AMENDED AND RESTATED NOTE AND EQUITY PURCHASE AGREEMENT

Exhibit 10.3

Revolving Loan Facility

Senior Term Notes

Senior Subordinated Notes

Junior Subordinated Notes

Preferred Stock

Common Stock

Warrants to Purchase Common Stock

AMENDED AND RESTATED

NOTE AND EQUITY PURCHASE AGREEMENT

by and among

IST ACQUISITIONS, INC.

IMAGING AND SENSING TECHNOLOGY CORPORATION AND
CERTAIN OF THE SUBSIDIARIES OF
IMAGING AND SENSING TECHNOLOGY CORPORATION

AS LOAN PARTIES

AND

AMERICAN CAPITAL FINANCIAL SERVICES, INC.

AS AGENT

and

THE PURCHASERS IDENTIFIED ON
ANNEX A HERETO

October 29, 2004

TABLE OF CONTENTS

TABLE OF CONTENTS
(continued)

TABLE OF CONTENTS
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AMENDED AND RESTATED NOTE AND EQUITY PURCHASE AGREEMENT

$15,000,000 Aggregate Principal Amount of Senior Term A Notes Due May 24, 2009

$7,500,000 Aggregate Principal Amount of Senior Term B Notes Due May 24, 2010

$4,000,000 Aggregate Principal Amount of Senior Term C Notes Due October 29, 2011

$7,500,000 Aggregate Principal Amount of Senior Subordinated Notes Due May 24, 2011

$1,250,000 Aggregate Principal Amount of Junior Subordinated Notes Due May 24, 2012

$5,250,000 Revolving Loan Facility

22,000 Shares Preferred Stock of Parent

10,000 Shares of Class B Common Stock of Parent

Warrants to Purchase 83,458 Shares
of Class B Common Stock of Parent

          THIS AMENDED AND RESTATED NOTE AND EQUITY PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 29, 2004, is by and among IST ACQUISITIONS, INC., a Delaware corporation (“ Parent ”), IMAGING AND SENSING TECHNOLOGY CORPORATION, a New York corporation (“ Borrower ”), IST CONAX NUCLEAR, INC., a New York corporation, I.S. TECHNOLOGY de PUERTO RICO, INC., a Delaware corporation, IMAGING AND SENSING TECHNOLOGY INTERNATIONAL CORP., a New York corporation, IST INSTRUMENTS, INC., a New York corporation, QUADTEK, INC., a Washington corporation (each a “ Subsidiary ” and collectively the “ Subsidiaries ” and together with Borrower and Parent, the “ Loan Parties ”), the securities purchasers that are now and hereafter at any time parties hereto and are listed in Annex A (or any amendment or supplement thereto) attached hereto (each a “ Purchaser ” and collectively, “ Purchasers ”), and AMERICAN CAPITAL FINANCIAL SERVICES, INC., a Delaware corporation (“ ACFS ”), as administrative and collateral agent for Purchasers (in such capacity “ Agent ”). Capitalized terms used and not defined elsewhere in this Agreement are defined in Article 1 hereof.

RECITALS

1. The parties hereto were party to a Note and Equity Purchase Agreement, dated as of May 24, 2004, as amended by Amendment No. 1 thereto, dated August 18, 2004 (the “ Existing Purchase Agreement ”), pursuant to which Parent and Borrower obtained financing from Purchasers by selling to Purchasers Senior Term A Notes, due May 24, 2009, for an aggregate amount of $15,000,000, Senior Term B Notes, due May 24, 2010, for an aggregate amount of $7,500,000, Senior Subordinated Notes, due May 24, 2011, for an aggregate amount of $7,500,000, and

Junior Subordinated Notes, due May 24, 2012, for an aggregate amount of $1,250,000 (collectively the “ Original Notes ”).

2. Purchasers have sold or contributed certain of such Notes to ACS Funding Trust I, a Delaware statutory trust, Wachovia Bank, National Association, a national banking association (“ Wachovia ”), and CoLTS Trust 2004-1, a Delaware Statutory trust (“ CoLTS ”).

3. Wachovia, by its execution hereof, ratifies and consents to Amendment No. 1 to the Existing Purchase Agreement.

4. Pursuant to a Stock Purchase Agreement (the “ Stock Purchase Agreement ”), dated May 24, 2004, by and between Parent and certain stockholders of Borrower (collectively, “ Sellers ”), Parent acquired by purchase from Sellers all of the issued and outstanding capital stock of Borrower (the “ Acquisition ”).

5. The Loan Parties sold the Original Notes to Purchasers in the aggregate amount of $31,250,000 for the purpose of financing the Acquisition.

6. The Loan Parties have entered into a revolving credit facility with Purchasers in the amount of $5,250,000 for the purpose of financing the Acquisition and providing working capital.

7. Parent has sold 22,000 shares of its Series A Redeemable Preferred Stock, $.001 par value (“ Preferred Stock ”), and 10,000 shares of its Class B Common Stock, $.001 par value (“ Class B Common Stock ”) to Purchasers.

8. In order to induce Purchasers to purchase the Preferred Stock and the Junior Subordinated Notes (as defined herein), Parent has issued and sold to Purchasers, in connection with the purchase of the Preferred Stock and the Junior Subordinated Notes, warrants exercisable for an aggregate of 81,589 and 1,869 shares of Class B Common Stock, respectively, subject to the terms and conditions set forth in this Agreement.

9. Pursuant to the Sale and Purchase Agreement of the Nuclear Business, dated of even date herewith, by and between IST Auxitrol Nuclear SAS, a wholly-owned subsidiary of Parent (“ IST France ”), and Auxitrol SA (“ Auxitrol ”), IST France has, concurrent herewith, acquired by purchase certain assets of Auxitrol (the “ Auxitrol Acquisition ”).

10. The Loan Parties, Purchasers and the Agent have agreed to amend and restate the Existing Purchase Agreement in connection with the Auxitrol Acquisition to provide for the purchase and sale of Senior Term C Notes to Purchasers for the purpose of financing the Auxitrol Acquisition, and to amend certain other terms of the Existing Purchase Agreement.

11. It is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities existing under the Existing Purchase Agreement or evidence payment of any such obligations and liabilities, that this Agreement amends and restates in its entirety the Existing Purchase Agreement, and that from and after the date hereof the Existing Purchase Agreement shall be of no further force or effect.

          NOW, THEREFORE, the parties hereto, in consideration of the premises and their mutual covenants and agreements herein set forth and intending to be legally bound hereby, covenant and agree as follows:

ARTICLE 1
DEFINITIONS

          1.1 Certain Definitions . In addition to other words and terms defined elsewhere in this Agreement, the following words and terms shall have the meanings set forth below (and such meanings shall be equally applicable to both the singular and plural form of the terms defined, as the context may require):

          “ ACAS ” shall mean American Capital Strategies, Ltd., a Delaware corporation.

          “ ACFS ” shall have the meaning assigned to such term in the preamble hereto.

          “ Additional Closing ” shall mean the closing of the purchase and sale of the Additional Securities pursuant to this Agreement.

          “ Additional Closing Date ” shall have the meaning assigned to such term in Section 2.8(b) hereof.

          “ Additional Securities ” shall mean the Senior Term C Notes.

          “ Advance Rates ” shall have the meaning assigned to such term in Section 2.3(a) hereof.

          “ Affiliate ” shall mean with respect to any Person, any other Person that is directly or indirectly controlling, controlled by or under common control with such Person or entity or any of its Subsidiaries, and the term “control” (including the terms “controlled by” and “under common control with”) means having, directly or indirectly, the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or by contract or otherwise. Without limiting the foregoing, the ownership of ten percent (10%) or more of the voting securities of a Person shall be deemed to constitute control. Notwithstanding anything to the contrary herein, neither Purchasers nor any of their respective Affiliates shall be deemed to be Affiliates of the Loan Parties by virtue of the transactions contemplated in this Agreement.

           “Acquisition” shall have the meaning assigned to such term in the Recitals hereto.

          “ Agent ” shall have the meaning assigned to such term in the preamble hereto and any successor agent provided for hereunder.

          “ Agreement ” shall mean this Amended and Restated Note and Equity Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

          “ Amendment No. 1 to the Existing Purchase Agreement ” shall mean that certain Amendment, dated August 18, 2004, to the Existing Purchase Agreement.

          “ Appraised Value ” shall mean the fair market value of a security on a control premium basis without discount for limitations on voting rights, minority interests, illiquidity or restrictions on transfer, as determined by an appraisal performed at the expense of Parent by any of (x) Houlihan, Lokey, Howard & Zukin, (y) Duff & Phelps or (z) Willamette Management Associates, or any successor to such firms, as Parent shall elect; provided that such appraiser shall be directed to determine the value of such securities as soon as practicable, but in no event later than thirty (30) days from the date of its selection and for such purposes all rights, options and warrants to subscribe for or purchase, and other securities convertible into or exchangeable for Common Stock of Parent shall be deemed to be exercised, exchanged or converted, and the underlying shares of Common Stock of Parent shall be deemed outstanding.

          “ Auxitrol ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Auxitrol Acquisition ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Borrowing Base Certificate ” shall have the meaning assigned to such term in Section 2.3(b) hereof.

          “ Business ” shall mean the principal business of the Loan Parties as set forth in Section 5.1(b) herein and as such shall continue to be conducted following the purchase and sale of the Securities.

          “ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which banking institutions in New York or Maryland are authorized or required by law to close.

          “ By-laws ” shall mean the by-laws, partnership agreement, operating agreement or analogous instrument governing the operations of each of the Loan Parties, as applicable, including all amendments and supplements thereto.

          “ Capital Expenditures ” shall mean for any period of determination the sum of capital expenditures and payments under Capitalized Leases of the Loan Parties for such period determined and consolidated in accordance with GAAP.

          “ Capitalized Leases ” shall mean, with respect to any Person, leases of (or other agreements conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee that, in accordance with GAAP (as defined in Section 1.2 hereof), either would be required to be classified and accounted for as capital leases on a balance sheet of such Person or otherwise be disclosed as such in a note to such balance sheet.

          “ Cash Flow Prepayments ” shall have the meaning assigning to such term in Section 3.7(b) hereof.

          “ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9604, et seq.), as amended, and rules, regulations, standards guidelines and publications issued thereunder.

          “ Change of Control ” shall mean the occurrence of any of the following:

          (a) any transaction or series of related transactions resulting in the sale or issuance of securities or any rights to securities of Parent by Parent representing in the aggregate more than fifty percent (50%) of its issued and outstanding voting securities, on a fully diluted basis, or any transaction or series of related transactions resulting in the sale, transfer, assignment or other conveyance or disposition of any securities or any rights to securities of Parent by any holder or holders thereof representing in the aggregate more than 50% of the issued and outstanding voting securities of Parent on a fully diluted basis and the receipt of any consideration in connection therewith;

          (b) a merger, consolidation, reorganization, recapitalization or share exchange (whether or not the Parent is the surviving and continuing corporation) in which the stockholders of Parent immediately prior to such transaction own, as a result of and receive in exchange for securities of Parent owned by them (whether alone or together with cash, property or other securities), or the issuance by Parent of securities to stockholders of another Person or Persons in such transactions, cash, property or securities of the resulting or surviving entity and as a result thereof Persons who were holders of voting securities of Parent and Underlying Common Stock hold less than 50% of the capital stock, calculated on a Fully Diluted Basis, of the resulting corporation entitled to vote in the election of directors;

          (c) a sale, transfer or other disposition of 30% or more of the assets of the Loan Parties, on a consolidated basis;

          (d) any sale or issuance or series of sales or issuances of the Common Stock or any other voting security (or security convertible into, exchangeable for, or exercisable for any other voting security) of Parent within a 12-month period that results in a transfer of more than 50% of the issued and outstanding shares of voting stock of Parent or a transfer of more than 50% of the voting power of Parent; and

          (e) the initial public offer of securities by Parent other than an offering of securities for an employee benefit plan on SEC Form S-8 or a successor form.

          “ Charter Documents ” shall mean the Articles of Incorporation, Certificate of Incorporation, certificate of limited partnership, certificate of limited liability company, charter or analogous organic instrument filed with the appropriate Governmental Authorities of each of the Loan Parties, as applicable, including all amendments and supplements thereto.

          “ Closing ” shall mean the closing of the purchase and sale of the Original Securities pursuant to this Agreement.

          “ Closing Date ” shall have the meaning assigned to such term in Section 2.8(a) hereof.

          “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

          “ Collateral Access Agreement ” shall mean an agreement in form and substance reasonably satisfactory to the Agent pursuant to which a mortgagee or lessor of real property on which collateral is stored or otherwise located, or a warehouseman, processor or other bailee of Inventory, acknowledges the Liens of the Agent and waives any Liens held by such Person on such property and, in the case of any such agreement with a mortgagee or lessor, permits the Agent access to and use of such real property for a reasonable amount of time following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any collateral stored or otherwise located thereon.

          “ CoLTS ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Common Stock ” shall mean the Class B Common Stock and Class A Common Stock of Parent, par value $.001 per share.

          “ Condition ” shall mean any condition that results in or otherwise relates to any Environmental Liabilities.

          “ Controlled Group ” shall mean the “controlled group of corporations” as that term is defined in Section 1563 of the Internal Revenue Code of 1986, as amended, of which the Loan Parties are a part from time to time.

          “ Copyright Licenses ” shall mean any agreement, whether written or oral, providing for the grant by or to any Loan Party of any right to use any Copyright.

          “ Copyrights ” shall mean all copyrights in published and unpublished works, and all applications, registrations and renewals relating thereto.

          “ Covered Taxes ” shall have the meaning assigned to such term in Section 3.9 hereof.

          “ Customer ” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Loan Party, pursuant to which such Loan Party is to deliver any personal property or perform any services.

          “ Debt to EBITDA Ratio ” shall mean the ratio of (i) Indebtedness of the Loan Parties, on a consolidated basis, as of a particular Measurement Date, to (ii) the EBITDA for the Measurement Period ending on such Measurement Date.

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

          “ Demand Registration ” shall have meaning assigned to such term in Section 12.2(a) hereof.

          “ EBITDA ” shall mean for any Measurement Period, without duplication, the total of the following for the Loan Parties on a consolidated basis, each calculated for such period: Net Income plus interest expense, plus taxes, plus depreciation, amortization and Management Fees, as adjusted by the Board of Directors of Parent for non-recurring charges.

          “ Eligible Inventory ” means Inventory of any Loan Party which meets each of the following requirements:

          (a) it (i) is subject to a perfected Lien in favor of the Agent and (ii) is not subject to any other assignment, claim or Lien;

          (b) it is salable;

          (c) it is in the possession and control of any Loan Party and it is stored and held in facilities owned by a Loan Party or, if such facilities are not so owned, the Agent is in possession of a Collateral Access Agreement with respect thereto;

          (d) it is not Inventory produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provisions contained in Title 29 U.S.C. §215;

          (e) it is not subject to any agreement which would restrict the Agent’s ability to sell or otherwise dispose of such Inventory;

          (f) it is located in the United States or in any territory or possession of the United States that has adopted Article 9 of the Uniform Commercial Code;

          (g) it is not “in transit” to any Loan Party or held by any Loan Party on consignment; provided , that Inventory at or in transit from foreign suppliers for which a Letter of Credit has been issued in support of such purchase shall be deemed eligible hereunder; and

          (h) the Agent shall not have determined in its discretion that it is unacceptable due to age, type, category, quality, quantity and/or any other reason whatsoever.

Inventory which is at any time Eligible Inventory but which subsequently fails to meet any of the foregoing requirements shall forthwith cease to be Eligible Inventory.

          “ Eligible Receivables ” shall mean, with respect to any Loan Party, each Receivable of such Loan Party arising in the ordinary course of such Loan Party’s business and that Agent, in its sole reasonable credit judgment, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time reasonably deem appropriate. A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent. In addition, no Receivable shall be an Eligible Receivable if:

          (a) it arises out of a sale made by such Loan Party to an Affiliate of the Loan Party or to a Person controlled by an Affiliate of the Loan Party;

          (b) it is due or unpaid more than ninety (90) days after the original invoice date;

          (c) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

          (d) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

          (e) the sale to the Customer is on a bill-and-hold unless the invoice is acknowledged by the Customer (provided that the value of such Receivables shall not exceed $50,000), guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

          (f) Agent believes, in its sole judgment, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

          (g) except as permitted under subsection (e) of this definition, the goods giving rise to such Receivable have not been shipped and delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by such Loan Party and accepted by the Customer or the Receivable otherwise does not represent a final sale;

          (h) the Receivables of the Customer exceed a credit limit determined by Agent, in its sole discretion, to the extent such Receivable exceeds such limit;

          (i) the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier of any Loan Party or the Receivable is contingent in any respect or for any reason;

          (j) any Loan Party has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

          (k) except as permitted under subsection (e) of this definition, shipment of the merchandise or the rendition of services has not been completed;

          (l) any return, rejection or repossession of the merchandise has occurred;

          (m) such Receivable is not payable to such Loan Party;

          (n) Receivables with respect to which the Customer is located in any state denying creditors access to its courts in the absence of a Notice of Business Activities Report or other similar filing, unless such Loan Party is incorporated under the laws of such state or has either qualified as a foreign corporation authorized to transact business in such state or has filed a Notice of Business Activities Report or similar filing with the applicable state agency for the then current year; or

          (o) such Receivable is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

          Notwithstanding the foregoing, the term Eligible Receivables shall include: (i) fifty percent (50%) of POC Receivables (up to a maximum of twenty percent (20%) of the Revolving Loan Commitment Amount); and (ii) eighty-five percent (85%) of the accounts receivable of IS&T Canada, Inc. (to the extent otherwise “Eligible Receivables”).

          “ Environmental Laws ” shall mean any Laws that address, are related to or are otherwise concerned with environmental, health or safety issues, including any Laws relating to any emissions, releases or discharges of Pollutants into ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling, clean-up or control of Pollutants or any exposure or impact on worker health and safety.

          “ Environmental Liabilities ” shall mean any obligations or liabilities (including any claims, suits or other assertions of obligations or liabilities) that are:

          (a) related to environmental, health or safety issues (including on-site or off-site contamination by Pollutants of surface or subsurface soil or water, and occupational safety and health); and

          (b) based upon or related to (i) any provision of past, present or future United States or foreign Environmental Law (including CERCLA and RCRA) or common law, or (ii) any judgment, order, writ, decree, permit or injunction imposed by any court, administrative agency, tribunal or otherwise.

          The term “Environmental Liabilities” includes: (i) fines, penalties, judgments, awards, settlements, losses, damages (including foreseeable and unforeseeable consequential damages), costs, fees (including attorneys’ and consultants’ fees), expenses and disbursements; (ii) defense and other responses to any administrative or judicial action (including claims, notice letters, complaints, and other assertions of liability); and (iii) financial responsibility for (1) cleanup costs and injunctive relief, including any Removal, Remedial or other Response actions, and natural resource damages, and (2) any other compliance or remedial measures.

          “ EPA ” shall mean the United States Environmental Protection Agency and any governmental body or agency succeeding to the functions thereof.

          “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as the same may from time to time be amended, and the rules and regulations of any governmental agency or authority, as from time to time in effect, promulgated thereunder.

          “ Event of Default ” shall mean any of the events of default described in Section 8.1 hereof.

          “ Excess Cash Flow ” shall mean for any Measurement Period, on a consolidated basis, calculated in accordance with GAAP: (a) EBITDA for such Measurement Period, minus (b) the sum of (i) Capital Expenditures made by the Loan Parties during such period in cash; (ii) scheduled principal payments made by the Loan Parties with respect to Indebtedness; (iii) amounts paid in cash by the Loan Parties during such period for taxes and interest; (iv) net changes in working capital of the Loan Parties and (v) amounts paid in cash by the Loan Parties during such period with respect to any Capitalized Leases.

          “ Executive Officer ” shall mean the president or the chief financial officer of the Borrower and Parent.

          “ Existing Purchase Agreement ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Fair Market Value ” of a security shall mean (i) if determined in connection with a sale of substantially all of the assets of or securities issued by Parent to an unrelated third party, the value to be realized by the holder of the security as a result thereof, (ii) otherwise, if available, the Market Price thereof, and (iii) otherwise, if Market Price is not available, the Appraised Value.

          “ Financial Projections ” shall have the meaning assigned to such term in Section 5.1(c)(ii) hereof.

          “ Financial Statements ” shall have the meaning assigned to such term in Section 5.1(c)(i) hereof.

          “ Financing Statements ” shall have the meaning assigned to such term in Section 4.1(c) hereof.

          “ First Amendment to Intercreditor and Subordination Agreement ” shall mean the Amendment, dated as of October 29, 2004, to the Intercreditor and Subordination Agreement, dated as of May 25, 2004, by and among Wachovia, CoLTS, ACAS, ACS Funding Trust I, Agent and the Loan Parties.

          “ Fiscal Year ” or “ fiscal year ” shall mean each twelve month period ending on April 30 of each year.

          “ Fixed Charge Coverage Ratio ” shall mean for a particular Measurement Period, the ratio of EBITDA of the Loan Parties less Capital Expenditures on a consolidated basis during such Measurement Period to the Fixed Charges during such Measurement Period.

          “ Fixed Charges ” shall mean, for any period, and each calculated for such period (without duplication) on a consolidated basis, the sum of (a) cash interest expense of the Loan Parties; plus (b) scheduled payments of principal with respect to all Indebtedness of the Loan Parties; plus (c) any cash payment or income or franchise taxes included in the determination of Net Income, excluding any provision for deferred taxes; plus (d) payment of deferred taxes accrued in any prior period.

          “ French Pledge Agreement ” shall have the meaning assigned to such term in Section 4.1(c) hereof.

          “ Fully Diluted Basis ” shall mean the total number of shares of Common Stock, which are issued and outstanding, plus the total number of shares of Common Stock which would be issued and outstanding assuming the exercise of all outstanding options, warrants or rights to purchase Common Stock and the conversion of all outstanding securities.

          “ GAAP ” shall have the meaning assigned to such term in Section 1.2 hereof.

          “ Governmental Authorities ” shall mean any federal, state or municipal court or other governmental department, commission, board, bureau, agency or instrumentality, governmental or quasi-governmental, domestic or foreign.

          “ Guaranty ” shall mean any guaranty of the payment or performance of any Indebtedness or other obligation and any other arrangement whereby credit is extended to one obligor on the basis of any promise of another Person, whether that promise is expressed in terms of an obligation to pay the Indebtedness of such obligor, or to purchase an obligation owed by such obligor, or to purchase goods and services from such obligor pursuant to a take-or-pay contract, or to maintain the capital, working capital, solvency or general financial condition of such obligor, whether or not any such arrangement is reflected on the balance sheet of such other Person, firm or corporation, or referred to in a footnote thereto, but shall not include endorsements of items for collection in the ordinary course of business. For the purpose of all computations made under this Agreement, the amount of a Guaranty in respect of any obligation shall be deemed to be equal to the maximum aggregate amount of such obligation or, if the Guaranty is limited to less than the full amount of such obligation, the maximum aggregate potential liability under the terms of the Guaranty.

          “ Holder ” shall have the meaning assigned to such term in Section 10.1 hereof.

          “ Indebtedness ” shall mean, for any Person at the time of any determination, without duplication, all obligations, contingent or otherwise, of such Person that, in accordance with GAAP, should be classified upon the balance sheet of such Person as indebtedness, but in any event including: (i) all obligations for borrowed money, (ii) all obligations arising from installment purchases of property or representing the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current liabilities incurred in the ordinary course of business on terms customary in the trade), (iii) all obligations evidenced by notes, bonds, debentures, acceptances or instruments, or arising out of letters of credit or bankers’ acceptances issued for such Person’s account, (iv) all obligations, whether or not assumed, secured by any

Lien or payable out of the proceeds or production from any property or assets now or hereafter owned or acquired by such Person, (v) all obligations for which such Person is obligated pursuant to a Guaranty, (vi) the capitalized portion of lease obligations under Capitalized Leases, (vii) all obligations for which such Person is obligated pursuant to any Interest Rate Protection Agreements or derivative agreements or arrangements, and (viii) all obligations of such Person upon which interest charges are customarily paid or accrued.

          “ Intellectual Property Collateral ” shall mean collectively all Patents, Trademarks and Copyrights of the Loan Parties and all Trademark Licenses, Patent Licenses, and Copyright Licenses.

          “ Interest Coverage Ratio ” means, for any Measurement Date, the ratio of (a) EBITDA for such Measurement Period over (b) cash interest expense less cash interest income of Loan Parties during such Measurement Period.

          “ Interest Rate Protection Agreement ” shall mean any interest rate swap, interest rate cap, interest rate collar or other interest rate hedging agreement or arrangement.

          “ Inventory ” shall mean, with respect to any Loan Party, now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Loan Party’s Business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.

          “ Inventory Advance Rate ” shall have the meaning assigned to such term in Section 2.3(a)(ii) hereof.

          “ Investment ” as applied to any Person shall mean the amount paid or agreed to be paid or loaned, advanced or contributed to other Persons, and in any event shall include, without limitation, (i) any direct or indirect purchase or other acquisition of any notes, obligations, instruments, stock, securities or ownership interest (including partnership interests and joint venture interests) and (ii) any capital contribution to any other Person.

          “ Investment Banking Agreement ” shall mean that certain investment banking agreement between Borrower and ACFS dated as of the Closing Date.

          “ IP Collateral Assignments ” shall have the meaning assigned to such term in Section 4.1(c) hereof.

          “ IRS ” shall mean the Internal Revenue Service and any governmental body or agency succeeding to the functions thereof.

          “ IST France ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Junior Cash Interest ” shall have the meaning assigned to such term in Section 3.1(c) hereof.

          “ Junior Origination Fee ” shall mean a fee of $1,226,250 to be paid by the Loan Parties to Purchasers or their designee in consideration of the Subordinated Notes, the Preferred Stock and the Class B Common Stock.

          “ Junior PIK Interest ” shall have the meaning assigned to such term in Section 3.1(c) hereof.

          “ Junior Subordinated Notes ” shall have the meaning assigned to such term in Section 2.2(b) hereof.

          “ Junior Subordinated Debt Warrants ” shall have the meaning assigned to such term in Section 2.4 hereof.

          “ Laws ” shall mean all U.S. and foreign federal, state or local statutes, laws, rules, regulations, ordinances, codes, policies, rules of common law, and the like, now or hereafter in effect, including any judicial or administrative interpretations thereof, and any judicial or administrative orders, consents, decrees or judgments.

          “ LIBOR Business Day ” means a business day on which banks in the city of London are generally open for interbank or foreign exchange transactions.

          “ LIBOR Period ” means each month commencing on the Closing Date, or the Additional Closing Date, in the case of the Senior Term C Notes, (or if the Closing Date (or Additional Closing Date) is not a LIBOR Business Day, the next succeeding LIBOR Business Day) and ending one month thereafter; provided , that the foregoing provision relating to LIBOR Periods is subject to the following:

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

          (b) any LIBOR Period that would otherwise extend beyond the maturity date of the Senior Term Notes shall end on such date; and

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

          “ LIBOR Rate ” means, for each LIBOR Period, a rate of interest determined by Agent, equal to the rate of interest that under current practice is listed as the one month London Interbank Offered Rate as of the commencement of such LIBOR Period under the heading “Money Rates” in the Eastern Edition of The Wall Street Journal (and should such practice

change, such other indication of the prevailing LIBOR Rate as may reasonably be chosen by the Required Purchasers).

          “ Lien ” shall mean any security interest, pledge, bailment, mortgage, hypothecation, deed of trust, conditional sales and title retention agreement (including any lease in the nature thereof), charge, encumbrance or other similar arrangement or interest in real or personal property, now owned or hereafter acquired, whether such interest is based on common law, statute or contract.

          “ Loan Parties ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Manage ” and “ Management ” shall mean generation, production, handling, distribution, processing, use, storage, treatment, operation, transportation, recycling, reuse and/or disposal, as those terms are defined in CERCLA, RCRA and other Environmental Laws (including as those terms are further defined, construed, or otherwise used in rules, regulations, standards, guidelines and publications issued pursuant to, or otherwise in implementation of, such Environmental Laws).

           “Management Fee” shall have the meaning assigned to such term in Section 7.1(k) hereof.

          “ Market Price ” of any security shall mean the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed, or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of each day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the NASDAQ System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of thirty (30) days consisting of the day as of which “Market Price” is being determined and the twenty-nine (29) consecutive business days prior to such day. If at any time such security is not listed on any securities exchange or quoted in the NASDAQ System or the over-the-counter market, the “Market Price” shall be the fair value thereof determined jointly by Parent and the Holders of Warrants representing a majority of the shares of Common Stock of Parent obtainable upon exercise of the Warrants. If such parties are unable to reach agreement within ten (10) days, then the Market Price shall be deemed not to be available.

          “ Material Adverse Change ” shall mean any change that has a Material Adverse Effect.

          “ Material Adverse Effect ” shall mean a material adverse effect on the business, properties, assets, liabilities or condition (financial or otherwise) of the Loan Parties, taken as a whole.

          “ Measurement Date ” shall have the meaning assigned to such term in Section 7.3 hereof.

          “ Measurement Period ” shall mean the twelve month period ending on a Measurement Date, or as otherwise provided in Section 7.3 .

          “ Multiemployer Plan ” shall mean a multiemployer plan (within the meaning of Section 3(37) of ERISA) that is maintained for the benefit of the employees of the Loan Parties or any member of the Controlled Group.

          “ Net Income ” shall mean, for any period, the net income (or loss) of the Loan Parties on a consolidated basis for such period, after deduction of all expenses, taxes and other proper charges, determined in accordance with GAAP, for such period taken as a single accounting period.

          “ Notes ” shall mean, collectively, the Senior Term Notes, the Senior Subordinated Notes, the Junior Subordinated Notes and the Revolving Notes.

          “ Option Plan ” shall mean the IST Acquisitions, Inc. 2004 Option Plan.

          “ Options ” shall mean the options to purchase shares of Common Stock under the Option Plan and, where the context requires, any shares of restricted stock issued upon exercise thereof.

          “ Original Notes ” shall mean the Original Senior Term Notes, the Senior Subordinated Notes, the Junior Subordinated Notes and the Revolving Notes.

          “ Original Securities ” shall mean the Original Notes, the Preferred Stock, the Common Stock, and any Common Stock issuable upon exercise of the Warrants.

          “ Original Senior Term Notes ” shall have the meaning assigned to such term in Section 2.1(b) hereof.

          “ Other Subordinated Junior Notes ” shall have the meaning assigned to such term in Section 13.4 hereof.

          “ Other Subordinated Securities ” shall have the meaning assigned to such term in Section 13.4 hereof.

          “ Other Taxes ” shall have the meaning assigned to such term in Section 3.9 hereof.

          “ Patent Licenses ” shall mean all agreement, whether written or oral, providing for the grant by or to the Loan Parties of any right to use any Patent.

          “ Patents ” shall mean (a) all patents now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, Canada, or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (b) the right to obtain all renewals thereof.

          “ Parent ” shall have the meaning assigned to such term in the preamble hereto.

          “ Payment Default ” shall mean the occurrence of an event of default under the terms of particular Indebtedness as a result of the failure to pay interest or principal on such Indebtedness beyond any applicable cure period.

          “ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any other governmental agency, department or instrumentality succeeding to the functions thereof.

          “ Permitted Liens ” shall have the meaning assigned to such term in Section 7.2(b) hereof.

          “ Person ” shall mean any individual, partnership, limited partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity or department, agency or political subdivision thereof.

          “ Piggyback Registration ” shall have the meaning assigned to such term in Section 12.1(a).

          “ PIK Interest ” shall mean Junior PIK Interest or Senior PIK Interest, as applicable.

          “ Plan ” shall mean any employee benefit plan (within the meaning of Section 3(3) of ERISA), other than a Multiemployer Plan, established or maintained by any of the Loan Parties or any member of the Controlled Group.

          “ Pledge Agreement ” shall have the meaning assigned to such term in Section 4.1(c) hereof.

          “ POC Receivables ” shall mean percentage-of-completion receivables.

          “ Pollutant ” shall include any “hazardous substance” and any “pollutant or contaminant” as those terms are defined in CERCLA; any “hazardous waste” as that term is defined in RCRA; and any “hazardous material” as that term is defined in the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), as amended (including as those terms are further defined, construed, or otherwise used in rules, regulations, standards, guidelines and publications issued pursuant to, or otherwise in implementation of, said Environmental Laws); and including without limitation any petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, polychlorinated biphenyls (PCBs), dioxins, dibenzofurans, heavy metals, and radon gas; and including any other substance or material that is reasonably determined to present a threat, hazard or risk to human health or the environment.

          “ Preferred Stock ” shall have the meaning assigned to such term in the Recitals hereof.

          “ Preferred Stock Warrants ” shall have the meaning assigned to such term in Section 2.4 hereof.

          “ Prime Rate ” shall mean the rate of interest that under current practice is listed as such under the heading “Money Rates” in the Eastern Edition of The Wall Street Journal , and if a range of rates is listed, the highest such rate, and should such practice change, such other indication of the prevailing prime rate of interest as may reasonably be chosen by Required Purchasers.

          “ Properties and Facilities ” shall have the meaning assigned to such term in Section 5.1(q) hereof.

          “ Proprietary Rights ” shall mean all right, title, and interest in the following intellectual property, including both statutory and common law rights: (i) copyrights in published and unpublished works, and all applications, registrations and renewals relating thereto; (ii) registered or unregistered trademarks, service marks, domain names, logos, trade dress and other source or business identifiers, and the goodwill associated therewith; (iii) patents, patent applications, and other patent or industrial property rights in any country; and (iv) trade secrets, confidential or proprietary information, inventions, ideas, designs, concepts, compilations of information, methods, techniques, procedures, processes, and know-how, whether or not patentable patents, trademarks, trade names, service marks, copyrights, inventions, production methods, licenses, formulas, know-how and trade secrets, regardless of whether such are registered with any Governmental Authorities, including applications therefor.

          “ Purchase Documents ” shall mean this Agreement, the Notes, the Warrants and the Security Documents and all other agreements, instruments and documents delivered in connection therewith as any or all of the foregoing may be supplemented or amended from time to time.

          “ Purchaser ” shall have the meaning assigned to such term in the preamble hereto and in Section 6.2 hereof.

          “ Put Option ” shall have the meaning assigned to such term in Section 10.1 hereof.

          “ Put Option Closing ” shall have the meaning assigned to such term in Section 10.5 hereof.

          “ Put Price ” shall have the meaning assigned to such term in Section 10.2 hereof.

          “ Put Shares ” shall have the meaning assigned to such term in Section 10.2 hereof.

          “ RCRA ” shall mean the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), as amended, and all rules, regulations, standards, guidelines, and publications issued thereunder.

          “ Receivables ” shall mean all of such Loan Party’s accounts, contract rights, instruments (including those evidencing indebtedness owed to such Loan Party by its Affiliates), documents, chattel paper, general intangibles relating to accounts, drafts and acceptances, and all other forms of obligations owing to such Loan Party arising out of or in connection with the sale

or lease of Inventory or the rendition of services, all guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.

          “ Receivables Advance Rate ” shall have the meaning assigned to such term in Section 2.3(a).

          “ Registrable Securities ” shall mean any shares of Common Stock of Parent purchased upon the exercise of any Warrant and any shares of Common Stock of Parent purchased pursuant to Article 11 hereof, and any shares of Common Stock of Parent now owned or hereafter acquired by any Purchaser.

          “ Removal ,” “ Remedial ” and “ Response ” actions shall include the types of activities “covered” by CERCLA, RCRA, and other comparable Environmental Laws, and whether the activities are those that might be taken by a government entity or those that a government entity or any other person might seek to require of waste generators, handlers, distributors, processors, users, storers, treaters, owners, operators, transporters, recyclers, reusers, disposers, or other persons under “removal,” “remedial,” or other “response” actions.

          “ Reportable Event ” shall mean any of the events that are reportable under Section 4043 of ERISA and the regulations promulgated thereunder, other than an occurrence for which the thirty (30) day notice contained in 29 C.F.R. § 2615.3(a) is waived.

          “ Request for Borrowing ” shall have the meaning assigned to such term in Section 2.3(b) hereof.

          “ Required Purchasers ” shall mean, at any time, Purchasers holding a pro rata percentage of the outstanding principal amount of the Notes aggregating at least 66-2/3% at such time.

          “ Revolving Loan ” shall have the meaning assigned to such term in Section 2.3 hereof.

           “Revolving Loan Commitment” shall mean the amount of $5,250,000.

          “ Revolving Loan Commitment Fee ” shall mean a fee of $105,000 to be paid by the Loan Parties to Purchasers or their designee in consideration of the Revolving Loan Commitment.

          “ Revolving Loan Termination Date ” shall have the meaning assigned to such term in Section 2.3(a) hereof.

          “ Revolving Notes ” shall have the meaning assigned to such term in Section 2.3(a) hereof.

          “ SEC ” shall mean the Securities and Exchange Commission and any governmental body or agency succeeding to the functions thereof.

          “ Securities ” shall mean the Notes, the Warrants, the Preferred Stock, the Common Stock and the Common Stock issuable upon exercise of the Warrants.

          “ Securities Act ” shall mean the Securities Act of 1933, as amended.

          “ Securities Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

          “ Security Agreement ” shall have the meaning assigned to such term in Section 4.1(c) hereof.

          “ Security Documents ” shall mean the Security Agreement, the IP Collateral Assignments, the Pledge Agreement, the French Pledge Agreement, the Financing Statements, and all other documents, instruments and other materials necessary to create or perfect the security interests created pursuant to the Security Agreement.

           “Senior Cash Interest” shall have the meaning assigned to such term in Section 3.1(b).

          “ Senior Loans ” shall mean, collectively, the Revolving Loan and Senior Term Loans.

          “ Senior Note Payment Default ” shall have the meaning assigned to such term in Section 13.2 hereof.

          “ Senior Note Covenant Default ” shall have the meaning assigned to such term in Section 13.2 hereof.

          “ Senior Origination Fee ” shall mean a fee of $525,000 to be paid by the Loan Parties to Purchasers or their designee in consideration of the Senior Loans (other than the Senior Term C Loan).

          “ Senior PIK Interest ” shall have the meaning assigned to such term in Section 3.1(b) hereof.

          “ Senior Subordinated Notes ” shall have the meaning assigned to such term in Section 2.2(a) hereof.

          “ Senior Subordinated Note Payment Default ” shall mean a Payment Default on the Senior Subordinated Notes.

          “ Senior Term Loan A ” shall have the meaning assigned to such term in Section 2.1(a) hereof.

          “ Senior Term Loan B ” shall have the meaning assigned to such term in Section 2.1(b) hereof.

          “ Senior Term Loan C ” shall have meaning assigned to such term in Section 2.1(c) hereof.

          “ Senior Term Loans ” shall have the meaning assigned to such term in Section 2.1(b) hereof.

          “ Senior Term A Notes ” shall have the meaning assigned to such term in Section 2.1(a) hereof.

          “ Senior Term B Notes ” shall have the meaning assigned to such term in Section 2.1(b) hereof.

          “ Senior Term C Notes ” shall have the meaning assigned to such term in Section 2.1(c) hereof.

          “ Senior Term C Closing Fee ” shall mean a fee of $120,000 to be paid by the Loan Parties to ACFS in consideration of the Senior Term C Notes.

          “ Senior Term Notes ” shall have the meaning assigned to such term in Section 2.1(c) hereof.

          “ Stockholders Agreement ” shall have the meaning assigned to such term in Section 4.1(f) hereof.

          “ Structuring Fee ” shall mean a fee of $1,250,000 payable by the Loan Parties to ACFS in consideration of the structuring of the financing contemplated hereby.

          “ Subject Securities ” shall mean the Warrants, any shares of Common Stock of Parent purchased upon the exercise of any Warrant and any shares of Common Stock of Parent purchased pursuant to Article 11 hereof.

          “ Subordinated Notes ” shall have the meaning assigned to such term in Section 2.2(b) hereof.

          “ Subsidiary ” of any corporation shall mean any other corporation or limited liability company of which the outstanding capital stock possessing a majority of voting power in the election of directors (otherwise than as the result of a default) is owned or controlled by such corporation directly or indirectly through Subsidiaries.

          “ Taxes ” shall have the meaning assigned to such term in Section 3.9 hereof.

          “ Termination and Release Agreement ” shall mean that Termination and Release Agreement, dated May 25, 2004, between JPMorgan Chase Bank and Borrower, as amended and supplemented from time to time.

          “ Trademark Licenses ” shall mean any agreement, whether written or oral, providing for the grant by or to any Loan Party of any right to use any Trademark.

          “ Trademarks ” shall mean (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office, the Canadian Intellectual Property Office or in any similar office or agency of the United States, Canada, any state, any province or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (b) the right to obtain all renewals and extensions thereof.

          “ Transaction Documents ” shall have the meaning assigned to such term in Section 5.1(f) hereof.

          “ Transactions ” shall mean the incurrence of debt and the issuance of securities in connection therewith, as contemplated by this Agreement, the Notes and all other agreements contemplated hereby and thereby.

          “ Underlying Common Stock ” shall mean (i) the Common Stock of Parent issued or issuable upon exercise of the Warrants and (ii) any equity securities issued or issuable with respect to the securities referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

          “ Unlocking Offer ” shall have the meaning assigned to such term in Section 10.6 hereof.

          “ UST ” shall mean an underground storage tank, including as that term is defined, construed and otherwise used in RCRA and in rules, regulations, standards, guidelines and publications issued pursuant to RCRA and comparable state and local laws.

          “ Wachovia ” shall have the meaning assigned to such term in the Recitals hereto.

          “ Warrants ” shall have the meaning assigned to such term in Section 2.4 hereof.

          “ Warrant Shares ” shall mean the shares of Common Stock issued or issuable upon exercise of the Warrants.

          1.2 Accounting Principles . The character or amount of any asset, liability, capital account or reserve and of any item of income or expense to be determined, and any consolidation or other accounting computation to be made, and the construction of any definition containing a financial term, pursuant to this Agreement shall be determined or made in accordance with generally accepted accounting principles in the United States of America consistently applied (“ GAAP ”), unless such principles are inconsistent with the express requirements of this Agreement.

          1.3 Other Definitional Provisions; Construction . Whenever the context so requires, neuter gender includes the masculine and feminine, the singular number includes the plural and vice versa. 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 it any particular provision of this agreement, and references to section, article, annex, schedule, exhibit and like references are references to this Agreement unless otherwise specified. A Default or Event of Default shall “continue” or be “continuing” until such Default or Event of Default has been cured or waived by Agent and Purchasers. References in this Agreement to any Persons shall include such Persons, successors and permitted assigns. Other terms contained in this Agreement (which are not otherwise specifically defined herein) shall have meanings provided in Article 9 of the New York Uniform Commercial Code on the date hereof to the extent the same are used or defined therein. Whenever the context so requires, the term “Loan Parties” shall be deemed to include any direct or indirect Subsidiary of Parent. By way of example, references to the consolidated financial position of the Loan Parties shall be deemed to include the financial results of each of Parent’s direct and indirect Subsidiaries which are included in the Financial Statements.

ARTICLE 2
ESTABLISHMENT OF REVOLVING LOAN FACILITY
AND ISSUE AND SALE OF SECURITIES

          2.1 Senior Term Loans .

          (a) Subject to the terms and conditions set forth in this Agreement, Purchasers agree to make a loan (“ Senior Term Loan A ”) to the Loan Parties on the Closing Date in the principal amount of $15,000,000. From and after Closing, the Senior Term Loan A shall be evidenced by one or more promissory notes made by the Loan Parties in favor of Purchasers in the form attached hereto as Exhibit A-1.1 (together with any promissory notes issued in substitution therefor pursuant to Sections 6.3 and 6.4, the “ Senior Term A Notes ”) to be delivered by the Loan Parties at the Closing.

          (b) Subject to the terms and conditions set forth in this Agreement, Purchasers agree to make a loan (“ Senior Term Loan B ”) to the Loan Parties on the Closing Date in the principal amount of $7,500,000. From and after Closing, the Senior Term Loan B shall be evidenced by one or more promissory notes made by the Loan Parties in favor of Purchasers in the form attached hereto as Exhibit A-1.2 (together with any promissory notes issued in substitution therefor pursuant to Sections 6.3 and 6.4, the “ Senior Term B Notes ”, and together with the Senior Term A Notes, the “ Original Senior Term Notes ”) to be delivered by the Loan Parties at the Closing.

          (c) Subject to the terms and conditions set forth in this Agreement, Purchasers agree to make a loan (“ Senior Term Loan C ” and together with Senior Term Loan A and the Senior Term Loan B the “ Senior Term Loans ”) in the principal amount of $4,000,000. From and after the Additional Closing, the Senior Term Loan C shall be evidenced by one or more promissory notes made by the Loan Parties in favor of Purchasers in the form attached hereto as Exhibit A-1.3 (together with any promissory notes issued in substitution therefor pursuant to Sections 6.3 and 6.4, the “ Senior Term C Notes ”, and together with the Senior Term A Notes and the Senior Term B Notes, the “ Senior Term Notes ”) to be delivered by the Loan Parties at the Additional Closing.

          2.2 Subordinated Notes .

          (a) Senior Subordinated Notes . The Loan Parties have duly authorized the issuance and sale to Purchasers of $7,500,000 in aggregate principal amount of the Loan Parties’ Senior Subordinated Notes due May 24, 2011 (together with any Notes issued in substitution therefor pursuant to Sections 6.3 and 6.4 and any Notes issued in exchange for Put Shares pursuant to Section 10.5, the “ Senior Subordinated Notes ”), to be substantially in the form of the Senior Subordinated Note attached hereto as Exhibit A-2 .

          (b) Junior Subordinated Notes . The Loan Parties have duly authorized the issuance and sale to Purchasers of $1,250,000 in aggregate principal amount of the Loan Parties’ Junior Subordinated Notes due May 24, 2012 (together with any Notes issued in substitution therefor pursuant to Sections 6.3 and 6.4 and any Notes issued in exchange for Put Shares pursuant to Section 10.4, the “ Junior Subordinated Notes ”, together with the Senior Subordinated Notes, the “ Subordinated Notes ”), to be substantially in the form of the Junior Subordinated Note attached hereto as Exhibit A-3 .

          2.3 Revolving Loans .

          (a) Subject to the terms and conditions set forth in this Agreement, on or after the Closing Date and to, but excluding, May 24, 2005 (the “ Revolving Loan Termination Date ”), Purchasers shall, severally, on a pro rata basis based on the percentages specified to Agent, make loans and advances to the Loan Parties on a revolving credit basis (collectively, the “ Revolving Loans ”) in an aggregate amount outstanding at any time equal to the lesser of (x) the Revolving Loan Commitment Amount or (y) an amount equal to the sum of:

     (i) 85% of Eligible Receivables (“ Receivables Advance Rate ”), plus

     (ii) 50% of the value of the Eligible Inventory determined by Agent in its sole discretion (the “ Inventory Advance Rate ,” together with the Receivables Advance Rate, the “ Advance Rates ”), minus

     (iii) such reserves as Agent may reasonably deem proper and necessary in its sole discretion from time to time.

          From and after the Closing, the Revolving Loans shall be evidenced by a promissory note made by the Loan Parties in favor of Purchasers (the “ Revolving Notes ”) in the form attached hereto as Exhibit A-4 to be delivered by the Loan parties at the Closing. The date and amount of each Revolving Loan made by Purchasers and each payment on account of principal thereof shall be recorded by Agent on its books; provided that, the failure of Agent to make any such recordation shall not affect the obligations of the Loan Parties to make payments when due of any amounts owing in respect of the Revolving Loans.

          (b) Purchasers shall make Revolving Loans available to the Loan Parties up to a maximum of one draw per week, in integral multiples of $100,000, provided that the conditions set forth in Section 2.3(a) hereof, this Section 2.3(b) and Section 4.2 hereof have been satisfied. Before a Revolving Loan is made, the Loan Parties shall have (i) provided Agent an irrevocable written Request for Borrowing in the form of Exhibit H (a “ Request for Borrowing ”) by

facsimile or other means set forth in Section 14.6 so that such notice is received by Agent not later than three (3) Business Days before the day on which the Revolving Loan is to be made, (ii) provided a borrowing base certificate in form and substance satisfactory to the Agent (a “ Borrowing Base Certificate ”) demonstrating that, after giving effect to the Revolving Loans requested in the accompanying Request for Borrowing, the outstanding Revolving Loans do not exceed the amounts specified in Section 2.3(a)(x) or (y) and (iii) contacted Agent and received from Agent either oral or written confirmation of Agent’s receipt of the Request for Borrowing not later than 1:00 pm New York time three (3) Business Days before the date on which the Revolving Loan is to be made. No Revolving Loan shall be made if it would cause the aggregate amount of Revolving Loans to exceed the Revolving Loan Commitment Amount or the amount determined pursuant to Section 2.3(a)(y). Agent and Purchasers shall be entitled to rely conclusively on any Executive Officer’s authority to deliver a Request for Borrowing or other writing on behalf of the Loan Parties and neither Agent nor any Purchaser shall have any duty to verify the identity of or signature of any Person identifying himself as an Executive Officer.

          2.4 Authorization and Issuance of the Warrants.

           Warrants . Parent has duly authorized the issuance and sale to Purchasers of stock purchase warrants substantially in the form of the warrant attached hereto as Exhibit B evidencing Purchasers’ right to acquire an aggregate of 1,869 shares of Class B Common Stock of Parent (the “ Junior Subordinated Debt Warrants ”). Parent has duly authorized the issuance and sale to Purchasers of stock purchase warrants substantially in the form of the warrant attached hereto as Exhibit B evidencing Purchasers’ right to acquire an aggregate of 81,589 shares of Class B Common Stock of Parent (the “ Preferred Stock Warrants ” and, together with the Junior Subordinated Debt Warrants, the “ Warrants ”).

          2.5 Authorization and Issuance of Common Stock . The Company has duly authorized the issuance and sale to Purchasers, pursuant to the terms and conditions of this Agreement, of 10,000 shares of Class B Common Stock.

          2.6 Authorization and Issuance of Preferred Stock . The Company has duly authorized the issuance and sale to Purchasers, pursuant to the terms and conditions of this Agreement, of 22,000 shares of Preferred Stock, having the rights, preferences, privileges and restrictions set forth in the Charter Documents of Parent.

          2.7 Sale and Purchase . Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, (a) the Loan Parties shall sell to Purchasers, and Purchasers shall purchase from the Loan Parties, in an amount equal to the relative portion of the Notes to be purchased by each Purchaser as set forth on Annex B , the Notes in the aggregate principal amount set forth in Section 2.1, 2.2 and 2.3 hereof for $35,250,000 in the aggregate plus the amount of the Revolving Loan, (b) Parent shall sell to Purchasers, and Purchasers shall purchase from Parent, in an amount equal to the relative portion of the Warrants as set forth on Annex B , the Warrants for $100 in the aggregate, (c) Parent shall sell to Purchasers, and Purchasers shall purchase from Parent, in amount equal to the relative portion of shares of Preferred Stock to be purchased by each Purchaser as set forth on Annex B , the Preferred Stock for $1,000 per share and (d) Parent shall sell to Purchasers, and Purchasers shall purchase from Parent, in amount equal to the relative portion of shares of Class B Common

Stock to be purchased by each Purchaser as set forth on Annex B , the Class B Common Stock for $100 per share.

          2.8 The Closing .

          (a) The closing of the sale of the Original Securities took place at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153, on May 24, 2004 (the “ Closing Date ”). The Original Securities were issued in such name or names and in such permitted denomination or denominations, numbers and amounts as set forth in Annex B or as Purchasers requested in writing not less than two (2) Business Days before the Closing Date. Delivery of the Original Securities were made to Purchasers against payment of the purchase price therefor, less any unpaid Senior Origination Fee, Junior Origination Fee, Revolving Loan Commitment Fee, Structuring Fee and any other amounts due and payable pursuant to Section 4.1(i).

          (b) Delivery of and payment for the Additional Securities (the “ Additional Closing ”) shall be made at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153, commencing at 10:00 a.m., local time, on the date hereof or at such place or on such other date on or before the date hereof as may be mutually agreeable to the Loan Parties and Purchasers. The date and time of the Additional Closing as finally determined pursuant to this Section 2.8 are referred to herein as the “ Additional Closing Date .” Delivery of the Additional Securities shall be made to Purchasers against payment of the purchase price therefor, less any unpaid Senior Term C Closing Fee and any other amounts due and payable pursuant to Section 4.1(i) hereof, by wire transfer of immediately available funds in the manner agreed to by the Loan Parties and Purchasers. The Senior Term C Notes shall be issued in such name or names and in such permitted denomination or denominations, numbers and amounts as set forth in Annex B or as Purchasers may request in writing not less than two (2) Business Days before the Additional Closing Date.

ARTICLE 3
REPAYMENT OF REVOLVING LOANS, THE SENIOR TERM LOANS
AND THE SUBORDINATED NOTES

          3.1 Interest Rates and Interest Payments.

          (a) Senior Term Loans .

     (i) The Loan Parties, jointly and severally, covenant and agree to make payments to the Agent, for the ratable benefit of Purchasers, of accrued interest on the Senior Term Loan A on the last day of each LIBOR Period, commencing on July 1, 2004 through the date of repayment in full of the Senior Term Loan A. The Senior Term Loan A shall bear interest on the outstanding principal thereof at a rate equal to the LIBOR Rate, as such rate may adjust from time to time, plus four and five tenths percent (4.5%) per annum.

     (ii) The Loan Parties, jointly and severally, covenant and agree to make payments to the Agent, for the ratable benefit of Purchasers, of accrued interest on the Senior Term Loan B on the last day of each LIBOR Period,

commencing on July 1, 2004 through the date of repayment in full of the Senior Term Loan B. The Senior Term Loan B shall bear interest on the outstanding principal thereof at a rate equal to the LIBOR Rate, as such rate may adjust from time to time, plus eight percent (8.0%) per annum.

     (iii) The Loan Parties, jointly and severally, covenant and agree to make payments to the Agent, for the ratable benefit of Purchasers, of accrued interest on the Senior Term Loan C on the last day of each LIBOR Period, commencing on December 1, 2004 through the date of repayment in full of the Senior Term Loan C. The Senior Term Loan C shall bear interest on the outstanding principal thereof at a rate equal to the LIBOR Rate, as such rate may adjust from time to time, plus nine percent (9.0%) per annum.

          (b) Senior Subordinated Notes . The Loan Parties, jointly and severally, covenant and agree to make payments to Agent for the ratable benefit of Purchasers, of accrued interest on the Senior Subordinated Notes on the first Business Day of each month during the term of the Senior Subordinated Notes commencing on July 1, 2004. The Senior Subordinated Notes will bear interest in two components: (i) interest will be payable in cash on the outstanding principal amount thereof (as increased by Senior PIK Interest that is paid-in-kind as described below) at a rate equal to twelve percent (12%) per annum (“ Senior Cash Interest ”); and (ii) interest will be payable in kind on (and thereby increase) the outstanding principal amount of the Senior Subordinated Notes (as such principal amount is increased from time to time) at a rate of two percent (2%) per annum (“ Senior PIK Interest ”). A late fee of two hundred and fifty (250) basis points shall be added on any amounts due hereunder which are not paid in accordance with this Section 3.1(b). Senior PIK Interest shall be payable as an increase in the principal amount of the Senior Subordinated Notes on the first Business Day of each month without any further action on the part of Agent or the Loan Parties and such increased principal amount of the Senior Subordinated Notes shall be paid in full in connection with the repayment of the Senior Subordinated Notes. The Agent’s determination of the amount of Senior Subordinated Notes outstanding at any time shall be conclusive and binding, absent manifest error.

          (c) Junior Subordinated Notes . The Loan Parties, jointly and severally, covenant and agree to make payments to Agent for the ratable benefit of Purchasers, of accrued interest on the Junior Subordinated Notes on the first Business Day of each month during the term of the Junior Subordinated Notes commencing on July 1, 2004. The Junior Subordinated Notes will bear interest in two components: (i) interest will be payable in cash on the outstanding principal amount thereof (as increased by Junior PIK Interest that is paid-in-kind as described below) at a rate equal to twelve percent (12%) per annum (“ Junior Cash Interest ”), and (ii) interest will be payable in kind on (and thereby increase) the outstanding principal amount of the Junior Subordinated Notes (as such principal amount is increased from time to time) at a rate of two percent (2%) per annum (“ Junior PIK Interest ”). A late fee of two hundred and fifty (250) basis points shall be added on any amounts due hereunder which are not paid in accordance with this Section 3.1(c). Junior PIK Interest shall be payable as an increase in the principal amount of the Junior Subordinated Notes on the first Business Day of each month without any further action on the part of Agent or the Loan Parties and such increased principal amount of the Junior Subordinated Notes shall be paid in full in connection with the repayment of the Junior

Subordinated Notes. The Agent’s determination of the amount of Junior Subordinated Notes outstanding at any time shall be conclusive and binding, absent manifest error.

          (d) Cash Payments in Lieu of PIK Interest . Notwithstanding Sections 3.1(b) and 3.1(c) hereof, commencing with the first “accrual period” (as defined for purposes of the Code) ending after the fifth anniversary of the Closing Date and continuing with each subsequent accrual period thereafter, the Loan Parties shall, in respect of both series of Subordinated Notes, pay in cash, on or before the end of such accrual period, an amount equal to the sum of the annual PIK Interest, the accrued and unpaid PIK Interest and the accrued and unpaid original issue discount (other than PIK Interest) with respect to such series of Subordinated Notes if, but only to the extent that, the aggregate amount of the sum of (i) the PIK Interest and (ii) the original issue discount (other than PIK Interest), in each case that has accrued and not been paid in cash from the Closing Date through the end of such accrual period on such series of Subordinated Notes, exceeds the product of the “issue price” (as defined for purposes of the Code) for such series of Subordinated Notes and the “yield to maturity” (as defined for purposes of the Code) on such series of Subordinated Notes. Any such payment shall first be allocated to the accrued and unpaid PIK Interest.

          (e) Revolving Loans . The Loan Parties, jointly and severally, covenant and agree to make payments to the Agent for the ratable benefit of Purchasers of accrued interest on the Revolving Loans on the first Business Day of each month, through the date of their repayment in full. The Revolving Loans will bear interest on the outstanding principal thereof at a rate per annum equal to the LIBOR Rate, as such rate may adjust from time to time, plus four and one half quarters percent (4.50%). Until the Revolving Loan Termination Date, the Loan Parties agree to pay to Agent an unused line fee on the average daily unused amount of the Revolving Loan Commitment, at a rate equal to 0.70% per annum (computed for the actual number of days elapsed on the basis of a year of 360 days). For purposes of calculating usage under this Section 3.1(e), the Revolving Loan Commitment on any day shall be deemed used to the extent of the Revolving Notes outstanding at the close of business of Agent on such day. Such unused line fee shall be payable monthly in arrears on the last Business Day of each month and on the Revolving Loan Termination Date for any period then ending for which such unused line fee shall not have previously been paid.

          (f) Computation of Interest . Interest on the Notes and the Revolving Loans will be computed on the basis of a year within three hundred sixty (360) days and the actual number of days elapsed.

          3.2 Repayment of Senior Term Notes.

          (a) Original Senior Term Notes . The Loan Parties, jointly and severally, covenant and agree to repay to Agent, for the ratable benefit of Purchasers, the Original Senior Term Notes in accordance with the amortization schedule set forth on Annex C attached hereto. Notwithstanding the foregoing schedule, the Loan Parties, jointly and severally covenant and agree to repay any and all unpaid principal on the Original Senior Term Notes, unpaid interest, fees and other amounts due hereunder upon maturity of the Original Senior Term Notes.

          (b) Senior Term C Notes . The Loan Parties, jointly and severally, covenant and agree to repay to Agent, for the ratable benefit of Purchasers, the unpaid balance of the Senior Term C Notes in full, together with the all the accrued and unpaid interest, fees and other amounts due hereunder, on October 29, 2011.

          3.3 Repayment of Subordinated Notes.

          (a) Senior Subordinated Notes . The Loan Parties, jointly and severally, covenant and agree to repay to Agent, for the ratable benefit of Purchasers, the unpaid balance of the Senior Subordinated Notes in full, together with the all the accrued and unpaid interest, fees and other amounts due hereunder, on May 24, 2011.

          (b) Junior Notes . The Loan Parties, jointly and severally, covenant and agree to repay to Agent, for the ratable benefit of Purchasers, the unpaid balance of the Junior Notes in full, together with the all the accrued and unpaid interest, fees and other amounts due hereunder May 24, 2012.

          3.4 Repayment of Revolving Loans . The Loan Parties covenant and agree to pay to Agent, for the ratable benefit of Purchasers, the Revolving Loans in full together with all unpaid accrued interest, fees and other amounts due hereunder on the Revolving Loan Termination Date. In addition, the Loan Parties covenant and agree to pay to Agent, for the ratable benefit of Purchasers, such amount of the Revolving Loans as shall be necessary at any time so that the aggregate amount of Revolving Loans outstanding at any time do not exceed the lesser of the amounts set forth in Section 2.3(a)(x) and (y).

          3.5 Optional Prepayment of Notes . Subject to the terms of this Section 3.5, the Loan Parties may prepay to Agent, for the ratable benefit of Purchasers, the outstanding principal amount of the Senior Term Notes and the Subordinated Notes in whole or in part in multiples of $250,000, or such lesser amount as is then outstanding, at any time at a price equal to (i) the accrued interest, if any, to the date set for prepayment, plus (ii) in the case of the Subordinated Notes, a prepayment fee representing the amortization of certain of Purchasers’ costs incurred in connection with the purchase of the Subordinated Notes equal to the principal amount prepaid thereon multiplied by the following percentage:

provided , however , that no prepayment shall be applied to (a) the Subordinated Notes so long as the Senior Term Notes remain outstanding and (b) to the Junior Subordinated Notes so long as the Senior Subordinated Notes remain outstanding. All such prepayments shall (A) be applied

by Agent to the outstanding principal in the inverse order of maturity after application of such prepayment to any accrued interest and prepayment premium payable in connection therewith and (B) in connection with the Senior Term Loans, shall be applied first to the Senior Term Loan A and second, so long as no Senior Term A Notes remain outstanding, to the Senior Term Loan B, and third, so long as no Senior Term B Notes remain outstanding, to the Senior Term Loan C.

          3.6 Notice of Optional Prepayment . If the Loan Parties shall elect to prepay any Notes pursuant to Section 3.5 hereof, the Loan Parties shall give notice of such prepayment to Agent and each holder of the Notes to be prepaid not less than thirty (30) days or more than ninety (90) days prior to the date fixed for prepayment, specifying (i) the date on which such prepayment is to be made, (ii) the principal amount of such Notes to be prepaid on such date, and (iii) the premium, if any, and accrued interest applicable to the prepayment. Such notice shall be accompanied by a certificate of the Chairman of the Board of Directors, the President or the Vice President and of the Treasurer of Parent that such prepayment is being made in compliance with Section 3.5. Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with accrued interest thereon and the premium, if any, shall become due and payable on the prepayment date set forth in such notice.

          3.7 Mandatory Prepayment .

          (a) Change of Control; Event of Default . The Notes shall be prepaid in full, together with all interest, fees and expenses plus a prepayment premium computed in accordance with Section 3.5, as if such prepayment were a voluntary prepayment, in the event of a Change of Control or upon such Notes becoming due as a consequence of an Event of Default pursuant to Section 8.2.

          (b) Excess Cash Flow . In addition to the amounts payable by the Loan Parties in respect of the Notes pursuant to Sections 3.2, 3.3, 3.4 and 3.7(a) hereof, the Loan Parties jointly and severally, covenant and agree to make an annual principal prepayment on the Senior Term Loans (the “ Cash Flow Prepayment ”) on or before the end of the LIBOR Period that occurs the soonest after the one hundred twentieth (120th) day following the end of each Fiscal Year in an amount equal to fifty percent (50%) of the Excess Cash Flow, or such lesser amount as is then outstanding under the Notes for so long as any amounts remain outstanding under the Senior Term Notes. All Cash Flow Prepayments in respect of any Fiscal Year shall be applied by Agent to the outstanding principal of the Senior Term Notes. All such prepayments shall be applied by Agent to the outstanding principal of Senior Term Loan A, and then to the outstanding principal of Senior Term Loan B, and then to the outstanding principal of Senior Term Loan C, in each case in the inverse order of maturity after application of such prepayment to any accrued interest payable in connection therewith.

          3.8 Home Office Payment . The Loan Parties will pay all sums becoming due on any Note for principal, premium, if any, and interest to Agent by the method and at the address specified for such purpose in Annex A , or by such other method or at such other address as Purchasers shall have from time to time specified to the Loan Parties in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Loan Parties made concurrently with or reasonably promptly after payment or prepayment in full of any Note, each holder of a Note shall

surrender such Note for cancellation, reasonably promptly after such request, to the Loan Parties at their principal executive office.

          3.9 Taxes . Any and all payments by the Loan Parties hereunder or under the Notes or other Purchase Documents that are made to or for the benefit of Purchasers shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings and penalties, interests and all other liabilities with respect thereto (collectively, “ Taxes ”), excluding taxes imposed on Agent’s or Purchasers’ net income or capital and franchise taxes imposed on any of them by the jurisdiction under the laws of which any of them is organized or any political subdivision thereof (all such nonexcluded Taxes being hereinafter referred to as “ Covered Taxes ”). If any of the Loan Parties shall be required by law to deduct any Covered Taxes from or in respect of any sum payable hereunder or under any Notes or other Purchase Documents to Agent for the benefit of Purchasers, or to Purchasers, the sum payable shall be increased as may be necessary so that after making all required deductions of Covered Taxes (including deductions of Covered Taxes applicable to additional sums payable under this paragraph), each Purchaser receives an amount equal to the sum it would have received had no such deductions been made. The Loan Parties shall make such deductions and the Loan Parties shall pay the full amount so deducted to the relevant taxation authority or other authority in accordance with applicable law. In addition, the Loan Parties agree to pay any present or future stamp, documentary, excise, privilege, intangible or similar levies that arise at any time or from time to time from any payment made under any and all Purchase Documents or from the execution or delivery by the Loan Parties or from the filing or recording or maintenance of, or otherwise with respect to the exercise by Agent or Purchasers of their respective rights under any and all Purchase Documents (collectively, “ Other Taxes ”). The Loan Parties will indemnify Agent and Purchasers for the full amount of Covered Taxes imposed on or with respect to amounts payable hereunder and Other Taxes, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payment of this indemnification shall be made within thirty (30) days from the date Agent or Purchasers provide the Loan Parties with a certificate certifying and setting forth in reasonable detail the calculation thereof as to the amount and type of such Taxes. Any such certificates submitted by Agent or Purchasers in good faith to the Loan Parties shall, absent manifest error, be final, conclusive and binding on all parties. The obligation of the Loan Parties under this Section 3.9 shall survive the payment of the Notes and the termination of this Agreement. Within thirty (30) days after the Loan Parties having received a receipt for payment of Covered Taxes and/or Other Taxes, the Loan Parties shall furnish to Agent the original or certified copy of a receipt evidencing payment thereof.

          3.10 Maximum Lawful Rate . This Agreement, the Notes and the other Purchase Documents are hereby limited by this Section 3.10. In no event, whether by reason of acceleration of the maturity of the amounts due hereunder or otherwise, shall interest and fees contracted for, charged, received, paid or agreed to be paid to Purchasers exceed the maximum amount permissible under such applicable law. If, from any circumstance whatsoever, interest and fees would otherwise be payable to Agent or Purchasers in excess of the maximum amount permissible under applicable law, the interest and fees shall be reduced to the maximum amount permitted under applicable law. If from any circumstance, Agent or Purchasers shall have received anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excess of interest shall be applied to the reduction of the

principal amount of the Notes, in such manner as may be determined by Purchasers, and not to the payment of fees or interest, or if such excess interest exceeds the unpaid balance of the principal amount of the Notes, such excess shall be refunded to the Loan Parties.

          3.11 Break Funding Payments . In the event of the payment of any principal of any Note (other than the Subordinated Notes) other than on the date such payment was scheduled pursuant to Annex C attached hereto or the due date for mandatory prepayments pursuant to Section 3.7 hereof (including payments as a result of an Event of Default), the Loan Parties shall compensate each Purchaser, upon demand, for the loss, cost and expense attributable to such event with respect to the period from such payment date to the day immediately preceding the next payment date scheduled pursuant to Annex C hereof.

          3.12 Capital Adequacy . If, after the date hereof, either the introduction of or any change of the interpretation of any law or the compliance by Purchasers with any guideline or request from any governmental authority (whether or not having the force of law) has or would have the effect of reducing the rate of return on the capital or assets of Purchasers as a consequence of, as determined by Agent or Purchasers in their sole discretion, the existence of any Purchaser’s obligations under this Agreement or any other Purchase Documents, then, upon demand by Purchasers, the Loan Parties immediately shall pay to Purchasers, from the time as specified by Purchasers, additional amounts sufficient to compensate Purchasers in light of such circumstances. The obligations of the Loan Parties under this Section 3.11 shall survive the payments of the Notes and the termination of this Agreement.

          3.13 Certain Waivers . The Loan Parties unconditionally waive (i) any rights to presentment, demand, protest or (except as expressly required hereby) notice of any kind, and (ii) any rights of recission, setoff, counterclaim or defense to payment under the Notes or otherwise that the Loan Parties may have or claim against any Purchaser, the Agent or any prior Purchaser or Agent.

ARTICLE 4
CONDITIONS

          4.1 Conditions to the Senior Term Loans and Purchase of Securities . The obligation of Purchasers to advance the Senior Term Loans and to purchase and pay for the Securities is subject to the satisfaction, prior to or at the Closing, in the case of the issuance of the Original Securities, and the Additional Closing, in the case of the issuance of the Additional Securities, as the case maybe, of the following conditions:

          (a) Representations and Warranties True . The representations and warranties contained in Article 5 hereof shall be true and correct in all material respects at and as of the Closing Date and the Additional Closing Date as though then made, except to the extent of changes caused by the transactions expressly contemplated herein.

          (b) Material Adverse Change . There shall have been no Material Adverse Change in the business, financial condition, assets, Business or prospects of the Loan Parties or the capital markets since April 30, 2003.

          (c) Security Documents . The Loan Parties and Agent, for the benefit of Purchasers, shall have entered into (i) a security agreement or security agreements with Agent subordinated in lien priority only to the Liens in favor of any senior lender as contemplated therein, if any, in form and substance as set forth in Exhibit C attached hereto (as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof, the “ Security Agreement ”), (ii) a collateral patent, trademark and license assignment or assignments in form and substance as set forth in Exhibit D attached hereto (as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof, the “ IP Collateral Assignments ”), and (iii) a stock pledge and security agreement in form and substance as set forth in Exhibit E attached hereto (as the same may be amended, modified or supplemental from time to time in accordance with the terms thereof, the “ Pledge Agreement ”). Parent and Agent, for the benefit of Purchasers, shall have entered into a French stock pledge and security agreement in form and substance as set forth in Exhibit E-1 attached hereto (as the same may be amended, modified or supplemental from time, the “ French Pledge Agreement ”). The Loan Parties shall have executed and delivered to Agent, for the benefit of Purchasers, such financing statements and other instruments (collectively, “ Financing Statements ”) as Agent shall require in order to perfect and maintain the continued perfection of the security interest created by the Security Agreement. Agent shall have received reports of filings with appropriate government agencies showing that there are no Liens on the assets of the Loan Parties other than Permitted Liens.

          (d) Environmental Reports . Agent shall have received reports covering the Loan Parties’ properties in form and substance satisfactory to Agent regarding the Loan Parties’ compliance with Environmental Laws.

          (e) Collateral Access Agreements . The Loan Parties shall have delivered to Agent a Collateral Access Agreement for each property specified by the Agent, in form and substance satisfactory to the Agent.

          (f) Stockholders Agreement . Parent and each of its stockholders shall have entered into a stockholders agreement in form and substance as set forth in Exhibit I hereto (as the same may be amended, modified or supplemented and in effect from time to time, the “ Stockholders Agreement ”).

          (g) Delivery of First Amendment to Intercreditor and Subordination Agreement . Agent shall have received a duly executed copy of the First Amendment to the Intercreditor and Subordination Agreement.

          (h) Closing Documents . The Loan Parties will have delivered or caused to be delivered to Agent all of the following documents in form and substance satisfactory to Agent:

     (i) Senior Term Notes evidencing the Senior Term Loans (as designated by Agent and Purchasers pursuant to Section 2.1 and Annex A hereof) in aggregate original principal amounts as set forth herein, duly completed and executed by the Loan Parties;

     (ii) one or more Subordinated Notes (as designated by Agent and Purchasers pursuant to Section 2.2 and Annex A hereof) in aggregate original principal amounts as set forth herein, duly completed and executed by the Loan Parties;

     (iii) one or more Revolving Notes evidencing the Revolving Loans (as designated by Agent and Purchasers pursuant to Section 2.3 and Annex A hereof) in the maximum amounts as set forth herein, duly completed and executed by the Loan Parties;

     (iv) one or more Warrants (as designated by Agent and Purchasers pursuant to Section 2.4 and Annex A hereof) evidencing the right to acquire the number of shares of Class B Common Stock set forth in Section 2.4 and Annex A hereof, subject to adjustment from time to time in accordance with the terms thereof;

     (v) one or more stock certificates representing the Preferred Stock purchased pursuant to this Agreement;

     (vi) one or more stock certificates representing the Class B Common Stock purchased pursuant to this Agreement;

     (vii) certificates of good standing dated not more than 10 days prior to the Closing Date and the Additional Closing Date for each of the Loan Parties issued by their respective jurisdictions of organization and each jurisdiction where it is qualified to operate as a foreign corporation, or its equivalent;

     (viii) a copy of the Charter Documents of each of the Loan Parties, certified by the appropriate governmental official of the jurisdiction of its organization as of a date not more than 10 days prior to the Closing Date and the Additional Closing Date;

     (ix) a copy of the By-laws of each of the Loan Parties, certified as of the Closing Date and the Additional Closing Date by the secretary, assistant secretary, manager or general partner, as applicable, of each respective Loan Party;

     (x) a certificate of the secretary or assistant secretary, manager or general partner of each of the Loan Parties, certifying as to the names and true signatures of the officers or other authorized person of the respective Loan Party authorized to sign this Agreement and the other documents to be delivered by the respective Loan Party hereunder;

     (xi) copies of the resolutions duly adopted by each Loan Party’s board of directors, general partners, board of managers or other governing body, authorizing the execution, delivery and performance by the respective Loan Party of this Agreement and each of the other agreements, instruments and documents contemplated hereby to which the respective Loan Party is a party to, and the

consummation of all of the other Transactions, certified as of the Closing Date and the Additional Closing Date by the secretary, assistant secretary, manager or general partner of the respective Loan Party;

     (xii) a certificate dated as of the Closing Date and the Additional Closing Date from an officer, general partner or manager of each of the Loan Parties stating that the conditions specified in this Section 4.1 have been fully satisfied or waived by Agent;

     (xiii) certificates of insurance evidencing the existence of all insurance required to be maintained by the Loan Parties pursuant to Section 7.1(c), and Agent shall be satisfied with the type and extent of such coverage;

     (xiv) copies of all material leases to which any of the Loan Parties is a party to; and

     (xv) such other documents relating to the Transactions contemplated by this Agreement as Agent or its counsel may reasonably request.

          (i) Purchaser’s Fees and Expenses.

     (i) Revolving Loan Commitment Fee . On the Closing Date, the Loan Parties shall pay the Revolving Loan Commitment Fee to ACFS (and the Loan Parties hereby authorize Agent to deduct from the aggregate proceeds from the sales of the Notes by the Loan Parties, the unpaid amount of such Revolving Loan Commitment Fee);

     (ii) Senior Origination Fee . On the Closing Date, the Loan Parties shall pay the Senior Origination Fee to ACFS (and the Loan Parties hereby authorize Agent to deduct from the aggregate proceeds from the sales of the Notes by the Loan Parties, the unpaid amount of such Senior Origination Fee);

     (iii) Junior Origination Fee . On the Closing Date, the Loan Parties shall pay the Junior Origination Fee to ACFS (and the Loan Parties hereby authorize Agent to deduct from the aggregate proceeds from the sales of the Notes by the Loan Parties, the unpaid amount of such Junior Origination Fee);

     (iv) Structuring Fee . On the Closing Date, the Loan Parties shall pay the Structuring Fee to ACFS (and the Loan Parties hereby authorize the Agent to deduct from the sales of the Notes by the Loan Parties the unpaid amount of such Structuring Fee);

     (v) Senior Term C Closing Fee . On the Additional Closing Date, the Loan Parties shall pay the Senior Term C Closing Fee to ACFS (and the Loan Parties hereby authorize Agent to deduct from the aggregate proceeds from the sales of the Senior Term C Notes by the Loan Parties, the unpaid amount of such Senior Term C Closing Fee); and

     (vi) Other Fees and Expenses . On the Closing Date and the Additional Closing Date, the Loan Parties shall have paid the fees and expenses of Agent and Purchasers, payable by the Loan Parties pursuant to Section 14.4 hereof (and the Loan Parties hereby authorize Agent to deduct all such amounts from the aggregate proceeds of the sale of the Notes by the Loan Parties).

          (j) Legal Investment . On the Closing Date and the Additional Closing Date, Purchasers’ purchases of the Securities shall not be prohibited by any applicable law, rule or regulation of any Governmental Authority (including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System) as a result of the promulgation or enactment thereof or any changes therein, or change in the interpretation thereof by any Governmental Authority, subsequent to the date of this Agreement.

          (k) Proceedings . All proceedings taken or required to be taken in connection with the transactions contemplated hereby to be consummated at or prior to the Closing and the Additional Closing and all documents incident thereto will be satisfactory in form and substance to Agent and its counsel and to Purchasers and their counsel.

          (l) Background Investigations . Agent shall be satisfied with the results of background investigations of Donald Hartman and Steven Burke.

          (m) Employment/Confidentiality and Noncompete Agreements . The Loan Parties shall have entered into employment/confidentiality and noncompete agreements with officers and employees of the Loan Parties designated by Agent on terms reasonably satisfactory to Agent, and such confidentiality and noncompete agreements shall be in full force and effect as of the Closing Date and shall not have been amended or modified. The Loan Parties shall have provided the Agent with copies of all employment/confidentiality and noncompete agreements and all other agreements providing compensation in any form whatsoever (including, without limitation, any benefit plans between Loan Parties and any and all of its directors, officers or employees).

          (n) Consummation of Acquisitions .

     (i) On the Closing Date, the Acquisition shall have been consummated in form and substance satisfactory to Purchasers, in Purchasers’ sole discretion, and Purchasers shall have been provided copies of all agreements, instruments and documents delivered in connection therewith.

     (ii) On the Additional Closing Date, the Auxitrol Acquisition shall have been consummated in form and substance satisfactory to Purchasers, in Purchasers’ sole discretion, and Purchasers shall have been provided copies of all agreements, instruments and documents delivered in connection therewith.

          (o) Investment Banking Agreement . The Loan Parties and ACFS shall have executed an Investment Banking Agreement in a form reasonably satisfactory to ACFS in the form attached hereto as Exhibit G.

          4.2 Conditions Precedent to each Revolving Loan . The obligation of Purchasers on any date (including the Closing Date) to make a Revolving Loan is subject to the satisfaction of each of the following conditions precedent:

          (a) Request for Borrowing and Borrowing Base Certificate . Agent shall have received a duly executed Request for Borrowing and Borrowing Base Certificate with respect to each Revolving Loan in accordance with Section 2.3(b) hereof.

          (b) Compliance . Both before and after giving effect to the proceeds of any Revolving Loan, (i) no Default or Event of Default shall have occurred and be continuing, (ii) repayment of the Notes shall not been accelerated in accordance with Section 8.2 hereof, (iii) the Loan Parties shall have complied and be in compliance with all the terms, covenants and conditions of each Purchase Document, and (iv) the representations and warranties of the Loan Parties contained in Section 5 hereof shall be true and correct on and as of the Closing Date and shall be true and correct in all material respects on and as of any such date after the Closing Date; with the same effect as though made on and as of the date of each Revolving Loan (except to the extent that any of the Schedules to this Agreement have been amended prior to any funding date to appropriately update any immaterial matters disclosed therein); and the Agent, if it so requests, shall have received a certificate, dated as of the date of each Revolving Loan, signed by an Executive Officer of the Loan Parties to the foregoing effect.

          (c) No Material Adverse Change . No Material Adverse Change shall have occurred since the date of the last audited financial statements of the Loan Parties delivered to the Agent.

          (d) Additional Documents . The Agent shall have received prior to the date of each Revolving Loan all additional documents and certificates that the Agent shall have reasonably requested.

          4.3 Waiver . Any condition specified in this Article 4 may be waived by Agent on behalf of Purchasers; provided that no such waiver will be effective against Agent unless it is set forth in a writing executed by Agent.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

          5.1 Representations and Warranties of Loan Parties . As a material inducem