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include the Agents in their individual capacities. 9.9 Successor Administrative Agent, Syndication Agent and Documentation Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders. 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, unless a Default or Event of Default shall have occurred and be continuing, be approved by the Borrower. 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, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Section 9 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 which is 30 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 administrative agent as provided for above. Similarly, the Syndication Agent and/or the Documentation Agent may resign as Syndication Agent and/or Documentation Agent, as the case may be, upon 30 days' notice to the Lenders. The procedure for replacement and effective date of resignation for the Syndication Agent and the Documentation Agent shall be identical to that provided above for the Administrative Agent. 9.10 The Arrangers and the Managing Agents. Except as expressly set forth herein, each of the Arrangers and the Managing Agents, in their respective capacities as such, shall have no duties or responsibilities, and shall incur no liabilities, under this Agreement or the other Credit Documents. 73 SECTION 10. MISCELLANEOUS 10.1 Amendments and Waivers. Neither this Agreement nor any other Credit Document, nor any terms hereof or thereof may be amended, supplemented, waived or modified except in accordance with the provisions of this subsection. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend any scheduled date of maturity of any Loan or reduce the stated rate or amount of any interest or fee payable hereunder or extend the scheduled date of any payment thereof, in each case without the consent of each Lender affected thereby, or increase the commitment of any Lender or extend the expiry of the commitment of any Lender without the consent of such Lender, (ii) amend, modify or waive the definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Credit Documents, in each case without the written consent of all the Lenders, (iii) release all or substantially all of the Collateral or release all or substantially all of the Credit Parties from their Guarantee Obligations under the Credit Documents without the consent of all Lenders, (iv) amend, modify or waive any provision of Section 9 without the written consent of the then Agents, or (v) amend, modify or waive any provision of this Agreement or any other Credit Document which would directly and adversely affect the Arrangers or the Agents without the written consent of the Arrangers or the Agents, as the case may be. In addition to the foregoing, (A) no amendment, modification, termination or waiver of any provision of subsection 2.5, subsection 2.6 or subsection 2.12 which has the effect of changing any interim scheduled payments, voluntary or mandatory prepayments, the application of any scheduled payment or voluntary or mandatory prepayment, the application of proceeds of any Collateral or any Commitment reductions applicable to any Class (an "Affected Class") in a manner that disproportionately disadvantages such Class relative to the other Class shall be effective without the written concurrence of the Requisite Class Lenders of the Affected Class (it being understood and agreed that any amendment, modification, termination or waiver of any provision which only postpones or reduces any interim scheduled payment, voluntary or mandatory prepayment or Commitment reduction from those set forth in subsection 2.6 with respect to only one Class shall be deemed to not disproportionately disadvantage the other Class and, therefore, shall not require the consent of Requisite Class Lenders of such other Class), (B) no amendment, modification, termination or waiver of any provision of any Guarantee or Pledge Agreement shall be effective without the written concurrence of the Requisite Class Lenders for each Class and (C) no amendment, modification or waiver with respect to any provision of this subsection 10.1 or to the definition of "Requisite Class Lenders" shall be effective without the written concurrence of all Lenders, all Facility A Lenders and all Facility B Lenders. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the Agents and all future holders 74 of the Loans. In the case of any waiver, the Borrower, the Lenders and the Agents shall be restored to their former positions and rights hereunder and under the other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. 10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when delivered, (b) in the case of delivery by mail, three days after being deposited in the mails, postage prepaid, or (c) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows in the case of the Borrower, the Administrative Agent, the Syndication Agent and the Documentation Agent, and as set forth in Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto: Holdings, the Borrower or any of its Subsidiaries: L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: Robert LaPenta Fax: (212) 805-5470 with a copy to Attention: Christopher C. Cambria Fax: (212) 805-5494 75 The Administrative Agent: Addresses for notices of borrowing, prepayments and other administrative matters: Bank of America, N.A. 1850 Gateway Boulevard, 5th Floor Concord, CA 94520 Attention: Agency Administrative Services #5596 Josephine T. Flores, Vice President Fax: (925) 675-8500 Tel: (925) 675-8374 Addresses for all other notices (including with respect to amendments and waivers): Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, CA 94103 Attention: Agency Management #10831 Dietmar Schiel, Vice President Fax: (415) 436-3425 Tel: (415) 436-2769 with a copy to: Bank of America, N.A. 335 Madison Avenue New York, NY 10017 Attention: Lisa B. Choi Fax: (212) 503-7066 Tel: (212) 503-8101 76 The Documentation Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michelle Swanson Fax: (212) 528-0819 The Syndication Agent: Lehman Commercial Paper Inc. 3 World Financial Center, 9th Floor New York, New York 10285 Attention: Michelle Swanson Fax: (212) 528-0819 provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not be effective until received. 10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 10.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse each of the Arranger and the Agents for all of their respective reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Credit Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees, charges and disbursements of a single counsel for the Lenders (in addition to any local counsel), (b) to pay or reimburse each Lender and Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Credit Documents and any such other documents, including, without limitation, the fees and disbursements of counsel to each Lender and of counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or 77 determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Credit Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender, Arranger and Agent harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or the other Credit Documents or the use of the proceeds of the Loans in connection with the Acquisition, including, without limitation, any of the foregoing relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower, any of its Subsidiaries or any of the Properties (all the foregoing in this clause (d), collectively, the "indemnified liabilities"), it being understood that the Borrower shall have an obligation hereunder to any Lender, Arranger or Agent with respect to any indemnified liabilities incurred by any Agent, Arranger or Lender as a result of any Materials of Environmental Concern that are first manufactured, emitted, generated, treated, released, spilled, stored or disposed of on, at or from any Property or any violation of any Environmental Law, which in any case first occurs on or with respect to such Property (i) after the Property is transferred to any Agent, Arranger or Lender or their successors or assigns by foreclosure sale, deed in lieu of foreclosure, or similar transfer or, following such transfer, (ii) in connection with, but prior to, the sale, leasing or other transfer of such Property by such Agent, Arranger or Lender or their successors or assigns to one or more third parties; provided, however, that the Borrower shall have no obligation hereunder to any Agent, Arranger or Lender with respect to otherwise indemnified liabilities arising from the gross negligence or willful misconduct of such Agent, Arranger or Lender, or with respect to otherwise indemnified liabilities following the sale, leasing or other transfer of such Property to one or more third parties. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 10.6 Successors and Assigns; Participation and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Agents and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender or any other interest of such Lender hereunder and under the other Credit Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Credit Documents, and the Borrower and the Agents shall continue to deal solely and 78 directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Credit Documents. No Lender shall be entitled to create in favor of any Participant, in the participation agreement pursuant to which such Participant's participating interest shall be created or otherwise, any right to vote on, consent to or approve any matter relating to this Agreement or any other Credit Document except for those specified in clauses (i), (ii) and (iii) of the proviso to subsection 10.1. The Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in subsection 10.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that in the case of subsection 2.15, such Participant shall have complied with the requirements of said subsection; provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time and from time to time assign to any Lender, any affiliate thereof or, in the case of Lender that is an investment fund which is regularly engaged in making, purchasing or investing in loans or securities (an "Investment Fund"), any other such Investment Fund which is under common management with such Lender, or, with the consent of the Borrower, the Administrative Agent and the Syndication Agent (which in each case shall not be unreasonably withheld), to an additional bank, Investment Fund or financial institution (an "Assignee") all or any part of its rights and obligations under this Agreement and the other Credit Documents pursuant to an Assignment and Acceptance, substantially in the form of Exhibit F, executed by such Assignee, such assigning Lender (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower, the Administrative Agent and the Syndication Agent) and delivered to the Administrative Agent for its acceptance and recording in the Register with a copy to the Syndication Agent, provided that, in the case of any such assignment to an additional bank or financial institution, (A) either (x) such assignment is of all the rights and obligations of the assigning Lender or (y) the sum of the aggregate principal amount of the Loans and the aggregate amount of the unused Commitments being assigned and, if such 79 assignment is of less than all of the rights and obligations of the assigning Lender, the sum of the aggregate principal amount of the Loans and the aggregate amount of the unused Commitments remaining with the assigning Lender are each not less than $5,000,000 (or such lesser amount as may be agreed to by the Borrower and the Administrative Agent) and (B) each Assignee which is a Non-U.S. Lender shall comply with the provisions of clause (A) of subsection 2.15(b) hereof, or, with the prior written consent of the Borrower, which shall not be unreasonably withheld, the provisions of clause (B) of subsection 2.15(b) hereof (and, in either case, with all of the other provisions of subsection 2.15(b) hereof). Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto). Notwithstanding any provision of this paragraph (c) and paragraph (f) of this subsection, the consent of the Borrower shall not be required for any assignment which occurs at any time when any of the events described in clause (f) of Section 8 shall have occurred and be continuing. (d) The Administrative Agent, on behalf of the Borrower, shall maintain at the address of the Administrative Agent referred to in subsection 10.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and Commitments of and principal amounts of the Loans owing to each Lender from time to time and the registered owners of the Obligations evidenced by the Notes and the Loan Accounts. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of a Loan, a Note or other Obligation hereunder as the owner thereof for all purposes of this Agreement and the other Credit Documents, notwithstanding any notice to the contrary. Any assignment of any Loan, Commitment or other obligation evidenced by a Note or a Loan Account shall be effective only upon appropriate entries with respect thereto being made in the Register, and prior to such recordation, all amounts owing to the assignor with respect thereto shall remain owing to the assignor. Any assignment or transfer of all or part of an Obligation evidenced by a Note shall be registered in the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Obligation, duly endorsed by (or accompanied by a written instrument of assignment or transfer duly executed by) the holder thereof, and thereupon one or more new Notes shall be issued to the designated Assignee, if requested, and the 80 old Note shall be returned by the Administrative Agent to the Borrower marked "canceled." (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Borrower the Administrative Agent and the Syndication Agent ) together with payment to the Administrative Agent of a registration and processing fee of $3,500 (provided that no such payment shall be required whenever LCPI or BOA is the assigning Lender), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower. Following the effective date of any such Assignment and Acceptance, the Administrative Agent shall be entitled to update Schedule I hereto to reflect the then outstanding Commitments of each Lender whereupon such amended Schedule I shall be substituted for the pre-existing Schedule I and be deemed a part of this Agreement without any further action or consent of any party and the Administrative Agent shall promptly deliver a copy of such amended Schedule I to each Lender and the Borrower. (f) The Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee, subject to the provisions of subsection 10.15, any and all financial information in such Lender's possession concerning the Borrower and its Affiliates which has been delivered to such Lender by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf of the Borrower in connection with such Lender's credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement. (g) If, pursuant to this subsection 10.6, any interest in this Agreement or any Loan is transferred to any Transferee which would be a Non-U.S. Lender upon the effectiveness of such transfer, the assigning Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the assigning Lender (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) that under applicable law and treaties no U.S. Taxes will be required to be withheld by the Administrative Agent, the Borrower or the assigning Lender with respect to any payments to be made to such Transferee in respect of the Loans, (ii) to furnish to the assigning Lender (and, in the case of any Assignee registered in the Register, the Administrative Agent and the Borrower such Internal Revenue Service Forms required to be furnished pursuant to subsection 2.15(b) and (iii) to agree (for the benefit of the assigning Lender, the Administrative Agent and the Borrower) to be bound by the provisions of subsection 2.15(b). 81 (h) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this subsection concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. (i) Notwithstanding any other provision contained in this Agreement or any other Credit Document to the contrary, (x) any Lender may assign all or any portion of the Loans held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned Loans made by the Borrower to or for the account of the assigning or pledging Lender in accordance with the terms of this Agreement shall satisfy the Borrower's obligations hereunder in respect to such assigned Loans to the extent of such payments and (y) with the consent of the Administrative Agent (not to be unreasonably withheld), any Lender which is an Investment Fund may pledge all or any portion of its Loans to its trustee in support of its obligations to its trustee. No such assignment shall release the assigning Lender from its obligations hereunder. 10.7 Adjustments; Set-off. (a) At any time that an Event of Default has occurred and is continuing, if any Lender (a "benefited Lender") shall at any time receive any payment of all or part of its Loans owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in clause (f) of Section 8, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, Facility A Lender or Facility B Lender (any such affected Lender, Facility A Lender or Facility B Lender, hereinafter, an "Affected Lender"), if any, in respect of the Borrower's obligations owing to such other Affected Lender, whether under this Agreement, the Facility A Credit Agreement or Facility B Credit Agreement, including any interest thereon, such benefited Lender shall purchase for cash from each other Affected Lender a participating interest in such portion of each such other Affected Lender's Loans owing to it, Facility A Loans or Facility A Reimbursement Obligations and/or Facility B Loans or Facility B Reimbursement Obligations owing to it, or shall provide such other Affected Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Affected Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest unless the benefited Lender is 82 required by court order to pay interest thereon, in which case each Lender returning funds to such benefited Lender shall pay its pro rata share of such interest. (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender and Borrower also agree that all proceeds of any such set-off shall be subject to the ratable sharing provisions of subsections 2.12 and 10.7(a) hereof to the same extent as if an Event of Default had occurred and was then continuing. 10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 10.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 83 10.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 10.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents; (b) none of the Arrangers, the Agents nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between any of the 84 Agents and the Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders. 10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE ARRANGERS, THE LENDERS AND THE OTHER PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 10.15 Confidentiality. Each Lender agrees to keep confidential all non-public information provided to it by the Borrower pursuant to this Agreement that is designated by the Borrower in writing as confidential (excluding any such information already in the possession of such Lender or provided to such Lender by a third party not in violation of this Agreement which, in either case, is not, to the knowledge of such Lender, subject to a confidentiality agreement); provided that nothing herein shall prevent any Lender from disclosing any such information (i) to any Agent or any other Lender or any of its Affiliates, (ii) to any Transferee or prospective Transferee or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors which receives such information and agrees to be bound by the confidentiality provisions hereof, (iii) to its employees, directors, agents, attorneys, accountants and other professional advisors, (iv) upon the request or demand of any Governmental Authority having jurisdiction over such Lender, (v) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (vi) which has been publicly disclosed other than in breach of this Agreement, or (vii) in connection with the exercise of any remedy hereunder. 10.16 Conversion of Currencies. (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the date on which final judgment is given. (b) The obligations of the Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the "Applicable Creditor") shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than the currency in which such sum is stated to be due hereunder (the "Agreement Currency"), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in 85 accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Borrower contained in this subsection 10.16 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder. 10.17 Year 2000. The Borrower has reviewed, or will expeditiously review, its operations and those of its Subsidiaries with a view to assessing whether its businesses, or the businesses of any of its Subsidiaries, are experiencing any Year 2000 Problem. The Borrower shall take all actions necessary and commit adequate resources to assure that its computer-based and other systems (and those of all of its Subsidiaries) are able to effectively process data, including dates after January 1, 2000, without experiencing any Year 2000 Problem that could reasonably be expected to cause a Material Adverse Effect. At the request of the Required Lenders, the Borrower will provide the Administrative Agent with assurances and substantiations (including, but not limited to, the results of internal or external audit reports prepared in the ordinary course of business) reasonably acceptable to the Administrative Agent as to the capability of the Borrower and its Subsidiaries to conduct its and their businesses and operations after January 1, 2000 without experiencing a Year 2000 Problem causing a Material Adverse Effect. The Borrower represents and warrants that it has a reasonable basis to believe that no Year 2000 Problem will cause a Material Adverse Effect. [Signature Pages Follow] 86 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. L-3 COMMUNICATIONS CORPORATION By: /s/ Lawrence W. O'Brien Title: Vice President and Treasurer BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Dietmar Schiel Title: Vice President LEHMAN COMMERCIAL PAPER INC., as Documentation Agent, Syndication Agent and as a Lender By: /s/ Andrew Keith Title: Senior Vice President BANK OF AMERICA, N.A., as a Lender By: /s/ Lisa B. Choi Title: Vice President Signature pages to New 364 Day Credit Agreement THE BANK OF NEW YORK By: /s/ Ken Sneider Title: Vice President Signature pages to New 364 Day Credit Agreement THE BANK OF NOVA SCOTIA By: /s/ John Hoymans Title: Managing Director Signature pages to New 364 Day Credit Agreement BANK ONE, NA By: /s/ Andrea Kantor Title: Vice President Signature pages to New 364 Day Credit Agreement CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Scott Chappelka Title: Vice President Signature pages to New 364 Day Credit Agreement FIRST UNION COMMERCIAL CORPORATION By: /s/ Michael Landini Title: Vice President Signature pages to New 364 Day Credit Agreement BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC. By: /s/ Martin Rahe /s/ Douglas B. Warren Title: Senior Vice President Vice President Signature pages to New 364 Day Credit Agreement THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND By: /s/ Brendan McLoughlin /s/ Martina Maher Title: Manager Senior Manager Signature pages to New 364 Day Credit Agreement BANK OF TOKYO-MITSUBISHI TRUST COMPANY By: /s/ Hidekazu Kojima Title: Vice President Signature pages to New 364 Day Credit Agreement COMERICA BANK By: /s/ James Grossett Title: First Vice President Signature pages to New 364 Day Credit Agreement CREDIT INDUSTRIEL ET COMMERCIAL By: /s/ Brian O'Leary /s/ Marcus Edward Title: Vice President Vice President Signature pages to New 364 Day Credit Agreement THE DAI-ICHI KANGYO BANK, LTD. By: /s/ Micholas Fiore Title: Vice President Signature pages to New 364 Day Credit Agreement DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG By: /s/ Stephen A. Santora /s/ Richard W. Wilbert Title: Vice President Vice President Signature pages to New 364 Day Credit Agreement DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES By: /s/ Vincent Carotenuto /s/ B. Craig Erickson Title: Assistant Vice President Vice President Signature pages to New 364 Day Credit Agreement ERSTE BANK, NEW YORK By: /s/ Arcinee Hovanessian /s/ John S. Runnion Title: Vice President First Vice President Signature pages to New 364 Day Credit Agreement GE CAPITAL COMMERCIAL FINANCE, INC. By: /s/ Thomas E. Johnstone Title: Duly Authorized Signatory Signature pages to New 364 Day Credit Agreement THE INDUSTRIAL BANK OF JAPAN, LIMITED By: /s/ J. Kenneth Biegen Title: Senior Vice President Signature pages to New 364 Day Credit Agreement MEES PIERSON CAPITAL CORP. By: /s/ Scott T. Webster /s/ Eugene Oliva Title: Vice President Vice President Signature pages to New 364 Day Credit Agreement MITSUBISHI TRUST AND BANKING CORPORATION By: /s/ Beatrice E. Kossodo Title: Senior Vice President Signature pages to New 364 Day Credit Agreement NATIONAL CITY BANK By: /s/ Robert Rowe Title: Senior Vice President Signature pages to New 364 Day Credit Agreement THE ROYAL BANK OF SCOTLAND PLC By: /s/ Derek Bonnar Title: Vice President Signature pages to New 364 Day Credit Agreement SOCIETE GENERALE By: /s/ Jose A. Mareno Title: Director Signature pages to New 364 Day Credit Agreement SUMMIT BANK By: /s/ Richard Banning Title: Vice President Signature pages to New 364 Day Credit Agreement WEBSTER BANK By: /s/ John Gilfenan Title: Vice President Signature pages to New 364 Day Credit Agreement DEN DANSKE BANK AKTIESELSKAB CAYMAN ISLANDS BRANCH By: /s/ John O'Neill /s/ Peter L. Hargaves Title: Vice President Vice President Signature pages to New 364 Day Credit Agreement MERITA BANK PLC By: /s/ Charles J. Lansdown Title: Senior Vice President By: /s/ Anu Seppala Title: Vice President Signature pages to New 364 Day Credit Agreement SUNTRUST BANK By: /s/ W. David Wisdom Title: Vice President Signature pages to New 364 Day Credit Agreement BANQUE WORMS CAPITAL CORPORATION By: /s/ Anne Edith Bodin /s/ Michelle Fleming Title: Credit Analyst Vice President General Counsel Signature pages to New 364 Day Credit Agreement Exhibit A-1 to Credit Agreement FORM OF NOTE THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT. $__________________ New York, New York _____________, ____ FOR VALUE RECEIVED, the undersigned, L-3 Communications Corporation, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of ________________ (the "Lender") at the office of Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent"), located at 1850 Gateway Boulevard, Concord, California, 94520, in lawful money of the United States of America and in immediately available funds, on the Termination Date, the principal amount of (a) ______________ Dollars ($____________), or, if less, (b) the aggregate unpaid principal amount of all Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in subsection 2.9 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date and amount of each Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to a Eurodollar Loan or a Base Rate Loan (as applicable) and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Loan. This Note (a) is one of the Notes referred to in the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions or entities from time to time parties thereto, Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent, Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment, in whole or in part, as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, 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. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. L-3 COMMUNICATIONS CORPORATION By: ______________________________ Name: Title: 2 Schedule A to Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ------------------------------------------------------------------------------------------------------------------- Amount of Amount of Base Amount Principal of Rate Loans Unpaid Principal Amount of Base Converted to Base Rate Loans Converted to Balance of Base Notation Date Rate Loans Base Rate Loans Repaid Eurodollar Loans Rate Loans Made By - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- ===================================================================================================================
3 Schedule B to Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
- ------------------------------------------------------------------------------------------------------------------- Interest Amount of Unpaid Amount Period and Amount of Eurodollar Principal Amount of Converted to Eurodollar Principal of Loans Balance of Eurodollar Eurodollar Rate with Eurodollar Converted to Eurodollar Notation Date Loans Loans Respect Thereto Loans Repaid Base Rate Loans Loans Made By - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------
4 EXHIBIT B-1 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page ---- SECTION 1. DEFINED TERMS....................................................2 1.1. Definitions.............................................................2 1.2. Other Definitional Provisions...........................................4 1.3. Effect of Restatement...................................................4 SECTION 2. GUARANTEE.........................................................4 2.1. Guarantee...............................................................4 2.2. No Subrogation..........................................................5 2.3. Amendments, etc. with respect to the Guaranteed Obligations.............6 2.4. Guarantee Absolute and Unconditional....................................6 2.5. Reinstatement...........................................................7 2.6. Payments................................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES....................................7 3.1. Representations in Credit Agreements....................................7 SECTION 4. COVENANTS.........................................................8 4.1. Covenants in Credit Agreements..........................................8 4.2. Issuance of Indebtedness................................................8 4.3. Investments.............................................................8 4.4. Activity................................................................8 4.5. Distributions...........................................................8 4.6. Notices.................................................................8 4.7. Foreign Jurisdictions...................................................8 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS....................................8 4A.1 Reports.................................................................8 4A.2 Certificates; Other Information.........................................9 4A.3 Inspection of Property, Books and Records; Discussions..................9 4A.4 Notices.................................................................9 4A.5 Further Assurance......................................................10 4A.6 Additional Collateral..................................................10 4A.7 Payment of Obligations.................................................10 SECTION 5. MISCELLANEOUS....................................................11 5.1. Amendments in Writing..................................................11 5.2. Notices................................................................11 5.3. No Waiver by Course of Conduct; Cumulative Remedies....................11 5.4. Enforcement Expenses; Indemnification..................................11 5.5. Successors and Assigns.................................................12 5.6. Counterparts...........................................................12 i 5.7. Severability...........................................................12 5.8. Section Headings.......................................................12 5.9. Integration............................................................12 5.10. GOVERNING LAW.........................................................12 5.11. SUBMISSION TO JURISDICTION; WAIVERS...................................12 5.12. Acknowledgments.......................................................13 5.13. WAIVER OF JURY TRIAL..................................................13 5.14. Releases..............................................................14 ii SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED PARENT GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. (f/k/a Bank of America NT & SA) as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent, the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, Holdings has executed and delivered to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents, the Amended and Parent Guarantee Agreement (the "Prior Guarantee"), dated as of August 13, 1998 in respect of the obligations of the Borrower to the Administrative Agent for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreement; WHEREAS, Holdings, the Agents, the Arrangers and the Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that Holdings shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. 2 (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower or any other Credit Party with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). "Parent Distributions": the collective reference to any of the following, whether direct or indirect: (i) the declaration or payment of any dividend or other distribution on or in respect of any shares of any class of any Capital Stock of Holdings, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other retirement for value of any such shares of Capital Stock of Holdings, now or hereafter outstanding, (iii) any other payment by Holdings to the holder 3 of any shares of any class of the Capital Stock of Holdings in their capacity as such and (iv) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of Holdings now or hereafter outstanding; provided, however, that the term "Parent Distribution" shall not include payments of salaries or bonuses to employees of Holdings in their capacities as such. "Permitted Parent Distributions": (a) the issuance by Holdings of options or other equity securities of Holdings to outside directors, members of management or employees of Holdings in the ordinary course of business, (b) cash payments made in lieu of issuing fractional shares of Holdings' common stock or preferred stock, (c) cash payments to repurchase Capital Stock of Holdings solely with the proceeds of dividends received from the Borrower pursuant to clause (C) of the definition of Permitted Stock Payments in the Credit Agreements; provided, however, that such payments do not exceed $5,000,000, and (d) the application of up to $2,000,000 of the proceeds of the sale of common stock of Holdings to the repurchase of common stock of Holdings from management of Holdings or the Borrower. "Subscription Agreements": (a) that certain common stock agreement dated April 30, 1997, by and between Frank C. Lanza and Holdings and (b) that certain common stock agreement dated April 30, 1997, by and between Robert V. LaPenta and Holdings, in each case, as in effect on the date hereof. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Holdings hereby unconditionally and irrevocably guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective 4 successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of Holdings hereunder shall be joint and several with the Obligations of the other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of Holdings hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by Holdings under applicable federal and state laws relating to the insolvency of debtors without rending the guarantee of Holdings hereunder unenforceable. (c) Holdings agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of Holdings hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders, hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of Holdings under this Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated (notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding). (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of Holdings hereunder, and Holdings shall, notwithstanding any such payment (other than any payment made by Holdings in respect of the Guaranteed Obligations or any payment received or collected from Holdings in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of Holdings hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 No Subrogation. Notwithstanding any payment made by Holdings hereunder or any set-off or application of funds of Holdings by any of the Agents or Lenders, Holdings shall not be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall Holdings seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by Holdings hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of the Guaranteed Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to Holdings on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by Holdings in trust for the Agents and the Lenders, segregated 5 from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly indorsed by Holdings to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.3 Amendments, etc. with respect to the Guaranteed Obligations. Holdings shall remain obligated hereunder notwithstanding that, without any reservation of rights against Holdings and without notice to or further assent by Holdings, any demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such Agent or Lender and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.4 Guarantee Absolute and Unconditional. Holdings waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Credit Parties, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Holdings waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Holdings understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or the Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the other Credit Parties for the 6 Guaranteed Obligations, or of Holdings under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Holdings, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve Holdings of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against Holdings. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.5 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the any of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.6 Payments. Holdings hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 7 SECTION 4. COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. Holdings shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by Holdings or any of its Subsidiaries. 4.2 Issuance of Indebtedness. Holdings shall not issue, incur or assume any Indebtedness or any Guarantee Obligations other than Indebtedness and Guarantee Obligations under the Credit Documents to which it is a party. 4.3 Investments. Holdings shall not have outstanding or acquire any Investment in any Person other than Investments in Capital Stock of the Borrower and Cash Equivalents. 4.4 Activity. Holdings shall not engage in any business activity other than its ownership and voting of the Capital Stock of the Borrower and the performance of its obligations under the Credit Documents to which it is a party and the Transaction Documents to which it is a party. 4.5 Distributions. Holdings shall not make any Parent Distributions other than Parent Distributions payable solely in common stock of Holdings and Permitted Parent Distributions. 4.6 Notices. Holdings shall promptly give notice to the Administrative Agent of the occurrence of any Default or Event of Default. 4.7 Foreign Jurisdictions. No later than the Closing Date, Holdings shall be duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Reports. Holdings will deliver to the Administrative Agent promptly upon their becoming available, copies of all consolidated or consolidating financial statements, reports, notices and proxy statements sent or made available generally by Holdings to its security holders, 8 of all regular and periodic reports and all registrations statements and prospectuses, if any, filed by Holdings with any securities exchange or with the Securities and Exchange Commission and of all press releases and other statements made available generally by Holdings to the public concerning Holdings. 4A.2 Certificates; Other Information. Holdings shall furnish to the Administrative Agent with copies for each Lender: (a) concurrently with the delivery by the Borrower of the financial statements referred to in subsection 6.1 of each of the Credit Agreements, a certificate of a Responsible Officer of Holdings stating that, to the best of such Officer's knowledge, during such period (i) no Subsidiary has been formed or acquired and (ii) such Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; and (b) promptly, such additional financial and other information as any Lender may from time to time reasonably request. 4A.3 Inspection of Property, Books and Records; Discussions. Holdings shall keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time on a Business Day and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of Holdings and its Subsidiaries with officers and employees of Holdings and its Subsidiaries and with its independent certified public accountants; provided that the Administrative Agent or such Lender shall notify Holdings prior to any contact with such accountants and give Holdings the opportunity to participate in such discussion; provided, further, that Holdings shall notify the Administrative Agent of any such visits, inspections or discussions prior to each occurrence thereof. 4A.4 Notices. Holdings shall promptly give written notice to the Administrative Agent of: (a) any (i) default or event of default under any Contractual Obligation of Holdings or (ii) litigation, investigation or proceeding which may exist at any time between Holdings and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect; (b) any litigation or proceeding affecting Holdings in which the amount involved is $7,500,000 or more and not covered by insurance or in which injunctive or similar relief is sought; (c) the following events, as soon as possible and in any event within 45 days after Holdings knows or has reason to know thereof: (i) the occurrence or 9 expected occurrence of any Reportable Event with respect to any plan (other than a Multiple Employer Plan), a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or Holdings or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan; and Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action Holdings proposes to take with respect thereto. 4A.5 Further Assurance. Upon the request of the Administrative Agent, Holdings shall promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including, without limitation, financing, statements and continuation statements) for filing under the provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Agents and the Lenders, Liens on the Collateral that are duly perfected in accordance with all applicable Requirements of Law. 4A.6 Additional Collateral. With respect to any Capital Stock acquired after the Closing Date by Holdings that is intended to be subject to the Lien created by any of the Pledge Agreements but which is not so subject promptly (and in any event within 30 days after the acquisition thereof): Holdings shall (i) execute and deliver to the Administrative Agent such amendments to the Parent Pledge Agreement or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described in clauses (i) and (ii) immediately preceding, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. 4A.7 Payment of Obligations. Holdings shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings or its Subsidiaries, as the case may be; provided that, notwithstanding the foregoing, Holdings and each of its Subsidiaries shall have the right to pay any such obligation and in good faith contest, by proper legal actions or proceedings, the invalidity or amount of such claims. 10 SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon Holdings shall be addressed to Holdings at its notice address set forth below its signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against Holdings under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. 11 (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE 12 SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 13 5.14 Releases. At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to Holdings, and the Administrative Agent shall execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. [Signature page follows] 14 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ____________________________________ Name: ______________________________ Title: _____________________________ S-1 EXHIBIT B-2 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page SECTION 1. DEFINED TERMS.....................................................3 1.1. Definitions.............................................................3 1.2. Other Definitional Provisions...........................................4 1.3. Effect of Restatement...................................................4 SECTION 2. GUARANTEE.........................................................4 2.1. Guarantee...............................................................4 2.2. Right of Contribution...................................................5 2.3. No Subrogation..........................................................5 2.4. Amendments, etc. with respect to the Guaranteed Obligations.............5 2.5. Guarantee Absolute and Unconditional....................................6 2.6. Reinstatement...........................................................7 2.7. Payments................................................................7 SECTION 3. REPRESENTATIONS AND WARRANTIES....................................7 3.1. Representations in Credit Agreements....................................7 SECTION 4. COVENANTS.........................................................7 4.1. Covenants in Credit Agreements..........................................7 SECTION 5. MISCELLANEOUS.....................................................8 5.1. Amendments in Writing...................................................8 5.2. Notices.................................................................8 5.3. No Waiver by Course of Conduct; Cumulative Remedies.....................8 5.4. Enforcement Expenses; Indemnification...................................9 5.5. Successors and Assigns..................................................9 5.6. Counterparts............................................................9 5.7. Severability............................................................9 5.8. Section Headings........................................................9 5.9. Integration.............................................................9 5.10. GOVERNING LAW..........................................................9 5.11. SUBMISSION TO JURISDICTION; WAIVERS....................................9 5.12. Acknowledgments.......................................................10 5.13. WAIVER OF JURY TRIAL..................................................10 5.14. Additional Guarantors.................................................11 5.15. Releases..............................................................11 i SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Guarantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Guarantors are parties to an Amended and Restated Subsidiary Guarantee Agreement dated as of August 13, 1998 (the "Prior Guarantee"), in respect of the obligations of the Borrower to the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents including its obligations under the Original Credit Agreements; WHEREAS, the Guarantors, Agents, Arrangers and Lenders wish to amend and restate the Prior Guarantee to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Guarantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Guarantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, it is a condition precedent to the several obligations of the Lenders to make their respective extensions of credit to or for the benefit of the Borrower under the Credit Agreements that the Guarantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Lenders and the Agents. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower 2 thereunder, each Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Prior Guarantee in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Guarantee Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Guarantors": the collective reference to each Guarantor. "Guaranteed Obligations": has the meaning set forth in Section 2.1(a) hereof. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the 3 Agents and the Lenders that are required to be paid by the Borrower or any other Credit Party pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Prior Guarantee; provided, that (i) each party hereto acknowledges and agrees that there is no defense, setoff or counterclaim of any kind, nature or description to Guaranteed Obligations with respect to any Obligations arising prior to the Closing Date and (ii) all references in the other Credit Documents to the Prior Guarantee shall be deemed to refer without further amendment to this Agreement. SECTION 2. GUARANTEE 2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Lenders and the Agents and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and each of the other Credit Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower's and such other Credit Party's Obligations (collectively, the "Guaranteed Obligations"). The liability of each of the Guarantors hereunder shall be joint and several with the Obligations of all other Guarantors. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Credit Documents shall in no event exceed the maximum amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors without rendering the guarantee of such Guarantor hereunder unenforceable. (c) Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent, on behalf of the other Agents and the Lenders hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Guaranteed Obligations and the obligations of each Guarantor under this 4 Agreement shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of each of the Credit Agreements, no Loans or Letters of Credit may be outstanding. (e) No indefeasible payment made by any Credit Party or any other Person or received or collected by any of the Agents or the Lenders by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to release the liability of any Guarantor hereunder, and each Guarantor shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunder until the Guaranteed Obligations are paid in full, no Loan or Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Agents and the Lenders, and each Guarantor shall remain jointly and severally liable to the Agents and the Lenders for the full amount guaranteed by such Guarantor hereunder. 2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by any of the Agents or Lenders, no Guarantor shall be entitled to be subrogated to any of the rights of any of the Agents or Lenders against the other Credit Parties or any collateral security or guarantee or right of offset held by any of the Agents or Lenders for the payment of all or any portion of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any of the other Credit Parties in respect of payments made by such Guarantor hereunder, until all amounts owing to the Agents and the Lenders by the other Credit Parties on account of any of the Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Agents and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Required Lenders may determine. 2.4 Amendments, etc. with respect to the Guaranteed Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any 5 demand for payment of any of the Guaranteed Obligations made by any of the Agents or Lenders may be rescinded by such party and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any of the Agents or Lenders, and the Credit Agreements, the other Credit Documents and any other documents executed and delivered in connection therewith may be amended, restated, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security guarantee or right of offset at any time held by any of the Agents or Lenders for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. None of the Agents or Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any of the Agents or Lenders upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Agents and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Credit Parties with respect to the Guaranteed Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreements, this Agreement or any other Credit Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any of the Agents or Lenders, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any of the other Credit Parties or any other Person against any of the Agents or Lenders, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any of the Credit Parties) which constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Credit Parties for the Guaranteed Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any of the Agents or Lenders may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the other Credit Parties or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by any of the Agents or Lenders to make any such demand, to pursue such other rights or remedies or to 6 collect any payments from any of the other Credit Parties or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any of the other Credit Parties or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any of the Agents or Lenders against any Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by and of the Agents or Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Credit Parties, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any of the Credit Parties or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the office of the Administrative Agent located at 1850 Gateway Blvd., 5th Floor, Concord, CA 84520; Attention: Agency Administrative Services #5596, Josephine T. Flores; Fax: (925) 675-8500. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Guarantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Guarantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Guarantor or to the Credit Document to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Guarantor's knowledge. SECTION 4. COVENANTS Each Guarantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Guaranteed Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Covenants in Credit Agreements. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is 7 caused by the failure to take such action or to refrain from taking such action by any of the Credit Parties. SECTION 5. MISCELLANEOUS 5.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 5.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Guarantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth below its respective signature hereto. 5.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Agent or any Lender shall by any act (except by a written instrument pursuant to Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 5.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or reimburse each of the Lenders and Agents for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Guarantor is a party, including, without limitation, the fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with any of the transactions contemplated by this Agreement. (c) Each Guarantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the 8 execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this Section 5.4 shall survive repayment of the Guaranteed Obligations and all other amounts payable under each of the Credit Agreements, this Agreement and the other Credit Documents. 5.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Guarantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Lenders. 5.6 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 5.7 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 5.8 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 5.9 Integration. This Agreement and the other Credit Documents represent the agreement of the Guarantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 5.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 5.11 SUBMISSION TO JURISDICTION; WAIVERS. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND 9 ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GUARANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 5.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 5.12 Acknowledgments. Each Guarantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor the Lenders has any fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Guarantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders, or among the Guarantors and the Agents and/or the Lenders. 5.13 WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY 10 JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 5.14 Additional Guarantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of each of the Credit Agreements shall become a Guarantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. 5.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Guaranteed Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Guarantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights shall revert to the Guarantors, and the Administrative Agent shall execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request to evidence such termination. (b) At the request and sole expense of the Borrower, a Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreements. [Signature page follows] 11 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYNE CORPORATION By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notice to any Guarantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: _________________________________ Name: ___________________________ Title: __________________________ S-2 Annex 1 to Second Amended and Restated Subsidiary Guarantee Agreement ASSUMPTION AGREEMENT, dated as of ______________, _____, made by ______________________________, a ______________ corporation (the "Additional Guarantor"), in favor of Bank of America, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") parties to the Credit Agreements referred to below. All capitalized terms not defined herein shall have the collective meanings ascribed to them in each of such Credit Agreements. W I T N E S S E T H: WHEREAS, (a) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the banks, financial institutions or other entities party thereto as Lenders (the "Facility A Lenders"), Lehman Commercial Paper Inc. ("LCPI"), as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a Second Amended and Restated Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), (b) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility B Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into an Amended and Restated 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement") and (c) the Borrower, the banks, financial institutions or other entities party thereto as Lenders (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), LCPI as Documentation Agent, LCPI as Syndication Agent, LCPI and Banc of America Securities LLC as Arrangers, the Administrative Agent and certain other entities named therein as Co-Agents have entered into a new 364 Day Credit Agreement, dated as of _________ __, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement, and, together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); WHEREAS, in connection with the Credit Agreements, certain Subsidiaries of the Borrower (other than the Additional Guarantor) have entered into a Subsidiary Guarantee Agreement and a Subsidiary Pledge Agreement, each amended and restated as of _________ __, 2000 (as amended, supplemented or otherwise modified from time to time, respectively, the "Subsidiary Guarantee Agreement" and the "Subsidiary Pledge Agreement") in favor of the Administrative Agent for the benefit of the Lenders; WHEREAS, the Credit Agreements require the Additional Guarantor to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; and Annex 1 - 1 WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Subsidiary Guarantee Agreement and the Subsidiary Pledge Agreement; NOW, THEREFORE, IT IS AGREED: 1. Subsidiary Guarantee Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 5.14 of the Subsidiary Guarantee Agreement, hereby becomes a party to the Subsidiary Guarantee Agreement as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Guarantee Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the Subsidiary Guarantee Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 2. Subsidiary Pledge Agreement. By executing and delivering this Assumption Agreement, the Additional Subsidiary Guarantor, as provided in Subsection 7.15 of the Subsidiary Pledge Agreement, hereby becomes a party to the Subsidiary Pledge Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The information set forth in Annex 1-B hereto is hereby added to the information set forth in Schedule 1 to the Subsidiary Pledge Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in the Subsidiary Pledge Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 3. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. [ADDITIONAL GUARANTOR] By: _______________________________________ Name: Title: Address for Notices: ______________________________ Annex 1 - 2 ______________________________ ______________________________ Attention: Phone: ( ) ___________ Fax: ( ) ___________ Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: _______________________________________ Name: Title: Annex 1 - 3 EXHIBIT B-3 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT made by L-3 COMMUNICATIONS HOLDINGS, INC. in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page SECTION 1. DEFINED TERMS.....................................................2 1.1. Definitions..........................................................2 1.2. Other Definitional Provisions........................................4 1.3. Effect of Restatement................................................4 SECTION 2. PLEDGE............................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES....................................4 3.1. Representations in Credit Agreement..................................4 3.2. Title; No Other Liens................................................5 3.3. Perfected First Priority Liens.......................................5 3.4. Chief Executive Office...............................................5 3.5. Pledged Stock........................................................5 SECTION 4. COVENANTS.........................................................5 4.1. Maintenance of Perfected Security Interest...........................6 4.2. Pledged Stock........................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS....................................7 4A.1 Further Documentation................................................7 4A.3 Notices..............................................................7 SECTION 5. REMEDIAL PROVISIONS...............................................8 5.1. Pledged Stock........................................................8 5.2. Proceeds to be Turned Over To Administrative Agent...................9 5.3. Application of Proceeds..............................................9 5.4. Code and Other Remedies..............................................9 5.5. Registration Rights.................................................10 5.6. Waiver; Deficiency.................................................11 SECTION 6. THE ADMINISTRATIVE AGENT.........................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc.........11 6.2. Duty of Administrative Agent........................................12 6.3. Authority of Administrative Agent...................................12 SECTION 7. MISCELLANEOUS....................................................13 7.1. Amendments in Writing...............................................13 7.2. Notices.............................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies.................13 7.4. Enforcement Expenses; Indemnification...............................13 7.5. Successors and Assigns..............................................14 7.6. Set-Off.............................................................14 i 7.7. Counterparts........................................................14 7.8. Severability........................................................14 7.9. Section Headings....................................................15 7.10. Integration........................................................15 7.11. GOVERNING LAW......................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS................................15 7.13. Acknowledgments....................................................16 7.14. WAIVER OF JURY TRIAL...............................................16 7.15. Releases...........................................................16 ii SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED PARENT PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, Holdings executed and delivered to the Original Administrative Agents a certain Amended and Restated Parent Pledge and Security Agreement dated as August 13, 1998 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, Holdings and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that Holdings execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. 2 (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Parent Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Holdings, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of Holdings and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Parent Guarantee, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by Holdings with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by Holdings or any Subsidiary of Holdings with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and Lenders that are required to be paid by Holdings pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, Holdings while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 3 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to Holdings' Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Holdings hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by Holdings or in which Holdings now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Holdings hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. The representations and warranties set forth in Section 4 of the Credit Agreements, each of which is hereby incorporated herein by reference, are true and correct, and the Agents and the Lenders shall be entitled to rely on each of 4 them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to Holdings' knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, Holdings owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by Holdings to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of Holdings and any Persons purporting to purchase any Collateral from Holdings, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, Holdings' jurisdiction of organization and the location of Holdings' chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by Holdings hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by Holdings. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Holdings is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS 5 Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest . Holdings shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If Holdings shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, Holdings shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by Holdings to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by Holdings and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by Holdings, Holdings shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of Holdings, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, Holdings will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock 6 or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of Holdings or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4a. CERTAIN AFFIRMATIVE COVENANTS Holdings covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) Holdings will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of Holdings, Holdings will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Holdings will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Holdings will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to Holdings of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), Holdings shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to Holdings, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by Holdings or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to Holdings to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) Holdings hereby authorizes and instructs each Issuer of any Pledged Stock pledged by Holdings hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Holdings, and Holdings agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by Holdings consisting of cash, checks and other near-cash items shall be held by Holdings in trust for the Agents and the Lenders, segregated from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the Administrative Agent in the exact form received by Holdings (duly endorsed by Holdings to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by Holdings in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by Holdings and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to Holdings or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to Holdings or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Holdings or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office 9 of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Holdings, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to Holdings. To the extent permitted by applicable law, Holdings waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, Holdings will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Holdings agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Holdings recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to 10 agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Holdings acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Holdings agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Holdings further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against Holdings, and Holdings hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Holdings waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Holdings shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Holdings hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Holdings and in the name of Holdings or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Holdings hereby gives the Administrative Agent the power and right, on behalf of Holdings, without notice to or assent by Holdings, to do any or all of the following: (i) in the name of Holdings or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; 11 (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If Holdings fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by Holdings, shall be payable by Holdings to the Administrative Agent on demand. (d) Holdings hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holdings or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to Holdings for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Holdings acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action 12 taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and Holdings, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and Holdings shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or Holdings hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent, nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Holdings agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against Holdings or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which Holdings is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 13 (c) Holdings agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent Holdings would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Holdings and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that Holdings may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Holdings hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to Holdings, any such notice being expressly waived by Holdings, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of Holdings, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of Holdings to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against Holdings, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify Holdings promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any 14 such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of Holdings, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. HOLDINGS HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO HOLDINGS AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND 15 (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Holdings hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to Holdings arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Holdings, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among Holdings and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. HOLDINGS AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to Holdings and the Administrative Agent shall deliver to Holdings any Collateral held by the Administrative Agent hereunder, and execute and deliver to Holdings such documents as Holdings shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by Holdings in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of Holdings, shall execute and deliver to Holdings all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. [Signature page follows] 16 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS HOLDINGS, INC. By: ____________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: _______________________________ Name: _________________________ Title: ________________________ S-1 Schedule 1 DESCRIPTION OF PLEDGED STOCK Pledged Stock: Issuer Class of Stock Stock Certificate No. No. of Shares - ------------------ ------------------ --------------------- ------------- L-3 Communications Common 1 100 Corporation Sch. 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016 Sch. 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Parent Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. L-3 Communications Corporation By: ____________________________________________ Christopher C. Cambria Vice President-General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 EXHIBIT B-4A TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page ---- Section 1. DEFINED TERMS....................................................3 1.1 Definitions......................................................3 1.2 Other Definitional Provisions....................................4 1.3 Effect of Restatement............................................4 Section 2. PLEDGE...........................................................4 Section 3. REPRESENTATIONS AND WARRANTIES...................................5 3.1 Title; No Other Liens............................................5 3.2 Perfected First Priority Liens...................................5 3.3 Chief Executive Office...........................................5 3.4 Pledged Stock....................................................5 Section 4. COVENANTS........................................................6 4.1 Maintenance of Perfected Security Interest.......................6 4.2 Pledged Stock....................................................6 Section 4A. CERTAIN AFFIRMATIVE COVENANTS....................................6 4A.1 Further Documentation............................................6 4A.2 Payment of Obligations...........................................6 4A.3 Notices..........................................................6 Section 5. REMEDIAL PROVISIONS..............................................8 5.1 Pledged Stock....................................................8 5.2 Proceeds to be Turned Over To Administrative Agent...............9 5.3 Application of Proceeds..........................................9 5.4 Code and Other Remedies..........................................9 5.5 Registration Rights.............................................10 5.6 Waiver; Deficiency..............................................11 Section 6. THE ADMINISTRATIVE AGENT........................................11 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.....11 6.2 Duty of Administrative Agent....................................12 6.3 Authority of Administrative Agent...............................13 i Section 7. MISCELLANEOUS...................................................13 7.1 Amendments in Writing...........................................13 7.2 Notices.........................................................13 7.3 No Waiver by Course of Conduct; Cumulative Remedies.............13 7.4 Enforcement Expenses; Indemnification...........................13 7.5 Successors and Assigns..........................................14 7.6 Set-Off.........................................................14 7.7 Counterparts....................................................14 7.8 Severability....................................................15 7.9 Section Headings................................................15 7.10 Integration.....................................................15 7.11 GOVERNING LAW...................................................15 7.12 SUBMISSION TO JURISDICTION; WAIVERS.............................15 7.13 Acknowledgments.................................................16 7.14 WAIVER OF JURY TRIAL............................................16 7.15 Releases........................................................16 7.16 Conflict........................................................17 ii SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT, dated as of April 24, 2000, is made by L-3 Communications Corporation, a Delaware corporation (the "Borrower"), in favor of Bank of America, N.A. as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Amended and Restated Borrower Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into an Amended and Restated Charge Over Shares governed by the laws of England and Wales, under which certain shares of capital stock of L-3 Communications U.K. Ltd. owned by the Borrower have been pledged to the Administrative Agent (the "Charge Over Shares"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Borrower Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, the Borrower while this Agreement is in effect; provided that, in no event shall the Pledged Stock include more than 65.0 3 percent of the issued and outstanding stock of L-3 Communications U.K. Ltd. (the "U.K. Issuer Pledge Limitation"). "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Borrower hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in, all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. 4 SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, Borrower hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by the Borrower to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor, duly executed in blank will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Pledged Stock. (a) Except for the U.K. Issuer Pledge Limitation, the shares of Pledged Stock pledged by the Borrower hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by the Borrower. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. 5 SECTION 4. COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. The Borrower shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.2 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Pledge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2 shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue 6 any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Further Documentation. (a) The Borrower will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: 7 (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), the Borrower shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the Borrower, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Borrower Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the Borrower or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to the Borrower to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 8 (c) The Borrower hereby authorizes and instructs each Issuer of any Pledged Stock pledged by the Borrower hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from the Borrower, and the Borrower agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Borrower or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the 9 Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrower, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative Agent account for the surplus, if any, to the Borrower. To the extent permitted by applicable law, the Borrower waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Borrower will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Borrower agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) The Borrower recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for 10 investment and not with a view to the distribution or resale thereof. The Borrower acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) The Borrower agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. The Borrower further agrees that a breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against the Borrower, and the Borrower hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. The Borrower waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. The Borrower shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, the Borrower hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or 11 otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, and other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 12 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any 13 and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 14 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE CREDIT AGREEMENTS AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; 15 (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 16 7.16 Conflict. In the event there is a conflict between the terms of this Agreement and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares or the Pledged Stock of L-3 U.K. and a court of competent jurisdiction determines that the laws of the United Kingdom shall govern such dispute, then the Charge Over Shares shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K.; provided that, if such a court determines that the laws of the State of New York shall govern such dispute, then this Borrower Pledge Agreement shall control such dispute as to the Charged Shares and Pledged Stock of L-3 U.K. [Signature page follows] 17 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. L-3 COMMUNICATIONS CORPORATION By: ______________________________ Christopher C. Cambria Vice President - General Counsel and Secretary Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: Robert LaPenta Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ____________________________________ Name: Title: S-1 Schedule 1 DESCRIPTION OF PLEDGED STOCK Pledged Stock: Stock Certificate No. of Issuer Class of Stock No. Shares ------ -------------- ----------------- ------ L-3 Communications Ilex Common 1 100 Systems, Inc. Hygienetics Environmental Common 2 100 Services, Inc. L-3 Communications U.K. Ltd. Ordinary 3 65 Shares L-3 Communications SPD Common 1 100 Technologies Inc. L-3 Communications Aydin Common 1 1000 Corporation Microdyne Corporation* Common 1 1000 * Represented by the stock certificate of L-M Acquisition Corporation ("L-M") which was converted to the stock of the surviving company in the merger of L-M and Microdyne Corporation. Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE Jurisdiction of Organization Location of Chief Executive Office Delaware 600 Third Avenue New York, New York 10016 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Borrower Pledge Agreement dated as of _______ __, 2000 (the "Agreement"), made by the parties thereto for the benefit of Bank of America, N.A, as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. HYGIENETICS ENVIRONMENTAL SERVICES, INC. ______________________________________________ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. ______________________________________________ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. ______________________________________________ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION ______________________________________________ Christopher C. Cambria Vice President - General Counsel and Secretary MICRODYNE CORPORATION ______________________________________________ Christopher C. Cambria Vice President - General Counsel and Secretary L-3 COMMUNICATIONS U.K. LTD. ______________________________________________ Name: ________________________________________ Title: _______________________________________ Address for Notices to all Signatories: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: (212) 805-5470 EXHIBIT B-4B TO CREDIT AGREEMENT ================================================================================ AMENDED AND RESTATED CHARGE OVER SHARES made by L-3 COMMUNICATIONS CORPORATION in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated April 24, 2000 ================================================================================ TABLE OF CONTENTS Page ---- SECTION 1. DEFINED TERMS.......................................................3 1.1. Definitions.........................................................3 1.2. Other Definitional Provisions.......................................4 1.3. Effect of Restatement...............................................4 SECTION 2. CHARGE..............................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES......................................5 3.1. Title; No Other Liens...............................................5 3.2. Perfected First Fixed Charge Over Shares............................5 3.3. Chief Executive Office..............................................5 3.4. Charged Shares......................................................5 SECTION 4. COVENANTS...........................................................6 4.1. Undertaking to Pay..................................................6 4.2. Charged Shares......................................................6 SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS......................................7 4A.1 Maintenance of Perfected Security Interest; Further Assurances......7 4A.2 Payment of Obligations..............................................8 4A.3 Notices.............................................................9 SECTION 5. REMEDIAL PROVISIONS.................................................9 5.1. Charged Shares......................................................9 5.2. Payments to be Turned Over To Administrative Agent.................10 5.3. Application of Dividends and Other Payments........................10 5.4. Right to Enforce Security..........................................10 5.5. Right to Take Possession, Exercise Rights, etc.....................11 5.6. Law of Property Act 1925 Not Applicable............................11 5.7. No Liability of Administrative Agent..............................11 SECTION 6. THE ADMINISTRATIVE AGENT...........................................11 6.1. Administrative Agent's Appointment as Attorney-in-Fact, etc........11 6.2. Duty of Administrative Agent.......................................12 6.3. Authority of Administrative Agent..................................13 i SECTION 7. MISCELLANEOUS......................................................13 7.1. Amendments in Writing..............................................13 7.2. Notices............................................................13 7.3. No Waiver by Course of Conduct; Cumulative Remedies................13 7.4. Enforcement Expenses; Indemnification..............................13 7.5. Successors and Assigns.............................................14 7.6. Set-Off............................................................14 7.7. Counterparts.......................................................15 7.8. Severability.......................................................15 7.9. Section Headings...................................................15 7.10. Integration.......................................................15 7.11. GOVERNING LAW.....................................................15 7.12. SUBMISSION TO JURISDICTION; WAIVERS...............................15 7.13. Acknowledgments...................................................16 7.14. WAIVER OF JURY TRIAL..............................................16 7.15. Releases..........................................................17 7.16. Conflict; New York Law Pledge Agreement...........................17 ii AMENDED AND RESTATED CHARGE OVER SHARES This AMENDED AND RESTATED CHARGE OVER SHARES, dated April 24, 2000, is made between (i) L-3 Communications Corporation, a Delaware corporation (the "Borrower"), and (ii) Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, the Borrower executed and delivered to the Original Administrative Agents a certain Charge Over Shares (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Charge Over Shares") in favour of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Charge Over Shares); WHEREAS, the Borrower and the Administrative Agent wish to amend and restate the Existing Charge Over Shares (as so amended and restated herein, this "Charge Over Shares") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, concurrently herewith, the Borrower has entered into a Second Amended and Restated Borrower Pledge Agreement governed by the laws of the State of New York, pursuant to which the Borrower has, inter alia, pledged to the Administrative Agent certain shares of capital stock of L-3 Communications U.K. Ltd. (as amended, restated, supplemented or otherwise modified from time to time, the "New York Law Pledge Agreement"); and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements that the Borrower execute and deliver this Charge Over Shares. NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the Agents, to amend and restate the Existing Charge Over Shares in its entirety to read as provided herein: 2 SECTION 1. DEFINED TERMS 1.1 Definitions. ----------- (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Charged Shares": the shares listed on Schedule 1, together with any other shares, stock certificates, securities convertible into and warrants, options, and other rights to purchase or otherwise acquire, or rights of any nature whatsoever in respect of the share capital of any Person that may be issued or granted to, or held by, the Borrower while this Charge Over Shares is in effect; provided that, in no event shall the Charged Shares include more than 65.0 percent of the issued and outstanding capital shares of L-3 Communications U.K. Ltd. ("L-3 U.K.") (the "U.K. Issuer Share Charge Limitation"). "Charge Over Shares": this Amended and Restated Charge Over Shares, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Charged Shares. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower (including, without limitation, (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Charge Over Shares, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel 3 to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Charge Over Shares shall refer to this Charge Over Shares as a whole and not to any particular provision of this Charge Over Shares, and Section and Schedule references are to this Charge Over Shares unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof shall refer to the Borrower's Collateral or the relevant part thereof. (d) References to the Borrower, any Agent or the Lender include references to any person for the time being deriving title under each of them respectively. 1.3 Effect of Restatement. This Charge Over Shares amends, restates and supersedes the Existing Charge Over Shares; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Change Over Shares shall be deemed to refer without further amendment to this Charge Over Shares. SECTION 2. CHARGE The Borrower, as beneficial owner and as security for the payment and discharge of all the Obligations, hereby charges in favor of the Administrative Agent by way of a first fixed charge all of the following property now owned or at any time hereafter acquired by the Borrower or in which the Borrower now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Charged Shares; (b) any other securities which the Borrower may, with the prior consent of the Administrative Agent, from time to time substitute for all or any of the Charged Shares; and (c) all other securities and all rights, moneys (including, without limitation, dividends) and property whatsoever which may from time to time at any time be derived from, accrue on or be offered in respect of the Charged Shares whether by way of redemption, exchange, conversion, rights, bonus, capital reorganization or otherwise howsoever. 4 As security for its obligations under this Charge Over Shares, the Borrower has delivered, or procured there to be delivered to the Administrative Agent: (i) all share certificates representing the Charged Shares; and (ii) blank, undated stock transfer forms in respect of the Charged Shares executed by the Borrower. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, the Borrower hereby represents and warrants as to itself and the Collateral charged by it hereunder to each of the Agents and the Lenders that: 3.1 Title; No Other Liens. Except for the security interest and charge granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Charge Over Shares and the other Liens permitted to exist on the Collateral by the Credit Agreements, the Borrower owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.2 Perfected First Fixed Charge Over Shares. The charge granted pursuant to this Charge Over Shares: (a) constitutes a valid perfected charge over all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as security for the Obligations, enforceable in accordance with the terms hereof against all creditors of the Borrower and any Persons purporting to purchase any Collateral from the Borrower, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and (b) are prior to all other charges and Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.3 Chief Executive Office. On the date hereof, the Borrower's jurisdiction of organization and the location of the Borrower's chief executive office is specified on Schedule 2. 3.4 Charged Shares. (a) The Charged Shares charged by the Borrower hereunder constitute (i) 65 percent of the issued and outstanding shares of all classes of the Capital Stock of L-3 U.K. and (ii) all outstanding warrants, options or other rights to purchase, or other agreements outstanding with respect to, or property that is now or hereafter convertible into, or that requires the issuance 5 or sale of, any Charged Shares and such Charged Shares have been validly charged to the Administrative Agent pursuant hereto. (b) All the Charged Shares have been duly and validly issued and are fully paid and nonassessable. (c) The Borrower is the record and beneficial owner of, and has good and marketable title to, the Charged Shares charged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Charge Over Shares and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Undertaking to Pay. The Borrower shall discharge each Obligation when due in accordance with its terms or, in the case of an Obligation the terms of which do not provide a time for payment, immediately on demand by the Administrative Agent. 4.2 Charged Shares. (a) If the Borrower shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the Charged Shares, or as a dividend or distribution thereunder, or otherwise in respect thereof, and subject to the U.K. Issuer Share Charge Limitation, the Borrower shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by the Borrower to the Administrative Agent, if required, together with an undated stock transfer form or endorsement covering such certificate or instrument, as applicable, duly executed in blank by the Borrower and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional security for the Obligations. Any sums paid upon or in respect of the Charged Shares upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Charged Shares or any property shall be distributed upon or with respect to the Charged Shares pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the 6 Administrative Agent to be held by it hereunder as additional security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Charged Shares under circumstances described in this Section 4.2(a) shall be received by the Borrower, the Borrower shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of the Borrower, as additional security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, the Borrower will not (i) vote to enable, or take any other action to permit, any Issuer to issue any shares or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any shares or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of the Collateral (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this Charge Over Shares or (iv) enter into any agreement or undertaking restricting the right or ability of the Borrower or the Administrative Agent to sell, assign or transfer any of the Collateral. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS The Borrower covenants and agrees with the Agents and the Lenders that, from and after the date of this Charge Over Shares until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4A.1 Maintenance of Perfected Security Interest; Further Assurances. (a) The Borrower shall: (i) execute and deliver to the Administrative Agent (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the laws of England and Wales or such other country as the Administrative Agent may, in any particular case, reasonably specify; (ii) effect any registration or notarization, give any notice or take any other step, which the Administrative Agent may, by notice to the Borrower and with the consent of the Required Lenders, reasonably specify for any of the purposes described in Section 4A.1(b) or for any similar or related purpose. (b) Those purposes (which in each case the Administrative Agent shall have determined are necessary or desirable to give effect to the terms of this Charge Over Shares) are (i) validly and effectively to create any Lien or right of any kind which the Administrative Agent intended should be created by or pursuant to this Charge Over Shares or the Credit Agreements; 7 (ii) to create a specific mortgage or assignment of any particular part of the Collateral or otherwise to vest in the Administrative Agent the title to any particular part of the Collateral; (iii) to protect the priority, or increase the effectiveness, in any jurisdiction of any Lien which is created, or which the Administrative Agent intended should be created, by or pursuant to this Charge Over Shares or the Credit Agreements; (iv) to enable or assist the Administrative Agent to sell or otherwise deal with any part of the Collateral to transfer title to, or grant any interest or right relating to, any part of the Collateral or to exercise any power which is referred to in Section 5 or which is conferred by the Credit Agreements; (v) to enable or assist the Administrative Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Collateral in any country or under the law of any country. (c) The Administrative Agent may specify the terms of any document to be executed by the Borrower under Section 4A.1(a), and those terms may include any covenants, powers and provisions which the Administrative Agent reasonably considers appropriate to protect its own or any other Lender's or Agent's interests. (d) The Borrower shall comply with a notice under Section 4A.1(a) by the date specified in the notice. (e) At the same time as the Borrower delivers to the Administrative Agent any document executed under 4.3(a)(i), the Borrower shall also deliver to the Administrative Agent a certificate signed by two (2) of the Borrower's directors which shall: (i) set out the text of a resolution of the Borrower's directors specifically authorizing the execution of the document specified by the Administrative Agent; and (ii) state either that the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Borrower's by-laws or other constitutional documents. 4A.2 Payment of Obligations. The Borrower will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower and such proceedings 8 could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. The Borrower will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Charged Shares. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the Borrower of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsections 5.4 and/or 5.5, the Borrower shall be permitted to receive all cash dividends, principal and interest paid in respect of the Charged Shares paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Charged Shares; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Charge Over Shares or any other Credit Document. (b) THE BORROWER HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF THE BORROWER WITH RESPECT TO THE COLLATERAL, INCLUDING THE RIGHT TO VOTE THE CHARGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE OCCURRENCE OF THE LAST TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE CHARGED SHARES, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE CHARGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND 9 WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY CHARGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE CHARGED SHARES OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE RESPONSIBLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO. Immediately following the occurrence of an Event of Default, the Borrower shall give notice to the Secretary of L-3 U.K. of the appointment of the Administrative Agent as the Borrower's proxy and the Borrower's attorney in accordance with this Section 5.1 and Section 6 in relation to the Charged Shares. 5.2 Payments to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all payments or other funds received in respect of any of the Collateral (including all dividends, distributions or other income in respect of the Collateral) by the Borrower consisting of cash, checks and other near-cash items shall be held by the Borrower in trust for the Agents and the Lenders, segregated from other funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to the Administrative Agent in the exact form received by the Borrower (duly endorsed by the Borrower to the Administrative Agent, if required). All such payments or other funds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All such payments or other funds while held by the Administrative Agent in a Collateral Account (or by the Borrower in trust for the Administrative Agent and the Lenders) shall continue to be held as security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Dividends and Other Payments. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of amounts held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such amounts held in any Collateral Account remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Right to Enforce Security. On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Charge Over Shares has become enforceable: 10 (a) the security constituted by this Charge Over Shares shall immediately become enforceable; (b) the Administrative Agent shall be entitled at any time or times to exercise the powers set out in Section 5.5 and in the Credit Agreements; and (c) the Administrative Agent shall be entitled at any time or times to exercise all the powers possessed by it as chargee of the Collateral conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Collateral concerned. 5.5 Right to Take Possession, Exercise Rights, etc. On the occurrence of an Event of Default, the Administrative Agent shall be entitled then or at any later time or times: (a) to exercise the power of sale and other powers conferred by Section 101 of the Law of Property Act, 1925 as varied or amended by this Charge Over Shares; (b) solely and exclusively to exercise all voting and/or consensual powers pertaining to the Charged Shares or any thereof and may exercise such powers in such manner as the Administrative Agent may think fit; (c) in connection with, or in order to facilitate, a sale of the Charged Shares, to remove the then existing Directors and Officers (with or without cause); and/or (d) to sell the Charged Shares or any part thereof at such place and in such manner and at such price or prices as the Administrative Agent may reasonably deem fit, and upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to each purchaser thereof the Charged Shares so sold. 5.6 Law of Property Act 1925 Not Applicable. The Borrower hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Charge Over Shares. 5.7 No Liability of Administrative Agent. The Administrative Agent shall not be obliged to check the nature or sufficiency of any payment received by it under this Charge Over Shares or to preserve, exercise or enforce any right forming part of, or relating to, any Collateral. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The Borrower hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Borrower and in the name of the Borrower or in its own name, for the purpose of carrying out the terms of this Charge Over Shares, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Charge Over Shares, and, without limiting the generality of the foregoing, the Borrower 11 hereby gives the Administrative Agent the power and right, on behalf of the Borrower, without notice to or assent by the Borrower, to do any or all of the following: (i) in the name of the Borrower or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. (b) If the Borrower fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the Borrower, shall be payable by the Borrower to the Administrative Agent on demand. (d) The Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Charge Over Shares are coupled with an interest and are irrevocable until this Charge Over Shares is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The 12 powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lenders to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. The Borrower acknowledges that the rights and responsibilities of the Administrative Agent under this Charge Over Shares with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Charge Over Shares shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Borrower, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation, or entitlement, to make any inquiry respecting such authority. SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Charge Over Shares may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents or the Borrower hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of the other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) The Borrower agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against the Borrower or 13 otherwise enforcing or preserving any rights under this Charge Over Shares and the other Credit Documents to which the Borrower is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Charge Over Shares. (c) The Borrower agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Charge Over Shares to the extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Charge Over Shares shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that the Borrower may not assign, transfer or delegate any of its rights or obligations under this Charge Over Shares without the prior written consent of the Administrative Agent. 7.6 Set-Off. The Borrower hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to the Borrower, any such notice being expressly waived by the Borrower, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or Lender to or for the credit or the account of the Borrower, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of the Borrower to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against the Borrower, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify the Borrower promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights 14 of the Agents and Lenders under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agents or Lenders may have. 7.7 Counterparts. This Charge Over Shares may be executed by one or more of the parties to this Charge Over Shares on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Charge Over Shares shall be effective when a counterpart which bears the signature of the Borrower and a counterpart of the attached Acknowledgment and Consent which bears the signature of L-3 U.K. shall have been delivered to the Administrative Agent and the Administrative Agent shall have executed this Charge Over Shares. 7.8 Severability. Any provision of this Charge Over Shares which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 7.9 Section Headings. The Section headings used in this Charge Over Shares are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Charge Over Shares and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, the Credit Agreements or in the other Credit Documents. 7.11 GOVERNING LAW. THIS CHARGE OVER SHARES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF ENGLAND AND WALES. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF ANY OF ENGLAND, THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR 15 HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME AND THAT A JUDGMENT IN ANY PROCEEDINGS BROUGHT IN ANY COMPETENT COURT SHALL BE CONCLUSIVE AND BINDING UPON THE BORROWER AND MAY BE ENFORCED IN THE COURTS OF ANY OTHER JURISDICTION; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO AND WITH RESPECT TO ANY ACTION BROUGHT IN ENGLAND BY DELIVERING A COPY THEREOF OF TO L-3 U.K. WHICH THE BORROWER HEREBY APPOINTS AS ITS AGENT FOR SERVICE OF PROCESS IN ENGLAND WITH RESPECT TO ANY ACTION BROUGHT AGAINST THE BORROWER UNDER OR RELATING TO THIS CHARGE OVER SHARES OR ANY OF THE COLLATERAL; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Charge Over Shares and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Charge Over Shares or any of the other Credit Documents, and the relationship between the Borrower, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among Agents, among the Agents and/or the Lenders or among the Borrower and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. THE BORROWER AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN 16 ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CHARGE OVER SHARES OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Charge Over Shares and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the Borrower hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Borrower and the Administrative Agent shall deliver to the Borrower any Collateral held by the Administrative Agent hereunder, and execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the Borrower in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. 7.16 Conflict; New York Law Pledge Agreement. In the event there is a conflict between the terms of this Charge Over Shares and the Credit Agreements, the Credit Agreements shall control. In the event that there is a dispute as to the charge or pledge of the Charged Shares, and a court of competent jurisdiction determines that the laws of the State of New York shall govern such dispute, then the New York Law Pledge Agreement shall control such dispute as to the Charged Shares; provided that, if such a court determines that the laws of England and Wales shall govern such dispute, then this Charge Over Shares shall control such dispute as to the Charged Shares. [Signature page follows] 17 IN WITNESS whereof the parties hereto have caused this Charge Over Shares to be duly executed as a Deed the day and year first before written. Executed as a deed ) by L-3 COMMUNICATIONS CORPORATION ) SEAL ---- acting by ) --------------------------------- Signature of Secretary ) -------------------- Signature of witness ) ---------------------- Address for Notices: 600 Third Avenue 34th Floor New York, New York 10016 Attention: President Phone: +1 212 697-1111 Fax: +1 212 805-5470 Executed as a deed ) by BANK OF AMERICA, N.A., ) AS ADMINISTRATIVE AGENT ) acting by ) --------------------------------- Signature of Assistant Secretary ) ---------- Signature of witness ) ---------------------- S-1 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Charge Over Shares dated _______ __, 2000 (the "Charge Over Shares"), made by the parties thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows: 1. The undersigned will be bound by the terms of the Charge Over Shares and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Charge Over Shares. 3. The terms of Sections 5.1(a) and 5.5 of the Charge Over Shares shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Charge Over Shares. 4. The undersigned accepts the appointment by the Borrower pursuant to subsection 7.12(c) of the undersigned as agent for the Borrower for service of process in England for any action brought against the Borrower under or relating to the Charge Over Shares or any of the Collateral (as defined therein). L-3 COMMUNICATIONS U.K. LTD. ---------------------------------------- Name: ---------------------------------- Title: --------------------------------- Address for Notices: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Fax: 212-805-5470 Schedule 1 DESCRIPTION OF CHARGED SHARES Charged Shares:
Issuer Class of Shares Share Certificate No. No. of Shares ------ --------------- --------------------- ------------- L-3 Communications U.K. Ltd. Ordinary 3 65
Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE Jurisdiction of Organization Location of Chief Executive Office ---------------------------- ---------------------------------- Delaware 600 Third Avenue New York, New York 10016 EXHIBIT B-5 TO CREDIT AGREEMENT ================================================================================ SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT made by HYGIENETICS ENVIRONMENTAL SERVICES, INC., L-3 COMMUNICATIONS ILEX SYSTEMS, INC., L-3 COMMUNICATIONS SPD TECHNOLOGIES INC L-3 COMMUNICATIONS AYDIN CORPORATION and MICRODYNE CORPORATION in favor of BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT Dated as of April 24, 2000 ================================================================================ TABLE OF CONTENTS Page ---- SECTION 1. DEFINED TERMS......................................................3 1.1 Definitions..............................................................3 1.2 Other Definitional Provisions............................................4 1.3 Effect of Restatement....................................................4 SECTION 2. PLEDGE.............................................................4 SECTION 3. REPRESENTATIONS AND WARRANTIES.....................................5 3.1 Representations in Credit Agreements.....................................5 3.2 Title; No Other Liens....................................................5 3.3 Perfected First Priority Liens...........................................5 3.4 Chief Executive Office...................................................6 3.5 Pledged Stock............................................................6 SECTION 4. COVENANTS..........................................................6 4.1 Maintenance of Perfected Security Interest...............................6 4.2 Pledged Stock............................................................6 SECTION 4a. CERTAIN AFFIRMATIVE COVENANTS......................................7 4A.1 Further Documentation....................................................8 4A.2 Payment of Obligations...................................................8 4A.3 Notices..................................................................8 SECTION 5. REMEDIAL PROVISIONS................................................8 5.1 Pledged Stock............................................................8 5.2 Proceeds to be Turned Over To Administrative Agent.......................9 5.3 Application of Proceeds.................................................10 5.4 Code and Other Remedies.................................................10 5.5 Registration Rights.....................................................11 5.6 Waiver; Deficiency......................................................12 SECTION 6. THE ADMINISTRATIVE AGENT..........................................12 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.............12 6.2 Duty of Administrative Agent............................................13 6.3 Authority of Administrative Agent.......................................13 SECTION 7. MISCELLANEOUS.....................................................14 7.1 Amendments in Writing...................................................14 7.2 Notices.................................................................14 7.3 No Waiver by Course of Conduct; Cumulative Remedies.....................14 7.4 Enforcement Expenses; Indemnification...................................14 7.5 Successors and Assigns..................................................15 7.6 Set-Off.................................................................15 7.7 Counterparts............................................................15 7.8 Severability............................................................15 7.9 Section Headings........................................................16 7.10 Integration.............................................................16 7.11 GOVERNING LAW...........................................................16 7.12 SUBMISSION TO JURISDICTION; WAIVERS.....................................16 i 7.13 Acknowledgments.........................................................17 7.14 WAIVER OF JURY TRIAL....................................................17 7.15 Additional Grantors.....................................................17 7.16 Releases................................................................17 ii SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT This SECOND AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT, dated as of April 24, 2000, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Grantors"), in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent") for (a) the banks and other financial institutions or entities (collectively, the "Facility A Lenders") from time to time parties to the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility A Credit Agreement"), among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the Facility A Lenders, Lehman Commercial Paper Inc. ("LCPI"), as documentation agent (in such capacity, the "Facility A Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility A Syndication Agent"; and together with the Facility A Documentation Agent and the Administrative Agent, the "Facility A Agents"), LCPI and Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility A Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain Amended and Restated Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility A Credit Agreement") among the Borrower, the Agents party thereto (the "Original Facility A Agents", including the Administrative Agent party thereto, the "Original Facility A Administrative Agent"), the lenders party thereto (the "Original Facility A Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (b) the banks and other financial institutions or entities (the "Facility B Lenders"; and together with the Facility A Lenders, the "Lenders"), from time to time parties to the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility B Credit Agreement"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility B Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility B Syndication Agent"; and together with the Facility B Documentation Agent and the Administrative Agent, the "Facility B Agents"), LCPI and Banc of America Securities LLC (f/k/a BankAmerica Robertson Stephens) as arrangers (in such capacity, the "Facility B Arrangers"), the Administrative Agent and certain other entities named therein as Co-Agents, which amended and restated in its entirety that certain 364 Day Credit Agreement dated as of August 13, 1998 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Facility B Credit Agreement"; and together with the Original Facility A Credit Agreement, the "Original Credit Agreements") among the Borrower, the Administrative Agent (the "Original Facility B Administrative Agent"; and together with the Original Facility A Administrative Agent, the "Original Administrative Agents"), the other Agents party thereto (together with the Original Facility B Administrative Agent, the "Original Facility B Agents"; and together with the Original Facility A Agents, the Original Agents"), the lenders party thereto (the "Original Facility B Lenders"; and together with the Original Facility A Lenders, the "Original Lenders") and LCPI and BancAmerica Robertson Stephens (n/k/a Banc of America Securities LLC ) as arrangers, and (c) the banks and other financial institutions or entities (the "Facility C Lenders"; and together with the Facility A Lenders and the Facility B Lenders, the "Lenders"), from time to time parties to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, restated, supplemented or otherwise modified from time to time, the "Facility C Credit Agreement"; and together with the Facility A Credit Agreement and the Facility B Credit Agreement, each a "Credit Agreement", and collectively, the "Credit Agreements"), among the Borrower, the Administrative Agent, LCPI as documentation agent (in such capacity, the "Facility C Documentation Agent"), LCPI as syndication agent (in such capacity, the "Facility C Syndication Agent"; and together with the Facility C Documentation Agent and the Administrative Agent, the "Facility C Agents"; and together with the Facility A Agents and the Facility B Agents, the "Agents"), Lehman Brothers, Inc. ("LBI") and Banc of America Securities LLC as arrangers (in such capacity, the "Facility C Arrangers"; and together with the Facility A Arrangers and the Facility B Arrangers, the "Arrangers"), the Administrative Agent and certain other entities named therein as Managing Agents. W I T N E S S E T H: WHEREAS, each Grantor executed and delivered to the Original Administrative Agents a certain Amended and Restated Subsidiary Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Existing Pledge Agreement") in favor of the Original Administrative Agents for the ratable benefit of the Original Lenders and the Original Agents to secure the Obligations (as defined in the Existing Pledge Agreement); WHEREAS, each Grantor and the Administrative Agent wish to amend and restate the Existing Pledge Agreement (as so amended and restated herein, this "Agreement") to, inter alia, reflect the amending and restating of the Original Credit Agreements and the entering into of the Facility C Credit Agreement; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each Grantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreements; and WHEREAS, the Lenders have required, as a condition to the extension of credit under the Credit Agreements, that each Grantor execute and deliver this Agreement NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreements, and to induce the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders and the 2 Agents, to amend and restate the Existing Pledge Agreement in its entirety to read as provided herein: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreements and used herein shall have the collective meanings given to them in each of the Credit Agreements. (b) The following terms shall have the following meanings: "Agreement": this Second Amended and Restated Subsidiary Pledge Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Collateral": as defined in Section 2. "Issuers": the collective reference to each issuer of any Pledged Stock. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations": the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations under each of the Credit Agreements and all other obligations and liabilities of the Borrower and any other Credit Party (including, without limitation), (i) interest accruing at the then applicable rate provided in each of the Credit Agreements after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in each of the Credit Agreements after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and (ii) any exposure of any Lender under any lockbox arrangement, controlled disbursement arrangement, checking accounts or other similar arrangements (collectively, "Cash Management Agreements") with or on behalf of the Borrower and/or its Subsidiaries) to any Agent or any Lender (or, in the case of any Interest Rate Agreement referred to below, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, either of the Credit Agreements, this Agreement, the Subsidiary Guarantees, the other Credit Documents, any Letter of Credit or any Interest Rate Agreement entered into by the Borrower or any other Credit Party with any Lender (or any Affiliate of any Lender) or any Cash Management Agreement entered into by the Borrower or any Subsidiary of the Borrower with any Lender or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, 3 indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Agents and the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Pledged Stock": the shares of Capital Stock listed on Schedule 1, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect. "Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions or payments with respect thereto. "Securities Act": the Securities Act of 1933, as amended. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof. 1.3 Effect of Restatement. This Agreement amends, restates and supersedes the Existing Pledge Agreement; provided, that (i) the Liens in favor of Administrative Agent for the benefit of Lenders securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations and (ii) all references in the other Credit Documents to the Existing Pledge Agreement shall be deemed to refer without further amendment to this Agreement. SECTION 2. PLEDGE Each Grantor hereby pledges to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Agents and the Lenders, a first priority security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and 4 complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations: (a) all Pledged Stock; and (b) to the extent not otherwise included, all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into the Credit Agreements and to induce the Agents and the Lenders to make their respective extensions of credit to or for the benefit of the Borrower thereunder, each Grantor hereby represents and warrants to each of the Agents and the Lenders that: 3.1 Representations in Credit Agreements. In the case of each Grantor, the representations and warranties set forth in Section 4 of the Credit Agreements as they relate to such Grantor, each of which is hereby incorporated herein by reference, are true and correct, and each of the Agents and Lenders shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 3.1, be deemed to be a reference to such Grantor's knowledge. 3.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Agents and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreements, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. 3.3 Perfected First Priority Liens. The security interests granted pursuant to this Agreement: (a) upon delivery by each of the Grantors to the Administrative Agent of the original certificates evidencing such Pledged Stock together with undated stock powers therefor duly executed in blank, will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Agents and the Lenders, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and 5 (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreements which have priority over the Liens on the Collateral by operation of law. 3.4 Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization and the location of such Grantor's chief executive office is specified on Schedule 2. 3.5 Pledged Stock. (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Pledged Stock pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and other Liens permitted by the Credit Agreements which have priority by operation of law. SECTION 4. COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 4.1 Maintenance of Perfected Security Interest. Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in subsection 3.3 and shall defend such security interest against the claims and demands of all Persons whomsoever. 4.2 Pledged Stock. (a) If such Grantor shall become entitled to receive or shall receive any instruments, stock certificates (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), options or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or as a dividend or distribution thereunder, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Agents and the Lenders, hold the same in trust for the Agents and the Lenders and promptly (and in any event within 60 days) deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power or endorsement covering such certificate or instrument, as applicable, 6 duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be promptly (and in any event within 60 days) paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be promptly (and in any event within 60 days) delivered to the Administrative Agent to be held by it hereunder as additional collateral security (or except as provided in the Credit Agreements) for the Obligations. Except as provided in the Credit Agreements, if any sums of money or property so paid or distributed in respect of the Pledged Stock under circumstances described in this Section 4.2(a) shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations. (b) Except as provided in the Credit Agreements, without the prior written consent of the Administrative Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreements), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Stock or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Pledged Stock or Proceeds thereof. (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in subsection 4.2(a) with respect to the Pledged Stock issued by it and (iii) the terms of subsections 5.1(c) and 5.5 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to subsections 5.1(c) or 5.5 with respect to the Pledged Stock issued by it. SECTION 4A. CERTAIN AFFIRMATIVE COVENANTS Each Grantor covenants and agrees with the Agents and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 7 4A.1 Further Documentation. (a) Such Grantor will furnish to the Agents and the Lenders from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. (b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. 4A.2 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 4A.3 Notices. Such Grantor will advise the Agents and the Lenders promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreements) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event of which it is aware which could reasonably be expected to have a material adverse effect on the enforceability, or perfection or priority of, the security interests purported to be created hereby. SECTION 5. REMEDIAL PROVISIONS 5.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to subsection 5.1(b), each Grantor 8 shall be permitted to receive all cash dividends paid in respect of the Pledged Stock paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreements, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would materially impair the Collateral or which would result in any violation of any provision of the Credit Agreements, this Agreement or any other Credit Document. (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of the Pledged Stock shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including giving or withholding written consents of shareholders and calling special meetings of shareholders) and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Stock pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Administrative Agent. 5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Agents and the Lenders, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly endorsed by such Grantor to the Administrative Agent, if required). All Proceeds received 9 by the Administrative Agent hereunder shall be held by the Administrative Agent in a deposit account (a "Collateral Account") maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in subsection 5.3. 5.3 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds held in any Collateral Account in payment of the Obligations in such order as required by the Credit Agreements, and any part of such funds which are not required as collateral security for the Obligations shall be paid over from time to time by the Administrative Agent to the Borrower or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. 5.4 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Agents and the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any of the Agents or Lenders or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agents or Lenders shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 5.4, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Agents and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in such order as the Administrative Agent may elect, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-504(1)(c) of the New York UCC, need 10 the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against any Agents or Lenders arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 15 days before such sale or other disposition. 5.5 Registration Rights. (a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 5.4, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this subsection 5.5 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a 11 breach of any of the covenants contained in this subsection 5.5 will cause irreparable injury to the Agents and the Lenders, that the Agents and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 5.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreements. 5.6 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or privileges which it may acquire under Section 9-112 of the New York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency. SECTION 6. THE ADMINISTRATIVE AGENT 6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following: (i) in the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under or with respect to any Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under or with respect to any Collateral whenever payable; (ii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral; and (iii) execute, in connection with any sale provided for in subsections 5.4 or 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral. Anything in this subsection 6.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this subsection 6.1(a) unless an Event of Default shall have occurred and be continuing. 12 (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this subsection 6.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Credit Agreements, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand. (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 6.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Agents and the Lenders hereunder are solely to protect the Agents' and the Lenders' interests in the Collateral and shall not impose any duty upon any Agents or Lender to exercise any such powers. The Agents and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 6.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Agents and the Lenders, be governed by the Credit Agreements and by such other agreements with respect thereto as may exist from time to time among them, but, as among the Agents and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 13 SECTION 7. MISCELLANEOUS 7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, restated, supplemented or otherwise modified except in accordance with subsection 10.1 of each of the Credit Agreements. 7.2 Notices. All notices, requests and demands to or upon the Agents, the Lenders or any Grantor hereunder shall be effected in the manner provided for in subsection 10.2 of each of the Credit Agreements; provided, that any such notice, request, or demand to or upon any Grantor shall be addressed to such Grantor at its address set forth below its respective signature hereto. 7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent, any other Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any of the Agents or Lenders, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any of the Agents or Lenders of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent, on behalf of other Agents and the Lenders, would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 7.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay or reimburse each of the Lenders and the Agents for all its reasonable costs and expenses incurred in collecting against such Grantor or otherwise enforcing or preserving any rights under this Agreement and the other Credit Documents to which such Grantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and of counsel to each of the other Agents and Lenders. (b) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) Each Grantor agrees to pay, and to save the Agents and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the 14 extent the Borrower would be required to do so pursuant to subsection 10.5 of the applicable Credit Agreement. (d) The agreements in this subsection 7.4 shall survive repayment of the Obligations and all other amounts payable under each of the Credit Agreements and the other Credit Documents. 7.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 7.6 Set-Off. Each Grantor hereby irrevocably authorizes each of the Agents and Lenders at any time and from time to time pursuant to subsection 10.7(b) of the applicable Credit Agreement whenever an Event of Default shall have occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Agent or Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or Lender hereunder and claims of every nature and description of such Agent or Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreements, any other Credit Document or otherwise, as such Agent or Lender may elect, whether or not any Agent or Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each of the Agents and Lenders shall notify such Grantor promptly of any such set-off and the application made by such Agent or Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and Lender under this subsection 7.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or Lender may have. 7.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 7.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 15 7.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 7.10 Integration. This Agreement and the other Credit Documents represent the agreement of the Grantors, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any of the Agents or Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or in the other Credit Documents. 7.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 7.12 SUBMISSION TO JURISDICTION; WAIVERS. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION 16 OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 7.13 Acknowledgments. Each Grantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents to which it is a party; (b) none of the Agents nor Lenders has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between the Grantors, on the one hand, and the Agents and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Agents, among the Agents and/or the Lenders or among the Grantors and the Agents and/or the Lenders. 7.14 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 7.15 Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to subsection 6.10 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 attached to the Amended and Restated Subsidiary Guarantee Agreement executed concurrently herewith. 7.16 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors; provided, however, that the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreements, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor 17 all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement. [Signature page follows] 18 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS SPD TECHNOLOGIES INC. By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary L-3 COMMUNICATIONS AYDIN CORPORATION By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary MICRODYDE CORPORATION By: -------------------------------------------- Christopher C. Cambria Vice President-General Counsel and Secretary S-1 Address for Notices for each Grantor: c/o L-3 Communications Corporation 600 Third Avenue, 34th Floor New York, NY 10016 Attention: President Phone: (212) 697-1111 Fax: (212) 805-5470 Accepted on behalf of the Agents and the Lenders as of the date first above written: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: ----------------------------------- Name: ----------------------------- Title: ---------------------------- S-2 Schedule 1 DESCRIPTION OF PLEDGED STOCK Pledged Stock:
Issuer Owner (Guarantor) Class of Stock Stock Certificate No. No. of Shares - ------ ----------------- -------------- --------------------- -------------
Schedule 1 Schedule 2 LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE(1) Grantor Jurisdiction of Location ------- --------------- -------- Organization ------------ Hygienetics Environmental Delaware 1570 Buckeye Drive Services, Inc. Milpitas, CA 95035 L-3 Communications Ilex Delaware 1570 Buckeye Drive Systems, Inc. Milpitas, CA 95035 L-3 Communications Aydin Delaware 600 Third Avenue Corporation New York, NY 10016 L-3 Communications SPD Delaware 13500 Roosevelt Blvd. Technologies Inc. Philadelphia, PA 19116 Microdyne Corporation Maryland 600 Third Avenue New York, NY 10016 - ---------- (1) Borrower to advise of Chief Executive Office for each Sub. Schedule 2 ACKNOWLEDGMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Subsidiary Pledge Agreement dated as of _________ ____, 2000 (the "Agreement"), made by the Grantors party thereto for the benefit of Bank of America, N.A., as Administrative Agent. The undersigned agrees for the benefit of the Administrative Agent, the other Agents and the Lenders as follows: 1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned. 2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 4.2(a) of the Agreement. 3. The terms of Sections 5.1(a) and 5.5 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.1(a) or 5.5 of the Agreement. [NAME OF ISSUER] -------------------------------------------------- Name: -------------------------------------------- Title: ------------------------------------------- Address for Notices: -------------------------------------------------- -------------------------------------------------- Fax: --------------------------------------------- EXHIBIT C-I to the Credit Agreement SIMPSON THACHER & BARTLETT 425 LEXINGTON AVENUE NEW YORK, N.Y. 10017-3954 (212) 455-2000 ----- FASCIMILE: (212) 455-2502 DIRECT DIAL NUMBER E-MAIL ADDRESS April 28, 2000 Bank of America, N.A., as Administrative Agent Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent Lehman Brothers, Inc. as Arranger Banc of America Securities LLC as Arranger and The Lenders listed on Schedule I hereto which are parties to the Credit Agreement on the date hereof Re: Second Amended and Restated Credit Agreement dated as of April 24, 2000, Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 and New 364 Day Credit Agreement dated as of April 24, 2000 Ladies and Gentlemen: We have acted as counsel to L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Holdings, Inc., a Delaware corporation (the "Parent Guarantor"), the subsidiaries of the Borrower named on Schedule II attached hereto (each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors"; (the Borrower, the Parent Guarantor and the Subsidiary Guarantors being referred to herein collectively as the "Credit Parties") in connection with the preparation, execution and delivery of the following documents: (a) the Second Amended and Restated Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of COLUMBUS LOS ANGELES PALO ALTO LONDON HONG KONG TOKYO SINGAPORE SIMPSON THACHER & BARTLETT America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility A Credit Agreement"); (b) the Amended and Restated 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger and Bank of America, N.A. (f/k/a Bank of America, National Trust and Savings Association), as Administrative Agent (the "Facility B Credit Agreement") (c) the New 364 Day Credit Agreement, dated as of April 24, 2000 among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc., as Syndication Agent and Documentation Agent, Banc of America Securities LLC and Lehman Brothers, Inc., as the Arrangers, Bank of America, N.A., as Administrative Agent and the financial institutions named therein as Managing Agents (the "Facility C Credit Agreement"; collectively with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements"); (d) the Notes; (e) the Parent Guarantee; (f) the Subsidiary Guarantee; (g) the Parent Pledge Agreement; (h) the Borrower Pledge Agreement; (i) the Subsidiary Pledge Agreement; and (j) the Charge Over Shares. The documents described in the foregoing clauses (a) through (j) are collectively referred to herein as the "Credit Documents"; the documents described in the foregoing clauses (g) through (j) are collectively referred to herein as the "Security Documents". Unless otherwise indicated, capitalized terms used but not defined herein shall have the respective meanings set forth in the Credit Agreements. This opinion is furnished to you pursuant to Section 5.1(m) of the Credit Agreements. In connection with this opinion, we have examined: 2 SIMPSON THACHER & BARTLETT (A) the Credit Agreements, signed by each Credit Party party thereto, the Administrative Agent, Syndication Agent, Documentation Agent, Arranger and certain of the Lenders; (B) each other Credit Document, signed by each Credit Party party thereto; and (C) forms of the Notes to be delivered after the date hereof, We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Credit Parties. In addition, we have examined, and have relied as to matters of fact upon, the representations made in the Credit Documents. In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. In addition, we have assumed that (1) the Credit Parties have rights in the Collateral existing on the date hereof and will have rights in property which becomes Collateral after the date hereof and (2) "value" (as defined in Section 1-201(44) of the Uniform Commercial Code as in effect in the State of New York (the "New York UCC")) has been given by the Lenders to the Borrower for the security interests and other fights in the Collateral. In rendering the opinion set forth in paragraph 6 below with respect to the Notes, we have assumed that at the time of any execution and delivery of Notes after the date hereof, the Board of Directors of the Borrower (or any committee thereof acting pursuant to authority properly delegated to such committee by the Board of Directors) has not taken any action to rescind or otherwise reduce its prior authorization of the issuance of such Notes. Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth herein, we are of the opinion that: 1. Each of the Borrower and the Parent Guarantor (a) has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Delaware, (b) has the corporate power and authority to execute and deliver each of the Credit Documents to which it is a party, to perform its obligations thereunder and to grant the security interests to be granted by it pursuant to the Security Documents and (c) has duly authorized, executed and delivered each Credit Document to which it is a party. 3 SIMPSON THACHER & BARTLETT 2. Each of the Subsidiary Guarantors (other than Microdyne Corporation ("Microdyne"), as to which we express no opinion) has duly authorized, executed and delivered each Credit Document to which it is a party. 3. The execution and delivery by each of the Borrower and the Parent Guarantor of the Credit Documents to which it is a party, the borrowings by the Borrower in accordance with the terms of the Credit Documents and the granting of the security interests to be granted by the Borrower and the Parent Guarantor pursuant to the Security Documents will not result in any violation of (1) the Certificate of Incorporation or By-Laws of either the Borrower or the Parent Guarantor, (2) assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 4. The execution and delivery by each Subsidiary Guarantor of the Credit Documents to which it is a party and the granting of the security interests to be granted by it pursuant to the Security Documents will not result in any violation of, assuming that proceeds of the borrowings will be used in accordance with the terms of the Credit Agreement, any federal or New York statute or the Delaware General Corporation Law or any rule or regulation issued pursuant to any New York or Federal statute or the Delaware General Corporation Law, but excluding any government procurement statute or regulations issued pursuant thereto. 5. No consent, approval, authorization, order, filing, registration or qualification of or with any Federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law is required for the execution and delivery by any Credit Party of the Credit Documents to which it is a party, the borrowings by any Credit Party in accordance with the terms of the Credit Documents or the granting of any security interests under the Security Documents, except filings required for the perfection of security interests granted pursuant to the Security Documents and consents, waivers, approvals, filings and registrations described on Schedule 4.4 to the Credit Agreement. 6. Assuming that each of the Credit Documents is a valid and legally binding obligation of each of the Lenders parties thereto and assuming that (a) Microdyne is validly existing and in good standing under the laws of the State of Maryland and has duly authorized, executed and delivered the Credit Documents to which it is a party in accordance with its Articles of Incorporation and By-Laws, (b) execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party do not violate any applicable laws (excepting the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States, other than any government procurement statute or regulations issued pursuant thereto) and (c) execution, delivery and performance by each Credit Party of the Credit 4 SIMPSON THACHER & BARTLETT Documents to which it is a party do not constitute a breach or violation of any agreement or instrument which is binding upon such Credit Party, each Credit Document (other than the Charge Over Shares) constitutes and each Note delivered to a Lender after the date hereof, assuming the due execution and delivery by the Borrower, will constitute the valid and legally binding obligation of each Credit Party which is a party thereto, enforceable against such Credit Party in accordance with its terms. 7. No Credit Party is an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended. 8. Assuming that the Borrower will comply with the provisions of the Credit Agreements relating to the use of proceeds, the execution and delivery of the Credit Agreements by the Borrower and the making of the Loans under the Credit Agreements will not violate Regulation, T, U or X of the Board of Governors of the Federal Reserve System. 9. The Parent Pledge Agreement and Borrower Pledge Agreement create in favor of the Administrative Agent for the benefit of the Lenders a security interest under the New York UCC in the Pledged Stock (as defined in the Pledge Agreements) described on Schedule I to each of the Parent Pledge Agreement and the Borrower Pledge Agreement (the "Pledged Securities"). 10. The Administrative Agent will have a perfected security interest in the Pledged Securities for the benefit of the Lenders under the New York UCC upon delivery to the Administrative Agent for the benefit of the Lenders in the State of New York of the certificates representing the Pledged Securities in registered form, endorsed in blank by an effective endorsement or accompanied by undated stock power with respect thereto duly endorsed in blank by an effective endorsement. 11. The choice of New York Law to govern each Credit Document in which such choice is stipulated is a valid and effective choice of law under the laws of the State of New York. Our opinions in paragraphs 6 and 9 above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. Our opinion in paragraph 6 above also is subject to the qualification that certain provisions of the Security Documents (other than the Charge Over Shares) (the "U.S. Security Documents") in whole or in part, may not be enforceable, although the inclusion of such provisions does not render the U.S. Security Documents invalid, and the U.S. Security Documents and the laws of the State of New York contain adequate remedial provisions for the practical realization of the rights and benefits afforded thereby. 5 SIMPSON THACHER & BARTLETT Our opinions in paragraphs 9 and 10 above are limited to Articles 8 and 9 of the New York UCC, and therefore those opinion paragraphs do not address (i) collateral of a type not subject to Article 9 or 8, as the case may be, of the New York UCC, and (ii) under New York UCC ss. 9-103 what law governs perfection of the security interests granted in the collateral covered by this opinion letter. We express no opinion with respect to: (A) perfection of any security interest (1) in any Security Agreement Article 9 Collateral of a type represented by a certificate of title, (2) in any proceeds and (3) in any collateral consisting of money; (B) the effect of ss. 9-306(2) of the New York UCC with respect to any proceeds of Collateral that are not identifiable; (C) perfection of any security interest whose priority is subject to Section 9-313 of the New York UCC; (D) the priority of any security interest; (E) the effect of Section 552 of the Bankruptcy Code (11 U.S.C. 552) (relating to property acquired by a pledgor after the commencement of a case under the United States Bankruptcy Code with respect to such pledgor) and Section 506(c) of the Bankruptcy Code (11 U.S.C. 506(c) (relating to certain costs and expenses of a trustee in preserving or disposing of collateral; (F) the effect of any provision of the Credit Documents which is intended to establish any standard other than a standard set forth in the New York UCC as the measure of the performance by any party thereto of such party's obligations of good faith, diligence, reasonableness or care or of the fulfillment of the duties imposed on any secured party with respect to the maintenance, disposition or redemption of collateral, accounting for surplus proceeds of collateral or accepting collateral in discharge of liabilities; (G) the effect of any provision of the Credit Documents which is intended to permit modification thereof only by means of an agreement signed in writing by the parties thereto; (H) the effect of any provision of the Credit Documents insofar as it provides that any Person purchasing a participation from a Lender or other Person may exercise set-off or similar rights with respect to such participation or that any Lender or other Person may exercise set-off or similar rights other than in accordance with applicable law; 6 SIMPSON THACHER & BARTLETT (I) the effect of any provision of the Credit Documents imposing penalties or forfeitures; (J) the enforceability of any provision of any of the Credit Documents to the extent that such provision constitutes a waiver of illegality as a defense to performance of contract obligations; or (K) the effect of any provision of the Credit Documents relating to indemnification or exculpation in connection with violations of any securities laws or relating to indemnification, contribution or exculpation in connection with willful, reckless or criminal acts or gross negligence of the indemnified or exculpated Person or the Person receiving contribution. In connection with the provisions of the Credit Documents whereby Credit Parties submit to the jurisdiction of the courts of the United States of America for the Southern District of New York, we note the limitations of 28 U.S.C. ss. ss. 1331 and 1332 on subject matter jurisdiction of the Federal Court. In connection with the provisions of the Credit Documents which relate to forum selection of the courts of the United States for the Southern District of New York, (including, without limitation, any waiver of any objection to venue or any objection that a court is an inconvenient forum), we also note that such court's discretion to transfer an action from one Federal court to another under 28 U.S.C. ss. 1404(a). We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the Federal law of the United States and the Delaware General Corporation Law. This opinion letter is rendered to you in connection with the above described transactions. This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, /s/ Simpson Thacher & Bartlett ------------------------------ SIMPSON THACHER & BARTLETT 7 SIMPSON THACHER & BARTLETT SCHEDULE I LENDERS LEHMAN COMMERCIAL PAPER INC. BANK OF AMERICA, N.A. THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA CREDIT LYONNAIS BANK ONE, N.A. FIRST UNION COMMERCIAL CORPORATION FLEET NATIONAL BANK THE FUJI BANK, LIMITED HSBC BANK USA SOCIETE GENERALE BANKBOSTON, N.A. BANK OF TOKYO - MITSUBISHI TRUST COMPANY BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC. BANK OF IRELAND BANQUE WORMS CAPITAL CORPORATlON CREDIT INDUSTRIEL ET COMMERCIAL COMERICA BANK THE DAI-ICHI KANGYO BANK, LTD. DEN DANSKE BANK AKTIESELSKAB DEUTSCHE GENOSSENSCHAFTSBANK AG DRESDNER BANK AG ERSTE BANK DER OLSTERREICHISCHEN GE CAPITAL COMMERCIAL FINANCE, INC. THE INDUSTRIAL BANK OF JAPAN, LIMITED MEES PIERSON CAPITAL CORP. MERITA BANK PLC THE MITSUBISHI TRUST AND BANKING CORPORATION NATIONAL CITY BANK THE ROYAL BANK OF SCOTLAND PLC SUMMIT BANK SUNTRUST BANK WEBSTER BANK 8 SIMPSON THACHER & BARTLETT SCHEDULE II BORROWER SUBSIDIARIES HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware Corporation. L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware Corporation. L-3 COMMUNICATIONS SPD TECHNOLOGIES INC., a Delaware Corporation. L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware Corporation. MICRODYNE CORPORATION, a Maryland Corporation. 9 [Note: to be replaced with final draft of general counsel's opinion.] Exhibit C-2 to Credit Agreement L-3 COMMUNICATIONS CORPORATION 600 THIRD AVENUE, 34th FLOOR NEW YORK, NEW YORK 10016 April __, 2000 Bank of America, N.A., as Administrative Agent 335 Madison Avenue New York, New York 10017 Lehman Commercial Paper Inc., as Arranger, Syndication Agent and Documentation Agent 3 World Financial Center, 9th Floor New York, New York 10285 Banc of America Securities LLC, as Arranger 9 W 57th Street, 32nd Floor New York, New York 10019 Lehman Brothers, Inc., as Arranger 3 World Financial Center New York, New York 10285 The Lenders Listed on Schedule 1 hereto Ladies and Gentlemen: I have acted as counsel to L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"), L-3 Communications Corporation, a Delaware corporation (the "Borrower"), L-3 Communications Ilex Systems, Inc., a Delaware corporation ("Ilex"), Hygienetics Environmental Systems, Inc., a Delaware corporation ("HES"), L-3 Communications SPD Technologies Inc., a Delaware corporation ("SPD"), L-3 Communications Aydin Corporation, a Delaware corporation ("Aydin") and Microdyne Corporation, a Maryland corporation ("Microdyne" and collectively with Ilex, HES, SPD and Aydin, the "Subsidiaries", and together with Holdings and the Borrower, the "Loan Parties"), in connection with (a) the Second Amended and Restated Credit Agreement dated as of April 24, 2000 (the "Facility A Credit Agreement") among the Borrower, the Lenders parties thereto, Lehman Commercial Paper Inc. ("LCPI"), as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and Bank of America, N.A. (f/k/a Bank of America National Trust & Savings Association), as Administrative Agent ("BOA"), (b) the Amended and Restated 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility B Credit Agreement") among the Borrower, the Lenders parties thereto, LCPI, as Syndication Agent, Documentation Agent and an Arranger, Banc of America Securities LLC (f/k/a BancAmerica Robertson Stephens), as an Arranger, and BOA, as Administrative Agent and (c) the New 364 Day Credit Agreement dated as of April 24, 2000 (the "Facility C Credit Agreement" and together with the Facility A Credit Agreement and the Facility B Credit Agreement, the "Credit Agreements") among the Borrower, the Lenders parties thereto, Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent, Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents. In that connection, you have requested this opinion in connection with the following documents: (i) the Credit Agreements, (ii) the Notes, (iii) the Parent Pledge Agreement, (iv) the Borrower Pledge Agreement, (v) the Subsidiary Pledge Agreement, (vi) the Parent Guarantee, (vii) the Subsidiary Guarantee and (viii) the Charge Over Shares (the documents referred to in clauses (i) through (viii) are referred to herein collectively as the "Loan Documents"). Terms defined in the Loan Documents are used herein as therein collectively defined. In connection with this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of each of the Loan Documents. In addition, I have examined originals or copies, certified or otherwise identified to my satisfaction, of such records, agreements, instruments and other documents as I have deemed relevant and necessary as a basis for the opinions hereinafter set forth. For the purposes hereof, I have assumed, with your permission, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and regularity of all documents examined by me. As to questions of fact relevant to this opinion, I have relied upon, and assume the accuracy of, the representations and warranties of the Loan Parties in the Loan Documents and have relied upon certificates and oral or written statements and other information of public officials, officers and representatives of the Loan Parties and others and assume compliance on the part of all parties to the Loan Documents with their covenants and agreements contained therein. In rendering the opinions expressed below, I have assumed, with your permission and without any independent investigation or verification of any kind, that (a) the Loan Documents constitute the valid and legally binding obligations of each party to the Loan Documents other than the Loan Parties, enforceable against such parties in accordance with their respective terms, and (b) the execution, delivery and performance by each Loan Party of each Loan Document to which it is a party do not contravene, or require any order, consent, approval, license, authorization, validation, filing, recording, registration or exemption not obtained or 2 made under, any applicable provision of any law, statute, rule or regulation (other than any law, statute, rule or regulation of the United States of America or the State of New York). Based upon the foregoing, and subject to the qualifications and limitations stated herein, I am of the opinion that: 1. Ilex has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Guarantee and the Subsidiary Pledge Agreement (collectively, the "Subsidiary Documents") and perform its obligations thereunder. 2. HES has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 3. SPD has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 4. Aydin has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 5. Microdyne has been duly incorporated and is validly existing and in good standing under the laws of the State of Maryland with corporate power and authority to conduct its business as now conducted and to own, or hold under lease, its assets and to enter into the Subsidiary Documents and perform its obligations thereunder. 6. Microdyne, has duly authorized, executed and delivered each Credit Document to which it is a party. 7. To my knowledge, there are no legal or governmental proceedings pending or threatened against any of the Loan Parties or to which any of their respective properties is subject which reasonably could be expected to have a Material Adverse Effect other than as disclosed in Schedule 4.6 to the Credit Agreements. 8. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Credit Agreements, the Notes, the Charge Over Shares and the Borrower Pledge Agreement (collectively, the "Borrower Credit Documents") by the Borrower, the borrowing and granting of security interests by the Borrower under the Borrower Credit Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court or other governmental authority binding upon the Borrower or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under 3 any material Contractual Obligation applicable to or binding upon the Borrower or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the any of the Pledge Agreements and/or the Guarantees (collectively, the "Security Documents"). 9. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Subsidiary Documents by each of the Subsidiaries party thereto, the making of the guarantee and granting of security interests by each of the Subsidiaries under the Subsidiary Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon any Subsidiary, (b) violate the provisions of any such Subsidiaries' Constitutional Documents or, (c) other than as disclosed in the Schedules to the Credit Agreements result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon any Subsidiary or any of their respective properties or assets or (ii) the creation of any lien on any of their respective properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 10. To my knowledge, except as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, the execution and delivery of the Parent Guarantee and the Parent Pledge Agreement (collectively, the "Parent Documents") by Holdings, the making of the guarantee and granting of security interests by Holdings under the Parent Documents and the consummation of the transactions contemplated therein do not: (a) violate any order, writ, injunction or decree of any court of other governmental authority binding upon Holdings or, (b) other than as disclosed in the Schedules to the Credit Agreements, result in (i) the breach of or a default under any material Contractual Obligation applicable to or binding upon Holdings or any of its properties or assets or (ii) the creation of any lien on any of its properties or assets pursuant to any such material Contractual Obligation, except for liens arising under the Security Documents. 11. Based solely on certificates from public officials, I confirm that the Borrower is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Holdings is qualified to do business in New York. Based solely on certificates from public officials, I confirm that Ilex is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that HES is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that SPD is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Aydin is qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Based solely on certificates from public officials, I confirm that Microdyne is 4 qualified to do business in each State where such qualification is required, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. 12. The Borrower's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of the Borrower's stock records, are owned of record by Holdings free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. Holdings has no direct Subsidiaries other than the Borrower. 13. Ilex's authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Ilex's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 14. HES' authorized capital stock consists of 100 shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of HES' stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 15. SPD's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of SPD's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 16. Aydin's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Aydin's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. 17. Microdyne's authorized capital stock consists of [100] shares of common stock, all of which have been duly authorized and validly issued, are fully paid and nonassessable, are free of preemptive rights and, based solely on my review of Microdyne's stock records, are owned of record by the Borrower free and clear of all liens, claims, charges, or encumbrances other than Liens created or permitted by the Security Documents. I am a member of the Bar of the State of New York and I express no opinion as to the laws of any jurisdiction other than the federal laws of the United States of America, the laws of the State of New York, the Delaware General Corporation Law and the [Maryland General Corporation Law]. This opinion is rendered to you in connection with the above-described transactions in my capacity as counsel to the Loan Parties. This opinion may not be relied upon 5 by you for any other purpose, or relied upon by any other person, firm or corporation without my prior written approval. Very truly yours, 6 Schedule I LENDERS LEHMAN COMMERCIAL PAPER INC., BANK OF AMERICA, N.A. THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA CREDIT LYONNAIS BANK ONE, N.A. FIRST UNION COMMERCIAL CORPORATION FLEET NATIONAL BANK THE FUJI BANK, LIMITED HSBC BANK USA SOCIETE GENERALE BANKBOSTON, N.A. BANK OF TOKYO - MITSUBISHI TRUST COMPANY BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE INC. BANK OF IRELAND BANQUE WORMS CAPITAL CORPORATION CREDIT INDUSTRIEL ET COMMERCIAL COMERICA BANK THE DAI-ICHI KANGYO BANK, LTD. DEN DANSKE BANK AKTIESELSKAB DEUTSCHE GENOSSENSCHAFTSBANK AG DRESDNER BANK AG ERSTE BANK DER OESTERREICHISCHEN GE CAPITAL COMMERCIAL FINANCE, INC. THE INDUSTRIAL BANK OF JAPAN, LIMITED MEES PIERSON CAPITAL CORP. MERITA BANK PLC THE MITSUBISHI TRUST AND BANKING CORPORATION NATIONAL CITY BANK THE ROYAL BANK OF SCOTLAND PLC SUMMIT BANK SUNTRUST BANK WEBSTER BANK Exhibit D to Credit Agreement FORM OF BORROWING CERTIFICATE FOR NEW 364 DAY CREDIT AGREEMENT Pursuant to subsection 5.1(g) of the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents, the undersigned hereby delivers this Certificate. The Borrower hereby requests that a [Eurodollar/Base Rate] Loan be made in the aggregate principal amount of __________ on __________, _____ [with an Interest Period of ___ months]. The undersigned hereby certifies as follows: (a) The representations and warranties made by the Borrower and each of its Subsidiaries and each of the other Credit Parties in the Credit Documents are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof (except to the extent they relate to a particular date, in which case they shall remain true and correct as of such date); and (b) No Default or Event of Default has occurred and is continuing on the date hereof or after giving effect to the Loans and other extensions of credit requested to be made on such date. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Credit Agreement. The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such borrowing as if then made. Please wire transfer the proceeds of the borrowing to the account of the Borrower at _____________________________ Routing No.: ________________ (Account No._____), or as otherwise directed by the Borrower on the attached Schedule 1. The Borrower has caused this Borrowing Certificate to be executed and delivered, and the certification and warranties contained herein to be made, by its Responsible Officer this _____ day of __________, _____. L-3 COMMUNICATION CORPORATION By: -------------------------------------- Name: Title: 2 Exhibit E to Credit Agreement FORM OF EXEMPTION CERTIFICATE OF NON-U.S. LENDER FOR NEW 364 DAY CREDIT AGREEMENT Reference is made to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among L-3 Communications Corporation, a Delaware Corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement. _______________ (the "Non-U.S. Lender") is providing this certificate pursuant to subsection 2.15(b) of the Credit Agreement. Under penalties of perjury, the Non-U.S. Lender hereby represents and warrants that: 1. The Non-U.S. Lender is the sole record and beneficial owner of the Note(s) in respect of which it is providing this certificate and it shall remain the sole beneficial owner of such Note(s) at all times during which it is the record holder of such Note(s). 2. The Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In this regard, the Non-U.S. Lender further represents and warrants that: (a) the Non-U.S. Lender is not subject to regulatory or other legal requirements as a bank in any jurisdiction; (b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements; (c) the Non-U.S. Lender is not a 10-percent shareholder within the meaning of Section 881(c)(3)(B) of the Code; (d) the Non-U.S. Lender is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code; 3. The Non-U.S. Lender meets all of the requirements under Code Section 871(h) or 881(c) to be eligible for a complete exemption from withholding of U.S. Taxes on interest payments made to it under the Credit Agreement. IN WITNESS WHEREOF, the undersigned has duly executed this certificate. [NAME OF NON-U.S. LENDER] By: ------------------------------------- Name: Title: Date: ________________ 2 Exhibit F to Credit Agreement FORM OF ASSIGNMENT AND ACCEPTANCE FOR NEW 364 DAY CREDIT AGREEMENT Reference is made to the New 364 Day Credit Agreement, dated as of April 24, 2000 (as amended, supplemented or otherwise modified prior to the Effective Date (as defined below), the "Credit Agreement"), among L-3 Communication Corporation, a Delaware corporation, (the "Borrower"), the Lenders, Banc of America Securities LLC and Lehman Brothers, Inc. as the Arrangers, Bank of America, N.A. as the Administrative Agent for the Lenders (in such capacity, the "Administrative Agent"), Lehman Commercial Paper, Inc. as the Syndication Agent and the Documentation Agent, and the financial institutions named therein as Managing Agents. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. The Assignor identified on Schedule 1 hereto (the "Assignor") and the Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), the interest described in Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement and other Credit Documents with respect to those credit facilities contained in the Credit Agreement as set forth on Schedule 1 hereto (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Credit Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder, that such interest is free and clear of any such adverse claim and that Assignor is legally authorized to enter into this Assignment and Acceptance; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the Credit Agreement or any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the Assigned Facilities and (i) requests that the Administrative Agent, upon request by the Assignee, exchange the attached Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor has retained any interest in any Assigned Facility, requests that the Administrative Agent exchange the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date). 3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 4.1 thereof 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 Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to clause (b) of subsection 2.15 of the Credit Agreement. 4. The effective date of this Assignment and Acceptance shall be the Effective Date of Assignment described in Schedule 1 hereto (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 5. Upon such acceptance and recording, 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 Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Credit Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment 2 and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 7. THIS ASSIGNMENT AND ACCEPTANCE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto. 3 Schedule 1 to Assignment and Acceptance Name of Assignor: ________________________________ Name of Assignee: ________________________________ Effective Date of Assignment: ____________________
Credit Facility Assigned Principal Amount Assigned Commitment Percentage Assigned(1) ------------------------ ------------------------- --------------------------------- $__________________ _____._____%
[Name of Assignee] [Name of Assignor] By:______________________ By:_________________________ Title: Title: Accepted: Consented To: BANK OF AMERICA, N. A., L-3 COMMUNICATION CORPORATION(2) as Administrative Agent By:_________________________ By:______________________ Title: Title: Accepted: LEHMAN COMMERCIAL PAPER INC., as Syndication Agent By:______________________ Title: - ---------- (1) Calculate the Commitment Percentage that is assigned to at least 9 decimal places and show as a percentage of the aggregate commitments of all Lenders. (2) The Credit Agreement provides that the consent of the Borrower is required unless the assignee (a) already is a Lender under the Credit Agreement, (b) is an affiliate of a Lender, or (c) in the case of a Lender that is an Investment Fund, any other such Investment Fund which is under common management with such Lender. EX-99 11 0011.txt EXHIBIT 7.10 LOGIMETRICS, INC. 50 ORVILLE DRIVE, BOHEMIA NEW YORK 11716 - -------------------------------------------------------------------------------- INFORMATION STATEMENT PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14f-1 PROMULGATED THEREUNDER NOTICE OF CHANGE IN THE MAJORITY OF THE BOARD OF DIRECTORS July 20, 2000 THE TRANSACTION This Information Statement is being mailed on or about July 20, 2000 to holders of record of shares of common stock, par value $.01 per share ("Common Stock"), of LogiMetrics, Inc., a Delaware corporation (the "Company"), at the close of business on July 10, 2000 (the "Record Date"), in accordance with the requirements of Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder. This Information Statement is being delivered in connection with the appointment by L-3 Communications Corporation, a Delaware corporation ("L-3"), of a majority of the members of the Board of Directors of the Company (the "Board") pursuant to the terms of the transactions described below. L-3 is a wholly owned subsidiary of L-3 Communications Holdings, Inc., a Delaware corporation ("Holdings"). No vote or other action by the Company's stockholders is required in response to this Information Statement. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. Please read this Information Statement carefully. It describes the terms of the transactions that took place between the Company and L-3 (collectively, the Transaction") and contains certain other information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Transaction was consummated on July 11, 2000 (the "Closing Date"). The Company and L-3 entered into a Purchase Agreement, dated July 10, 2000 (the "Purchase Agreement"), relating to the Transaction. Pursuant to the terms of the Purchase Agreement, among other things, L-3 acquired, beneficially and of record, 93,236,794 newly issued shares of the Company's outstanding Common Stock (the "Purchaser Shares"), which Purchaser Shares constituted at the closing of the Transaction approximately 53.5% of the Company's outstanding Common Stock (calculated after giving effect to the issuance of the stock to L-3 and certain anti-dilution adjustments), for $15.0 million, $8.5 million of which was paid in cash at the closing of the Transaction and the balance of which was paid in the form of a secured promissory note (the "Note") that will be prepaid from time to time as necessary to fund the Company's reasonable ongoing working capital needs. If not paid prior thereto, the Note will be paid in full on the earlier of (i) January 2, 2001, and (ii) the date that the Company consummates a qualifying Public Offering of its equity securities (as defined in the Purchase Agreement) (the "Qualifying Offering"). The cash purchase price for the Purchaser Shares was, and any payments under the Note will be, financed using working capital of L-3, borrowings under L-3's senior credit facilities with a syndicate of banks and financial institutions led by Bank of America National Trust & Savings Association, as administrative agent, or a combination thereof. The number of shares of Common Stock issuable to L-3 will be adjusted, if necessary, on the first business day following the 30th day after the Closing Date so that the Purchaser Shares will, following such adjustment, constitute 53.5% of the Company's outstanding Common Stock (determined after giving effect to the dilutive effects of certain contingently issuable securities as specified in the Purchase Agreement). Under the Purchase Agreement, L-3 has agreed, subject to the satisfaction of certain conditions, to purchase up to 3,333,333 shares of Common Stock (the "Additional Shares") for $5.0 million on or after January 2, 2001 (unless L-3 elects to acquire any Additional Shares in its sole discretion prior to January 2, 2001), to the extent the Company requires additional reasonable ongoing working capital to operate its business. Pursuant to the terms of the Purchase Agreement, the Company has granted to L-3 an option (the "L-3 Option") to acquire up to 5,555,555 shares of Common Stock at an exercise price of $0.54 per share (subject to adjustment in certain circumstances). The L-3 Option is exercisable upon the purchase of all of the Additional Shares. In the Purchase Agreement, L-3 granted to the Company the option, exercisable by a majority of the entire Board, to cause L-3 to transfer without further consideration certain technology and other assets to the Company in connection with the Qualifying Offering upon the satisfaction of certain conditions. Pursuant to the Purchase Agreement, L-3 may, in its sole discretion, provide administration and other services and equipment (including team services, support services, facilities, tools and equipment) to the Company. Such services and equipment will be billed, from time to time, at cost to the Company, including direct labor, direct material, other direct charges and expenses and overhead (including a corporate expense allocation charge equal to 1.5% of the Company's consolidated sales). L-3 also has agreed to use its reasonable best efforts (i) until the 60th day after the Closing Date to obtain an additional $5.0 million investment in the Company from one or more investment banks on the same terms as L-3's purchase of the Additional Shares; and (ii) to cooperate with the Company to consummate the Qualifying Offering no later than December 31, 2000, subject to market and economic conditions. Pursuant to the Purchase Agreement, the Company has agreed to maintain directors' and officers' insurance in place for a period of six years (subject to certain expense limitations) and to maintain certain provisions in its charter and by-laws relating to the indemnification of directors and officers for such six-year period. -2- Under the Purchase Agreement, the Company may not, without the approval of either (i) those holders of Common Stock (excluding L-3, entities controlled, directly or indirectly, by L-3 and executive officers (within the meaning of the Exchange Act) of L-3) (the "Minority Stockholders") that represent not less than a majority of the outstanding Common Stock held by all such holders (a "Special Stockholder Majority") or (ii) a majority of the Existing Holder Designees (as defined below), effect the following extraordinary transactions: (A) certain mergers, consolidations or share exchanges, (B) the sale of all or substantially all of its assets in one transaction or a series of related transactions, (C) the seeking of protection under applicable bankruptcy and insolvency laws, (D) the issuance, offer or sale of any shares of its capital stock or securities exercisable for, convertible into or otherwise giving the holder the right to obtain shares of capital stock (other than the issuance of shares and options pursuant to the Transaction, shares issuable upon the exercise or conversion of outstanding securities, the granting of certain options and rights to purchase Common Stock contemplated by the Transaction and shares of Common Stock issuable upon the exercise of such options and rights), (E) the amendment of its certificate of incorporation or by-laws if the terms of such amendment would conflict with the terms of the Transaction or would materially and adversely affect the rights of the Minority Stockholders, (F) amend or modify any of the provisions of the documents relating to the Transaction, (G) enter into a Rule 13e-3 transaction (as defined in Rule 13e-3 promulgated under the Exchange Act), or (H) enter into, assume or become bound by any agreement, instrument or understanding to do any of the foregoing or otherwise attempt to do any of the foregoing. In addition, L-3 has agreed not to sell to a non-affiliated third party more than 53.27% of the Purchaser Shares prior to December 31, 2001. The directors appointed by the Existing Holders (as defined below) will have the right to enforce the provisions of the Purchase Agreement and to otherwise act on behalf of the Company with respect to the Purchase Agreement and the other documents relating to the Transaction. These provisions will expire upon the earlier of (i) the consummation of a Qualifying Offering and (ii) the date upon which the Existing Holders collectively cease to own at least 10% of the outstanding Common Stock (as determined pursuant to the provisions of the Purchase Agreement). Under the Purchase Agreement, L-3 has the right to cancel (in whole or in part), at L-3's option, its obligation to make any payment in respect of the Note if, in L-3's reasonable discretion: (i) a breach by the Company of any representation, warranty, covenant or agreement contained in the Purchase Agreement or any other document relating to the Transaction results from or has resulted in a Material Adverse Effect (as defined in the Purchase Agreement) with respect to either (A) the Company, or (B) L-3; or (ii) a Material Adverse Effect has occurred or shall occur with respect to the Company as a result of certain specified litigation claims. If L-3 exercises its right not to pay amounts due under the Note and it is determined by a court of competent jurisdiction in a final, non-appealable judgment or order or by a final, non-appealable arbitration award that L-3 did not in fact have the right so to cancel its obligation to make any payment in respect of the Note, then L-3 must pay to the Company the Liability Amount (as defined below), as liquidated damages for loss of a bargain and not a penalty. The payment of the Liability Amount will be the sole and exclusive remedy of the Company in connection with such a breach by L-3 and L-3 will have no other liability to the Company in respect thereof. The term "Liability Amount" is defined in the Purchase -3- Agreement as the portion of the purchase price for the Purchaser Shares not paid in cash by L-3 to the Company at such time. In addition, pursuant to the terms of the Purchase Agreement, L-3 has the right to cancel (in whole or in part), at L-3's option, its obligation to purchase Additional Shares if, in L-3's reasonable discretion: (i) a breach by the Company of any representation, warranty, covenant or agreement contained in the Purchase Agreement or any other document relating to the Transaction results from or results in a Material Adverse Effect with respect to either (A) the Company, or (B) L-3; or (ii) after the closing, a Material Adverse Effect has occurred or shall occur with respect to the Company. If L-3 exercises its right not to consummate the purchase of the Additional Shares and it is determined by a court of competent jurisdiction in a final, non-appealable judgment or order or by a final, non-appealable arbitration award that L-3 did not in fact have the right so to cancel its obligation to purchase the Additional Shares, then L-3 must pay to the Company the Damage Amount (as defined below), as liquidated damages for loss of a bargain and not a penalty. The payment of the Damage Amount will be the sole and exclusive remedy of the Company in connection with such a breach by L-3 and L-3 will have no other liability to the Company in respect thereof. The term "Damage Amount" is defined in the Purchase Agreement as the portion of the purchase price for the Additional Shares not paid in cash by L-3 to the Company at such time. Each of the Company and L-3 has agreed in the Purchase Agreement to indemnify the other party and certain related parties and hold them harmless from any losses arising from, in connection with or otherwise with respect to its breach of any representation or warranty contained in the Purchase Agreement (subject to the expiration of such representations and warranties) or its failure to perform any covenant or agreement made or contained in the Purchase Agreement or fulfill any obligation in respect thereof. If the Company is required to indemnify L-3 pursuant to these provisions (as determined by a court of competent jurisdiction or by an arbitration award), then L-3 is entitled, in addition to any other right or remedy it may have, to exercise rights of set-off against any amounts then due and payable to the Company under the Purchase Agreement or that may thereafter become due and payable to the Company under the Purchase Agreement (including under the Note and in respect of the purchase price for the Additional Shares). L-3's obligation to indemnify the Company and certain related parties pursuant to these provisions (as determined by a court of competent jurisdiction or by an arbitration award), shall not exceed in the aggregate $20 million, such $20 million to be reduced from time to time beginning on the Closing Date by any and all amounts paid in cash to the Company or on its behalf pursuant to the Purchase Agreement (including the $8.5 million which was paid in cash at the closing of the Transaction, payments or other credits with respect of the Note and the purchase price for the Additional Shares). Effective as of the closing of the Transaction, the number of directors constituting the Board was reduced to three; Charles S. Brand, Frank A. Brand, and Mark B. Fisher resigned as directors of the Company, and Jay B. Langner was appointed as a director of the Company. The Company anticipates that, effective upon the expiration of the ten-day period beginning on the later of the date of the filing of this Information Statement with the Securities and Exchange Commission ("SEC") pursuant to Section 14(f) and Rule 14f-1 and the date of mailing of this Information Statement to the Company's stockholders (the "Effective Time"), the Board will be further reconstituted to consist of seven directors, and Frank C. Lanza, Robert V. LaPenta, Christopher C. Cambria, and John S. Mega will be appointed as new directors to fill the vacancies created by the increase in the number of directors. After the Effective Time, Norman M. Phipps, Jean-Francois Carreras and Jay B. Langner will remain as directors. -4- Effective upon the closing of the Transaction, the following persons were elected to hold the offices set forth opposite their respective names. John S. Mega Acting President Charles S. Brand Senior Vice President of Technology and Acting General Manager - New Jersey Operations Norman M. Phipps Senior Vice President of Administration Christopher C. Cambria Vice President and Secretary For certain information regarding Mr. Mega and Mr. Cambria, see "L-3 Designees" herein. For certain information about Messrs. Brand, Carreras and Phipps, see "Directors and Executive Officers" herein. For certain information regarding Mr. Langner, see "Existing Holders Designees" herein. In connection with and prior to the closing of the Transaction, the holders of the Company's outstanding Class A 13% Senior Subordinated Convertible Pay-in-Kind Debentures due July 29, 1999 (the "Class A Debentures"), Amended and Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due July 29, 1999 (the "Class B Debentures") and Class C 13% Convertible Senior Subordinated Debentures due September 30, 1999 (the "Class C Debentures" and, collectively with the Class A Debentures and the Class B Debentures, the "Convertible Debt") converted such indebtedness into an aggregate of 30,612,420 shares of Common Stock. In addition, prior to the closing of the Transaction, the holders of the Company's outstanding Series A 12% Cumulative Convertible Redeemable Preferred Stock, stated value $50,000 per share (the "Preferred Stock"), converted the Preferred Stock into an aggregate of 2,358,500 shares of Common Stock. Prior to the closing of the Transaction, the Existing Holders also exchanged their outstanding warrants to purchase Common Stock for an aggregate of 12,301,799 shares of Common Stock (the "Warrant Exercise"). In connection with and prior to the closing of the Transaction, the Company amended (i) its Certificate of Incorporation to increase the number of authorized shares to 355,000,000 shares, consisting of 350,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.01 per share, and (ii) its By-laws to allow the holders of a majority of the outstanding Common Stock to call special meetings of the stockholders of the Company. The proceeds of the Transaction will be used, among other things, to repay certain indebtedness and for working capital purposes. In connection with the Transaction, the Company granted options to purchase an aggregate of 9,352,200 shares of Common Stock to certain directors and former directors of the Company, certain employees of the Company, and certain employees of L-3 to be designated by L-3. In addition, options to purchase an aggregate of 12,665,308 shares of Common Stock were issued to certain investors in the Company and to L-3 (with L-3 having the ability to direct all or part of its options to certain parties related to L-3 to be designated by L-3). These option grants are referred to herein collectively as the "Option Grants." See "Transaction Option Grants" for a description of the Option Grants. GENERAL As of the Record Date, the Company had issued and outstanding 168,870,780 shares of Common Stock, the Company's only class of voting securities that would be entitled to vote for directors at a stockholders meeting if one were to be held. Each share of Common Stock is entitled to one vote. At each annual meeting of the Company's stockholders, directors are -5- elected for a term ending at the next annual meeting of stockholders, when their successors are duly elected and qualified. The officers of the Company serve at the discretion of the Board. RIGHT TO DESIGNATE DIRECTORS Pursuant to the terms of the Stockholders Agreement, dated July 10, 2000, among the Company, L-3 and the other parties thereto (the "Stockholders Agreement"), from and after the Effective Time, the number of directors comprising the Board will be set at seven. The existing holders of the Company's securities that are parties to the Stockholders Agreement (other than L-3) (the "Existing Holders") have the right to designate three directors so long as they continue beneficially to own at least 15% of the outstanding Common Stock (as determined pursuant to a specified formula). If the Existing Holders beneficially own less than 15% of the outstanding Common Stock (as so determined), the number of directors they have the right to appoint will be reduced to two. If the Existing Holders beneficially own less than 10% of the outstanding Common Stock, they no longer will have the right to designate directors of the Company. Pursuant to these rights, the Existing Holders have designated Mr. Carreras and Mr. Phipps, two of the Company's existing directors, and have appointed Mr. Langner as the third director (collectively, the "Existing Holder Designees"). Many of the Existing Holders are affiliated with, or related to, Cramer Rosenthal McGlynn, Inc. ("CRM"). Mr. Phipps also is an Existing Holder. Upon compliance by the Company with the requirements of Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, L-3 has the right under the Stockholders Agreement to designate the remaining members of the Board so long as it continues to be the owner of at least 25% of the outstanding Common Stock (as so determined). Pursuant to these rights, L-3 has informed the Company that it currently intends to designate Frank C. Lanza, Robert V. LaPenta, Christopher C. Cambria, and John S. Mega (collectively, the "L-3 Designees") as directors of the Company. The information contained in this Information Statement concerning L-3 and the L-3 Designees has been furnished to the Company by L-3, and the Company has not independently verified such information. The information contained in this Information Statement concerning Mr. Langner has been furnished to the Company by the Existing Holders, and the Company has not independently verified such information. L-3 DESIGNEES Each of the L-3 Designees has consented to serve as a director of the Company if appointed or elected. None of the L-3 Designees currently is a director of the Company. Neither Frank C. Lanza nor Robert V. LaPenta hold any position with the Company. John S. Mega is currently the Acting President of the Company and Christopher C. Cambria is currently the Vice President and Secretary of the Company. To the best of L-3's knowledge, except as set forth below, none of the L-3 Designees beneficially owns any equity securities or rights to acquire any such securities of the Company, nor has any such person been involved in any transaction with the Company or any of its directors, executive officers, or affiliates that is required to be disclosed pursuant to the rules and regulations of the SEC. -6- The names, ages, present principal occupations and five-year employment history of each of the L-3 Designees are set forth below. Each individual's business address is c/o L-3 Communications Corporation, 600 Third Avenue, New York, NY 10016. The information set forth herein regarding the L-3 Designees is as of July 11, 2000. -7-
- -------------------------------- ------- ------------------------------------------------------ NAME AGE PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH L-3/ MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - -------------------------------- ------- ------------------------------------------------------ Frank C. Lanza 68 Chairman and Chief Executive Officer and Director of L-3 since April 1997. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Lanza was Executive Vice President of Lockheed Martin, a member of Lockheed Martin's Executive Council and Board of Directors and President and Chief Operating Officer of Lockheed Martin's command, control, communications and intelligence ("C3I") and Systems Integration Sector, which comprised many of the businesses Lockheed Martin acquired from Loral. Prior to the April 1996 acquisition of Loral, Mr. Lanza was President and Chief Operating Officer of Loral, a position he held since 1981. Robert V. LaPenta 54 President and Chief Financial Officer and Director of L-3 since April 1997. From April 1996 until April 1997, Mr. LaPenta was a Vice President of Lockheed Martin and was Vice President and Chief Financial Officer of Lockheed Martin's C3I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he was Loral's Senior Vice President and Controller, a position he held since 1981. Mr. LaPenta is on the Board of Trustees of Iona College and The American College of Greece. Christopher C. Cambria 42 Vice President and Secretary and General Counsel of L-3 since June 1997. From 1994 until joining L-3, Mr. Cambria was an associate with Fried, Frank, Harris, Shriver & Jacobson. From 1986 until 1993, he was an associate with Cravath, Swaine & Moore. John S. Mega 47 Vice President of L-3 and President of L-3's Microwave Group since April 1997. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Mega was a Vice President and Chief Financial Officer of Lockheed Martin's Tactical Defense Systems business. Prior to the April 1996 acquisition of Loral, Mr. Mega was a Corporate Group Controller for Loral.
-8- EXISTING HOLDER DESIGNEES Each of the Existing Holder Designees has consented to serve as a director of the Company if appointed or elected. Prior to the consummation of the Transaction, Mr. Langner was not a director of the Company and he does not hold any other position with the Company. To the best of the Existing Holders' knowledge, Mr. Langner does not own beneficially any equity securities or rights to acquire any such securities of the Company, nor has he been involved in any transaction with the Company or any of its directors, executive officers, or affiliates that is required to be disclosed pursuant to the rules and regulations of the SEC. For certain information about Mr. Carreras and Mr. Phipps, see "Directors and Executive Officers" herein. Mr. Langner's business address is P.O. Box 355, Great Neck, New York 11022. The age, present principal occupation and five-year employment history of Mr. Langner are set forth below. Such information is as of July 15, 2000.
- -------------------------------- ------- ------------------------------------------------------------- NAME AGE PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH THE COMPANY/ MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - -------------------------------- ------- ------------------------------------------------------------- Jay B. Langner 70 Mr. Langner has been the Honorary Chairman of Hudson General Corporation (an aviation services company) since April 1999. From 1961 to 1999, Mr. Langner served in various capacities for Hudson General, including Chairman and Chief Executive Officer. Mr. Langner has been the Chairman of Montefiore Medical Center since 1986 and is a director of the Gregorian University Foundation and a trustee of the Orpheus Chamber Orchestra. Mr. Langner also serves as a director of Petroquest Energy, Inc.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information known by the Company regarding the beneficial ownership of the Company's Common Stock, as of July 11, 2000, by each beneficial owner of more than five percent of the outstanding Common Stock (calculated in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder), by each of the Company's directors immediately following the closing of the Transaction, by each executive officer named in the Summary Compensation Table (presented below) and by all of such directors and the executive officers of the Company as a group. This information gives effect to (i) the issuance of the Purchaser Shares, (ii) the resignations of Charles S. Brand, Frank A. Brand and Mark B. Fisher as directors of the Company, (iii) the conversion of the Convertible Debt into an aggregate of 30,612,420 shares of Common Stock, (iv) the conversion of the Preferred Stock into an aggregate of 2,358,500 shares of Common Stock, and (v) the Warrant Exercise. Except as otherwise indicated, the person or entities listed below have sole voting and investing power with respect to all shares of Common Stock beneficially owned by them, except to the extent such power may be shared with a spouse or with a parent company. Unless otherwise specified, -9- the business address of each such person is c/o LogiMetrics, Inc., 50 Orville Drive, Bohemia, New York 11716.
- --------------------------------------------- --------------------------- ---------------------------------- ------------- NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND NATURE OF (1) PERCENT OF BENEFICIAL OWNERSHIP CLASS - --------------------------------------------- --------------------------- ---------------------------------- ------------- L-3 Communications Corporation 108,901,622 (2) 59.0% 600 Third Avenue New York, NY 10016 L-3 Communications Holdings, Inc. 108,901,622 (2) 59.0% 600 Third Avenue New York, NY 10016 John S. Mega -- -- -- Christopher C. Cambria -- -- -- Charles S. Brand 17,026,810 (3) 10.1% Norman M. Phipps 3,361,065 (4) 2.0% James R. Meckstroth 189,000 (5) * Erik S. Kruger 240,000 (6) * Jean-Francois Carreras 222,500 (7) * Jay B. Langner 8,000 * All Executive Officers 21,047,375 12.7% and Directors as a group (8 persons)
- ------------------ * Less than 1% (1) Each stockholder possesses sole voting and investment power with respect to the shares listed, except as otherwise indicated. Includes shares of Common Stock, which the individual has the right to acquire within 60 days of July 11, 2000. (2) Includes (i) 3,333,333 shares of Common Stock issuable upon the exercise by L-3 of its right to acquire the Additional Shares, (ii) 5,555,555 issuable upon the exercise of the L-3 Option, and (iii) 6,775,940 shares of Common Stock issuable upon the exercise of stock -10- options granted to L-3 pursuant to the Option Grants which are exercisable within 60 days of July 11, 2000. L-3 is a wholly owned subsidiary of Holdings. (3) Includes 20,000 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 11, 2000. (4) Includes 825,000 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 11, 2000. (5) Includes 185,000 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 11, 2000. (6) Includes 200,000 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 11, 2000. (7) Consists of (i) 32,500 shares of Common Stock issuable upon the exercise of warrants held by Mr. Carreras, and (ii) 190,000 shares of Common Stock issuable upon the exercise of stock options exercisable within 60 days of July 11, 2000. -11- DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information concerning those individuals who served as members of the Board or as executive officers of the Company prior to the consummation of the Transaction. The information contained herein is as of July 15, 2000.
- ---------------------------------------- ------------- --------------------------------------------------------------- NAME AGE FORMER POSITION WITH THE COMPANY - ---------------------------------------- ------------- --------------------------------------------------------------- Charles S. Brand 60 Chairman of the Board & Chief Technical Officer Norman M. Phipps 40 President, Chief Operating Officer, Interim Chief Financial Officer & Director James R. Meckstroth 50 Senior Vice President - Operations Erik S. Kruger 39 Vice President - Finance and Administration & Secretary Frank A. Brand 76 Director Jean-Francois Carreras 50 Director Mark B. Fisher 41 Director
CHARLES S. BRAND. Prior to the consummation of the Transaction, Mr. Brand served as the Company's Chairman of the Board and Chief Technical Officer since March 1998. From April 1997 to March 1998, Mr. Brand was the Chairman and Chief Executive Officer of the Company. From February 1994 to April 1997, Mr. Brand was the President of mmTech, Inc. (which subsequently became a wholly owned subsidiary of the Company). Prior to founding mmTech, Mr. Brand was the founder and President of Trontech, Inc., a manufacturer of solid state amplifiers used in military applications and wireless equipment for the cellular and PCS markets, which was subsequently sold in December 1986 to Dynatech Corporation. Mr. Brand has been involved in the development of LMDS systems for over ten years. Mr. Brand is the nephew of Dr. Frank A. Brand. NORMAN M. PHIPPS. Prior to the consummation of the Transaction, Mr. Phipps served as the President and Chief Operating Officer of the Company since April 1997, and also as interim Chief Financial Officer since March 1998. From May 1996 to April 1997, Mr. Phipps served as Chairman of the Board and Acting President of the Company. Mr. Phipps continues to serve as a director of the Company following the consummation of the Transaction and is one of the three Existing Holder Designees. Mr. Phipps has served as a principal of two private -12- investment firms, Phipps, Teman & Company, L.L.C. (from January 1994 to December 1997) and CP Capital Partners (from January 1991 to December 1993). Mr. Phipps is a director of Avery Communications, Inc., a company primarily involved in the provision of software and services addressing the customer relationship and billing/operational support system needs of telecommunications and Internet service providers. JAMES R. MECKSTROTH. Mr. Meckstroth has served as the Company's Senior Vice President - Operations since December 1998. Mr. Meckstroth acted as a consultant to the Company from July 1998 to December 1998. From August 1997 to July 1998, Mr. Meckstroth served as Senior Vice President - Global Operations for Glenayre Electronics, Inc. From July 1994 to August 1997, Mr. Meckstroth was Vice President of Engineering for Glenayre's Wireless Messaging Group. From July 1992 to July 1994, Mr. Meckstroth was the Director of Operations/Research and Development at PPG Biomedical Systems Division. ERIK S. KRUGER. Mr. Kruger has served as Vice President - Finance and Administration of the Company since February 1998 and continues to serve in such capacity following the consummation of the Transaction. Mr. Kruger served as Secretary of the Company from February 1998 until the consummation of the Transaction. From March 1996 to January 1998, Mr. Kruger was the Chief Financial Officer of CellularVision of New York, L.P. From September 1990 to February 1996, Mr. Kruger was employed by Coopers & Lybrand L.L.P., specializing in the telecommunications and entertainment industries. Mr. Kruger is a Certified Public Accountant. DR. FRANK A. BRAND. Dr. Brand has been a director of the Company since April 1997. Since 1991, Dr. Brand has been a private investor and consultant. Prior to his retirement in 1991, Dr. Brand held several senior management positions with M/A-COM, Inc., a major manufacturer of telecommunications products and systems, including Chief Technical Officer, Chief Operating Officer and Acting Chief Executive Officer. Dr. Brand is a Life-Fellow of the Institute of Electrical and Electronic Engineers, a Fellow of Polytechnic University and a member of the Engineering Dean's Council at UCLA. JEAN-FRANCOIS CARRERAS. Mr. Carreras has been a director of the Company since April 1997, and continues to serve in such capacity following the consummation of the Transaction and is one of the three Existing Holder Designees. Since October 1994, Mr. Carreras has been a partner in the Paris law firm of Sokolow, Dunaud, Mercadier and Carreras. From October 1994 to July 1995, Mr. Carreras was also a partner in the law firm of Arent, Fox, Kintner, Plotkin & Kahn. Prior thereto, until October 1994, Mr. Carreras was a partner in the law firm of Coudert Brothers. Mr. Carreras is a French citizen. MARK B. FISHER. Mr. Fisher is the President of MBF Capital Corporation, Inc. ("MBF"), a firm that invests in and advises technology driven companies. From 1990 to 1996, Mr. Fisher served as a Principal of Alex. Brown & Sons, Inc. As indicated above, effective as of the closing of the Transaction, the number of directors constituting the Board was reduced to three; Charles S. Brand, Frank A. Brand, and Mark B. Fisher resigned as directors of the Company, and Jay B. Langner was appointed as a director of -13- the Company. The Company anticipates that, at the Effective Time, the Board will be further reconstituted to consist of seven directors, and Frank C. Lanza, Robert V. LaPenta, Christopher C. Cambria, and John S. Mega will be appointed as new directors to fill the vacancies created by the increase in the number of directors. After the Effective Time, Norman M. Phipps, Jean-Francois Carreras and Jay B. Langner will continue as directors. Effective upon the closing of the Transaction, the following persons were elected to hold the offices set forth after their names. John S. Mega Acting President Charles S. Brand Senior Vice President of Technology and Acting General Manager - New Jersey Operations Norman M. Phipps Senior Vice President of Administration Christopher C. Cambria Vice President and Secretary
For certain information about Mr. Mega and Mr. Cambria, see "L-3 Designees" herein. Certain information about Mr. Brand and Mr. Phipps is set forth above. The Board directs the management of the business and affairs of the Company, as provided by Delaware law, and conducts its business through meetings of the Board and three standing committees: the Audit Committee, Compensation Committee, and Executive Committee. In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues. The Company does not have a separate, standing nominating committee, however, the Board performs the functions of such committee. Pursuant to the terms of the Stockholders Agreement, from and after the Effective Time, the number of directors comprising the Board will be set at seven. The Existing Holders have the right to designate three directors so long as they continue to beneficially to own at least 15% of the outstanding Common Stock (as determined pursuant to a specified formula). If the Existing Holders beneficially own less than 15% of the outstanding Common Stock (as so determined), the number of directors they have the right to appoint will be reduced to two. If the Existing Holders beneficially own less than 10% of the outstanding Common Stock, they no longer will have the right to designate directors of the Company. Upon compliance by the Company with the requirements of Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, L-3 has the right under the Stockholders Agreement to designate the remaining members of the Board so long as it continues to be the owner of at least 25% of the outstanding Common Stock (as so determined). The Existing Holders have the right, in their sole discretion, to remove any of the directors appointed by them, with or without cause. L-3 has the right to remove any of the directors appointed by it. The Existing Holders or L-3, as the case may be, will vote their shares to effect such removal at a meeting of the stockholders or pursuant to a written consent. -14- COMMITTEES OF THE BOARD; BOARD MEETINGS The Board held three meetings during fiscal year 1999. In addition to its regularly scheduled meetings, the Board took action on eight occasions by unanimous written consent. Each director attended 75% or more of the aggregate of (i) meetings of the Board held during the period for which he served as a director and (ii) meetings of all committees held during the period for which he served on those committees. The three standing committees of the Board are described below: Audit Committee. During the fiscal year ended June 30, 1999, the Audit Committee consisted of Dr. Frank Brand, Mr. Jean-Francois Carreras and Francisco A. Garcia. Mr. Garcia resigned as a director in November 1999. The Audit Committee makes recommendations to the Board of Directors with respect to the independent auditors of the Company's financial statements, reviews the scope of the annual audit and meets periodically with the Company's independent auditors to review their findings and recommendations, reviews quarterly financial information and earnings releases prior to public dissemination, approves major accounting policies and changes thereto and periodically reviews the Company's principal internal accounting controls to assure that the Company maintains an appropriate system of financial control. The Audit Committee did not meet during fiscal 1999. Compensation Committee. During the fiscal year ended June 30, 1999, the Compensation Committee consisted of Dr. Frank Brand and Messrs. Carreras and Garcia. The Compensation Committee periodically reviews and determines the amount and form of compensation and benefits payable to the Company's principal executive officers and certain other management personnel. The Compensation Committee also administers certain of the Company's employee benefit plans. The Compensation Committee did not meet during fiscal 1999. Executive Committee. During the fiscal year ended June 30, 1999, the Executive Committee consisted of Mr. Charles Brand and Mr. Phipps. The Executive Committee exercises such authority as is delegated to it from time to time by the full Board. The Executive Committee did not meet during fiscal 1999. Once the L-3 Designees are elected or appointed as directors of the Company, the Company anticipates that the composition of the three standing committees of the Board will change and will include one or more of the L-3 Designees. DIRECTOR COMPENSATION The Company currently does not regularly compensate directors for their service to the Company. However, directors are reimbursed for out-of-pocket expenses incurred in their capacity as directors of the Company. During the fiscal year ended June 30, 1999, Dr. Brand and Mr. Fisher provided certain consulting services to the Company. See "Certain Relationships and Related Party Transactions." -15- PRIOR AGREEMENTS; PRIOR RIGHT TO DESIGNATE DIRECTORS; CHANGES IN CONTROL In July 1997, the Company entered into a purchase agreement (the "1997 Agreement") with a group of institutional investors (the "Investors"), including certain entities affiliated with Mark B. Fisher, a former director of the Company. Pursuant to the terms of the 1997 Agreement, the Company issued and sold to the Investors an aggregate of $3,588,333 in aggregate principal amount of the Company's Class A Debentures and warrants to acquire an aggregate of 11,500,000 shares of Common Stock for a total purchase price of $4,352,500. In connection with the transactions contemplated by the 1997 Agreement, the Investors, the Company, and Charles S. Brand entered into a Stockholders Agreement (the "1997 Stockholders Agreement") pursuant to which, among other things, Mr. Brand agreed to certain restrictions on his ability to sell his shares of Common Stock. Pursuant to the terms of the 1997 Stockholders Agreement, the Investors received certain rights to appoint members of the Board. Under the terms of the 1997 Stockholders Agreement, the holders of a majority of the shares of Common Stock beneficially owned by the Investors had the right, subject to certain limitations, to cause the Company to enter into a "Company Sale" (as defined in the 1997 Stockholders Agreement). In March 1996, the Company entered into a Unit Purchase Agreement (the "Unit Purchase Agreement") with Cerberus Partners, L.P. ("Cerberus") pursuant to which the Company issued and sold to Cerberus an aggregate of $1,042,372 of convertible senior subordinated debentures which were subsequently exchanged for the Class B Debentures, and warrants to acquire an aggregate of 2,542,380 shares of Common Stock for a total purchase price of $1,500,000. Pursuant to the terms of the Unit Purchase Agreement, Cerberus received the right to appoint one member of the Board. STOCKHOLDERS AGREEMENT Pursuant to the terms of the Stockholders Agreement, the 1997 Stockholders Agreement and the provisions of the Unit Purchase Agreement giving Cerberus the right to appoint a director were terminated. Pursuant to the terms of the Stockholders Agreement, from and after the Effective Time, the number of directors comprising the Board will be set at seven. The Existing Holders have the right to designate three directors so long as they continue beneficially to own at least 15% of the outstanding Common Stock (as determined pursuant to a specified formula). If the Existing Holders beneficially own less than 15% of the outstanding Common Stock (as so determined), the number of directors they have the right to appoint will be reduced to two. If the Existing Holders beneficially own less than 10% of the outstanding Common Stock, they no longer will have the right to designate directors of the Company. Upon compliance by the Company with the requirements of Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, L-3 has the right under the Stockholders Agreement to designate the remaining members of the Board so long as it continues to be the owner of at least 25% of the outstanding Common Stock (as so determined). -16- Under the terms of the Stockholders Agreement, so long as L-3 remains the owner of at least 25% of the Common Stock (as so determined), L-3 has a right of first offer with respect to the proposed transfer, in one or a series of related transactions, by a Major Selling Stockholder (as defined in the Stockholders Agreement) of (i) 10% or more of the Common Stock Equivalents (as so defined), other than in certain specified market transactions, or (ii) Common Stock Equivalents which to the actual knowledge of the Major Selling Stockholder, together with the holdings of Common Stock Equivalents of the person to which the transfer is to be made, would result in such person owning more than 10% of the Common Stock Equivalents (after giving effect to such transfer). Pursuant to the terms of the Stockholders Agreement, the Existing Holders effected the conversion or exchange of their Convertible Debt and warrants, waived certain anti-dilution rights, including rights resulting from the Transaction, waived certain registration rights and consented to the Transaction. In addition, the Existing Holders agreed to extend the maturity date of certain loans made by them to the earlier of (i) the fifth day following the consummation of a Qualifying Offering and (ii) June 30, 2001, and agreed to waive certain other rights specified in the Stockholders Agreement. In addition, pursuant to the terms of the Stockholders Agreement, until compliance by the Company with the requirements of Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, the Company agreed to operate its business in the ordinary course and to refrain from taking certain actions without L-3's consent. The Stockholders Agreement terminates upon the earliest to occur of (i) the consummation of a Qualifying Offering, (ii) with respect to L-3 or an Existing Holder, when such party has effected the transfer of its entire ownership interest in the Company, (iii) the consummation of a "Company Sale" (as defined in the Stockholders Agreement) approved by a Special Director Majority or a Special Stockholder Majority in accordance with the Purchase Agreement, and (iv) the written mutual consent of L-3 and the Existing Holders that collectively own a majority of the Common Stock Equivalents then held by all Existing Holders. STOCK COMPENSATION PROGRAM Pursuant to the terms of the LogiMetrics, Inc. 1997 Stock Compensation Program (the "Stock Compensation Program"), each director who has not been a full-time employee of the Company or any subsidiary for at least the prior 12 months receives an option to purchase 20,000 shares of Common Stock each year on the earlier of (i) the date of the Company's annual meeting of stockholders, and (ii) June 1. Options granted to such directors under the Stock Compensation Program have an exercise price equal to the fair market value of the underlying shares of Common Stock on the date of grant. -17- EXECUTIVE COMPENSATION The following table sets forth certain compensation paid to the Company's Chief Executive Officer and each other executive officer of the Company as of June 30, 1999 (collectively, the "Named Executive Officers"):
- ------------------------------------------------------------------------------------------------------------------------------- SUMMARY COMPENSATION TABLE (1) ANNUAL COMPENSATION - ------------------------------------------------------------------------------------------------------------------------------- NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS OTHER LONG-TERM ALL OTHER ($) ($) ANNUAL COMPENSATION COMPENSATION COMPENSATION SECURITIES ($) ($) UNDERLYING OPTIONS/ SARS(#) - ------------------------------------------------------------------------------------------------------------------------------- Kenneth C. Thompson (2) 1999 $126,000 -- * -- Chief Executive Officer 1998 $171,100 (3)(4) -- * -- Charles S. Brand (5) 1999 $100,000 (6) -- * -- Chairman of the Board 1998 $200,000 -- * -- & Chief Technical Officer 1997 $162,500 -- * 20,000 Norman M. Phipps 1999 $150,000 -- * -- $1,775 (7) President, Chief Operating 1998 $150,000 -- * -- $1,775 (7) Officer and Interim Chief 1997 $153,395 (8) -- * 825,000 Financial Officer James R. Meckstroth 1999 $102,327 (9) -- * 260,000 Senior Vice President- Operations Erik S. Kruger 1999 $116,858 -- * -- Vice President- 1998 $37,596 (10) -- * 200,000 Finance & Administration
- ------------------ * Represents less than the lesser of $50,000 or 10% of salary and bonus for each Named Executive Officer. -18- (1) The Company did not grant any stock appreciation rights or restricted stock and did not make any long-term incentive payments during the period covered by the Summary Compensation Table. (2) Mr. Thompson resigned as the Company's Chief Executive Officer and as a director in November 1999. (3) Includes consulting fees paid to Mr. Thompson prior to his becoming Chief Executive Officer of the Company in March 1998. (4) Pursuant to the terms of his consulting agreement, a portion of Mr. Thompson's consulting fee was paid in the form of 108,000 shares of Common Stock with a fair market value of $54,000. See "Employment Agreements and Compensation Arrangements." (5) Mr. Brand served as the Company's Chief Executive Officer from April 1997 until March 1998. (6) During fiscal 1999, Mr. Brand deferred $100,000 of his salary. (7) Represents life insurance premiums paid on behalf of Mr. Phipps. (8) Includes consulting fees paid to Mr. Phipps prior to his employment by the Company in April 1997. (9) Includes consulting fees paid to Mr. Meckstroth prior to his employment by the Company in December 1998. (10) Mr. Kruger joined the Company in February 1998. -19- FISCAL YEAR-END OPTION GRANTS The following table summarizes certain information relating to the grant of options to purchase Common Stock to each of the Named Executive Officers during the fiscal year ended June 30, 1999:
- ---------------------------------------------------------------------------------------------------------------------- OPTION/SAR GRANTS IN LAST FISCAL YEAR (1) - ---------------------------------------------------------------------------------------------------------------------- NAME NUMBER OF % OF TOTAL OPTIONS/SARS EXERCISE OR BASE EXPIRATION DATE SECURITIES GRANTED TO EMPLOYEES IN PRICE ($/SHARE) UNDERLYING FISCAL YEAR OPTIONS/SARS GRANTED (#) - ---------------------------------------------------------------------------------------------------------------------- James R. Meckstroth 260,000 (2) 100.0% $0.52 12/11/08
(1) The Company did not grant any stock appreciation rights during the fiscal year ended June 30, 1999. (2) The vesting period for the above grant was 35,000 upon the date of grant, 75,000 one year after the date of grant, 75,000 two years after date of grant and 75,000 upon the Company's successful completion of the private or public sale of its securities resulting in net proceeds of at least $10 million. FISCAL YEAR-END OPTION VALUES The following table sets forth information with respect to the Named Executive Officers concerning unexercised options held by such Named Executive Officers as of June 30, 1999. No stock options were exercised during the fiscal year ended June 30, 1999.
- -------------------------------------------------------------------------------------------------------------------- NAME NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY UNEXERCISED OPTIONS AT FISCAL OPTIONS AT FISCAL YEAR-END ($)(1) YEAR-END (#) EXERCISABLE/ UNEXERCISABLE - -------------------------------------------------------------------------------------------------------------------- Charles S. Brand 13,333/6,667 $1,933/$967 Norman M. Phipps 825,000/0 $165,000/$0 James R. Meckstroth -- -- Erik S. Kruger 133,334/66,666 $26,667/$13,333
-20- (1) Based on an estimated market value of $0.75 per share for the Common Stock on June 30, 1999. EMPLOYMENT AGREEMENTS AND COMPENSATION ARRANGEMENTS In April 1997, Mr. Charles Brand and Mr. Phipps entered into five-year employment agreements with the Company. Pursuant to such agreements, Mr. Brand was entitled to receive an annual base salary of $200,000 and Mr. Phipps received an annual base salary of $150,000 for the fiscal year ended June 30, 1999. These agreements were subject to periodic increases at the discretion of the Board. Mr. Brand and Mr. Phipps were entitled to participate in all compensation and employee benefit plans, including such bonuses as may be authorized by the Board from time to time. The Company also agreed to provide and maintain a $1,000,000 term-life insurance policy for the benefit of each of Mr. Brand and Mr. Phipps. In the event of the termination of employment by the Company (other than upon death, permanent disability or a "termination for cause" (as defined in each agreement)), each of Mr. Brand and Mr. Phipps would be entitled to receive his then-current base salary for a period equal to the greater of (i) the remainder of the term of his employment agreement, or (ii) twelve months from the effective date of termination. Each of Mr. Brand and Mr. Phipps also agreed to certain non-competition, confidentiality and intellectual property ownership covenants. These employment agreements were terminated in connection with the Transaction and replaced by the New Employment Agreements (as defined below). In August 1998, the Company entered into a three-year employment agreement with Mr. Thompson, pursuant to which Mr. Thompson agreed to serve as the Company's Chief Executive Officer. Effective November 15, 1999, Mr. Thompson resigned as the Company's Chief Executive Officer. In connection with his resignation, the Company and Mr. Thompson entered into a separation agreement (the "Separation Agreement"). In the Separation Agreement, the Company agreed to pay Mr. Thompson an aggregate of $137,097 in five monthly installments, without interest, in repayment of certain amounts owed to him and in lieu of any rights Mr. Thompson had under the employment agreement he entered into with the Company in August 1998. In addition, the Company issued to Mr. Thompson stock options exercisable for an aggregate of 500,000 shares of Common Stock (the "Option Shares") at an exercise price of $0.60 per share (subject to adjustment in certain circumstances) (the "Thompson Option"). The Thompson Option expires, as to one-half of the Option Shares, on November 15, 2001, and as to the remainder of such Option Shares, on November 15, 2002. Pursuant to the terms of the Separation Agreement, all prior agreements between Mr. Thompson and the Company were terminated and the Company and Mr. Thompson agreed to release certain claims against each other and certain related parties. Under the Separation Agreement, Mr. Thompson is subject to certain confidentiality obligations and agreed to non-competition and certain other covenants for a period of one year. In connection with the Transaction, the Company entered into new two-year employment agreements with Messrs. Brand and Phipps (the "New Employment Agreements"). Pursuant to the New Employment Agreements, Mr. Brand and Mr. Phipps will each receive an annual base salary of $210,000. The base salary is subject to periodic increases at the discretion -21- of the Board. Under the New Employment Agreements, Mr. Phipps was granted an option to acquire 750,000 shares of Common Stock at an exercise price of $0.54 per share (subject to adjustment in certain circumstances) (the "Phipps Option"). The Phipps Option vests in equal installments of one-third per year and expires, subject to earlier termination, ten years from the date of grant. Under the New Employment Agreements, the Company agreed to reimburse Mr. Brand and Mr. Phipps for the costs of maintaining a $1,000,000 term-life insurance policy for the benefit of each of Mr. Brand and Mr. Phipps, subject to a cap of $2,000 per annum. Mr. Brand and Mr. Phipps also are entitled to participate in certain compensation and employee benefit plans maintained by the Company. In the event of the termination of employment by the Company (other than upon death, permanent disability or a termination for "Cause" (as defined in the New Employment Agreements)) or a termination of employment by the employee for "Good Reason" (as so defined), each of Mr. Brand and Mr. Phipps would be entitled to receive his then-current base salary for a period equal to the greater of (i) the remainder of the term of his employment agreement, and (ii) 12 months (in the case of Mr. Brand) or six months (in the case of Mr. Phipps) from the effective date of termination. The Phipps Option will vest immediately upon a termination of employment giving Mr. Phipps the right to continue to receive his base salary as described above or upon the occurrence of a "Change in Control Event" (as defined in the Phipps Option). The New Employment Agreements also contain certain non-competition, confidentiality and intellectual property ownership covenants. STOCK COMPENSATION PROGRAM In May 1997, the Company adopted the Stock Compensation Program in order to promote the interests of the Company, its direct and indirect present and future subsidiaries and its stockholders by providing eligible persons with the opportunity to acquire an ownership interest, or to increase their ownership interest, in the Company as an incentive to remain in the service of the Company. The Stock Compensation Program authorizes the granting of incentive stock options, non-qualified stock options, stock appreciation rights, performance shares and stock bonus awards to employees and consultants of the Company and its subsidiaries, including those employees serving as officers or directors of the Company (the "Employee Plans"). The Stock Compensation Program also authorizes automatic option grants to directors who are not otherwise employed by the Company (the "Independent Director Plan"). In connection with the Transaction, the number of shares of Common Stock reserved for issuance under the Stock Compensation Program was increased to 12,665,308, of which up to 12,515,308 shares may be issued under the Employee Plans and up to 150,000 shares may be issued under the Independent Director Plan. The Stock Compensation Program is administered by the Compensation Committee of the Board (the "Administrator"). Options and awards granted under the Stock Compensation Program may have an exercise or payment price as established by the Compensation Committee, provided that the exercise price of incentive stock options granted under the Employee Plans may not be less than the fair market value of the underlying shares on the date of grant. Options granted under the Independent Director Plan must have an exercise price equal to the fair market value of the underlying shares on the date of grant. -22- Unless otherwise provided at the date of grant, no option or award may vest within one year of the date of grant and no option or award may be exercised more than 10 years from the date of grant. Options granted under the Independent Director Plan vest one year following the date of grant and expire if not exercised on or before the fifth anniversary thereof. Unless otherwise specified by the Compensation Committee, options and awards (other than pursuant to the Independent Director Plan) vest in four equal installments on the first, second, third and fourth anniversaries of the date of grant. Vesting of any option or award granted under the Stock Compensation Program may be accelerated in certain circumstances, including upon the occurrence of a "Change in Control Event" (as defined in the Stock Compensation Program). Options and awards granted under the Stock Compensation Program are nontransferable, except by will or by the laws of descent and distribution. However, the Compensation Committee may permit the recipient of a non-incentive stock option granted under the Employee Plans and options granted under the Independent Director Plan to transfer the option to a family member or a trust created for the benefit of family members. During the lifetime of a participant, an option may be exercised only by the participant or a permitted transferee. In the event that a participant's employment or service terminates as a result of death, all vested awards will be paid to the participant's estate by the Company and the participant's estate or any permitted transferee will have the right to exercise vested options for a period ending on the earlier of the expiration dates of such options or one year from the date of death. If the participant's employment or service terminates as a result of retirement or a "disability" (as set forth in the Stock Compensation Program), all vested awards will be paid to the participant by the Company and the participant or any permitted transferee will have the right to exercise vested options for a period ending on the earlier of the expiration dates of such options or one year from the date of termination. If the participant's employment or service terminates for cause, all options and awards will expire automatically upon termination. If the participant's employment or service terminates other than as a result of death, disability, retirement, or termination for cause, the participant will have the right to collect all vested awards immediately and the participant or any permitted transferee will have the right to exercise vested options for a period ending on the earlier of the expiration dates of such options or awards or 30 days from the date of termination, subject to extension at the discretion of the Administrator, or three months from the date of termination in the case of options granted pursuant to the Independent Director Plan. In all cases, any unvested options or awards will terminate as of the date of termination of employment or service. The Stock Compensation Program will terminate on April 30, 2007, unless earlier terminated by the Board. No options or awards may be granted under the Stock Compensation Program after its termination; however, termination of the Stock Compensation Program will not affect the status of any option or award outstanding on the date of termination. TRANSACTION OPTION GRANTS Pursuant to the terms of the Transaction, options to purchase 150,000 shares of Common Stock were issued to each of Dr. Frank A. Brand, Mr. Carreras and Mr. Fisher (collectively, the "Former Director Options"). The Former Director Options have an exercise price of $0.54 per -23- share (subject to adjustment in certain circumstances), are immediately exercisable and expire, subject to earlier termination, ten years from the date of grant. In addition, as described above under "Employment Agreements and Compensation Arrangements," Mr. Phipps received an option to acquire 750,000 shares of Common Stock in connection with the execution of his new employment agreement. Options to purchase an aggregate of 8,902,200 shares of Common Stock also were issued under the Stock Compensation Program to certain other employees of the Company and to certain employees of L-3 to be designated by L-3 in connection with the Transaction (the "Employee Options"). All of the Employee Options have an exercise price of $0.54 per share (subject to adjustment in certain circumstances), vest in equal installments of one-third per year and expire, subject to earlier termination, ten years from the date of grant. Pursuant to this grant, Mr. Meckstroth received options to acquire 740,000 shares of Common Stock and Mr. Kruger received options to acquire 400,000 shares of Common Stock. In addition, pursuant to the Transaction, options to purchase an aggregate of 12,665,308 shares of Common Stock were granted to L-3, CRM and Cerberus (the "Founder Options") (with each such party having the ability to direct all or part of its options to certain parties related to such party). The Founder Options have an exercise price of $0.54 per share (subject to adjustment in certain circumstances), are immediately exercisable and expire ten years from the date of grant. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the fiscal year ended June 30, 1999, the Company's Compensation Committee was comprised of Dr. Brand and Messrs. Carreras and Garcia. Mr. Garcia resigned as a director in November 1999. The Company entered into a consulting agreement with Dr. Brand pursuant to which Dr. Brand provided strategic, technological and other services to the Company for up to 90 days in any calendar year. Under the consulting agreement, which expired April 30, 1999, Dr. Brand received a quarterly payment of 36,363 shares of Common Stock. In the consulting agreement, Dr. Brand agreed to certain confidentiality, non-competition, and intellectual property covenants. No executive officer of the Company and no member of the Compensation Committee is a member of any other business entity that has an executive officer that sits on the Company's Board or on the Compensation Committee. CERTAIN RELATED PARTY TRANSACTIONS Directors and Officers ---------------------- In July 1997, Norman M. Phipps, a director of the Company, purchased 850,000 shares of Common Stock from the Company for $467,500, or $0.55 per share. In connection with the purchase, $8,500 was paid in cash from the proceeds of a one-time bonus paid to Mr. Phipps, and the remainder was paid in the form of a non-recourse secured promissory note (the "Phipps Note"). Also in July 1997, Michael L. Gaffney, an employee of the Company, purchased 400,000 shares of Common Stock from the Company for $220,000, or $0.55 per share. In connection with Mr. Gaffney's purchase, $4,000 was paid in cash from the proceeds of a one-time bonus paid -24- to Mr. Gaffney and the remainder was paid in the form of a non-recourse secured promissory note (the "Gaffney Note"). The Phipps Note and the Gaffney Note did not bear interest, had no fixed maturity date, and were each secured by a pledge of the shares of Common Stock purchased by Messrs. Phipps and Gaffney, respectively. The sale of the Class C Debentures as described below resulted in a "Change in Control Event" under the terms of the Phipps Note and the Gaffney Note. The Phipps Note and the Gaffney Note were each satisfied upon the occurrence of such "Change in Control Event." The Company recorded a non-cash charge to account for these transactions in the aggregate amount of $675,000 at June 30, 1998. MBF, an entity controlled by Mark B. Fisher, a director of the Company prior to the Transaction, paid $35,000 of the purchase price payable by it in connection with its July 1997 purchase of Series G Warrants, in the form of a non-recourse secured promissory note (the "MBF Note"). The MBF Note matures on July 29, 2000 and bears interest compounded annually) at a rate of 6.07% per annum, which is payable at maturity. The MBF Note is secured by a pledge of warrants purchased by MBF. The MBF Note has become immediately due and payable upon the occurrence of the Transaction which constituted a Company Sale (as defined in the 1997 Stockholders Agreement). Prior to its acquisition by the Company, Mr. Brand, the Company's former Chairman and Chief Executive Officer, lent certain amounts to the Company's subsidiary, mmTech, Inc. ("mmTech"), on an as-needed basis to fund a portion of mmTech's working capital requirements. The amount advanced by Mr. Brand was $849,206 at March 31, 2000. Pursuant to an agreement between Mr. Brand and the Company, the Company has agreed to pay interest on the unpaid advances (which previously had been interest-free) at a rate of seven percent per annum. Mr. Brand owns 40% of the outstanding common stock of Advanced Control Components, Inc. ("ACC"). ACC sublets space from the Company at its Eatontown, New Jersey facility and pays to mmTech $36,474 in annual rent. Employees from mmTech perform services for ACC and employees from ACC perform services for mmTech from time to time. The company utilizing such services pays to the company providing such services an amount equal to two times the base hourly salary of the employees providing such services for the number of hours involved. Pursuant to such arrangements, ACC paid to mmTech net amounts of $40,990 during the fiscal year ended June 30, 1999 and $268,883 during the fiscal year ended June 30, 1998. Pursuant to the terms of a Stock Purchase Agreement, dated October 21, 1998 (the "Stock Purchase Agreement"), Mr. Brand sold 2,000,000 shares of Common Stock to a group of institutional investors (the "1998 Investors") for a cash purchase price of $500,000, or $0.25 per share. The sale was made as a condition to the transactions contemplated by a Purchase Agreement, dated October 21, 1998 (the "1998 Purchase Agreement"), among the Company and the purchasers party thereto (including the 1998 Investors). Pursuant to the 1998 Purchase Agreement, the Company issued and sold $2.7 million in aggregate face amount of its Class C Debentures for an aggregate purchase price of $2.0 million. As required by the 1998 Investors, Mr. Brand used the proceeds of the sale of Common Stock pursuant to the Stock Purchase Agreement to acquire $667,000 in face amount of the Class C Debentures pursuant to the 1998 Purchase Agreement for a cash purchase price of $500,000. -25- In connection with the issuance by the Company of its Class A Debentures in July 1997, the Company granted to the Investors the right, at any time prior to August 15, 1998, to purchase an additional $833,333 in aggregate principal amount of the Class A Debentures and warrants to purchase an aggregate of 2,500,000 shares of Common Stock for a total purchase price of $1,000,000 (the "Purchase Option"). On May 1, 1998, the Investors exercised their respective rights to purchase $500,000 of the Purchase Option. On August 6, 1998, the Investors exercised their respective rights to purchase the remaining $500,000 of the Purchase Option. In April 2000, Norman M. Phipps, a director of the Company, purchased 1,250,000 shares of Common Stock from the Company for $812,500, or $0.65 per share. In connection with the purchase, $12,500 was paid in cash from the proceeds of a one-time bonus paid to Mr. Phipps and the remainder was paid in the form of a non-recourse secured promissory note (the "New Phipps Note"). The New Phipps Note did not bear interest, had no fixed maturity date, and was secured by a pledge of the shares of Common Stock purchased by Mr. Phipps. The New Phipps Note would have been satisfied automatically upon the occurrence of the Transaction which would have constituted a "Change in Control Event" (as defined in the New Phipps Note). In connection with the Transaction, the Company and Mr. Phipps agreed to rescind the purchase of these shares and agreed that the New Phipps Note would be deemed to be canceled and of no further force or effect. Mr. Phipps also agreed to forego certain payments that would have been owed to him by the Company in connection with the satisfaction of the New Phipps Note. The Company has been advised that, in connection with the Transaction, Mr. Phipps and CRM, acting as agent for certain of its affiliates, clients and other related persons, entered into a stock purchase and nominee agreement pursuant to which Mr. Phipps purchased 1,250,000 shares of Common Stock from CRM and certain related entities for an aggregate purchase price of $100,000 which was paid in the form of a full recourse promissory note (the "CRM Note"). The Company has been advised that the CRM Note bears interest at a rate of 5% per annum and matures on December 31, 2003, subject to earlier acceleration upon the occurrence of certain events. The Company also has been advised that the CRM Note would be deemed satisfied by CRM upon the occurrence of a Recovery Event (defined in the CRM Note as the recovery by CRM and certain related entities of one-half or more of the amounts invested by such entities in the Company). Registration Rights Agreement ----------------------------- In connection with the Transaction, the Company, L-3 and the Existing Holders entered into a Registration Rights Agreement (the "Registration Rights Agreement"). Pursuant to the terms of the Registration Rights Agreement, L-3 (or certain qualifying holders of shares purchased by L-3) has the right to demand at any time that the Company effect the registration of the shares of Common Stock acquired by L-3 for offering and sale under applicable securities laws (subject to certain black-out provisions described below). L-3 (or such qualifying successors) have the right to make four such demands. Under the Registration Rights Agreement, after the earlier to occur of (i) consummation of a Qualifying Offering and (ii) March 31, 2001, one or more Existing Holders meeting certain requirements have the right to demand that the Company effect the registration of the shares of Common Stock acquired by such Existing Holders (and any other Existing Holders who timely agree to participate in such offering) for offering and sale under applicable securities laws (subject to certain black-out provisions described below). The Existing Holders have the right to make two such demands. A -26- registration effected pursuant to the provisions described above is hereinafter referred to as a "Long-Form Registration." In addition, if at any time after the earlier of (i) January 2, 2001 and (ii) the consummation of a Qualifying Offering, the Company is eligible to effect such registration on Form S-3 (or a successor form), L-3 and the Existing Holders have the unlimited right to demand that the Company effect the registration of their shares of Common Stock (a "Short-Form Registration") so long as the shares to be offered for the benefit of the requesting holders (and any other parties to the Registration Rights Agreement who timely agree to participate in such offering) are reasonably expected to have an aggregate offering price of at least $1,000,000. The Company is not required to prepare and file a registration statement pursuant to a Long-Form Registration for a period of not more than 90 days following receipt by the Company of a request for registration, if (i) the Company in good faith gives written notice within five days after such receipt by the Company of such request that the Company is commencing to prepare a Company-initiated registration statement, and (ii) the Company actively employs in good faith all reasonable efforts to cause such registration statement to become effective. If the Company receives a request to effect a Long-Form Registration within 90 days of the date on which a previous registration statement filed pursuant to a Long-Form Registration has become effective, the Company is not required to commence preparation of such Long-Form Registration in accordance with such request until 90 days has elapsed since such effective date. If the Company furnishes to the persons requesting registration a certificate signed by the chief executive or chief financial officer of the Company stating that the Company, in good faith, has determined that (i) there exists material non-public information about the Company which the Company has a bona fide business purpose for preserving as confidential, or (ii) is undertaking (or is about to undertake) a proposed acquisition or financing that would significantly impact the pricing of the contemplated public offering, and in each case the Company provides such persons written notice thereof promptly after the Company makes such determination, then the Company has the right to defer the filing or the declaration of effectiveness of a registration statement, for a period of not more than (A) 90 days, in the case of a Long-Form Registration, or (B) 60 days, in the case of a Short-Form Registration, after receipt of the request to register; provided, however, that the Company is not entitled to defer such filing or declaration of effectiveness more than 120 days in any 12-month period. The parties to the Registration Rights Agreement also have unlimited "piggy back" rights with respect to any registration effected by the Company for its own account or for the account of another person (other than registrations relating to sales of securities to participants in a Company stock plan or in a transaction covered by Rule 145 promulgated under the Securities Act of 1933, as amended), subject to certain cut-back provisions. The Company will be required to bear all expenses incurred in effecting any Long-Form Registration and up to six Short-Form Registrations, including the fees and disbursements of any counsel or accountant retained by the holders of more than 50% of the stock being registered, but -27- excluding underwriting discounts and brokerage fees or commissions. In addition, the Company has agreed to indemnify participants in any registration for certain liabilities, including liabilities arising under applicable securities laws, and is obligated to contribute to any damages paid by such participants if such indemnification is unavailable to such participants. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Under Section 16(a) of the Exchange Act, the Company's directors and executive officers and persons holding more than 10% of a registered class of the Company's equity securities are required to file with the SEC and to provide the Company with initial reports of ownership, reports of changes in ownership and annual reports of ownership of common stock and other equity securities of the Company. Based solely upon a review of such reports and any amendments thereto which have been furnished to the Company, the Company believes that all of such reporting persons complied with all applicable Section 16(a) filing requirements in respect of the fiscal year ended June 30, 1999, except that James R. Meckstroth inadvertently failed to timely file a Form 3 upon becoming an executive officer of the Company and each of Gerald B. Cramer, Cramer Rosenthal McGlynn, LLC and AC Israel Enterprises, Inc. inadvertently failed to timely file their Form 3s upon becoming beneficial owners of more than 10% of the Common Stock. -28- -----END PRIVACY-ENHANCED MESSAGE-----